Category Archives: US Government

What if General Motor Fails?

Catastrophic Chain Reaction that will eliminate around 3 million jobs.

– Government will loose around $150 Billion in revenue
– Part Makers will Shut down and will be out of business.

– Sales would plummet as consumers will loose interest 

– Rental car companies, purchasers of about 15% of GM’s volume, would get nervous, too. They often sell their used models back to the auto maker. They’re worried they would have to liquidate the cars themselves if GM went bankrupt, says Maryann N. Keller, a longtime GM watcher who sits on the board of Dollar Thrifty Automotive Group Inc.

–  If GM went belly-up, retirees, workers, could all take a hit

– GM’s creditors would also stand to suffer. The company has $31 billion in long-term debt, most of it due in 2023 and beyond.

GM and Ford reported they spent a combined $14.6 billion more than they took in last quarter. GM said it could run out of money by the end of the year. Ford said it could last through 2009, but only because it arranged a hefty credit line last year.Next week, Congress plans to consider giving the auto industry part of the $700 billion Wall Street bailout during a lame-duck session.

On the other hand  “Bankruptcy could do great things for GM,” says William J. Rochelle III, a bankruptcy attorney with Fulbright & Jaworski LLP. But, of course, Chapter 11 is no sure bet. History is full of examples of companies that have emerged from bankruptcy simply to return in a few years.

As airlines and steelmakers have done, GM could use Chapter 11 to rewrite union contracts, potentially enabling it to slash retiree benefits and close plants without having to pay furloughed workers. The auto maker could even dump tarnished brands and get bankruptcy court protection from dealer lawsuits.

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Money Never Sleeps Pal

The point is, ladies and gentleman, that greed — for lack of a better word — is good.

Greed is right.

Greed works.

Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind.

And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the USA

That has become a mantra of sorts on Wall Street, thanks to Oliver Stone and Stanley Weiser. Twenty-one years ago, the two paired up to make the film Wall Street, starring Michael Douglas and Charlie Sheen.

Now , 20th Century Fox is moving forward with a sequel (called Money Never Sleeps) to 1987’s Wall Street. The modern-day story will again center on Gordon Gekko, who has recently been sprung from prison and re-emerges into a much more tumultuous financial world than the one he once lorded over. The Bud Fox character, played by Charlie Sheen in the original, will not appear in the latest incarnation. 

Seems like it is the perfect time for sequel to movie Wall Street when the economy is in crisis and the markets are in freefall.

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`Joe the Plumber,’ Obama Tax-Plan Critic, Owes Taxes

`Joe the plumber,” the Toledo, Ohio, man whose complaints about Barack Obama’s tax plan were highlighted by John McCain in the final presidential debate, owes the state of Ohio almost $1,200 in back income taxes.

According to records on file with the Lucas County Court of Common Pleas, the state filed a tax lien against Samuel J. Wurzelbacher for $1,182.98 on Jan. 26, 2007, that is still active.

Wurzelbacher was thrust into the national spotlight this week when he told Obama he worried that the Illinois senator’s proposals to roll back Bush administration tax breaks for Americans earning more than $250,000 would prevent him from buying a plumbing business that would earn between $250,000 and $280,000 a year.

McCain, an Arizona Republican senator, pointed to the exchange during the debate last night when he turned to the camera and said, “I will not stand for a tax increase on small-business income.” Directly criticizing Obama, he added, “what you want to do to `Joe the plumber’ and millions more like him is have their taxes increased and not be able to realize the American dream of owning their own business.”

Today, at a rally in Downingtown, Pennsylvania, McCain said “the real winner last night was `Joe the plumber.”’

On Oct. 12, as Obama was campaigning door-to-door in suburban Toledo, Wurzelbacher confronted the Democratic presidential nominee about his tax plan.

`American Dream’

“Do you believe in the American dream?” Wurzelbacher asked before asking about the tax increase. “I’m being taxed more and more for fulfilling the American dream.”

Wurzelbacher’s home telephone number is unlisted, and efforts to reach him by calling his neighbors and family were unsuccessful. Attempts to reach Wurzelbacher at the plumbing company where he works were also unsuccessful. The address on the lien and other records for him matched the address published by the Toledo Blade, which also noted the lien.

The state of Ohio places a lien on real property after several steps to try to collect a tax debt, according to John Kohlstrand, a spokesman for the Ohio Department of Taxation who said he couldn’t discuss any specific case.

Delinquency Notice

If a delinquency notice goes unheeded, the Department of Taxation issues a billing notice, Kohlstrand said. If that is ignored, a more formal assessment notice is sent. Failing to appeal an assessment or losing an appeal puts the debt into the hands of the state attorney general for collection. The attorney general typically sends a collection notice and simultaneously files a lien.

