General Motors Unaffected By Possible Corporate Tax Overhaul
The buzz around Washington, DC right now is all about the Trump Administration’s proposed overhaul of our corporate tax system. Of course, large businesses that have the most to gain are backing the proposed plan, but one of them is making remarks without much skin in the game. That company would be none other than General Motors.
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When GM declared bankruptcy and was bailed out by the federal government in 2009, that came with a tax deal from the administration as well. The Obama Administration ruled that GM is allowed to use its pre-bankruptcy losses to reduce its corporate tax burden, and the company’s CFO Chuck Stevens estimates that protection will cover the automaker for about five more years, potentially outlasting this presidency or the new corporate tax policy.
Before anyone gets upset, this tax relief was essential for GM to be able to pick itself up after the bailout. General Motors was able to use its tax savings to put more money into research of self-driving and electric cars. Without this tax help, it would be possible that General Motors and its brands would still be struggling to keep up with the industry.
This quarter alone, GM posted a record quarterly profit of $2.6 billion and its stock prices rose by 10 cents, overcoming Wall Street expectations for the eighth quarter in a row, according to a GM spokesman.
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While GM agrees with the new administration when it comes to corporate taxes, it is still staunchly opposed to a large disruption in the North American Free Trade Agreement, or NAFTA, which was a cornerstone of Trump’s campaign. It is joined in that opposition by many other automakers in this country. As the months move along, we shall see how policies are influenced by the substantial automotive industry.