Friday, January 4, 2013

Tax Relief Bill Was Packed With Pork

The Democratic National Committee, called the deal "a big gift-wrapped present of certainty to the middle class." But a closer inspection reveals that the tax relief bill was packed with "more pork" for special interest. The agreement came loaded with extensions of separate existing tax breaks for businesses and industries that had expired in the past year, the Joint Committee on Taxation tabulated the cost to be about $67.9 billion worth this year. The extensions will actually cost much more because some were made retroactive to cover 2012, but even more damaging some of the breaks and credits will last up to ten years.

A peek inside the bill that was passed shows what happens when Washington moves quickly and crafts legislation late into the night. They create a bill packed full of pork. Not only did they extend tax breaks for NASCAR racing moguls, the legislation also extended; tax credit for construction of renewable energy projects, like wind turbines and biomass, geothermal and hydropower generation, for one year, it's projected to cost about $116 million, the committee said. That may seem like a drop in the bucket, but here's the kicker: While the extension to qualify for new projects covers only 2013, the actual tax credit itself is good for 10 years. That means new projects that break ground in 2013 will be able to claim the credit for the next decade, at an overall price tag the committee put at slightly less than $12.2 billion. Below are a few more bonus deals for special interest;

• An obscure and arcane provision of corporate tax law, called active financing income, that lets U.S. corporations defer taxes on some income they earn from their overseas subsidiaries. That provision will cost the U.S. Treasury more than $9 billion this year and $1.8 billion next year.
• Tax breaks for Hollywood producers who shoot their movies and TV shows in the U.S., at a cost of about $430 million through 2014.
• A program that sends most federal taxes collected on rum produced in Puerto Rico and the U.S. Virgin Islands back to those territories to subsidize domestic production. Bar tab: $222 million over two years.
• A tax break worth about $15 million a year for asparagus growers hit hard by cheap asparagus imported from Peru.
• $4 million in tax breaks over the next two years for people who buy "2- or 3-wheeled plug-in electric vehicles" — in other words, electric scooters, Segways and the like.

Lawmakers did the easy work, again they avoided the hard choices, but it must be added, if  you look at the quantity of pork packed into this bill, that they, with the help of Vice President Biden, did the job very poorly. While Biden takes a victory lap and garners the praise of both the media and the poorly informed public please note; he and those who voted for this pork filled package should be ashamed.

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