If only the White House fought this hard for health care reform instead of these secret, back room deals to benefit the few. Oh that’s right, Obama only listens to lobbyists with deep pockets. This story brings back the issues in the recent Rolling Stone article that highlights the extensive ties to Robert Rubin and Citi inside the Obama economic team. The conflicts of interest have been there all along and even before Obama was sworn in. Remember that Citi was at the top of the heap before the bubble. They all were paying themselves very well – including and especially Robert Rubin – for creating the bubble. None of them ever paid back those bonuses despite being paid for selling worthless paper and gouging credit card customers. Now, they’re being rewarded yet again. And we’re supposed to support this White House?
The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.
The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
While the Obama administration has said taxpayers are likely to profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.