Bailout Watch 387: GM's Buffet Banquet
The more tax money GM asks for the more it seems to need. Starting at home, it had come to the attention of our elected leaders that their $13.4 billion bailout of GM would bump GM’s tax liability by $7-$10 billion dollars. Specifically, the loan terms (new equity structure) would have constituted a “change in ownership,” potentially triggering the massive tax bill under terms set to prevent companies from merging to avoid tax liability. Luckily for GM, the new compromise stimulus bill exempts TARP-receiving firms from these ownership requirements, reports MLive. Good luck digging through the 778-page bill to find the exact wording, though. Meanwhile, we’re still waiting on word from the International Swaps and Derivatives Association as to whether these same equity structure changes and government regulations will trigger GM’s default swaps. And while DC kisses $7-$10 billion in potential GM tax revenue goodbye (which should be reflected in the total bailout cost), GM has already moved on to the next trough.
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