Mr Pres and His Congress are Smart Busness Folks Take a Look

I'm not an accountant, but this sounds about right to me.......


ACCOUNTING 101
It seems like a miracle that our anointed leader was able to convince BP to establish a $20 billion slush (oops, escrow) fund to compensate those hurt by the ongoing oil plume in the Gulf of Mexico . After all, he had no constitutional power to force them to do so; so had to resort to Chicago-style arm twisting. It's just a shame that his background in running a business is so lacking, that he doesn't even understand that he hurt his own economy, while rewarding the cash flow of BP in doing so!

Let us take a closer look at the effect on BP's finances:
1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.

2. BP is a British corporation, but has a very large operating entity in the US .

3. By Generally Accepted Accounting Principles (GAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.

4. Our anointed leader also convinced this massive corporation to show their concern for the "small people" by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount to US citizens. Assuming that the Bush tax cuts will
survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We won't even discuss the effect on the US economy.

Let us put the results into a table easily understood by the "small people":
BP Cash Flow:
Escrow funding, Loss($7 billion).
Dividend saving, Gain $7.5 billion
Tax savings, Gain $7 billion
Net favorable cash flow, Gain $7.5 billion

US Treasury Tax Receipts:
BP Corporate income tax, Loss ($7.5 billion)
BP Shareholders' income tax, Loss ($0.45 billion)
Net unfavorable tax receipts, Loss ($7.95 billion)
Wow, what a boon to the American taxpayers.

I guess we really should expect this. After all, our anointed leader is the most inexperienced man in any room he enters. (With the possible exception of a meeting of the Amalgamated Chicago Community Organizers and Acorn Association.