Debt Wish: Cheating Debt

Debt Wish: Cheating Debt

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Debt Wish: Cheating Debt

According to the Associated Press, the fiscal cliff deal was “supposed to be a way to force Washington to confront our long-term debt problem.” Unfortunately for Americans, politics prevailed. After taking us to the brink of another recession, Washington still managed to carve out some special stocking stuffers for their favorite political allies.  If higher taxes were a serious solution to reducing our deficit, would lawmakers really be giving breaks to Hollywood studios, Puerto Rican rum distillers and electric scooter makers?  Instead of pushing for real tax reform, it looks like Washington is back to picking winners and losers.

CRONY CAPITALISM: DEFICIT REDUCTION DEAL INCLUDES HOST OF POLITICAL GIVEAWAYS

Lucky Few Escape Fiscal Cliff Tax Hikes:

Fiscal Cliff Bill Extends Tax Cuts For Select Few. “…The ‘fiscal cliff’ bill that passed Congress on Tuesday contained a bonanza for single-issue lobbyists, extending supports for Puerto Rican rum distillers, Hollywood studios, tribal-lands coal, electric-scooter makers and other corporate interests that Congress will subsidize through the tax code for another year or two.” (Editorial, “Congress Gives Out End-of-Year Perks to Interest Groups, Washington Post, 1/2/13)

$100 Billion In Special Tax Credits. “… Under the plan, the federal government would eat nearly $100 billion in forgone tax revenue over the next two years by extending special tax credits for select businesses that had been set to expire.” (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News, 1/1/13)

$430 Million For Hollywood. “$430 million for Hollywood through ‘special expensing rules’ to encourage TV and film production in the United States.  Producers can expense up to $15 million of costs for their projects.” (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News, 1/1/13)

$59 Million For Algae Growers. (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News, 1/1/13)

$331 Million For Puerto Rico And The Virgin Islands Rum Subsidies. (Devin Dwyer, “’Fiscal Cliff Deal Also Doles Out Millions for Hollywood, Railroads, Rum Producers,” ABC News, 1/1/13)

Extends Tax Credit For Indian Coal Facilities. (“Other nuggets in the fiscal cliff bill: Rum, electric vehicles and motor sports,” CNN Political Ticker, 1/1/13)

Extends Tax Credit For Wind Energy Industry. (CJ Ciaramella, “Congress Extends Eagle-Killing Wind Incentive,” Washington Free Beacon, 1/2/13)

WASHINGTON BACK TO PICKING WINNERS AND LOSERS, PUTTING POLITICS OVER ECONOMY

Sweetheart Deals Undermine Deficit Reduction:

Washington’s Favorites Secure ‘Sweetheart Deals.’ “…As usual, well-connected special interest groups — from Hollywood to the booze lobby — secured sweetheart deals for their own narrow interests. So the industry that employs Sean Penn and Ed Asner gets a nice fat tax break, and poor people with jobs get the shaft. The people who rail against ‘corporate welfare’ and ‘crony capitalism’ took the time to cut a nice side deal for the rum industry.” (Kevin D. Williamson, “Opinion: Democrats Raise Taxes on Poor to Subsidize Millionaires,” National Review, 1/2/13)

Only Some Will ‘Finally Pay Their Fair Share.’ “Obama said Tuesday that ‘millionaires and billionaires’ will finally ‘pay their fair share.’ That is, unless you are a Nascar track owner, a wind-energy company or the owners of StarKist Tuna, among many others who managed to get their taxes reduced in Congress’s New Year celebration… Congress and the White House want everyone to ignore this corporate-welfare blowout.” (Editorial, “Crony Capitalism Blowout,” Wall Street Journal, 1/2/13)

Real Costs Outweigh The Estimates. “The costs of all this are far greater than the estimates conjured by the Joint Tax Committee. They include slower economic growth from misallocated capital, lower revenues for the Treasury and thus more pressure to raise rates on everyone, and greater public cynicism that government mainly serves the powerful.” (Editorial, “Crony Capitalism Blowout,” Wall Street Journal, 1/2/13)

Congress Dodges What Fiscal Cliff Deal Was Originally Designed To Do: Address Deficits And Debt. “The ‘fiscal cliff’ deadline was originally designed to force lawmakers to confront trillion-dollar annual budget deficits that pile the nation’s debts higher each year. … The next two months will be another opportunity to come up with a plan or dodge the issues again.” (Connie Cass, Fiscal Cliff Deal Leaves Lots Of Issues Dangling,” Associated Press, 1/3/13)

Failure To Confront Debt Just The Latest In A “Long Series” Of Broken Promises. “Congress’ hectic resolution of the ‘fiscal cliff’ crisis is the latest in a long series of decisions by lawmakers and the White House to do less than promised – and to ask Americans for little sacrifice – in confronting the nation’s burgeoning debt.” (Charles Babington, “Analysis: Cliff Deal Is Another Pain-Free Punt,” Associated Press, 1/3/13)

“CORPORATE PORK” CRITICAL TO FINAL PASSAGE

Fiscal Cliff Bill Becomes All About “Corporate Pork”: 

‘Tax Extenders’ Critical Part Of Fiscal Cliff Bill. “…What wasn’t mentioned is what these leaders wanted, which is what’s known as ‘tax extenders,’ or roughly $205 billion of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. But it is critical to understanding what is going on.” (Matt Stoller, “Eight Corporate Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR,” Huffington Post, 1/2/13)

Trading Off Billions Of Dollars In ‘Corporate Pork.’ “Surely, a modest hike in income taxes for people who make more than $400,000 in income and stupid enough not to take that money in capital gain would be worth trading off for the few hundred billion dollars in corporate pork. This is what the fiscal cliff is about — who gets the money. And by leaving out the corporate sector, nearly anyone who talks about this debate is leaving out a key-negotiating partner.” (Matt Stoller, “Eight Corporate Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR,” Huffington Post, 1/2/13)

Designed To Reduce Deficit, Instead Adds $74 Billion In Spending. “The ‘fiscal cliff’ law passed so quickly, many in Congress never realized it was full of special interest tax breaks…the fiscal cliff law designed to reduce the deficit, added $74 billion in spending through changes in the tax law.” (Wyatt Andrews, “’Fiscal Cliff’ Bill Had Some Hidden Pork,” CBS News, 1/2/13)

What Happened To No More Pork Barrel Spending? “The issue with these middle-of-the-night tax breaks is that for many in Congress who had sworn off pork barrel spending, these represent a new level of pork.” (Wyatt Andrews, “’Fiscal Cliff’ Bill Had Some Hidden Pork,” CBS News, 1/2/13)

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