A quiet windfall for U.S. banks

[Contrary1]

:wow: Imagine that.

With attention on bailout debate, Treasury made change to tax law


The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

More: http://www.msnbc.msn.com/id/27635885/

[ColbertWatcher]

1. "Did the Treasury Department have the authority to do this?" I don't think so! k+r, n/t

[2dogs2queets]

2. Republican meddling

Section 382 of the tax code was created by Congress in 1986, "but from the beginning, some conservative economists and Republican administration officials criticized the new law as unwieldy and unnecessary meddling by the government in the business world." The only place for government meddling is in the private lives of citizens. :banghead:

[mrreowwr_kittty]

3. WTF??!

[mhatrw]

4. Looting. Pure and simple looting. n/t

[snot]

5. k&r'd

[lostnfound]

6. Buy a company whose only value is in acquiring tax losses.

Yep. That's a scam.

[Contrary1]

7. kick n/t

[file83]

8. Looks like Bush is "spreading the wealth around"

- only in this case, by "around" he means upward.