I'm surprised this hasn't come up over the past couple of days, but yesterday I saw something quite interesting in the news.

While we were all focused intently on the bailout negotiations, the Treasury Department quietly released a five-sentence statement saying it had repealed section 382 (I think) of the tax code.

Section 382 kept corporations from claiming losses taken on by buying failing corporations for tax deductions/exemptions (I don't know the exact way it works)

This was written in the 70's, I think, to keep big corporations from expanding their power during recessions. You know, the whole idea of encouraging competition instead of consolidating power in a few businesses. It's pretty basic foundations of sustainable free markets.

Let's all remember a couple important things about this.

Number 1: The bailout plan was sold to the taxpayers and to Congress as a way to encourage banks to lend. But, without any of us noticing until now, the Treasury Department gave a huge tax break to corporations that want to use the bailout to buy their rivals out. Not only is it completely unfair to encourage corporations to consolidate their power (remember the days of trusts and monopolies?), but we are handing them the resources to do it via the bailout.

Number 2:

ARTICLE I SECTION 8; CONSTITUTION OF THE UNITED STATES OF AMERICA

"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"

Is the Treasury Department "The Congress"? NO! This isn't only illegal, it goes against the highest legal document of the land!

Congress' response:
"We don't want to say it's illegal or do anything against the treasury for fear of creating another great depression" (paraphrasing an unnamed congressman)

So the taxpayers get ripped off 140 Billion in tax exemptions put in place to protect the spirit of competition that drives our economy, and Congress doesn't have the spine to act on it.

This is an outrage.
AN OUTRAGE!
JakeMartinez Reviewed by JakeMartinez on . Updated bailout price tag: 840 Billion? I'm surprised this hasn't come up over the past couple of days, but yesterday I saw something quite interesting in the news. While we were all focused intently on the bailout negotiations, the Treasury Department quietly released a five-sentence statement saying it had repealed section 382 (I think) of the tax code. Section 382 kept corporations from claiming losses taken on by buying failing corporations for tax deductions/exemptions (I don't know the exact way it works) This was Rating: 5