Posted on 03/30/2010 10:13:19 AM PDT by Behind Liberal Lines
The news on healthcare reform this week is that right off the bat, the major corporations are discovering they will be losing stunning amounts to taxes as a result of Obamacare.
Caterpillar, the first to speak out, reported it will take a one-time write-down of $100 million in order to account for the elimination of a federal tax refund it has been receiving for providing drug benefits to its retired employees. In the following days, AT&T, Verizon, 3M, Deer & Co., and AK Steel Holdings announced they would take similar write downs. AT&T's new tax bill will come to over $1 billion. The news is a body blow to major companies hoping to recover profitability and add jobs.
If all this sounds familiar, it should. It is exactly what Republicans predicted would happen if Obamacare became law....
All this, however, was too much for Henry Waxman, chairman of the House Energy and Commerce Committee. He demanded that CEOs from the major companies appear before him on April 21 to explain just what's going on. "These assertions appear to conflict with independent analyses," said the chairman, "which show that the new law will expand coverage and bring down costs."
(Excerpt) Read more at spectator.org ...
Prudential taking a one hundred million dollar hit.
Especially since it's congress that required them to make the announcements in the first place. America has become a very poor place to do business.
There's a simple reason for that Chairman. Congressmen don't to jail for intentionally disseminating bogus financial statements - Corporate CEOs do.
Yup, you got it right. King Obama is a rotten communists Muslim that wants a two step program. Destroy America and then the World. This man is purely insane beyond belief.
and that they all boldly tell The People the unvarnished Truth about what these commies have done...
Do you love this? Waxman is incredulous, the idea that the real consequences will, are occurring, "Why, how can this be? Our hand-picked chart-drawers say that the greatest legislation ever passed will be nirvana! I demand these CEO's come explain themselves!!"
Oh please, please, please. If one of the CEOs had enough guts to say this.
These companies are all legally obligated to report these charges right now, as he points out. But companies like this have a lot of leeway when it comes to the amount they actually report.
One of the games these companies play is reporting "charges" like this based on a worst-case assessment looking forward. This gets their projections out into the open to avoid future accusations of under-reporting them. More importantly, it allows the company to make changes moving forward that will look like stronger growth on future balance sheets.
Caterpillar seems like they're being very smart about this -- because they'll do whatever it takes moving forward to make that $1 billion "charge" in 1Q2010 disappear. And looking at this information, I can see exactly what is happening here . . .
Caterpillar is taking this $100 million "one-time charge" today to reflect what they know is their increased cost associated with the loss of the tax break they no longer have. But what they didn't do (because they don't know the implications of this yet) is make a forward-looking projection of how much their health care costs will decline once they dump all their retirees off their rolls and into the Medicare system. Remember -- the tax break was an incentive for companies like Caterpillar to keep retirees on their own insurance rolls. Without this tax incentive, you can be damn sure these retirees are going to be gone from the company's insurance plan by this time next year . . . and presto! -- the company shows a handsome growth in revenue next year after they shed this major cost.
THIS IS WHY THE U.S. STOCK MARKET HAS REACTED SO FAVORABLY TO OBAMA-CARE.
SEC regulations require such disclosures if these companies feel that these new laws will affect the bottom line and the value of the stockholders shares.
Correction in my 4th paragraph there . . . it’s a $100 million charge from Caterpillar, not $1 billion. I had copied and pasted parts of this from a similar thread about AT&T last week . . . it was AT&T who reported the $1 billion charge.
The Democrats grabbed control of Congress in 2006 and 2008 plus the white house thanks to McCain-Feingold.
Palin has no clue the evil McCain has caused.
I don’t think that their retirees get dumped into Medicare system. I think that their retired employees’ health insurance continues as their primary insurer until death, with Medicare being supplemental. Not sure about this, but many union contracts were set up this way years ago.
I sure hope they stand up to this.
Even if the company still provides “general” insurance coverage to retirees, they have the ability to toss the prescription drug costs onto Medicare. That was one of the whole purposes of the Medicare Prescription Drug Plan in the first place.
There is a difference between sedition on one hand, and a duty to resist on the other: the first is an affront to legitimate representative government, the second is a defense of the same against those who have abdicated by their own illegitimate acts any claim to such representation. We may soon need to bear this distinction in mind.
We still have a Constitution and it demands our present attention to act in its defense or lose it to those who would rip it asunder. Pray for peace, but not for the peace of slavery. I suspect things are about to change, and in ways that will require people to make difficult and sometimes painful choices. Such choices are being forced upon us intentionally and in increasing threatening terms, as our once cooperative and voluntary economic system gives way to command and control, opposition to which is not merely frowned upon but increasingly criminalized.
Hugo Chavez would be proud
I don’t think that their retirees get dumped into Medicare system. I think that their retired employees’ health insurance continues as their primary insurer until death, with Medicare being supplemental. Not sure about this, but many union contracts were set up this way years ago.
Most of the steel companies here in Western PA had lifetime health benes as part of their union contracts. That did not survive first contact with reality though. With those companies a shell of their former selves (even if they survived), those benefits were terminated years ago, leaving retirees to be dumped into Medicare and then scramble to fill in the gaps in their coverage.
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