Obama's IRS to grant Citi 38 billion dollar tax exemption

[JEDIYoda]

If I really thought he would give everyone the grand shakedown that he was promising, he would have had my support. Unfortunately, my cynicism has proven to be right again, though I wish I had been wrong.

BS and you know it!!! rofl.....hahaaaa

 

[JEDIYoda]

If mcsame was at the helm would he have done better?......lololo

 

[JEDIYoda]

I don't know Craig but Obama's dangerously leaning toward a DINO imo. He is really pissing off his base. I think he is getting some terrible advice from his inner circle (especially his economic team). This idea of bipartainship is such a joke in today's polorized political system. Hopefully he will start listening to the people who got him elected or he is going to a 1 term president.

Fortunately on these forums we know those who are crying loudest are NOT Obama`s base.........

 

[CycloWizard]

Hahaha You idiots are all too funny!!!

If it was bush that did it, and he's the one that started this whole mess rolling... you'd be YAY!!! Let's pay it up.

This whole two party system is corrupt from core out. Tell me something new!!!

No, Obama doesn't care about you that's for sure and I'm sure if you were in his position you wouldn't care about me!

I just laugh at people that think if mcsame was at the helm he would have done better...

Will it change? No...

Keep voting for your TWO PARTY CORRUPTION!!!!!!!!

How ya liking it so far?

I can only assume that this drunken idiocy was pointed in my direction. Unfortunately for you, I didn't for for McCain either.

 

[Craig234]

For as much as people complain about the 2 main parties I'm surprised the 3rd parties don't get more votes.

There are still a lot of people that will ONLY vote Democrat or Republican no matter how much they may not like either or both... The people will get the government they deserve.

I've discussed this previosly, under our winner take all syhstem, it's not practical to have more than two parties nearly ever - for a third party to succeed, it generally is to one side of one of the two parties, and splits the vote of the party it's closest to, and pretty much always thereby helps the party it's furthest from win. This is the case with Gore, with Perot, with Teddy Roosevelt, and so on.

For a third party win is so nearly impossible, it's have to not only pull away enough of the party it's closer to, but enough of the second party as well to get a majority.

As I've said before, what we should do is for states to enact ranked voting, where you can vote for first choice, second choice, and so on and have your vote count even if first choice doesn't win.

 

[TruePaige]

I've discussed this previosly, under our winner take all syhstem, it's not practical to have more than two parties nearly ever - for a third party to succeed, it generally is to one side of one of the two parties, and splits the vote of the party it's closest to, and pretty much always thereby helps the party it's furthest from win. This is the case with Gore, with Perot, with Teddy Roosevelt, and so on.

For a third party win is so nearly impossible, it's have to not only pull away enough of the party it's closer to, but enough of the second party as well to get a majority.

As I've said before, what we should do is for states to enact ranked voting, where you can vote for first choice, second choice, and so on and have your vote count even if first choice doesn't win.

I'd support something like that, along with several other election reforms.

 

[werepossum]

I can only assume that this drunken idiocy was pointed in my direction. Unfortunately for you, I didn't for for McCain either.

I generally vote Libertarian, but let's be honest, that's just avoiding having to settle for a lesser evil. Voting third party isn't actually an improvement, it's just dooming to defeat the party to which you are closest.

Besides, look at your third parties:
Greens - the Democrat Party isn't Marxist enough, government should control everything and each year seize and redistribute all the money.
Tea Party et al - the Republicans are too Marxist, government should shut down and not seize any money.
Libertarian - make drugs legal, dude, then eliminate everything not mentioned in the Constitution and cut taxes 50% so we can afford to buy drugs!

Any of that look attractive?

That signature line is still crazy awesome . . .

 

[QuantumPion]

So Obama gets to say on National TV "Look at how awesome TARP is, the US government made a profit!" in exchange for literally giving $45 billion to citicorp for free. Awesome.

