As if being bailed out by the federal government, pretending to pay it back, and effectively becoming Government Motors wasn’t enough.. now GM gets to avoid paying taxes too, thanks to it’s sweetheart bailout deal.
Of course, since GM is Government Motors, I guess having government pay taxes to itself is kind of redundant. On the other hand, GM is pretending to be a private company now and boasting profits and a bright future too.
Something here ain’t right.
GM has reported its first year of profit since 2004, but will not pay taxes for years because the company gets to claim all of the billions in previous losses. Despite having declared bankruptcy and avoided almost all of those losses.
Don’t you wish you could do that?
Here’s how they get to do that, thanks to the deal they got in bankruptcy court as part of their transition from General to Government Motors:
Normally, companies get to claim tax breaks on past losses. That’s a normal part of business in the big leagues. GM gets to write off about $14 billion in domestic and $19 billion in global losses over the next few years.
Usually, if a company declares bankruptcy, however, those losses are wiped clean and the company must start over. Not so with Government Motors, whose $30 billion in debt was wiped clean, but their ability to write it off on their tax forms wasn’t.
You have two choices here: see Government Motors as what it is – a government-run operation – or be pissed off that GM got yet another silent bailout of $14 billion.
Either way you look at it, it’s pretty bogus.