TAXES: The $145 Billion Abomination

[nostamj]

The $145 Billion Abomination

What started as a modest effort in Congress to replace a $5 billion-a-year export subsidy that the WTO ruled was illegal has turned into a $145 billion, 633-page corporate tax giveaway. Opportunistic members from both sides of the aisle united and cast aside fiscal responsibility to reward favored special interests and score political points in an election year. The bill still requires final passage by the House and Senate. The one potential bright spot was a bipartisan agreement to allow the FDA to regulate tobacco in exchange for a $10 billion buyout of tobacco farmers. But at the behest of tobacco companies, the provision allowing FDA regulation of their products was stripped out by Congressional negotiators. (The $10 billion buyout stayed in.) Sen. John McCain (R-AZ) called the bill "a disgrace" and "a complete sellout to the tobacco companies." At the urging of corporate lobbyists, lawmakers inserted so many last-minute changes "it will take weeks if not months for even the most skilled tax experts to identify all the deals that took place." Here are some highlights:

$27.9 BILLION FOR CORPORATIONS THAT EARN PROFITS ABROAD: The bill would allow corporations that have accumulated billions in untaxed overseas profits to bring the money back to the United States at a fraction of the normal tax rate. Even Treasury Secretary John Snow admits the provision discriminates "against companies that don't have large overseas operations." It would be a $20 billion windfall for giant corporations like Hewlett-Packard and Eli-Lilly. A separate provision would change the way overseas profits are calculated – at a total cost of $7.9 billion – saving General Electric Co. alone hundreds of millions of dollars.

$101 MILLION FOR NASCAR: The bill makes technical changes in the tax treatment of grandstand facilities, which will be worth $101 million to race track owners struggling to make ends meet.

$44 MILLION FOR IMPORTERS OF CHINESE CEILING FANS: The bill suspends a 4.7 percent duty on ceiling fans through 2006, a provision that primarily benefits Home Depot. Lobbyists for Home Depot also had the provision inserted into the administration's energy bill, but that bill failed to clear Congress.

$28 MILLION FOR CRUISE SHIP OPERATORS: A provision in the bill would allow cruise ship operators to delay paying taxes for certain products. The delay is worth $15 million for Carnival Corp. and $8 to $10 million for Royal Caribbean.

$27 MILLION FOR HORSE AND DOG GAMBLERS: The bill exempts foreign gamblers from paying taxes up front on their winnings at horse and dog tracks.

$11 MILLION FOR FISHING TACKLE BOX MANUFACTURES: Excise taxes on tackle boxes would be reduced from 10 percent to 3 percent. One of the biggest beneficiaries would be Plano Molding Co. – which just happens to be headquartered in House Speaker Dennis Hastert's district.

$9 MILLION FOR BOW AND ARROW MANUFACTURES: The bill eliminates taxes on "youth bows" that are not powerful enough to be used for hunting. It also reduces taxes for a device – called a broadhead – that is attached to the tips of arrows.

THE "REVENUE NEUTRAL" MYTH: The legislation is billed as revenue neutral because its proponents claim that tax cuts are off-set by closing other tax loopholes. But "the full costs have been glossed over and disguised by delaying the starting date of some provisions and scheduling others to end after several years." The Washington Post notes, "once Congress passes a tax break, lawmakers typically extend it when it comes up for renewal."

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[Lydia Leftcoast]

1. That bill is a perfect example of why I would love to see

a Constitutional amendment requiring all bills to deal only with one subject, so that these so-called "Christmas tree" bills would no longer be possible.

Imagine having to justify tax relief for importers of Chinese ceiling fan!

[TahitiNut]

2. Such 'hybrid' legislation (packed with unrelated pork) ...

... was regarded as inappropriate and deceitful in the Parliament of England in the 1700's. "It just wasn't done, old chap." Thus, the Framers had a blind spot, possibly expecting the Legislature to adopt the same unwritten customs.

[coreystone]

4. I totally agree!....

These guys pass legislation like MicroSoft wrote the code for the initial version of the Windows "XP" operating system. Speaking of operating systems, it does make it very difficult for the public to know who voted for what, or didn't vote that. I call any bill coming out of Congress as "Potpourri Legislation"!!

And, both parties do it!


;-)

[SpiralHawk]

3. Hey, I'm am like totally all for the Bow and Arrow tax break

and i think it's damn unpatriotic and unamerican and unsportsmanlike and unthinkable to imply that it is not the RIGHT THING TO DO.

After Chimpy and BushCo get through with the economy, we are going to need bows and arrows to shoot pigeons and squirrels so we can put food on the people, so to speak.