 

[Fern]

I think most people don't actually think there is anything majorly wrong with their party, unfortunately.

I think it's been made pretty clear that Repubs and conservatives have been thinking something is majorly wrong with the Repub party.

Fern

 

[Zebo]

Not just over this, but it's my opinion now that the Obama administration is corrupt regarding the finance industry.

There was an interview today of Matt Taibbi on this on the Thom Hartmann show (see sig), and Thom asked him why Obama has chosed the road of Clinton and not the road of FDR.

Taibbi said it's a mystery but the main theories are naivete by Obama, and his recognizing the need for money for re-election and how the needed money comes from Wall Street.

He said he thinks it's a combination of the two. That seems reasonable to me. I'm not that familiar with the details on campaign funding to know how much Obama 'has to' make these compromises to get re-elected, but clear the pressure is stronger than it should be for the good of our contry. I might still think Obama has a lot of good intentions, but I can't excuse the choices he's making.

None of this is to compare him to the Bush or other Republican would-be administrations. I'm not saying he's as bad or wose than they would be. But I am noting my conclusion of his wrongs.

And one way it is worse, is that we liberals expect a sellot from Bush - but it's very destructive when someone purportedly on 'our side' does something like this, it cripples any further debate.

Liberals are more and more fretting about what to do, between 'fixing' the Democratic party they're so disappointed in, and going outside it.

Nothing new there to what I've long been saying that there is a battle in the Democratic party between the progressive wing and the corporatist wing. Shamefully Obama has chosen the latter.

I understand he has to govern in the current system and the less important issue is Obama compared to the overall excessive power of the corporatocracy. That's what we need to fix.

And the only sizable group out to do that that I see is the progressive wing of Democrats.

Good post - what pisses me off most, as I understand the mechanizations and am generally cynical from local gov't all the way to Federal based on years of observation so the theft is what it is, is Obama's daily meme about cracking down on them and doing the right thing but in practice actively does just the opposite with appointments and policy. He's a liar of the highest order. At least Bush was forthright in his screwing ya.

 

[Fern]

Not just over this, but it's my opinion now that the Obama administration is corrupt regarding the finance industry.
-snip-

Well, damn this a record. I'm agreeing with you twice in one day.

In searching around for the IRS ruling I'm see a lot of concern that the Admin, apparently due to the political unpopularity of these bailouts, is accerlating permission for the banks to repay the gov and get out of the program (gov control etc). The concern is that some of these banks may not be in good enough shape (undercapitalized), and so like we could possibly be back to square 1 with financial institutions in distress again next year or so if the economy and employment doesn't pick up.

Betting on big employment gains to help prevent further home forclosures seems risky to me.

Fern

 

[Zebo]

LOL!

This is in a nutshell why we will never have the FairTax; Congress will never give up its power to reward its friends and punish its enemies via the tax code, and likewise no president is ever going to give up the power to do the same via the IRS.

We will have something very different very quickly as Asian and Arab states are looking for a combined currency and getting ready to cut off life line to USA. The Doomsday device (displacement of the dollar as world reserve which is now assured) will probably result in some sort of totalitarianism as America erupts from within. Before Obama's term expires you will see the dollar decoupled and left significantly worthless. You will see prices of oil and similar import commodities in dollar terms skyrocket. You will see the destruction of America's way of life. Take that to your insolvent bank.

Never say never. My bet is fair tax on top of all other taxes.

 

[Fern]

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
-snip-

Two things:

1) Sounds like politization of the IRS.

2) The IRS can NOT make exceptions to tax law. They might look the other way and decide not enforce, but they don't have the power to make exceptions to law. I've been unable to find a copy of the IRS ruling, but I'm betting it's legal opinion somehow justifying the position that government ownership doesn't actually qualify as 'change in ownership'. I bet it's ridiculously tortured in reasoning.

Fern

 

[Zebo]

Two things:

1) Sounds like politization of the IRS.

