Wednesday, December 16, 2009

WEANING CITIGROUP FROM THE TAXPAYER BAILOUT BY MILKING THE TAXPAYER

U.S. gave up billions in tax money in deal for Citigroup's bailout repayment DEAL MADE TO RECOVER BAILOUT Firms exempted from rule when U.S. sells its stake By Binyamin Appelbaum Washington Post Staff Writer Wednesday, December 16, 2009; A01 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.
We are being taken for idiots. This president is supporting another bubble economy at taxpayer expense.
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.
Tax breaks are not their money to give. Tax breaks are our money to be swindled out of.
Has the government given you a tax break lately? Have they even extended unemployment compensation for the 22-25% (the actual figure) of Americans out of work?
. . . "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."
Two weeks ago, Obama had the balls to tell us there was no federal money for job creation. You're on your own, boys, good luck.
Treasury officials said the most recent change was part of a broader decision initially made last year to shelter companies that accepted federal aid under the Troubled Assets Relief Program from the normal consequences of such an investment. Officials also said the ruling benefited taxpayers because it made shares in Citigroup more valuable and asserted that without the ruling, Citigroup could not have repaid the government at this time.
Without giving Citigroup our money, they couldn't have repaid our money. "Gee, Uncle Charlie, here's the money to repay me, because I know without that money, you'd be unable to pay. And, by the way, glad to see you and Aunt Agnes are bagging money and going to the islands for the winter. Me and the wife are losing our jobs (and probably our home), but I know it's best for us if you spend our dough in Bermuda."
. . . A senior Republican staffer also questioned the government's rationale. "You're manipulating tax rules so that the market value of the stock is higher than it would be under current law," said the aide, speaking on the condition of anonymity. "It inflates the returns that they're showing from TARP and that looks good for them."
Republicans are on our side now? Obama has gone so far into the pocket of Wall Street that even Republicans are alarmed? Thanks, Barack. You promised us change and turned us in for cash.
. . . The banks say the strings attached to the bailout, including limits on executive compensation, have restricted their ability to compete and return to health. Executives also have chafed under the stigma of living on the federal dole. President Obama chided bankers at the White House on Monday for not trying hard enough to make small-business loans.
Well, the poor dears. Chafing under all that stigma. I'm not sure what their definition of 'returning to health' is, but banks are the only segment of the economy bagging money these days. Goldman Sachs's profits amounted to $35 million a day for the three months to September; were more than three times as much as the bank made during the same period in 2008, with a a compensation fund of $16.7billion for the year to date – including $5.35bn set aside in the last quarter. Goldman's thirty-one thousand employees are set to average a bonus of $700,000 each.
. . . the president has acknowledged that the bailout is "wildly unpopular" and officials have been at pains to say they do not enjoy helping banks.
The bailout isn't the only thing that is becoming wildly unpopular and this president had best remember how and why he was elected. Merry Christmas, Goldman and Citigroup, Bank of America and Wells Fargo . . . and for the rest of us, a lump of coal.