Tax-cut legislation includes $55 billion in benefits for a host of industries
By Dan Eggen
Washington Post Staff Writer
Thursday, December 16, 2010
A host of industries, from Caribbean distilleries to Hollywood producers, would gain billions in tax breaks and other subsidies under compromise tax-cut legislation now moving its way through Congress.
The $858 billion package approved by the Senate today is focused primarily on continuing the Bush administration tax cuts for two years, extending unemployment benefits and other large-scale expenditures. But buried inside the legislation are more than $55 billion in other giveaways and tax reductions for some of Washington's most influential industry groups.
The energy and agricultural industries, for example, would continue to receive a generous ethanol tax credit at a cost to taxpayers of about $6 billion in 2011. The 45-cents-per-gallon credit goes to fuel blenders - including large oil and gas companies such as Shell - who count it against income tax owed to the United States.
U.S. technology companies such as Microsoft would continue to benefit from a tax credit for research and development carried out in the United States, costing taxpayers about $6 billion. Rum-makers in Puerto Rico and the U.S. Virgin Islands would get another two-year extension of excise tax credits for their products ($235 million), while movie and television producers would enjoy special deduction rules for U.S.-based projects ($162 million).
(More here.)
Washington Post Staff Writer
Thursday, December 16, 2010
A host of industries, from Caribbean distilleries to Hollywood producers, would gain billions in tax breaks and other subsidies under compromise tax-cut legislation now moving its way through Congress.
The $858 billion package approved by the Senate today is focused primarily on continuing the Bush administration tax cuts for two years, extending unemployment benefits and other large-scale expenditures. But buried inside the legislation are more than $55 billion in other giveaways and tax reductions for some of Washington's most influential industry groups.
The energy and agricultural industries, for example, would continue to receive a generous ethanol tax credit at a cost to taxpayers of about $6 billion in 2011. The 45-cents-per-gallon credit goes to fuel blenders - including large oil and gas companies such as Shell - who count it against income tax owed to the United States.
U.S. technology companies such as Microsoft would continue to benefit from a tax credit for research and development carried out in the United States, costing taxpayers about $6 billion. Rum-makers in Puerto Rico and the U.S. Virgin Islands would get another two-year extension of excise tax credits for their products ($235 million), while movie and television producers would enjoy special deduction rules for U.S.-based projects ($162 million).
(More here.)
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1 Comments:
Funding Puerto Rican rum is too tempting of a target not to exploit (and I plead guilty have done so in commentaries), but it is my understanding that this is really monies going back to the Puerto Rico and the Virgin Islands in lieu of monies that the US government most likely would have provided ... its legitimate claim but if the monies would not be returned it would cause the local governing bodies to raise taxes elsewhere or cut spending on other programs ... it's a vicious circle.
Yet, the real disappointing aspect is not whether these types of tax credits or subsidies should be included in the legislation, but that Congress is incapable of resolving these funding mechanisms ... best case in point is ethanol where some Senators have made strong arguments for and some have made strong arguments against, but in the end, they agree to punt on decision-making.
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