America and the Corporate Phoenix

Comments

1
If you are thinking the "corporate personhood" arguments stemming from extremely convoluted interpretations of the 14th Amendment are a two-way street, you are sorely mistaken. Corporations enjoy many rights that individuals do not.
2
Can I file for bankruptcy and get "tax advantages" for staying alive afterward?

Uh, yes. In fact, unlike corporate bankrupties, personal bankruptcies are never "liquidated". And you continue to get tax advantages such as the standard deduction and any refund you are owed after filing for personal bankruptcy.

Of course, your creditors will try to get hold of as much of that income as they can. Which is exactly what is happening in the WAMU case, as the articles you link to clearly explain.

I know this is SLOG, but when your knee-jerk anti-corporate the-law-is-so-unfair complaining is this bass-ackwards, you look bad even here.
3
Thanks!
4
David Wright- none of the conditions you describe are "tax advantages," as they represent the same rules which are applied to every taxpayer, bankrupt or not. I don't know whether WaMu's case is in any way different, but your argument certainly isn't sufficient to rule out the possibility.
5
Speech = Money

No Money = Silence

Please present your question in the form of money...the bigger the amount, the better we can hear you.
6
Furcifer @ 4: Read the linked articles. They make quite clear that the tax advantages that WAMU gets from continuing to exist are the same sort of tax advantages you get from continuing to exist.

1. tax refunds that are due Washington Mutual ... are its biggest asset If you file for bankruptcy, the IRS continues to owe whatever refunds it owes you. (And the bankruptcy court is likely to let you keep more of them than WAMU will likely get to keep from its creditors.)

2. Washington Mutual will have unused operating losses it can apply to future earnings If you have carryforward capital losses or unused charitable contribution deductions, you continue to be able to claim those after filing for bankruptcy. (And again, a bankruptcy court is likely to let you keep more of them than WAMU will likely get to keep from its creditors.)

There is nothing in the articles to suggest that WAMU is getting any substantial special tax benefit which does not exist in analogous form for personal bankrupties. The fact that corporations can be liquidated in bankruptcy, while people cannot, is a pretty damn big plus on the people's side. The fact that corporations in bankruptcy are run entirely for the benefit of their creditors, while courts do ensure that bankrupt people continue to have enough to live on is also a big plus on the people's side.

Talk to a financial advisor, and he will tell you that there is rarely any tax benefit to carrying out your activities as a corporation. (The most common exception, the S-corporation, applies to small, not big businesses.) Speaking broadly, the benefits of the corporate form are about limited liability, not taxes.