Wednesday, May 31, 2006

American Taxpayers Take One for the Team

Allan Sloan of Newsweek reminds me how little I learned in two semesters of Tax law with Thurston "T Bone" Reynolds with his "A Double Play for the Atlanta Braves". While the only reason perhaps to post here on Captain Bama is that the Braves are "our" team, the real issue is the way Time Warner which currently owns of the team will likely trade to Liberty Media, a massive holding company. Here's the way, in part, how Mr. Sloan explains

... The companies would bring home total tax savings I estimate at $700 million—far more than the Braves are worth. Sure, we other taxpayers would be shut out. But what's baseball without a sacrifice? ...

Most fans would call this long-pending transaction (which may finally have been announced by the time you read this) a "sale" of the Braves. But it would actually be a trade. To be specific, it's what tax techies call a "cash-rich split-off, " a game that's just gotten a big assist from President George W. Bush's recently enacted $70 billion tax cut.

How does the Tax Increase Prevention and Reconciliation Act of 2005 involve the Braves? Here's the play-by-play. (Here's where I am humbled so I'll leave off the play by play yet try some color commentary.)

"Making my/our tax cuts permanent will keep our economy strong!" is what Bu$hCo and the ReThuglicans claim. Now while I'd argue the economy is hardly strong, the real mystery to me is how the Big Mules get regular folks to vote their candidates into office where the "public servants" then hand gifts out the Fat Cats that essentially are paid for from the pockets of the little man/woman? The few goopers that I can get to explain (of course not counting those that just hate government!) their infatuation with tax cuts use that tired and discredited Laffer curve model which spawned the Reagonomics disaster of supply side infamy. I know plenty of folks in the 80s that did not care for being at the trickle down end of those policies. So where are the jobs created with this? How does the Tax Increase Prevention and Reconciliation Act of 2005 do anything but help the suits and the stockholders? $700 million might not pay for much more than a week or so in Iraq but since the oil revenues they promised would haven't shown up I guess every little bit helps pay Halliburton. Worst administration/Congress ever! Peace ... or War!