Wednesday, January 02, 2013

Fiscal Cliff Legislation Full Of Goodies

President Barack Obama's war on the rich only goes so far it seems. It turns out that behind the scenes during the fiscal cliff negotiations the White House kept insisting that a Christmas bag of goodies be included in the tax hike legislation to benefit corporate special interests with an assortment of corporate tax credits. Tim Carney explains how this bag of goodies worth $76 billion annually got attached to the fiscal cliff legislation with the help of lawmakers-turned lobbyists like former Sen. Trent Lott and Sen. John Breaux. It included corporate tax credits tailored specifically for GE and CitiGroup, Hollywood filmmakers, Captain Morgan, biotech companies, wind-turbine makers, biodiesel producers and algae growers, all of whom contributed heavily to Obama's re-election campaign. Incredibly, the tax credit provision for GE and CitiGroup allows the financial titans to move their profits into offshore accounts for the express purpose of deferring payment of U.S. taxes. Wasn't this the very practice Obama relentlessly lambasted his Republican opponent of participating in through his personal business dealings during this past election?

Obama isn't the only hypocrite in this sordid mess. Warren Buffett, a media darling despite his immense wealth, made sure the railroad industry in which he has heavily invested is provided tax breaks for maintaining rail lines. Yep, his railroad company will get a 50% credit for the cost to maintain tracks it owns or leases. The tax credit could benefit Buffett's company as much as $200 million based on its previously-announced $400 planned investment. He also helped up the tax haul the federal government takes from estates in the form of inheritance taxes to help market his life insurance product, which gets about 10% of its business from people looking for a pre-death funding mechanism to help family survivors pay inheritance taxes owed on their parents' estates. At the same time Buffet is selling life insurance policies to help people save their family farms and businesses, he's buying up other family-owned businesses at a bargain because families are desperate to sell them to pay inheritance taxes. It's no wonder Buffett has been compared to The Robber Barons of the 19th century.

It's not just corporate fat cats who fare well under our latest and greatest tax law. It turns out we will also be providing larger subsidies to commuters who rely on mass transit to get to work. The new law will allow them to shield up to $240 a month in work-related commuting costs from their taxable income. Current law provides a benefit of just $125 a month. That is in addition to the more than $10 billion annually the federal government spends on subsidies to state and local governments for mass transit to reduce transportation costs for urban commuters. Is it any wonder it's impossible to balance the federal budget?

No comments: