bailing out robert toll

[XBoxBoy]

Not sure what to think of this issue. Yes, it definitely needs to be fair, ie all companies have the same chance. And I’m not convinced that recouping already paid money is fair at all. (More supportive of the idea that you can carry your losses forward, but not claw back previous payments)

I’m definitely sympathetic though to the idea that a company that has ups and downs should be able to spread it’s costs and losses over multiple years. I work in an industry where you have expenses and costs for years then 90% of your revenue in a couple of months. Taxes on this kind of business model are really lousy and I don’t see any reason that such a business model should be discouraged by the taxman.

XBoxBoy

[SK in CV]

[quote=davelj]

As I understand it, you’ve got it approximately right.

So, there are two ways to look at this. One is that Toll is getting a freebie that they should never have gotten (Rich’s view – which is legitimate). The second way to look at it is that there’s nothing wrong with Toll’s receiving this benefit SO LONG AS EVERY OTHER COMPANY AND INDIVIDUAL GETS THE SAME BENEFIT. My problem with this crap is not so much that Toll gets this benefit, but rather that everyone else doesn’t get the same benefit. Mine is a level-playing-field argument.[/quote]

He had it exactly right. And it does now apply to all taxpayers. One of the earlier stimulus bills (I can’t remember which one it was) changed these rules only for small business (i think it was average gross reciepts under $15 million) allowing for a 5 year carryback instead of 2. The bill in the late fall (November I think?), which also extended and changed the new homeowner credit, also extended those modified carryback rules to all other taxpayers that were previously eligible to carryback losses. There may have also been a change in the applicable years. The new law only covers losses for 2 years ending in 2008 and 2009.

Homebuilders were among its biggest beneficiaries, but far from it’s only ones.

[SK in CV]

[quote=davelj]

As I understand it, you’ve got it approximately right.

So, there are two ways to look at this. One is that Toll is getting a freebie that they should never have gotten (Rich’s view – which is legitimate). The second way to look at it is that there’s nothing wrong with Toll’s receiving this benefit SO LONG AS EVERY OTHER COMPANY AND INDIVIDUAL GETS THE SAME BENEFIT. My problem with this crap is not so much that Toll gets this benefit, but rather that everyone else doesn’t get the same benefit. Mine is a level-playing-field argument.[/quote]

He had it exactly right. And it does now apply to all taxpayers. One of the earlier stimulus bills (I can’t remember which one it was) changed these rules only for small business (i think it was average gross reciepts under $15 million) allowing for a 5 year carryback instead of 2. The bill in the late fall (November I think?), which also extended and changed the new homeowner credit, also extended those modified carryback rules to all other taxpayers that were previously eligible to carryback losses. There may have also been a change in the applicable years. The new law only covers losses for 2 years ending in 2008 and 2009.

Homebuilders were among its biggest beneficiaries, but far from it’s only ones.

[SK in CV]

[quote=davelj]

As I understand it, you’ve got it approximately right.

So, there are two ways to look at this. One is that Toll is getting a freebie that they should never have gotten (Rich’s view – which is legitimate). The second way to look at it is that there’s nothing wrong with Toll’s receiving this benefit SO LONG AS EVERY OTHER COMPANY AND INDIVIDUAL GETS THE SAME BENEFIT. My problem with this crap is not so much that Toll gets this benefit, but rather that everyone else doesn’t get the same benefit. Mine is a level-playing-field argument.[/quote]

He had it exactly right. And it does now apply to all taxpayers. One of the earlier stimulus bills (I can’t remember which one it was) changed these rules only for small business (i think it was average gross reciepts under $15 million) allowing for a 5 year carryback instead of 2. The bill in the late fall (November I think?), which also extended and changed the new homeowner credit, also extended those modified carryback rules to all other taxpayers that were previously eligible to carryback losses. There may have also been a change in the applicable years. The new law only covers losses for 2 years ending in 2008 and 2009.

Homebuilders were among its biggest beneficiaries, but far from it’s only ones.

[SK in CV]

[quote=davelj]

As I understand it, you’ve got it approximately right.

So, there are two ways to look at this. One is that Toll is getting a freebie that they should never have gotten (Rich’s view – which is legitimate). The second way to look at it is that there’s nothing wrong with Toll’s receiving this benefit SO LONG AS EVERY OTHER COMPANY AND INDIVIDUAL GETS THE SAME BENEFIT. My problem with this crap is not so much that Toll gets this benefit, but rather that everyone else doesn’t get the same benefit. Mine is a level-playing-field argument.[/quote]

He had it exactly right. And it does now apply to all taxpayers. One of the earlier stimulus bills (I can’t remember which one it was) changed these rules only for small business (i think it was average gross reciepts under $15 million) allowing for a 5 year carryback instead of 2. The bill in the late fall (November I think?), which also extended and changed the new homeowner credit, also extended those modified carryback rules to all other taxpayers that were previously eligible to carryback losses. There may have also been a change in the applicable years. The new law only covers losses for 2 years ending in 2008 and 2009.

Homebuilders were among its biggest beneficiaries, but far from it’s only ones.

[SK in CV]

[quote=davelj]

As I understand it, you’ve got it approximately right.

