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Automakers lobby for big tax breaks

WASHINGTON - Major car companies would get immediate tax refunds of hundreds of millions of dollars if an economic stimulus bill under consideration in the U.S. House of Representatives becomes law.

General Motors would get a refund of $833 million if Congress and President Bush agree to repeal the alternative minimum tax on corporations retroactively, said the nonprofit research group Citizens for Tax Justice.

DaimlerChrysler acknowledged it would receive about $600 million.

Undo tax reform

The windfall payments would undo a tax reform of 15 years ago. Then the government created the alternative minimum tax so profitable companies could not reduce their tax bills to zero with use of deductions and loopholes.

Now, if the House bill is enacted, companies would get back all of the alternative minimum tax they have paid - except for the amounts they have used as credit against their regular corporate income taxes in good years.

Ford Motor Co. refused to say how much its refund would be. Instead, the company's Washington officials said Ford has a position different from other automakers.

Ford, like the others, favors repeal of the alternative minimum tax, but, unlike some others, it is not pushing for a refund of unused alternative minimum tax credits.

Possible refund amounts for companies other than the Big 3 were not immediately available.

GM spokesman Mike Morrissey said the $833 million figure from Citizens for Tax Justice is "a little high," but his company declines to provide the exact number it thinks is correct.

Nevertheless, he said GM does strongly favor repeal of the alternative minimum tax and the refund of that tax's credits.

"This is exactly what a stimulus package is supposed to do - inject money right back into the economy," Morrissey said.

A tax break for large, capital-intensive manufacturers, such as car companies, would have trickle-down effects, benefiting suppliers as well, he said.

The proposed repeal and refund of alternative minimum tax credits are just one part of a $103 billion economic stimulus bill to be considered by the House of Representatives this week.

Postponed vote

Votes were postponed last week when congressional offices were closed for anthrax testing.

Whether the refund provision for GM and other companies will stay in the legislation is unclear.

Democratic leaders have criticized the measure as a giveaway to business, and even President Bush has said the House bill may be too large.

DaimlerChrysler spokesman Stuart Schorr said his company also would benefit from an extended carry-back provision, allowing a company to deduct current losses from taxes for five previous years, instead of the current two.

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