The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
The “exemptions” are on roughly $38 billion in “future earnings.” The actual value of this exemption could be anywhere between zero (if Citi makes no profit) to roughly 40% of the whole, or $15 billion.
Obama was touting the “profits” made by Treasury on the TARP repayments. What he wasn’t saying is that not only did we flush the money (from TARP) that went into Chrysler (disclosed last night), we now find out that at the same time he was “touting” the so-called “profits” The President was handing that money straight back to the bailed-out companies via tax breaks!
So no, Mr. President, Treasury (and The American People by extension) did not “make a profit” on TARP, nor “will we recover every penny” that was paid out.
There have been several banks that have failed after receiving TARP money – we will get zero from them. We will get zero from Chrysler and GM. We lost 100% of the money injected into CIT, and now you have handed out billions of tax credits to Citibank.
Where’s the so-called “populism” – that is, the protection of “the little guy” while making those who were responsible for this economic mess pay for their sins Mr. President?
If you’re a Democrat and believe that you were electing “Hope and Change”, you might want to think about what you actually bought with your vote – not what you were sold.