Stunning Government Billion-Dollar Giveaway to Paper Companies in the Works

[G_j]

http://www.alternet.org/workplace/134985/stunning_government_billion-dollar_giveaway_to_paper_companies_in_the_works/


Stunning Government Billion-Dollar Giveaway to Paper Companies in the Works
By Christopher Hayes, The Nation. Posted April 4, 2009.

A tax loophole could let the ten largest paper companies rake in a whopping $8 billion. Where's the outrage?

Two years in Washington have started to make me feel jaded. I've come to expect that even nobly conceived laws will be manipulated and distorted for private ends. But once in a while I hear a story that gives me the queasy feeling that I'm nowhere near cynical enough. Such is the case with the tale of the paper industry and the alternative-fuel tax credit.


Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. And get this: even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry--handsomely--to use more fossil fuel. "Which is," as a Goldman Sachs report archly noted, the "opposite of what lawmakers likely had in mind when the tax credit was established."

The massive tax subsidy has barely been reported in the press, but it's caused a stir in the paper industry, which is struggling to stay profitable in the teeth of the recession. "Everybody's talking about it," paper industry analyst Brian McClay told me. "In the US and elsewhere in the world--in Canada and Brazil and Chile and Europe."

On March 24 International Paper (IP) announced it had received its first check from the IRS for a one-month period this past fall. The total? A whopping $71.6 million. "It's probably close to a billion a year of cash," McClay said. "If you look at the economics of this business, to make that kind of money today you'd have to be on another planet." IP's stock rose 12 per-?cent on the news.

..more..

[Webster Green]

1. Hemp (n/t)

[IDemo]

2. Stop making sense n/t

[Webster Green]

3. Ooh!...Great movie!

I think I'll watch it again tonight, hooked into the stereo and cranked up good and loud. :P

[G_j]

5. ***

:thumbsup:

[Raster]

4. wrong in oh so many ways.