Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature currently requires accessing the site using the built-in Safari browser.
Here's an original thought...you are a phony author that uses Glenn Beck's paranoia conspiracies as a 'secret' source and of course you are a right wing pea brain...
You poor widdle boobie.
That's not an original thought - that is part of the DNC talking points.
I see the pea brains are having a tantrum convention...maybe you can all pledge to Monica Lewinsky your authority figures...the god like CEO's...
The corporatocracy, the entitled class is miffed, the taxpayer's tit (OUR $$$), SOCIALISM, they were given by Bush and the Republicans, double dipping corporate welfare is being cut...
AT&T (T), Caterpillar (CAT), Deere (DE), and Verizon (VZ) garnered headlines last week (and an unwelcome summons to Capitol Hill) for announcing that a provision in the recent health care legislation would result in substantial accounting write downs. AT&T, for example, told the SEC that it expects to take a $1 billion charge in the first quarter because the law eliminates a tax subsidy for providing prescription drug coverage to retirees. According to the Wall Street Journal, Credit Suisse estimates that the total accounting hit for corporate America will total $4.5 billion.
Citing these impacts, a Wall Street Journal editorial denounced the provision as a wholesale destruction of wealth and capital. White House Press Secretary Robert Gibbs, in contrast, praised it as closing a loophole.
Whos right?
To figure that out, I spent a lovely Saturday afternoon tracking through the intersection of health policy, tax policy, and financial accounting and emerged with a clear verdict: Gibbs is right. The provision does indeed close a tax loophole.
But the WSJ isnt entirely completely wrong. The first law of loopholes is that every loophole benefits someone. If you close a loophole, someone will be hurt. Thats what happening here. The extra subsidy for retiree prescription drug coverage provided an extra financial boost for AT&T, Caterpillar, et al. Eliminating the loophole will thus reduce the value of the companies and the wealth of their shareholders, just as the WSJ alleges. But its hard to get too teary-eyed since that value and wealth were created by the loophole in the first place.
And now to the details:
Health policy. In 2003, the Medicare Modernization Act added a prescription drug benefit to Medicare. Some employers already provided prescription drug coverage to their retirees, and Congress worried that they would stop these programs and move all those people onto the government nickel. Congress thus created a subsidy to encourage employers to maintain those benefits. The government pays 28% of the cost of qualifying prescription drug coverage for employer-provided prescription drug coverage for retirees who are at least 65. Nothing in the new health legislation would change that.
Tax policy. Congress had to make two decisions in creating this subsidy.
* First, would the subsidy be treated as taxable income to recipients? Quite reasonably, Congress answered no.
* Second, would for-profit employers still be able to deduct from their taxable income any spending on retiree prescription drug coverage that was covered by the subsidy? For reasons I dont understand, Congress answered yes. As a result, the AT&Ts of the world could spend $100 on coverage, receive a $28 subsidy, and still deduct $100 in expenses from its income for tax purposes (rather than, say, $72).
In my view, the first decisionsubsidies arent taxablemakes sense because it treats all employers equally. For-profit firms, non-profit organizations, and state and local governments would all receive the same 28% incentive to maintain retiree coverage. If that subsidy were taxable then either (a) we would have to extend income taxation to non-profits and state and local governments or (b) the subsidy would be smaller for for-profit employers. Neither of those makes sense.
The second decisionfor-profit firms can deduct even those expenses that are covered by the subsidyappears peculiar for the same reason. That provisionwhich I characterize as a loopholemeans that the subsidy is actually more valuable to for-profit firms than to other types of employers. They get the subsidy (without paying taxes on it) and they get the tax benefit of writing off those expenses. As the Joint Committee on Taxation recently noted, that treatment is highly unusual. In my view, its right that the recent health legislation closed that loophole.
Financial accounting. This change doesnt actually go into effect until 2013. So why all the hullabaloo now? Two words: accrual accounting. Corporations must report the cost of future retiree health benefits as liabilities on their balance sheets. The associated tax subsidies show up as corresponding assets. The value of those tax assets got slashed by the new health legislation. Firms have to report that hit in the quarter in which the law was signed. Thats why weve seen this rash of announcements warning shareholders of a surprise hit to first quarter profits. The charges are non-cash at this pointno money is going out the door of these firms just yetbut will turn into real cash (i.e., higher tax payments) in the future.
Note: Another important question is how eliminating the loophole will affect the number of retirees who get drug coverage from their previous employer. Presumably the number will go down, but I havent seen any estimates of how much.
