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dbackjon wrote:So Big Business can deduct less - probably a good thing.

dbackjon wrote:So Big Business can deduct less - probably a good thing.

dbackjon wrote:So Big Business can deduct less - probably a good thing.

dbackjon wrote:Heavy-equipment maker Caterpillar says the new health care reform law will create a $100 million drag on its first-quarter earnings because of tax law changes.

The Peoria company said Wednesday that the health care overhaul President Barack Obama signed this week will reduce the tax deduction it receives for its retiree health care program.

Caterpillar says even though the change won't take effect until 2011, its liabilities for retiree health care are already reflected in its financial statements.

So Caterpillar expects to record an after-tax charge of $100 million in the first quarter.

And the company says the tax-law change is not reflected in its already cautious 2010 profit outlook of about $2.50 per share.

AT&T (T: 26.2598, 0.0998, 0.38%) said it plans to take a $1 billion non-cash charge during the first quarter due to the health-care form bill that President Barack Obama signed into law earlier this week. The telecom giant said the charge is due to a change in Mediacare Part D subsidy. AT&T also said due to the reform bill it plans to evaluate changes to the active and retiree health-care benefits it offers.

FargoBison wrote:

AT&T also said due to the reform bill it plans to evaluate changes to the active and retiree health-care benefits it offers.

http://www.foxbusiness.com/story/market ... ment-data/" onclick="window.open(this.href);return false;

The health care overhaul will cost U.S. companies billions and make them more likely to drop prescription drug coverage for retirees because of a change in how the government subsidizes those benefits.

In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.

With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.

Figuring out what it will mean for retirees will take longer, but analysts said as many as 2 million could lose the prescription drug coverage provided by their former employers, leaving them to enroll in Medicare’s program.

Industry groups say they lobbied hard against the change in the tax rules before it was added to the health care law over the winter.

“It was in all of our letters and communications that went up to the Hill, and the companies were heavily involved in that,” said Dena Battle, a tax specialist with the National Association of Manufacturers.

Nationwide, companies would take a $14 billion hit on their financial statements if all of the roughly 3,500 companies receiving the subsidies continued to do so, according to a study by Towers Watson, a human resources consulting firm.

Consumers Energy, a Michigan gas and electric company with 2.9 million customers, said it will not take a big first-quarter charge because, like most utility companies, it can try to recover the added costs from its customers through rate hikes.

OL FU wrote:With this timing I hope they don't need any bailout money

dbackjon wrote:The bill closed a loophole in the tax code. Well done - all loopholes need to be closed.

dbackjon wrote:The bill closed a loophole in the tax code. Well done - all loopholes need to be closed.

Hansel wrote:

dbackjon wrote:The bill closed a loophole in the tax code. Well done - all loopholes need to be closed.

I guess the "bad corporations" could just not pay their taxes outright like many of Obambi's appointees

kalm wrote:

Hansel wrote:
I guess the "bad corporations" could just not pay their taxes outright like many of Obambi's appointees

Wasn't that the basis for Kennedy's tax cut - cut the corporate and top marginal tax rates, but close the loopholes and we would actually increase tax revenue?

Hansel wrote:

dbackjon wrote:The bill closed a loophole in the tax code. Well done - all loopholes need to be closed.

I guess the "bad corporations" could just not pay their taxes outright like many of Obambi's appointees

dbackjon wrote:Heavy-equipment maker Caterpillar says the new health care reform law will create a $100 million drag on its first-quarter earnings because of tax law changes.

The Peoria company said Wednesday that the health care overhaul President Barack Obama signed this week will reduce the tax deduction it receives for its retiree health care program.

Caterpillar says even though the change won't take effect until 2011, its liabilities for retiree health care are already reflected in its financial statements.

So Caterpillar expects to record an after-tax charge of $100 million in the first quarter.

And the company says the tax-law change is not reflected in its already cautious 2010 profit outlook of about $2.50 per share.

Currently, the $665 a business gains by providing benefits—and keeping one senior off Medicare—is not taxed. By instead treating the subsidy as income taxed at the 35% corporate rate, Democrats expect to raise about $5.4 billion for ObamaCare—and while that's a pittance in the scheme of a new multitrillion-dollar price tag, it's also based on a static tax analysis that is surely wrong.

The cost of offering drug benefits will rise by about $233 per retiree, making Medicare a far more attractive option for businesses. Private drug coverage is already on the decline, but Verizon, Xerox, Boeing, Metlife, Caterpillar and other companies are already warning that they may be forced to cut benefits. (Consider this another reward for the Business Roundtable's decision to promote ObamaCare.)

As more employers drop drug coverage, Congress won't be dispensing as many subsidies with the one hand that it can tax with the other, so revenue will fall. The retirees who lose private benefits will simply move onto Medicare, so public drug spending will also rise. The American Benefits Council, which represents the largest employers, estimates the tax will be a net loser for the government if just one out of four retirees is crowded out of private coverage.

travelinman67 wrote:

dbackjon wrote:Heavy-equipment maker Caterpillar says the new health care reform law will create a $100 million drag on its first-quarter earnings because of tax law changes.

The Peoria company said Wednesday that the health care overhaul President Barack Obama signed this week will reduce the tax deduction it receives for its retiree health care program.

Caterpillar says even though the change won't take effect until 2011, its liabilities for retiree health care are already reflected in its financial statements.

So Caterpillar expects to record an after-tax charge of $100 million in the first quarter.

And the company says the tax-law change is not reflected in its already cautious 2010 profit outlook of about $2.50 per share.

Under the tax code, the write-off has to take place during the quarter in which the legislation was passed. Under SEC rules, since this is a write-off, corps have a strict timeline in which to file their intent to take the "accounting" write down.

I.e., they had to take it this quarter, or lose the opportunity to take the write down.

Ask Danefan...I'm sure he'll confirm.

D1B wrote:

Hansel wrote:
I guess the "bad corporations" could just not pay their taxes outright like many of Obambi's appointees

Fuck em, dipshit. Big corps don't mean shit anymore. Small business fuels our economy.

dbackjon wrote:The bill closed a loophole in the tax code. Well done - all loopholes need to be closed.