Posted on Jun 11, 2019
IBM Paid $0 In Taxes Thanks To Trump Tax Cuts. Now It’s Laying Off 1,700 Employees.
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SPC Erich Guenther
It's interesting because we don't hear anything about GM's Electric Car plans anymore yet Ford is already committed publicly to over $2 billion in spending. GM got government money and a bailout to boot because it was far ahead with the electric car. Seems like Tesla and Ford have both surpassed GM. Wall Street wants Ford to buy Tesla but I think that is too much debt for Ford and hope they don't.
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SPC Erich Guenther
Ford is spending $1 Billion just to bring back Detroits Michigan Central Station from a derelict building to fully restored train station and office building......which is really cool. That is going to be their new electric car division HQ.
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Which I think is good this year anyway as they are in or headed for financial trouble and need to prove their new technical direction. Had IBM paid full taxes this year would it be better off or worse off, in my view it would have been worse off and there would have been deeper job cuts to preserve capital for the future.
The whole point of the tax credit was so Coporations would have more money to spend in this country as compared to overseas which at some point will influence their investment decisions. Nobody stated that every Corporation would decide to expand right away within a year or two of the measure passing. Rather the effect would be over time. Likewise, letting them keep more of their tax money would cushion downturns more and reduce the need to layoff employees or cut as deep. In that respect I think they are working. We have to wait and see over at least a 10 year period if this makes U.S. Companies more competitive. It's also just an experiment, the measure will terminate in 10 years unless Congress renews it. So I am not sure what all the bitching is about. Congress should experiment like this. The goal of Congress should be to increase the wealth of both the taxpayer and the country vs. taxing us all nonstop into financial ruin.
The whole point of the tax credit was so Coporations would have more money to spend in this country as compared to overseas which at some point will influence their investment decisions. Nobody stated that every Corporation would decide to expand right away within a year or two of the measure passing. Rather the effect would be over time. Likewise, letting them keep more of their tax money would cushion downturns more and reduce the need to layoff employees or cut as deep. In that respect I think they are working. We have to wait and see over at least a 10 year period if this makes U.S. Companies more competitive. It's also just an experiment, the measure will terminate in 10 years unless Congress renews it. So I am not sure what all the bitching is about. Congress should experiment like this. The goal of Congress should be to increase the wealth of both the taxpayer and the country vs. taxing us all nonstop into financial ruin.
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IBM is a private for profit company....they answer to their stock holders....who pay taxes....they have 340,000 employees. IMB donates to both parties.....
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SPC Erich Guenther
I am a stock holder and in my view IBM routinely uses stock buybacks regardless of tax policy as a means of Corporate Finance. In the most recent case I believe they crossed the line a little with the Red Hat Linux stock buyback. I suspect they overpaid for Red Hat Linux and are using at least part of the Stock Buyback to avoid IBM stock declining too much. Had the Linux purchase price been excellent in IBM's favor the combined companies stock would not have diluted so much. Regardless of that IBM is fairly responsible with stock buybacks as a means of finance. No issues with them spending money in that regard.
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