2023-11-27 GM Could Get $45 Billion Tax Break - autoevolution

GM Could Get $45 Billion Tax Break

GM Could receive a tax brake of up to $45 billion dollars despite its recent bankruptcy, say Wall Street Journal sources. Despite having cost the U.S. government billions of dollars in bail-out money and having fired a lot of its employees, the picture for America’s industrial giant is starting to look a rosy. The company that was so close to being killed now might receive a parting gift from the government to help it on its way to a planned public re-listing.

Apparently, the tax benefit are a result of a “tax-loss carry-forwards”, which allows the company to use the losses the old company created in prior years as protection against taxes on future profits. The same wsj sources suggest the tax scheme could be in place for as much as 20 years and should be worth the entire amount of losses GM had prior to entering bankruptcy.

The fact that the U.S. government owns a 61% controlling stake in the company should have meant no such tax benefits could be offered. However, it is hoped that profit shielding will make the company more attractive to future investors. This fact shows the company’s recent restructuring and new model lineup make will keep its bottom on the plus side for a good time to come.

Of the total $45 billion tax break just $19 billion are in the form of carry-forward benefits, the rest are pension funds and post-retirement benefits related. (what made GM so cash-strapped in the first place).

The company has emerged from bankruptcy this June and is trying to make a new name for itself with hybrids and more fuel efficient engines.
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About the author: Mihnea Radu
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Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida.
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