Accounting basics: when a company experiences what accountants call “a material adverse impact” on its expected future earnings, and those changes affect an item that is already on the balance sheet, the company is required to record the negative impact — “to take the charge against earnings” — as soon as it knows that the change is reasonably likely to occur. This makes good accounting sense. The asset on the balance sheet is now less valuable, so you should record a charge. Otherwise, you’d be misleading investors. The Democrats, however, seem to believe that Generally Accepted Accounting Principles are some sort of conspiracy against Obamacare, and all that is good and right in America.
Here’s the story: one of the provisions in the new health care law forces companies to treat the current subsidies for retiree health benefits as taxable income. This strikes me as dumb policy; there’s not much point in giving someone a subsidy, and then taxing it back, unless you just like doing extra paperwork. And since the total cost of the subsidy, and any implied tax subsidy, is still less than we pay for an average Medicare Part D beneficiary, we may simply be encouraging companies to dump their retiree benefits and put everyone into Part D, costing us taxpayers extra money.
But this is neither here nor there, because Congress already did it. And now a bunch of companies with generous retiree drug benefits have announced that they are taking large charges to reflect the cost of the change in the tax law.
Henry Waxman thinks that’s mean, and he’s summoning the heads of those companies to Washington to explain themselves. It’s not clear what they’re supposed to explain. What they did is required by GAAP. And I’ve watched congressional hearings. There’s no chance that four CEO’s are going to explain the accounting code to the fine folks in Congress; explaining how to boil water would challenge the format.
Is abortion a sad and unfortunate reality — regrettable, as we are sometimes told, but often necessary — or is it a breezy nothingburger, completely “normal,” and something to be giddily celebrated like a last-minute NFL touchdown? For a long time, the abortion lobby has had difficulty deciding. This ... Read More
According to a professor of media studies at the University of Tulsa, the YouTube show Hot Ones is problematic because it “manipulates inequitable gender hierarchies.” In case you aren’t familiar with Hot Ones, it’s a show where the host challenges his guests to eat increasingly spicy chicken wings. ... Read More
Yesterday I wrote a piece rejecting the absurd alarmism surrounding Donald Trump’s nomination of Brett Kavanaugh to the Supreme Court. No one will “die” if Kavanaugh is confirmed. His judicial philosophy doesn’t represent an “emergency” for the “safety” or “freedom” of the American people. If ... Read More
A fascinating series of controversies erupted this week, and they had nothing to do with Donald Trump or Robert Mueller. Business Insider ran a column defending actress Scarlett Johansson from fierce criticism for her decision to play a transgender man in a forthcoming film called Rub and Tug. The writer, ... Read More
It was a hot and difficult summer. And Europeans were pained to hear the blunt assessment that the U.S. would not be able to forever sustain NATO without greater investment on their part. The alliance was heading for “collective military irrelevance” and the current state of affairs was “unacceptable,” ... Read More
Yesterday, I looked at a case where Judge Brett Kavanaugh, on the DC Circuit, sided with a criminal defendant asserting a “battered woman syndrome” defense. Today, let’s look at an opinion that aired his skepticism about an “ever-metastasizing” tool of federal prosecutors: 18 U.S.C. § 1001, the ... Read More
An unidentified 2016 congressional candidate reached out to Russian intelligence officers collectively posing as a Romanian hacker under the pseudonym Guccifer 2.0 for dirt on a political opponent, according to an indictment filed by Special Counsel Robert Mueller Friday. The indictment, which names twelve ... Read More