It's disingenuous of dealers, most of whom are fiscally and politically conservative, to sidle up to the public trough in Washington looking for a handout. But that's what former Oldsmobile dealers are doing. And it's wrong.
Included in the Senate version of a big trade bill is a provision that would give a special tax break to the 2,802 former or remaining Oldsmobile dealers. Dealers would be allowed to defer for two years any taxes on their settlement payments from General Motors. Dealers who reinvest the money in another franchise during that period would owe no taxes.
The House version of the tax bill does not include the tax break for Olds dealers. So the tax break will be one of the items hashed out in conference.
Olds dealers and their advocates, including the National Automobile Dealers Association, say they deserve the special treatment because they had no say in GM's decision to kill the sickly brand.
Nonsense. The settlements from GM were adequate compensation for most dealers, although there are individual circumstances in which dealers could use additional relief.
But a handout at taxpayers' expense is not the way to do it.
Dealers are in business in a great capitalist economy, which includes risks and rewards. Dealers take risks with their capital and reap the rewards. Not many dealers offer to pay extra taxes when times are good.
It's estimated that the tax break would cost the U.S. Treasury $189 million in lost tax revenue over 10 years, or an average of about $67,000 per Olds dealer. That's a pittance compared with the total cost of the bill, which has been pegged at $170 billion.
But it's not just the money: It's the principle.
It's hard to imagine dealers selling out their principles for a paltry $67,000. But just in case, lawmakers on the conference committee must do the right thing and kill the handout for Olds dealers.