Larger text
Smaller text
Legislation served with side of tax breaks
A good deal for some
Packaged into the “fiscal cliff” deal are:
• $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States.
• $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks they own or lease.
• $222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced on the islands and imported to the mainland.
• $70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”
• $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.
• $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.
Daily Photo Galleries
By McClatchy Newspapers
Published: Wednesday, January 2, 2013, 9:44 p.m.
Updated: Thursday, January 3, 2013
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.”
Most Popular Nation
- U.S. admits drones killed 4 Americans
- Vote on gays in Boy Scouts today
- From top to bottom, IRS officials not cooperating with lawmakers on targeting tactics
- FBI kills Florida friend of Boston Marathon bombers
- Wall of water a fear for N.D. community
- Chicago votes to shutter 50 schools; critics petition state
- WVU baseball players spring into action in tornado-ravaged Oklahoma
- Amphibian crisis first noted in 1989 persists
- Massive tornado roars through Oklahoma City suburb
- Pipeline bill passes House on party-line vote
- Fire chief says search almost complete in Oklahoma
You must be signed in to add comments
To comment, click the Sign in or sign up at the very top of this page.
Subscribe today! Click here for our subscription offers.
