Legislation served with side of tax breaks
By McClatchy Newspapers
Published: Wednesday, Jan. 2, 2013, 9:44 p.m.
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
- Obama administration delays decision on Keystone XL pipeline
- Iranian envoy officially blocked by law
- Judge strikes down Minnesota’s anti-coal law as unconstitutional
- Records exonerate ‘X-Men’ director, attorney says
- Medicaid paid $12M for Illinois dead, audit finds
- Grandmother left vengeful note in boys’ slayings, then committed suicide, police say
- Colorado deaths stoke marijuana worries
- Wyatt Earp gun sells for $225K at auction
- SpaceX supply ship makes Easter cargo delivery to space station
- Recovery expert believes wreckage of missing plane located
- Reid calls Nevada rancher’s supporters ‘terrorists’ over armed confrontation