Did you think we were done bailing out the UAW? Think again:
The new General Motors Corp. is trying to heighten interest in its sale of about $10 billion in stock held by its rescuers – the United Auto Workers health care trust fund and the governments of Canada, the United States and the province of Ontario.
Buyers will get an unusual bonus: the little-noticed forgiveness of about $45 billion in future federal income tax obligations to offset past losses and expenses of various kinds – a second bite of the bailout apple.
Writing off debt is nothing unusual. Most companies are allowed to do it – unless they went through bankruptcy as GM and Chrysler did. GM wrote off $80 billion in debt through bankruptcy. Now they’ll get to write off another $45 billion while Ford, who weathered the financial storm without taking TARP money or filing for bankruptcy, will get no tax relief for $27 billion in debt. Punish the private industry successes while rewarding the government-run failures. It’s the socialist way.
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