“The taxpayers may not necessarily know about the lien,” Kohlstrand said, although they would receive other notices.

In Wurzelbacher’s case, the lien indicated that the notice was sent to a previous address in Toledo.

Ray Ann Estep, section chief for revenue-recovery services for the Ohio attorney general, said Wurzelbacher’s lien was filed six months after the Department of Taxation certified the debt for collection.

“Unfortunately, sometimes people don’t resolve their debts as quickly as we would like them to,” she said.

Obama’s Plan

In addition to tax credits and a proposal that would allow Wurzelbacher to avoid paying capital-gains taxes if he ever sold the business he wants to acquire for a profit, Obama has proposed allowing the top two tax rates of 33 percent and 35 percent to revert to what they were during the Clinton administration, or 36 percent and 39.6 percent, respectively.

In 2007, the 33 percent bracket kicked in for taxable income exceeding $195,851.

Under Obama’s proposal, Wurzelbacher would face about $900 more in taxes if he netted $280,000 of income from his new business and had to pay an extra 3 percentage points on the amount over $195,851, said Gerald Prante, a senior economist at the Tax Foundation, a Washington research group that is examining both candidates’ plans.

“His average tax burden, the final bill he pays to the IRS isn’t going to go up much if he’s just making $280,000 a year,” Prante said. He would face higher marginal tax costs to expand the business beyond that, he said.

Not Taxable Income

It’s far more likely that the $280,000 Wurzelbacher told Obama he’d earn would be in the form of gross receipts and not taxable income, said Steven Bankler, a certified public accountant in San Antonio, who counts plumbers and other trade professionals as his clients.

By the time Wurzelbacher took proper business deductions, Bankler said, he’d be left with between $150,000 and $200,000 in taxable income and wouldn’t be affected by Obama’s proposed increase in the top rates.

Wurzelbacher might eventually have to pay more employment taxes under Obama’s plan to impose a rate of between 2 percent and 4 percent on wages over $250,000, Bankler said, but Obama has said that change wouldn’t take effect for a decade

Source- Bloomberg

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Plumber makes $250,000 a year . Is that a joke?

Joe the plumber makes $250,000 a year whereas according to the Bureau of Labor Statistics, the mean annual wage for plumbers in the United States in 2007 was $47,350.

Why are these politicians calling him a plumber when in reality he is a businessman. I bet next they will next call Bill Gates an electrician.

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Meet Joe the Plumber

Meet Joe the Plumber who was mentioned 13 times in the opening minutes of third and final presedential debate.

 

 

I would still like to see who Joe Six Pack is.

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Panel: Palin abused power in trooper case

ANCHORAGE, Alaska (CNN) — Republican vice presidential nominee Sarah Palin abused her power as Alaska’s governor and violated state ethics law by trying to get her ex-brother-in-law fired from the state police, a state investigator’s report concluded Friday. “Gov. Palin knowingly permitted a situation to continue where impermissible pressure was placed on several subordinates in order to advance a personal agenda,” the report states.

Palin and her husband, Todd, have consistently denied wrongdoing, describing Wooten as a “rogue trooper” who had threatened their family — allegations Branchflower discounted. “I conclude that such claims of fear were not bona fide and were offered to provide cover for the Palins’ real motivation: to get Trooper Wooten fired for personal family reasons,” Branchflower wrote.

The Branchflower report states Todd Palin used his wife’s office and its resources to press for Wooten’s removal, and the governor “failed to act” to stop it. But because Todd Palin is not a state employee, the report makes no finding regarding his conduct.

Click here for more details.

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AIG execs went on $500K retreat within days of bailout

After the bailout of AIG last month, the United States government effectively bought an 80% share in the company. That should have caused a fundamental change, you would think, in how the company was spending funds on compensation, bonuses and benefits.

But it doesn’t look like that’s what happened. The committee learned that shortly after the bailout went through, executives from AIG’s major U.S. life insurance subsidiary, AIG American General, held a week-long conference at an exclusive resort in California.

The resort is called the St. Regis Monarch Beach. … It’s very impressive. This is an exclusive resort. The rooms start, gentlemen, at $425 a night. Some are more than $1,200 a night. AIG spent nearly $500,000 in a single week at the at this hotel. Now, this was right after the bailout.Some of the charges  shareholders who are now U.S. taxpayers had to pay. Check this out.

AIG spent $200,000 for hotel rooms, and almost $150,000 for catered banquets. AIG spent  $23,000 at the hotel spa and another $1,400 at the salon. They were getting their manicures, their facials, their pedicures and their massages while the American people were were footing the bill. And they spent another $10,000 for leisure dining.

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