The "Money" is in the Details...

The WSJ and other newspapers are reporting the hidden details behind the bailout of the financial sector by the Ben and Hank team. Among the hidden gems, according to WSJ's "Obscure Tax Breaks Increase Cost of Financial Rescue - IRS and Treasury Take Series of Steps for Investors Caught Up in Crisis, Sparking Complaints of Overstepping Authority"

• Banks have free reign over the use of "tax losses" of the firms they have acquired
• Firms can borrow money from their foreign subsidiaries for longer periods. The current rule allows a company's foreign units to make a tax-free loan to the company as long as it is repaid in 30 days. Over a one-year period, the company can have outstanding loans from its subsidiaries for up to 60 days. Under the new rules, U.S. company can keep cash from a single loan for up to 60 days.In total, the company could have borrowed money for up to 180 days in a one-year period. See IRS eases tax rules on US firms with foreign units.
• Treasury/IRS has changed the capital loss deduction rules so that banks that have lost money on Fannie and Freddie preferred stocks can deduct them from ordinary income rather than deducting them from capital gains- again reducing the tax payments.
  

In both these cases, the Treasury is making changes to the tax code on its own, without legislation from the Congress. In fact, Congress was not even consulted about these changes. The cost to the tax payers- potentially tens of billions of dollars. One more data point that illustrates the way the "Corporate CEO Bush" is running the government to benefit his 'Corporate Buddies."