2) The IRS can NOT make exceptions to tax law. They might look the other way and decide not enforce, but they don't have the power to make exceptions to law. I've been unable to find a copy of the IRS ruling, but I'm betting it's legal opinion somehow justifying the position that government ownership doesn't actually qualify as 'change in ownership'. I bet it's ridiculously tortured in reasoning.

Fern

Government breaks the law all the time such as (action) illegally buying Fannie and Freddie paper and not shutting down these insolvent banks (inaction)..

 

[Zebo]

I bet it's ridiculously tortured in reasoning.
-------------
Exactly I missed this in first read - you should read their reasoning for failing to comply with Prompt Corrective Action (PCA) ushering in the “too big to fail” doctrine totally doing the opposite of what law was intended. They'll do anything in the name of crony capitalism 38 billion is chump change in that effort.

 

[werepossum]

We will have something very different very quickly as Asian and Arab states are looking for a combined currency and getting ready to cut off life line to USA. The Doomsday device (displacement of the dollar as world reserve which is now assured) will probably result in some sort of totalitarianism as America erupts from within. Before Obama's term expires you will see the dollar decoupled and left significantly worthless. You will see prices of oil and similar import commodities in dollar terms skyrocket. You will see the destruction of America's way of life. Take that to your insolvent bank.

Never say never. My bet is fair tax on top of all other taxes.

Man, worst of all worlds! I'm betting on a plethora of new taxes, not the fair tax but a VAT. With the FairTax all new purchases are equal; with a VAT Congress can still pick and choose winners. And the more different taxes, the more government can get away with raising overall revenue by raising them in alternate years. If you have only one tax and you raise it every year then it looks really bad, but if you have five taxes them you can raise one a year and each hasn't been raised in five years so it looks better.

I'm looking for a collapse in the dollar to lead to one world currency, the Uno. (Or perhaps my earlier thought, the Credit on the United Nations Treasury.) The UN has been looking for ways to gain more control and more importantly taxing authority, and the US politicians will need a way to hide the collapse via something they can portray as progress.

 

[Aegeon]

For starters, the claim of a 38 billion dollar tax break is highly misleading as phrased. (At least with regards to actually saving Citi Bank that kind of money, which is clearly the impression conveyed by some of these articles.)

We're talking about several billion dollars in actual potential savings, but when you look how this actually works with the US Government actually owning Citibank shares right now, this probably is actually a break even move for taxpayers overall if not actually saving taxpayer money.

Cornell management school professor Robert H. Frank says without the IRS ruling, Citigroup and other banks that accepted bailout money, known as TARP, would have to pay higher taxes on the profits they'll earn when the financial crisis is over.

ROBERT H. FRANK: If that were the case, then Citigroup wouldn't be able to raise the money to pay back the TARP loan it took last year. So yes, it's a break for them, but I think in this case it's one that serves the public interest as well.

The government will lose revenue from the tax breaks although the exact amount depends on the banks' future performance. Conceivably the IRS ruling is worth several billion dollars to banks that accepted TARP funds.

But Sheldon Cohen, a former IRS Commissioner now with money manager Farr Miller, says the lost revenue is worth it.

SHELDON COHEN: The bank's stock would have fallen, people would have lost confidence in the banks and maybe the monetary system. The whole cycle would have fed on itself.

The government owns about $25 billion worth of Citigroup stock as a result of the bailout. So a drop in the stock price would also hurt taxpayers, says Cohen, more than offsetting any revenue gain from higher taxes.

http://marketplace.publicradio.org/display/web/2009/12/16/pm-citi-tax/

Basically if the stock price of Citigroup drops enough as a result of this ruling, it actually could be a greater cost to the government than the potential ruling since the US government is going to be selling it Citigroup shares soon.

 

[heyheybooboo]

For starters, the claim of a 38 billion dollar tax break is highly misleading as phrased. (At least with regards to actually saving Citi Bank that kind of money, which is clearly the impression conveyed by some of these articles.)

