March 30, 2010

Big Business v. Big Government on Healthcare

Marc Comtois

Big Business learns that Big Government giveth and taketh away:

On Capitol Hill and in the White House on Monday, Democrats were fuming over a series of announcements that started Friday from Fortune 500 firms saying their bottom lines will take huge negative hits because of changes in tax law mandated by Obamacare. That hit in turn means lower profit projections. Caterpillar estimates, for example, that Obamacare will cost it $100 million; John Deere faces expenses of $150 million; 3M, $90 million; AK Steel, $31 million; Valero, $20 million. And then there's AT&T, which is marking its balance sheet down by a whopping $1 billion. All in all, the Wall Street Journal estimated a $14 billion haircut for these corporations.

Under post-Enron accounting rules, the corporations were required to revise their projections to account for the effect of Obamacare on their bottom lines. The effect is negative because Democrats, in their zeal to raise revenues and improve Obamacare's claimed effect on the federal deficit outlook, took away a tax break these companies needed in order to supply prescription drugs to their retirees. The tax subsidy, itself a government accounting ruse crafted in 2003 by the Republican Bush administration to dissuade corporations from dumping their retiree drug benefit programs on the then-new Medicare Part D, becomes taxable under Obamacare. Corporations are now being reminded of the harsh truth: What Big Government giveth, Big Government taketh away, too.

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About time they paid more - as opposed to making their employees and the gov. pick up all the slack.

Justin, believe it or not, you never took an oath to support the highest profits in history by Corporate America. That is not in any oath or pledge I ever saw or took in school, in life, etc.

Those who pray at the altar of profits are heeding the wrong Lord. Would you not agree?

Posted by: Stuart at March 30, 2010 9:45 AM

If Justin reads this, maybe he'll respond. 'Til then, I think it's safe to say that none of us at AR are champions of corporate welfare either, my man. And while you revel in big business getting it stuck to them, you're missing the point that more money sent to the gov't means less jobs for the average Joe, whether you like it or not, that's the way it is.

Posted by: Marc at March 30, 2010 10:04 AM

What makes Stuart think that businesses do not deserve the profits they earn?

Why does Stuart make ridiculous statements (once again, with lies as their underlying premises) and rhetorically ask why we do not agree with them?

I didn't see any references to oaths or prayers in Justin's post. Stuart must have pulled them out of his assumptions again.

Posted by: BobN at March 30, 2010 10:29 AM

Econ 101: corporations don't pay taxes.

Unlike the feds, they don't have monetary printing presses. The last entity in the chain pays the taxes, regulatory compliance costs, payroll and benefit costs and everything else, for it's built into the price.

The only reason the lefties like corporate taxes is that they mask from the public who's paying for it.

Stuart and his ilk (e.g., Henry Waxman) insist on living in a fantasy world in which they'll construct a progressive utopia.

Can't happen so it won't happen. The only thing progressives accomplish is to make everyone poorer.

Posted by: Ragin' Rhode Islander at March 30, 2010 12:03 PM

Stuart, you have made some interesting and coherent points.

But with regard to this, you seem to be taking the “government good, profits bad” well traveled road. I guess that means when the economy is doing poorly – i.e.: profits stock value, high unemployment, fewer people buying houses … then you are happy because those are a result of lower corporate profits. The financial meltdown of fall 2008 was then a good thing?

It would be interesting to have your view of the relationship between corporate profits and their employees. Should there be a correlation? Is it that you believe employees should be well paid and provided excellent insurance regardless of the profitability of the company? If a business does well, the employees should be rewarded. If a business does poorly, there should be no negative affect on the employees. Is that an accurate reflection of your view?

Posted by: msteven at March 30, 2010 12:06 PM

At the risk of piling on, Stuart, let me try to set you straight. You sound like a typical RI lefty, business bad, government and unions good.

It's attitudes and world views like yours that causes young RIers to leave the state for good upon college graduation.

Without successful businesses, with bright productive managers and employees, RI will again be the very last state to emerge from the current recession.

Posted by: BobW at March 30, 2010 1:15 PM

Those corporate meanies! How dare they obey the law by disclosing the losses to be inflicted by health care reform??

Posted by: Monique at March 30, 2010 1:58 PM

Shocked, shocked! (o hear this news.
These corporations weren't willing to create jobs before health care passed. Anybody who thinks they'd create jobs if health care had been defeated is delusional.
Face it; Corporate America strikes back hard, and south of the suspenders, when it doesn't get its way. It's reality, and we just have to deal with it.

Posted by: rhody at March 30, 2010 4:44 PM


Are you serious? 'Corporate America' can create jobs - but chooses not to for its own selfish interest. That makes sense.

Who exactly is 'Corporate America' in your view? WalMart? Big Insurance companies? How about small companies? How about government? Let me guess - the corporations that make money are "bad" but the employees that work for them are "good".

You just don't see that there is a direct relationship between corporations that make profit (be it profit or not-for-profit i.e.: government) and create jobs?

Posted by: msteven at March 30, 2010 5:12 PM

"Face it; Corporate America strikes back hard, and south of the suspenders, when it doesn't get its way."

Lol, wut?

Care to explain the mechanics of that one?

Posted by: Dan at March 30, 2010 8:36 PM

Of course Rhody is serious. Moronic, but serious. He hasn't a clue of what a business really is or what it does, and neither do his Leftist friends.

Posted by: BobN at March 30, 2010 10:31 PM
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