Saturday, April 02, 2016

Envision this: GM bailout benefits China, not America

Despite making nearly all of its profits in the U.S., General Motors reportedly pays little or no American taxes but paid China $908 million in taxes for the same year.

According to filing records from the Securities and Exchange Commission, the automotive company paid $5 million in federal taxes in 2015 despite its multi billion dollar earnings. When you factor in federal, state and local taxes, GM paid zero.  

The reason? GM received a $51 billion bailout, which included a $45.4 billion tax deduction, from the federal government.

The bailout initially came as a loan, with GM giving the U.S. Treasury Department a 61% stake in the company. When the Treasury Department sold the shares in 2013, taxpayers came up $10.5 short because the stock price dropped so much.

GM plans to increase production in China by 65% by the end of 2020, primarily the Buick Envision SUV. So if you buy an Envision, you're benefitting China, not America.

GM’s response: Since 2009, it has invested $17.8 billion in the U.S., creating 6,250 jobs and saving another 20,700.

GM isn’t alone. Standard and Poor’s 500 reports that 26 other companies paid no taxes despite reporting large pre-tax profits, including telecom firm Level 3 Communications, Hewlitt Packard and airlines United Continental and American Airlines.


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