Tax Change

[rek]

Quietly Ushered In, Tax Change Could Cost Government Billions

A change in tax law intended to encourage bank mergers could cost the U.S. government up to $140 billion in lost revenue, according to an estimate by New York law firm Jones Day.

The Treasury Department quietly made the change last week, in stark contrast to the public announcement of other pieces of the government response to the financial crisis. But this piece could be among the most expensive.

Companies are allowed to shelter profits from taxation based on past losses. The new regulation allows banks, and only banks, to shelter profits from taxation based on the losses at companies they acquire.

In a commentary published yesterday, Jones Day estimated that banks are still carrying about $400 billion of unrecognized losses on their books. At the standard corporate tax rate of 35 percent, those losses could be used to avoid about $140 billion in federal taxes, if the companies with losses are bought by companies with profits.

The first beneficiary could be Wells Fargo, which is trying to buy Wachovia and its projected losses of $74 billion on bad loans. Wells Fargo would be able to avoid taxes on its next $74 billion in profits, costing the government about $25 billion.

[BodybyFisher]

Bush brough him in, mark levin has questioned that decision, saying that Paulson is a democrat with ties to Obama. I will find the streaming audio from levin where he states that. Here is some interesting info on Paulson >> http://en.wikipedia.org/wiki/Henry_Paulson

I believe that the government is trying to hide the wrong doing that they did here and doing whatever they can to hide it.