A Word for Robert Benmosche: DOVIDENJA
Frustrated by Kenneth Feinberg’s compensation review, AIG CEO Robert Benmosche is thinking about stepping down. In a letter to AIG employees obtained by the WSJ, he states: “Let me be clear:….. We are all working aggressively to overcome this compensation barrier that stands in the way of restoring AIG’s value and allowing us to live up to our obligations to all stakeholders: our customers…our employees….our shareholders and creditors.”
Well Bobby, let me be clear: After receiving some $180 billion in federal aid, your largest and most important stakeholder is the U.S. taxpayers. Without our aid, your 100,000 employees would have lost their jobs and there would be no AIG. It is an attitude like yours that puts the sour taste for Wall Street in the mouths of many on Main Street.
Bobby...hard at work!
You recently said hello and maybe its time we say dovidenja. And by the way, don’t let the door hit you in the ass on your way out!
Just some thoughts…
Bob
H.R. 3548 – Well It’s About Time!
I applaud the Senate for getting off its ”royal behind” and finally passing the amended Unemployment Compensation Extension Act of 2009…some six weeks after the bill was passed in the House. Hopefully the number of people affected by the loss of benefits was minimal. As usual, the vote followed party lines: All In…All Yea…98-0!
The bill was named the Unemployment Compensation Extension Act of 2009, but actually encompasses a bit more than just unemployment. Let’s examine a few of the features of this bill:
- Unemployment Extension: The bill extends unemployment insurance benefits for an additional 14 weeks and up to 20 weeks for states with unemployment rates above 8.5 percent. The $2.4 billion cost will be paid for by extending the current Federal Unemployment Tax Act (FUTA) surtax until mid-2011.
- Homebuyer Tax Credit: The bill extends the $8000 first-time homebuyers tax credit and additionally provides a $6500 tax credit for some that are not first time buyers. Help for the housing market….great! According to the joint Committee on Taxation (JTC), the cost of this provision will be $10.8 billion.
- Five-Year Carryback of Net Operating Losses: The bill extends the net operating loss (NOL) carryback from two to five years for 2008 or 2009 for all firms (TARP recipients excluded). The JTC puts the price tag on this portion of the bill at $10.4 billion.
- Delay of Worldwide Interest Allocation: The bill delays the application of worldwide interest allocation provisions that were enacted but never implemented in 2004 until 2018. According to the JCT, this provision would generate $20.1 billion of revenue.
- Failure to File Partnership Return: The bill increase the penalty for failure to file a partnership or S corporation return from $89 to $195. The JCT projects that this provision will generate $642 million over ten years.
If the extension of unemployment benefits will cost $2.4 billion and the five-year carry back provision will cost $10.4 billion, why isn’t this the Five-Year Carryback Extension Act of 2009?
If a delay in worldwide interest allocation, which never was implemented, will generate $20.1 billion; why not eliminate it completely? That’s about $2 billion per year that could be used for health care!
If a $106 increase in the penalty for failure to file a partnership or S corporation return will generate $642 million, there must be an awful lot of partnerships or S corporations that don’t file correctly? Maybe we should make it $1000!
Just some thoughts…
Bob
BobCiti Fined $600K – What a Joke!
The Financial Industry Regulatory Authority has fine Citigroup $600,000 for helping foreign clients avoid (or more appropriately evade) taxes on dividends. A $600k fine? That’s less than 1% of the compensation for Andrew Hall. Give me a break…. That’s not even a slap on the hand! Citi has been pushing products that help clients evade taxes for years. How about a criminal investigation?
Let look at some law courtesy of FindLaw:
US Code – Title 26 – Section 7201: “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall…be guilty of a felony…”
US Code – Title 26 – Section 7202: “Any person required under this title to collect, account for , and pay over any tax imposed by this title who willfully fails to collect or truthfully account for and pay over such tax shall…be guilty of a felony…”
Where’s a cop when you need one?
Just some thoughts…
Bob
Health Care Reform – Spanky and the Engineer
Maybe its time the six little rascals from the Senate Finance Committee - lead rascal Max (Spanky) Baucus, ranking rascal Chuck (Alfalfa) Grassley, Kent (Froggy) Conrad, Jeff (Mickey) Bingaman, Olympia (Darla ) Snowe and Mike (Porky) Enzi were introduced to Barry the Engineer?
Just some thoughts…
Bob
Corporate Tax Rate: Give ‘em a Break!
What’s the deal with corporate tax rates? You constantly hear how U.S. corporations face one of the highest income tax rate in the world. How much do they really pay? Lets explore the financials of a one…
At Goldman Sachs from 2006 thru 2008, pre-tax earnings were $34.5 billion on revenues of almost $106 billion. Provisions for total income taxes were $11 billion or about 32%. Of the $11 billion, less than $5 billion was for U.S federal income tax. That’s less than 15%! What happened to that 35% corporate tax rate?
Just some thoughts…
Bob
Goldman Sachs’ Lloyd Blankfein: The Six Billion Dollar Man?
Within a year of receiving and repaying a $10 billion government bailout, access to several government programs designed to shore up the financial system, and the collapse of the major competitor Lehman Brothers; Goldman Sachs is reporting second quarter revenues of $13.76 billion and net earnings of $3.44 billion. It is looking more and more like Lloyd Balnkfein may this year become the $6 billion dollar man. If he does, his fellow 29,000 employees will probably average a mere $576,000.
Maybe our answer to financing health care reform is merely investing in Goldman?
Just some thoughts…
Bob
Double Crossed by the Taxx Rate at Rxx Companies
Recently, Senator Max Baucus, Chairman of the Senate Committee on Finance, announced an $80 billion cost reduction commitment by the pharmaceutical industry..
The cost reduction is great, but the statutory income tax rate might be more beneficial!
Let’s take a look at a couple of the major pharmaceutical companies:
Over the last two years, Pfizer had revenue of more than $96 billion with income before taxes of almost $19 billion. Pfizer paid only $2.7 billion in total taxes on income…or 14%. Of the total, only $481 million was for US taxes…that’s about 2.5%!
Over the same period, Merck had revenue of more than $48 billion with income before taxes over $13 billion. Merck paid $2.1 billion in total taxes on income….or 16%. Of the total, only $902 million was for US taxes…that’s about 6.8%!
What ever happened to that 35% statutory tax rate?
Just some thoughts…
Bob
Financial Reform: Lesson Forgotten?
As President Obama proposes “…a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression…”, he may want to reflect on just that…reforms that followed the Great Depression. Bring an end to the “too big to fail” institution….restore the Glass-Steagall Act!
Just some thoughts…
Bob
