PrintDecember 8, 2010
Crony Car Capitalism
Several recent revelations bring home just what a cesspool of crony capitalism the American auto industry has become. The Obama administration and the UAW (Obama's major financial and political supporter) are running the show.First is the news that the "new" GM walked away from the crony bankruptcy proceedings with a huge tax break -- one worth up to $45 billion. It was revealed in the paperwork filed for its IPO that the Obama administration gave the new GM a sweetheart deal: it will be allowed to carry forward huge losses incurred by the "old" GM prior to its bankruptcy. Of course, the IRS doesn't allow the new companies that emerge from bankruptcy to write off their old losses. But the feds decided to waive that rule for companies bailed out by TARP.Thus, the new GM will save about $45.4 billion in taxes on future earnings, which may allow it to escape taxes for the next twenty years. This "tax-loss carry-forward" is a...(Read Full Article)
