Nothing is certain in life except death and taxes, and since the world didn’t end on December 21, 2012, as some had interpreted the Mayan calendar, that meant the United States (US) Congress had to deal with taxes.
Oh, the agony of listening, day after day, about the “fiscal cliff” and whether this nation should jump or not. Some said, “let’s go” while others fiercely warned of another economic recession if we did. Yet, not long after the midnight hour of the first day of 2013, Congress did pass a huge 154-page bill without reading all the details. Yes, the government raised taxes on what some call high income earners (everybody has an opinion), along with all wage earners, about 77 percent of Americans, in the form of higher payroll taxes by allowing the payroll tax holiday to expire.
What didn’t get a lot of mainstream media attention are the billions of dollars in tax relief to a multitude of businesses and special interest groups. Keep in mind these weren’t new tax credits, but extensions of those that had already expired or were due to end in 2012. While some are provided to assist farmers, low-income communities, and developing industries such as biofuels, a few of the tax credits extended seem downright generous. For instance, $248 million in tax credits for film production expenses (yes, the government is subsidizing Hollywood), $222 million in tax credits for rum production in Puerto Rico and the US Virgin Islands (more daiquiris for all), and an extension of a seven-year cost recovery period for NASCAR-type racing complexes at a cost of $70 million.
So, who were the big tax credit winners? Per the Joint Committee on Taxation, $14.3 billion to subsidize business research and development (nothing more specific than that), $12.1 billion for a wind production tax credit (a “temporary” program put in place in 1992), and $5 billion in direct payments to farmers (some public policy groups say most are large corporations).
Yet the agony isn’t over as Congress must now go to bat on how to deal with this country’s ever-rising debt crisis. Gee, wonder how that happened?
February 2013 RENDER | back