We're talking about several billion dollars in actual potential savings, but when you look how this actually works with the US Government actually owning Citibank shares right now, this probably is actually a break even move for taxpayers overall if not actually saving taxpayer money.


http://marketplace.publicradio.org/display/web/2009/12/16/pm-citi-tax/

Basically if the stock price of Citigroup drops enough as a result of this ruling, it actually could be a greater cost to the government than the potential ruling since the US government is going to be selling it Citigroup shares soon.

Shhhh ....

There is no reason to interject facts into this discussion.

The legal standing of a 'minority stake' varies from state to state depending upon where Citi is incorporated. There was a basis in law for Uncle Sugar to assume the ownership position it did to protect the taxpayer interest.

Instead of celebrating the end of that public investment in Citi and the seemingly early return of public monies (with interest, I assume), folks here wish to create a mountain of hype out of what is most likely an issue of fairness.

And this is probably the last time you will ever see me defend a banker!



-

 

[bfdd]

heyheybooboo, defending a banker? I don't really see anyone talking shit about the bankers here, but I do see them talking shit on the administration and our policies makers for this action. If I have to pay ALL of my taxes, they do too. Fuck em.

 

[Jhhnn]

Heh. If giving Citi a tax break of a couple of billion means they can repay 20 billion in tarp funds, I see that as a good thing for the taxpayers. Well, unless you think that risking taxpayers' money any longer than necessary with Citi is a good thing...

Or, don't let the unwillingness to take a small loss turn into a big loss...

 

[bfdd]

I want a billion dollar tax exemption

 

[rudder]

Heh. If giving Citi a tax break of a couple of billion means they can repay 20 billion in tarp funds, I see that as a good thing for the taxpayers. Well, unless you think that risking taxpayers' money any longer than necessary with Citi is a good thing...

Or, don't let the unwillingness to take a small loss turn into a big loss...

Or how about not giving them any money in the first place. If they had failed then it would have presented a great opportunity for a number of smaller businesses to expand.

Why the government thinks it can run businesses is beyond me. Now they are lending money for companies to hire people. Businesses will hire people when they grow. Giving companies government money to stay afloat does no goodl

 

[jman19]

Or how about not giving them any money in the first place. If they had failed then it would have presented a great opportunity for a number of smaller businesses to expand.

Why the government thinks it can run businesses is beyond me. Now they are lending money for companies to hire people. Businesses will hire people when they grow. Giving companies government money to stay afloat does no goodl

Lulz - I wonder how many small businesses would have ceased to exist first?

 

[heyheybooboo]

heyheybooboo, defending a banker? I don't really see anyone talking shit about the bankers here, but I do see them talking shit on the administration and our policies makers for this action. If I have to pay ALL of my taxes, they do too. Fuck em.

As I understand it (always questionable), because of the 'ownership' stake by Uncle Sugar, Citi would not be able to take all the deductions to which they are entitled under existing law.

I'm not saying the law (or the bankers) are 100% right. I couldn't care less one way or the other.

But as typical of P&N, some folks are playing loose and fast with the facts. No big surprise. If we could harness the power of the knee-jerks we could well be energy independent.

What I find really interesting, however, is that the constraints on executive compensation that many here have railed against seem to now be the impetus behind our fine financial institutions deciding it is time to pay back the taxpayers (with interest). I'd say that is a good thing.

 

[Jhhnn]

Lulz - I wonder how many small businesses would have ceased to exist first?

Quit trying to make sense- you're casting pearls before swine.

My sister worked at a S&L that was taken over by the RTC years ago. Their basic strategy was slash and burn. Any note that could be called was called, driving more than a few of her customers into bankruptcy- going concerns, people who were making their payments all along. They were no more tender wrt mortgages...

Lots of businesses, large and small, depend on lines of credit, particularly when receivables aren't being received on time...