So, there are two ways to look at this. One is that Toll is getting a freebie that they should never have gotten (Rich’s view – which is legitimate). The second way to look at it is that there’s nothing wrong with Toll’s receiving this benefit SO LONG AS EVERY OTHER COMPANY AND INDIVIDUAL GETS THE SAME BENEFIT. My problem with this crap is not so much that Toll gets this benefit, but rather that everyone else doesn’t get the same benefit. Mine is a level-playing-field argument.[/quote]

He had it exactly right. And it does now apply to all taxpayers. One of the earlier stimulus bills (I can’t remember which one it was) changed these rules only for small business (i think it was average gross reciepts under $15 million) allowing for a 5 year carryback instead of 2. The bill in the late fall (November I think?), which also extended and changed the new homeowner credit, also extended those modified carryback rules to all other taxpayers that were previously eligible to carryback losses. There may have also been a change in the applicable years. The new law only covers losses for 2 years ending in 2008 and 2009.

Homebuilders were among its biggest beneficiaries, but far from it’s only ones.

[Rich Toscano]

I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich

[Rich Toscano]

I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich

[Rich Toscano]

I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich

[Rich Toscano]

I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich

[Rich Toscano]

I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich

[davelj]

[quote=Rich Toscano]I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich[/quote]

Technically, this is true, but… I seriously doubt that the “more careful” business owner you describe above would rather be in Bob Toll’s situation – that is, losing a shitpile of money but now getting the benefit of receiving tax dollars formerly paid out in profitable years. At the margin, I’m just not sure that there are many folks who would act more recklessly simply because they knew they might get to re-claim taxes paid in a prior period (at least I’m speaking for myself and the businesses I’m involved with). The TARP program and plenty of other measures taken by the government are, in my view, clear examples of creating moral hazard and warping incentives and behavior. But this “tax recapture” – I don’t view it in the same terms. (Recall that the TARP capital was “new” capital, while “tax recapture” is simply a return of taxes that the company already paid out of previous profits. These are two very different things.) As long as everyone’s getting the same treatment – which a prior poster is suggesting is the case (I don’t know) – then it doesn’t bother me too much.

[davelj]

[quote=Rich Toscano]I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich[/quote]

Technically, this is true, but… I seriously doubt that the “more careful” business owner you describe above would rather be in Bob Toll’s situation – that is, losing a shitpile of money but now getting the benefit of receiving tax dollars formerly paid out in profitable years. At the margin, I’m just not sure that there are many folks who would act more recklessly simply because they knew they might get to re-claim taxes paid in a prior period (at least I’m speaking for myself and the businesses I’m involved with). The TARP program and plenty of other measures taken by the government are, in my view, clear examples of creating moral hazard and warping incentives and behavior. But this “tax recapture” – I don’t view it in the same terms. (Recall that the TARP capital was “new” capital, while “tax recapture” is simply a return of taxes that the company already paid out of previous profits. These are two very different things.) As long as everyone’s getting the same treatment – which a prior poster is suggesting is the case (I don’t know) – then it doesn’t bother me too much.

[davelj]

[quote=Rich Toscano]I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich[/quote]

Technically, this is true, but… I seriously doubt that the “more careful” business owner you describe above would rather be in Bob Toll’s situation – that is, losing a shitpile of money but now getting the benefit of receiving tax dollars formerly paid out in profitable years. At the margin, I’m just not sure that there are many folks who would act more recklessly simply because they knew they might get to re-claim taxes paid in a prior period (at least I’m speaking for myself and the businesses I’m involved with). The TARP program and plenty of other measures taken by the government are, in my view, clear examples of creating moral hazard and warping incentives and behavior. But this “tax recapture” – I don’t view it in the same terms. (Recall that the TARP capital was “new” capital, while “tax recapture” is simply a return of taxes that the company already paid out of previous profits. These are two very different things.) As long as everyone’s getting the same treatment – which a prior poster is suggesting is the case (I don’t know) – then it doesn’t bother me too much.

[davelj]

[quote=Rich Toscano]I don’t believe this is a level playing field situation even if it applies to all businesses.

Let’s just take Bob Toll as an example. He took huge risks, accordingly made huge money during the boom, and then lost a lot in the bust.

Now contrast that to a business run by someone who wasn’t reckless. This hypothetical owner was more careful so had more modest profits in the boom, but then didn’t lose money in the bust. So this policy doesn’t benefit this business owner at all.

The net of it is that it benefits the homebuilder by subsidizing the losses he took for being reckless, but it doesn’t have a direct impact on the non-reckless.

So it is a question of bailing out the reckless (again). It’s not a level playing field because it largely rewards those who took huge, stupid risks, while not providing any help to those who did not.

Rich[/quote]

Technically, this is true, but… I seriously doubt that the “more careful” business owner you describe above would rather be in Bob Toll’s situation – that is, losing a shitpile of money but now getting the benefit of receiving tax dollars formerly paid out in profitable years. At the margin, I’m just not sure that there are many folks who would act more recklessly simply because they knew they might get to re-claim taxes paid in a prior period (at least I’m speaking for myself and the businesses I’m involved with). The TARP program and plenty of other measures taken by the government are, in my view, clear examples of creating moral hazard and warping incentives and behavior. But this “tax recapture” – I don’t view it in the same terms. (Recall that the TARP capital was “new” capital, while “tax recapture” is simply a return of taxes that the company already paid out of previous profits. These are two very different things.) As long as everyone’s getting the same treatment – which a prior poster is suggesting is the case (I don’t know) – then it doesn’t bother me too much.

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