A little noticed change in tax law was incorporated into the extension of jobless benefits last year. Under the new rules companies can use losses to apply for tax refunds against earnings from the past 5 years--up from just 2 years before the change.
The law specifically excluded companies that took TARP from applying for the refund. So how does JP Morgan qualify? It argues that since Washington Mutual never got TARP funds, its past taxes should qualify.
That's a plausible argument. But the deeper problem here is that our tax code shouldn't be used like this. This rewards the worst managed companies with a subsidy while punishing those that didn't see losses in the crisis. It's got bailout written all over it.
More bailout money under the guise of the extension of jobless benefits. Does any of this matter? Apathy suggests that it doesn't. Since neither voter or leader have the will to slay this monster, the consequences of this recklessness will not be undeserved when time for recognition eventually comes.
Source: finance.yahoo.com
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