Disclosure: I have no investments in AT&T, Caterpillar, Deere, or Verizon.
Tax Loopholes, Wealth Destruction and Healthcare Reform -- Seeking Alpha
Do you ever think an original thought or just regurgitate?
Here's an original thought...you are a phony author that uses Glenn Beck's paranoia conspiracies as a 'secret' source and of course you are a right wing pea brain...
This is an open forum, bub.
I'm just callin' 'em like I see 'em - and you are Very Transparent.
Do you ever think an original thought or just regurgitate?
Here's an original thought...you are a phony author that uses Glenn Beck's paranoia conspiracies as a 'secret' source and of course you are a right wing pea brain...
Ahhhh, are you cranky cuz you aren't capable of forming opinions for yourself? You really are a fool, Bf.
But here's a question, do I use Glen Beck or does he use me?
Even your accusation about me is repeated - you can't even come up with that on your own, you sad bastard. And, unfortunately, all you have done is show yourself to be as stupid as the original. I have never, not once, claimed 'secret' sources. I claim - because it is fact - that there are places I get facts that are not open sources. They aren't secret you moron - you just can't access them or don't know how to find them. Stupid boy.
The first response to Congress calling the hearing should be a middle finger salute. The most Waxman can get out of that is saying, these companies must not believe their numbers if they ignore me. The layoffs and premiums increases will speak for themselves son enough.
Do you ever think an original thought or just regurgitate?
Here's an original thought...you are a phony author that uses Glenn Beck's paranoia conspiracies as a 'secret' source and of course you are a right wing pea brain...
Ahhhh, are you cranky cuz you aren't capable of forming opinions for yourself? You really are a fool, Bf.
But here's a question, do I use Glen Beck or does he use me?
Even your accusation about me is repeated - you can't even come up with that on your own, you sad bastard. And, unfortunately, all you have done is show yourself to be as stupid as the original. I have never, not once, claimed 'secret' sources. I claim - because it is fact - that there are places I get facts that are not open sources. They aren't secret you moron - you just can't access them or don't know how to find them. Stupid boy.
Hey Cali gal...it is both ironic and revealing that you sent me a 'neg rep' ...
It shows your insecurities and your inability to engage in intelligent debate. And it reveals your lack of character and exposes your haughtiness and narcissism.
And above all it adds credence to my exposing your bullshit 'you just can't access them' sources...
You're outed...get over it...
The first response to Congress calling the hearing should be a middle finger salute. The most Waxman can get out of that is saying, these companies must not believe their numbers if they ignore me. The layoffs and premiums increases will speak for themselves son enough.
To which Waxman will undoubtedly reply:
"You are seeing today an all out attempt to marshal the forces of the opposition, using not merely the Capitalists, or their fellow travelers-the deluded businessmen, the executives, and some of my good friends in both the Democratic and Republican Parties who can become heroes over night in the eyes of the right-wing blogosphere if they will just join with the jackal pack."
No, once again, it's not about control and its not about Obama's Liberal Fascism. No, it's not. Really. Truly. Seriously. I was tired when I said "Control the people" when I meant "control the insurance companies"
The first response to Congress calling the hearing should be a middle finger salute. The most Waxman can get out of that is saying, these companies must not believe their numbers if they ignore me. The layoffs and premiums increases will speak for themselves son enough.
To which Waxman will undoubtedly reply:
"You are seeing today an all out attempt to marshal the forces of the opposition, using not merely the Capitalists, or their fellow travelers-the deluded businessmen, the executives, and some of my good friends in both the Democratic and Republican Parties who can become heroes over night in the eyes of the right-wing blogosphere if they will just join with the jackal pack."
To which the businesspersons can respond, your biting the hand that feeds you.
The first response to Congress calling the hearing should be a middle finger salute. The most Waxman can get out of that is saying, these companies must not believe their numbers if they ignore me. The layoffs and premiums increases will speak for themselves son enough.
To which Waxman will undoubtedly reply:
"You are seeing today an all out attempt to marshal the forces of the opposition, using not merely the Capitalists, or their fellow travelers-the deluded businessmen, the executives, and some of my good friends in both the Democratic and Republican Parties who can become heroes over night in the eyes of the right-wing blogosphere if they will just join with the jackal pack."
Yes, the CEOs of Ford, GM, and Chrysler were all hauled before Congress last year during the Bail Out hearings. I'm pretty sure GE has been hauled before Congress at some point as well.
