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Old 03-24-2020, 04:49 PM
Sam Stone is offline
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Join Date: Jun 1999
Posts: 28,696
Quote:
Originally Posted by BigAppleBucky View Post
My suggestions on corporate bailouts, including cruise lines.

1. No bailouts of foreign flagged cruise ship companies. Let Panama, the Cayman Islands, etc., bail them out. These companies avoid US taxes and labor laws.
While I sympathize, and mostly agree, many of the flagged countries would be utterly unable to bail out the cruise industry.

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2. No bail out of any public company that reported profits for the years 2017 - 2019 and paid no federal taxes. Any bail out limited to the amount of FIT paid in the same period.
So let's say a company falls on hard times and loses half of its value and has capital losses much greater than their taxes in a year, and so they carry forward their losses. They do all the right things - restructuring debt, selling assets, etc. They begin to turn it around and, have modest profits in 2017 and 2018. They use their previous losses to offset their taxable profit, so for a couple of years they pay no tax. Should that company not get a bailout?

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3. No bail out for any private company that paid no income taxes 2017 - 2019. Any bail out limited to the amount of FIT paid in the same period.
So we give a taxable benefit to solar companies to encourage them to build solar panels. A company rakes the offer, and starts a solar factory. It takes a huge capital investment, so the first two years are big losses. Then the company starts making some profit, but after applying the tax benefit they were offered, their tax obligation is zero. Then Covid-19 hits, and the company has to shut down and goes bankrupt.

No bailout for them either? They just took the deal we wanted them to take. Why should they be punished for it?

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4. No bail out of any company that bought significant amounts of its own stock since the 2017 tax law.
Even companies that bought their own stock only to watch it drop in half due to Covid-19? And what exactly is wrong with stock buybacks?

I would certainly stop them from buying back stock from this point on, as it would be easy to buy a lot of stock at depressed prices if you know you are getting a bailout and the price is going to go up, But I see no reason to punish companies that bought back stock years ago. Why? What are you trying to avoid?

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5. No bail out of any Trump or Kushner property.
I would add no bailouts for any company in which a politician of either party who voted for bailouts has a large financial interest.

Last edited by Sam Stone; 03-24-2020 at 04:50 PM.