Beware This Bogus Talking Point - "wave" of announcements of corporate losses. "

[imurhuckleberry]

On Saturday the Wall Street Journal editorial page loudly moaned about a provision of the healthcare bill that, they said, was prompting a "wave" of announcements of corporate losses. "This wholesale destruction of wealth and capital came with more than ample warning," they wrote ominously. "Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare."

I linked to this briefly the other day, but it's worth a little bit of explication.

It's true: there has been a wave of press releases announcing multi-million dollar writedowns from some of America's biggest corporations. In fact, as Igor Volsky points out, these press releases seem downright coordinated. So what's going on? It all goes back to George Bush's expansion of Medicare prescription drug benefits:

The Medicare Part D legislation gives subsidizes of about $1,300 per retiree per year to businesses that provide prescription drugs to their retirees and permits companies to deduct the value of credit....The new health care law, however, pays for itself by eliminating waste in the system and it closes this particular double dipping provision. Companies would still receive the tax-free subsidy, but they’ll no longer be able to deduct it. And they’re angry.

Well, who wouldn't be angry? Getting a government subsidy and being able to deduct it from your tax bill is a helluva juicy deal. I sure wish I could do something like that. But I'm not a giant corporation, so I can't.

continue reading ... http://motherjones.com/kevin-drum/2010/03/loopholes-are-forever

[cbdo2007]

1. What I am looking to hear from a corporation or politician - is why SHOULD they

be able to take this deduction?

It's easy for them to say, "Obama is costing us $100 Million over the next 3 years" but someone needs to ask them - do you think you should be able to deduct a tax-free subsidy? and why?

John Stewart or someone needs to ask one of these Repube politicians - "do you think companies should get to take this deduction???" I'm sure they would all say "No" because there really is no way to argue for it, but all the news media focuses on is the $100 million dollars the company is "losing".

That's like if I didn't pay my taxes for 5 years and then I get caught and say "Dang Obama just raised my tax rate 35% AND is making me pay a tax penalty!! but leaving out the part where I should have been paying them all along.

[veganlush]

2. they kinda left out the important stuff,huh?n/t

[Canuckistanian]

3. HuffPo had the right idea - "Corporate America Squealing At Welfare Cuts"

Big Business, GOP Complain That Health Reform Slashes Corporate Welfare

The Republican Party and major corporations have joined forces in the first major rearguard attack on health care reform, charging that the cost of complying with "Obamacare" is resulting in hundreds of millions of dollars in added business expenses.

The crime that reform is guilty of: Slashing corporate welfare.

Under the previous system, major corporations were subsidized by the government to provide prescription drug coverage to their retired employees. At the same time, corporations could claim on their tax returns that it was they -- not the taxpayers -- who paid for the drug coverage, and could write the expense off as a tax deduction.

~

Wall Street analysts say that the eye-popping charge-offs that are being reported are more smoke than fire. "Don't overreact to the hit to earnings," David Zion, a research analyst for Credit Suisse, said in a note to investors.

http://www.huffingtonpost.com/2010/03/31/corporate-america-squeals_n_519976.html

[cbdo2007]

4. It isn't even the corporate welfare that is getting cut - it's the tax deduction of the welfare.

Like I'm saying, ask any politician or business why they SHOULD be able to take a tax deduction and see how much sense their response makes. I'm guessing zero! and I'm going to ask my local congressman about it because he's one of those complaining about Obama hurting all these companies - we just need to ask him straight out at an event, "do you think companies SHOULD be able to take this tax deduction?"