U.S. gave up billions in tax money in deal for Citigroup's bailout repayment

[notesdev]

Source: Washington Post

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

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.

While the Obama administration has said taxpayers are likely to profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.

The IRS, an arm of the Treasury Department, has changed a number of rules during the financial crisis to reduce the tax burden on financial firms. The rule changed Friday also was altered last fall by the Bush administration to encourage mergers, letting Wells Fargo cut billions of dollars from its tax bill by buying the ailing Wachovia.

...

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534.html?hpid=topnews

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A bailout by any other name...

[Lindsay]

1. It's their world.

We only try to survive in it.

[Deja Q]

2. ...

:banghead:

Oops, wrong emoticon, I mean:


:popcorn:

[marasinghe]

3. precedent's gonna be set with the mandated health insurance premiums.

you might as well acclimatize yourself to:
- mandated corporate income tax reductions,
- mandated social security benefit reductions,
- mandated credit card interest rate increases,
- and, mandated personal income tax increases.

zimbabwe is supposed to have something like 80% aggregate taxes on personal income, counting vat, etc.. so, we got a little bit of a way to go, before they turn us into their wet-dream of: either feudal serfs, or domestic beasts of burden. they already got the overseers trained & ready, in the military, police & mercenaries.

[bertman]

4. I hate to say it, but I agree with you, marasinghe. FUCK THIS!!! They own us.

[razors edge]

7. They own nothing.

To own, one must earn and pay. Governments do not buy anything, they take.

Violations of the social contract will only stand as long as the victims and the courts allow it.

[optimator]

5. mandated private education is next

we are fucked

[razors edge]

9. No way.

The Federal Government has invested too much into the art of indoctrination to quit now.

Just look at the dividends it has paid so far, mindless nationalism, willingness to sacrifice our children.

Corporations would fuck all that up by getting greedy. They won't kill the last golden goose.

[Romulox]

6. A new stealth bailout without any of those pesky executive compensation limits. Nice. nt

[New Dawn]

8. The US government is entirely controlled by Wall Street and the Pentagon.

[girl gone mad]

10. Even much of the money they used to pay their way out of TARP..

came in through the backdoor via the Fed's MBS purchase program and other less conspicuous government-sponsored bailouts.

Once again, an opportunity to force them to make changes was lost. Their balance sheet now looks virtually the same as it did a year ago.

I think the banksters know the banks are going to fail again w/in the next two years, and they are trying to loot as much as they possible can before the inevitable happens.

[ozymandius]

11. Citigroup gains massive tax break in deal with IRS

Source: WaPo

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to longstanding tax rules for the benefit of Citigroup and the few other companies partially owned by the government. As a result, Citigroup will be allowed to retain $38 billion in tax breaks that otherwise would decline in value when the government sells its stake to private investors.

While the Obama administration has said taxpayers likely will profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.
.....

“The government is consciously forfeiting future tax revenues. It’s another form of assistance, maybe not as obvious as direct assistance but certainly another form,” said Robert Willens, an expert on tax accounting who runs a firm of the same name. “I’ve been doing taxes for almost 40 years and I’ve never seen anything like this where the IRS and Treasury acted unilaterally on so many fronts.”

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534.html

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Just in time for bonus season. And, of course, a banking executive cannot get a bonus if their company is on the TARP teat.

[AllentownJake]

12. Isn't it amazing how tough the talk was on Sunday's 60 minutes

and how catering the action is in private.

[ozymandius]

13. Fat Cats, indeed.

Made even fatter through the actions of this administration through its malicious lump of a Treasury Secretary, Timothy Geithner.

[AllentownJake]

14. They wouldn't be so fat Mr. President

If you stopped feeding them.

[westerebus]

15. How much health care coverage can you buy for $3.8 billion?

Which is a mere 10% of the total that will go untaxed.

[unabelladonna]

16. vile. just vile

the IRS wouldn't be as kind to an ordinary taxpaying citizen.

[WriteDown]

17. More Asian change. nt

[pissedoff01]

18. What's a few billion between friends

Vikram Pandit and Timothy "Goldman Sachs" Geithner

[Lorien]

19. OK, so where are those RW fools who keep telling us that asking to

buy into Medicare instead of being forced to purchase crap "insurance" policies is the same as demanding that the government buy us all new cars and ponies? The government IS buying quite a few people new private jets and third vacation homes, and those people "need" nothing whatsoever. What do they have to say about it?

[RUMMYisFROSTED]

20. k

[Odin2005]

21. WTF?

[pjt7]

22. Citigroup owns Obama just as much as

GoldmanSachs.

We F'd.

[Javaman]

23. Yayyyy!!! Obama's "fat cats" win again!!! Yayyyyy!!!

Cheer with me, will you?

"under the bus, under the bus, throw us all, under the bus!!!"

"fuck us one, fuck all, fat cat's killing us, one and all!!"

Rahh!! Rahhh!!!!

Scream lounder, it drowns out the tears!!!!

Yayyyyy!!!!

[mcablue]

24. The IRS is part of the Treasury. Guess who heads the Treasury?

Bank-friendly Tim Geithner.

[Romulox]

25. This is really going to sink?

:wtf:

[senseandsensibility]

26. kick

:-(