Archive for March 2nd, 2012

How does GM’s tax rate compare to Buffett’s secretary’s?

March 2, 2012

Interesting editorial in the WSJ re: the GM bailout.

Everybody knows the GM’s stock holders were wiped out, that secured debt holders were subordinated to the unsecured UAW claims and  haircut to about 50 cents on the dollar, and that “New GM” stock is trading about 25% below its IPO price — leaving taxpayers with a $15 billion book loss on Treasury holdings.

What most folks don’t know is that GM got a special deal that rolls old GM’s $45 billion in accumulated tax losses into new GM.  That’s usually not allowed when restructuring companies — as a means of stopping companies from just acquiring losses from other companies as a tax dodge.

Bottom line:

In a 2011 working paper, J. Mark Ramseyer of Harvard and Eric Rasmusen of Indiana University argue that by manipulating corporate tax rules by fiat, “Treasury gave the firm (and its owners, including the UAW) $18 billion more in assets.”

The WSJ observed:

Mr. Obama crowed yesterday about GM’s “highest profits in its 100-year history.”

We’d be interested to hear how its effective tax rate compares with Warren Buffett’s secretary’s.

Hmmm ….

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Forget price, what’s a company’s stance on, well, whatever?

March 2, 2012

TakeAway: The OpenLabel app allows consumers to make socially responsible shopping decisions real-time by simply scanning a barcode to read and contribute crowdsourced information.

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Excerpted from psfk.com “Add Crowdsourced Reviews To Scannable Barcodes

OpenLabel is inviting consumers to add reviews and information to everyday product barcodes to make socially responsible shopping much easier.

The app can scan barcodes and bring up crowdsourced information such as the company’s stance on workers’ rights, social justice, environment, health, and other corporate social responsibility aspects.

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Peter Kirwan, an investor of OpenLabel, explains that the app is “everything but price, we’re about actual information.” Although the app does allow consumers to submit pricing details, it hopes to deliver more in-depth information to help consumers decide if they should buy or avoid the product.

Edit by KJM