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The Wall Street Journal reports (subscription required) that General Motors (NYSE: GM) "could face an income-tax bill of as much as $7 billion that would be associated with a plan to give much of the company's outstanding stock to debtholders, the United Auto Workers union and the federal government."GM is looking to the government for help in avoiding the tax burden and hopefully the Treasury Department and Congress will make it easy. Just tell GM that it doesn't have to pay any taxes on the restructuring. Hampering GM's efforts to restructure itself could actually harm the company's ability to repay the billions in loans that have already been extended.
What the federal government should do is insist that the company's existing common stockholders be wiped out completely in the restructuring so that a larger chunk of the benefits of a successful turnaround (ha) can accrue to taxpayers.
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Reader Comments (Page 1 of 1)
2-02-2009 @ 12:34PM
shelleyxjr22 said...
EXCUSE ME! GM getting out of paying tax's?
WTF. Billions and Billions of dollars have been given to the automakers and banking industry's. And now their requesting a bailout on their tax's as well. When does the charity stop. Is the Government going to give the American people a year of waving tax's. I don't think so. These corporations and banks are sucking the financial blood right out of the American people and our country. When is our Government going to have the balls to tell the banks and auto industry. Enough is enough with the bailouts. Either financially survive on your own, pay your bills and the tax's you owe. Or go under. If these rules apply to the American people. Why should corporations and banks. Not have to follow the same rules.