Chemtura Corp (fka CHMT)

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Posted by: brikk Date: Sunday, November 08, 2009 12:42:07 AM
In reply to: dnoto who wrote msg# 4253 Post # of 4268

check this out... note the last line in bold. it's just one blogger's opinion, but i'm encouraged:

http://taxprof.typepad.com/taxprof_blog/2009/01/obama-proposes-extending-nol-carryback-from-2-years-to-5-years.html

January 6, 2009
Obama Proposes Extending NOL Carryback From 2 Years to 5 Years

Wall Street Journal: Write-Offs a Boon to Builders, Bankers, by Jesse Drucker:

The main business tax cuts proposed by President-elect Barack Obama are likely to be a windfall for two industries particularly tied to the current economic meltdown: Wall Street investment banks and home builders.

Under the proposal being crafted by the incoming Obama administration and congressional Democrats, companies would be able to use their so-called tax losses to offset taxable U.S. profits earned in the past five years.

Typically, companies can carry back such losses only two years. The Obama proposals likely would mean that companies with enormous losses from last year and this year could use the losses to help wipe out tax obligations from the previous five years and receive sizable tax-refund checks from the Treasury Department. For some firms, that would mean cash payments of billions of dollars.

That tax cut would be particularly helpful to industries that were flying high for the past several years, but now aren't expected to report much profit for the foreseeable future -- such as Wall Street firms, home builders and construction companies. ...

"I think it's ridiculous," said Dean Baker, an economist and co-director of the Center for Economic and Policy Research. "It's rewarding the people who messed up."

* Associated Press
* Bloomberg
* TaxVox

January 6, 2009 in News | Permalink
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Comments

To say it is ridiculous is shortsided. The current system allows these troubled industries to carry forward their losses. This would reduce their tax obligation in the future. Why not give it to them now when they need it so they can survive better and thus keep jobs in place. Fast forward 10 years. Long term would have not net effect on the the tax revenue for the government. These companies will have to pay taxes in the future (assuming they make profits in the next 10 years) in exchange for recieving a refund for their losses on the proposed 5-year carryback. The government does not loss out (long-term...other than inherent interest that could be argued) and the companies hopefully will keep their employees.

Posted by: nate | Jan 12, 2009 10:40:38 PM

Dean Baker, You are an Idiot! I agree. Why not give it to them now, and especially to the people that are feaking working and not sitting on their Ass like some of these other tax plans. Wake up and smell the coffee Dean! I am a developper and builder and i didnt "Screw Up" that is crazy and i think you are a fool for making such a ridiculous comment. you must be a a "State Worker" or in a cubical all day on facebook!

Posted by: I am an idiot Dean Baker | Jan 22, 2009 10:53:58 PM

Dean Baker, I would not go as far as to call you and idiot, like the previous posted blogger, as that would be rude. He does have a point. I too, was a builder caught up in this mortgage meltdown. I was forced to go with a private money lender when Countrywide Construction Lending was running into trouble back 2006. I had to witness my project drop 70 - 80% in value during 2007-08. It has completey destroyed my life.
The proposed five year carryback would be the most effective way for someone like me to be able to move forward. It would help use wipe out loses that just are not of the norm. It would aid us in moving forward.
I highly doubt that most builders and developers even have the means to continue in the same field. As for me, I am returning to college to finish up in optical engineering, as my education and experience in construction and related engineering as now seemingly worthless.
The five year carryback, also, may aid the bankrupcy courts in dealing with taxation issues, too.