There's plenty of pork in Wall Street rescue
Posted
Oct 03 2008, 05:46 PM
by
Karen Datko
Rating:
Doesn't this sound like something from David Letterman -- "Top 10 tax sweeteners in the bailout bill"? But this is no joke. It's a partial list of the pork included in the $700 billion Wall Street bailout Congress approved today. The list was prepared by the nonpartisan budget watchdog Taxpayers for Common Sense.
This explains why the once-brief bailout plan expanded to 451 pages. Senators added about $150 billion in tax breaks to overcome resistance to the bill. It worked, but it's prompted howls of complaint. "I believe there was even a tax cut for poodles who earn money in dog shows," wrote Jazz Shaw at The Moderate Voice. (That was a joke.)
Who benefits from all of these tax breaks? Here are a few examples:
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Makers of wooden arrows for kids. They get an exemption from an excise tax apparently intended for serious arrows used by adult archers. Bloomberg News says the tax break is worth $200,000 to Rose City Archery in Myrtle Point, Ore. Cost to taxpayers: $2 million over 10 years.
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Speedway owners. Race tracks get to keep a seven-year depreciation timetable. The IRA wanted to change it to 15 years. Cost to taxpayers: $100 million over two years.
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Rum-makers in Puerto Rico and the Virgin Islands. They get a two-year extension of a $13.25 rebate on a $13.50 per proof gallon excise tax charged on rum imported to the U.S. Cost to taxpayers: $192 million.
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Companies that do research in the U.S. They get a two-year extension of a tax credit. "Companies that have benefited from this provision include Microsoft Corp., Boeing Co., United Technologies Corp., Electronic Data Systems Corp. and Harley-Davidson," Taxpayers for Common Sense says. (Full disclosure: Microsoft owns MSN Money.) Cost to taxpayers: $19 billion.
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Movie and television producers. A tax incentive is intended to keep production here in the U.S. Cost to taxpayers: $478 million over 10 years.
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Wool producers and makers of wool clothing. This tariff relief will cost $148 million over five years.
Some of the pork -- we mean "provisions" -- in the bill extends tax breaks that are already in place, and some are new. (See the Taxpayers for Common Sense article for details.)
Of course, some of the pork bits can sound downright appealing, depending on your point of view. There are tax incentives for businesses that encourage their employees to commute by bicycle ($10 million); corporations and ag producers that donate food ($149 million); and groups that donate books to schools ($49 million). A fund that provides health care to retired miners will get a boost. The bill also extends tax breaks for renewable energy.
Overall, the bailout contains an estimated $150 billion in tax breaks, including $62 billion in the form of the dreaded alternative minimum tax that otherwise would have been collected from 24 million households this year.
But did these incentives have to be added so quickly to the unpopular bailout? Many bloggers think not. "No one, no one can sensibly claim that the pork deserved to be in the 'emergency' bill on the economy," said the staid Business Law Prof Blog.
