"The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.
But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.
The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.
'Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no,' said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. 'They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks.'"
But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.
The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.
'Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no,' said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. 'They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks.'"
"Outside of a loan, or a buy-out, this $140 billion in never-to-be-paid taxes is not (recoverable) to the American taxpayer.
Those actions are what probably make the recent lawsuit by Bloomberg News against the Secretary of the Treasury so important, because it appears that with all those loans that we’ve been making lately to banks, the Secretary of the Treasury is refusing to release the collateral those loans are being made against."
"Bloomberg reports the Fed is refusing to release details on which banks took out loans, fearing such disclosure would be blood in the water for short sellers and other financial mercenaries. Bloomberg News even went so far as to file a lawsuit on November 7th under the Freedom of Information Act to try to force disclosure.
Speaking to the Senate Banking Committee on September 23rd, Treasury Secretary Hank Paulson said of the $700 billion Troubled Asset Relief Program, or TARP: "We need oversight. We need protection. We need transparency. I want it. We all want it."
However, since the Fed's 11 new lending programs fall outside the scope of the bailout -- and indeed outside any federal supervision at all -- it can pretty much do whatever it wants, accountability be damned."
And from the original Washington Post article, cited above:
"Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes...
...The opposition to Section 382 is part of a broader ideological battle over how the tax code deals with a company's losses. Some conservative economists argue that not only should a firm be able to use losses to offset gains, but that in a year when a company only loses money, it should be entitled to a cash refund from the government."
Excuse Me? To quote the tennis genius: Are you serious? Republicans clearly favor welfare for corporations--the bigger the better, in both cases--but not welfare (or support or help or aid) to the individual. So when the economy tanks (by their own greedy stupidity) and We as individuals and family "only lose money," where's Our Section 382, O Mighty Morons of Mammon?
And though this is like throwing seeds on cement(heads), here's some badly-needed perspective on this whole Wall Street/Economic bailout fiasco:
"The United Nations’ Food and Agriculture Organization (FAO) stated that it would only take $30 billion a year to launch the necessary agricultural programs to completely solve global food insecurity. (Severe hunger afflicts 862 million people annually.)"
We have already given these economic vultures almost 2 trillion dollars. Here's a thought: Why don't We let them starve?
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