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LOL. Has AT&T ever taken a billion dollar charge before? How often? Is this a non-cash charge, by the way, for which no actual accounting has or ever will be presented?
It doesn't matter if they have or not. I'm sure that the executives at AT&T will disagree with you and just pass the costs right on to the consumer. What was that about only people who makle over 200K will pay more?
Last edited by Rick Roma; 03-27-2010 at 04:17 PM..
No, you are completely and totally wrong. Try reading something with some weight behind it. These are NON-CASH (i.e., book entries) to adjust the present value of the cumulative difference between the what AT&T in this case would have paid out net for its prescription drug coverage under the old tax system and what it will pay out net going forward under the new tax system. It is a one-time charge that is booked for purposes of disclosure.
Neither you nor any of your illustrious compadres in this thread has any room to be talking about stupid. None of you seems to know what's actually going on here at all.
I'm going to copy and paste this remark, and then send it to all those stupid people that get pink slips from the company's that are just making it all up.
You do realize that it will affect their bottom line, and therefore cause them to hire more Chinese, Vietnamese and Indian workers....
Close US based offices, factories, and assembly lines.... or maybe you don't.
The Dems need to wake up and realize that these companies can't cook the books like they can with the CBO. They live in the actual world and can't produce pure fantasy of what they would like to see happen.
It was there because even with the subsidy and write off it was cheaper for the government to have them in the private plan than it was to have them in medicare.
Let's just set the record straight that the reasons for creating the subsidy were primarily logistical, not financial. Prior to 2003, there had been no federal coverage of prescription drugs, so many companies offered it. When the government said it was about to offer such coverage, almost everyone in the private sector thought they would simply stop. But if they all stopped at the same time, the nascient infrastructure within the government would have been inundated and overcome by having to handle every eligible person in the country all at once. The subsidy was put in place to act as a flow-restrictor on those moving into Medicare Part-D so that the goverment would have time to bring itself up to speed and capacity for handling millions and millions of new accounts. A rational person looking at those 2003 arrangements today would conclude that the Bushies in fact overpaid for that flow-restrictor and that the terms of it should now be modified.
Simple tax rules....
If I make $100 and the governement gives me a subsidy of $100 then I made $200 dollars. But the government says I don't have to pay taxes on that subsidy. So I really need to only pay taxes on $100.
No, the subsidy in this case comes to you tax-free, so you only owe taxes on the other $100 to start out with. But you can also deduct the amount of the subsidy from your other income, so poof -- you pay taxes on $0.
Let's just set the record straight that the reasons for creating the subsidy were primarily logistical, not financial. Prior to 2003, there had been no federal coverage of prescription drugs, so many companies offered it. When the government said it was about to offer such coverage, almost everyone in the private sector thought they would simply stop. But if they all stopped at the same time, the nascient infrastructure within the government would have been inundated and overcome by having to handle every eligible person in the country all at once. The subsidy was put in place to act as a flow-restrictor on those moving into Medicare Part-D so that the goverment would have time to bring itself up to speed and capacity for handling millions and millions of new accounts. A rational person looking at those 2003 arrangements today would conclude that the Bushies in fact overpaid for that flow-restrictor and that the terms of it should now be modified.
Well it is creating a financial savings since the people on private plans cost the government half as much at it is to have them on medicare. Modify it if you wish but in the end the government will either need to continue to give these companies a similar incentive or potentially face more people going into the medicare plan. Stress on medicare will only increase as the boomers hit retirement.
LOL. You don't really need a crystal ball to fathom what the second quarter numbers will be. They will all be zero. These non-cash charges are accounting entries to mark down the book value of non-cash assets that many corporations have created for deferred tax relief receivables. Once the deductibility of federal prescription-drug subsidies is legally removed, the present value of that deferred asset stream declines. That's what the charges are for. Accounting rules require that companies who feel that the revaluation is material enough to warrant disclosure by posting a non-cash charge do so in the earnings report for the quarter in which the revaluation occurred. That is the first quarter. To the extent that accounting rules are followed by filers, every company that elects to book the charge will do so in the first quarter, and none will do so thereafter.
Until they revaluate for the OTHER HCR bill tax hits. This was only for the seniors...
The Dems need to wake up and realize that these companies can't cook the books like they can with the CBO. They live in the actual world and can't produce pure fantasy of what they would like to see happen.
Exactly! ...saganista's delusional suspension of reality included.
Indeed...
The point is that because of losing the tax-free subsidy per the HCR bill, corporations will shift their retirees into Medicare instead of continuing to provide private prescription coverage for them. The Medicare prescription coverage will cost the government much more than the partial tax-free subsidy they were paying corporations to provide private prescription coverage.
Hmmm. Your Accountancy seems to be accusing all these major corporations of false financial filings. You do realize that if they now plan to dump all their prescription drug coverage onto Medicare, they have no right at all to be booking these non-cash charges and should all be packed off to jail for attempted tax fraud. The very act of booking these charges represents a recognition of their continued coverage of prescription drug charges.
It's an either/or situation we have here, and you and your befuddled confreres are trying to play both sides of the street at the same time. On the one hand, we hear that prices and unemployment are going to soar due to these staggering new costs, and on the other we hear that all of these costs will never actually occur because everyone is going to be dumped back into Medicare. Can't freaking have it both ways.
In AT&T's case of course, more than half their employees are CWA members. Their contracts don't expire until 2012 and 2013, at which time they will be renegotiated, not REDICTATED as you seem to imagine. This is one reason why their non-cash charge is quite a bit larger than anybody else's. Also a reason why they will be expected to show up and explain themselves before Congressional committees next month. Meanwhile, AT&T and every other company can continue to look at the compensation and benefits packages that they want to offer in order to attract the numbers and sorts of employees that are necessary for the work that they do. Whether such benefits are or are not taxable will be one variable in the equations they use in such reviews and evaluations, but hardly the only or even the most signficant one.
Quote:
Originally Posted by InformedConsent
The HCR bill scrapped the $544 ($1,209 - $665) the government was saving per senior. So... the additional cost of $544 x millions of seniors gets added to the deficit? Or what?
Hmmm. That $665 represents 28% of the total cost, so the total cost of the benefits must be around $2375, all of which was tax deductible, and at a 35% marginal tax rate, that would be a gift of $831 on top of the subsidy for a total cost to the government of $1496, when Part-D could have done the job for $1204. Under HCR of course, that $665 is no longer deductible. That saves the government $233, meaning that the private plan will now cost the government $1263 as against the Part-D cost of $1204. A little closer to parity, wouldn't you say?
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