Volume XV No. 49: December 10, 2010
The last legislative trains are pulling out of Capitol Hill station and there are a bunch of hobo provisions trying to catch a ride. Whether you are for or against the proposed final spending bills for fiscal year 2011 or the grand tax compromise the President and Congressional Republicans hammered out, one has to admit larding them up with parochial provisions is the wrong way to go.
There are scores of these provisions littered in these bills.
Snatching defeat from the jaws of taxpayer victory, lawmakers look poised to waste another $6 billion continuing the 45-cent per gallon ethanol tax credit. We already mandate the use of ethanol, so the production credit is just lining industry\’s pockets. And to end this decades-old subsidy all Congress would have to do is …nothing. Instead, it appears taxpayers will be stuck with it for another year.
Some of these subsidies have been around the track before – literally. There is a motorsports (read: NASCAR) provision that will enable track owners to depreciate their investments over seven years instead of the 15 years the IRS mandates. Oh, and we\’ll probably extend – unreformed – the rebate of rum excise taxes back to Puerto Rico and the U.S. Virgin Islands. The USVI has used that revenue intended for economic development to entice Britain-based Diageo – the world\’s largest liquor conglomerate – to shift production from Puerto Rico to the USVI by using the rebate revenue to build Diageo a new distillery. We could go on: special expensing rules for film and television productions, deductions of state and local sales taxes, credit for US-based manufacturers of energy-efficient clothes washers, dishwashers and refrigerators…Phew.
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