Legislation served with side of tax breaks
WASHINGTON — There are breaks for movie producers and racetracks, a little gift for Captain Morgan rum and tax credits galore for makers of two- or three-wheeled plug-in electric vehicles, Indian coal facilities and companies that do business in American Samoa.
The 157-page bill passed by Congress in a rare New Year's Day session to temporarily avoid the nation's fiscal crisis is chockfull of goodies for special interest groups.
“They are the cockroaches of Washington policy,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan budget watchdog group. “They always survive. You cannot kill them.”
The bill, officially called the American Taxpayer Relief Act of 2012, raises taxes on the wealthy, provides benefits for 2 million unemployed Americans and postpones $109 billion in deep spending cuts.
But when Congress does business, the solutions are not always simple. Legislation is often filled with seemingly unrelated proposals that most Americans know little about.
That's why the bill to avert the so-called “fiscal cliff” includes dozens and dozens of other items — extensions of existing tax credits and benefits, handouts to companies and last-minute deals — pushed by lobbyists in the nation's capital and constituents back home. Some tax breaks had been killed a year or more ago, only to be resurrected in this bill.
The legislation extends certain farm subsidy programs for one year, a change that will prevent milk prices from doubling as part of what had been dubbed the “dairy cliff.” It also allows the Internal Revenue Service to share information with private prisons to combat fraud in tax returns.
Homeowners will be able to avoid paying taxes on the portion of their mortgage debt that was forgiven by a lender during a distress sale or a loan modification.
The bill even alters definitions in federal law, helping industries reinvent themselves. “Cellulosic biofuel” has turned into “second generation biofuel.”
For months, lawmakers on the campaign trail spoke about eliminating tax breaks and simplifying the tax code. But, watchdog groups say, they did the opposite, and cost taxpayers a whopping $30 billion.
“It flies in the face of tax reform,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan budget watchdog group. “Everyone is talking about closing loopholes, and they validate $30 billion of loopholes. It doesn't bode well for tax reform.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Alpha to idle two West Virginia coal mines
- Obama avoids calling terrorist attacks ‘Islamice_SSRq
- Mideast-North Africa category considered for 2020 Census
- Teen girl Hernandez killed by Denver police once cited for resisting arrest
- Executive order directs standards to reflect climate change projections
- Judge orders nonprofit tax form release in case against IRS
- Tickets let players bring home bacon — scent
- Day, night 4-digit drawings match
- Pittsburgh travelers feel effects of Northeast blizzard
- Northeast waits for foot (or 2) of snow to drop
- Vanderbilt University gang-rape defense points to campus culture