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Old 04-07-2009, 12:41 AM   #7
peaceandlove
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Join Date: Sep 2008
Location: Turtle Island
Posts: 2,776
Unhappy The 'UNINTENDED' Bailout

THE 'UNINTENDED' BAILOUT

Pulp Nonfiction
100 Days

by CHRISTOPHER HAYES

April 2, 2009
This article appeared in the April 20, (appears to be a typo on date or month) 2009 edition of The Nation.

Excerpt:

Quote:
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.
Complete article: http://www.thenation.com/doc/20090420/hayes

Last edited by peaceandlove; 04-07-2009 at 12:47 AM.
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