Fiscal Cliff (Pork) Notes

Tyler Durden's picture




 

The 'deal' is done and even the evening news seems perplexed by the market's excited reaction to three-quarters of the nation paying more taxes. Perhaps, as ABC News highlights below, it is the 'pork' that stuffed the bill...

The mix of tax perks covering the next year, but with budget implications for the next two years, includes everything from incentives for employers to hire veterans to incentives for employers to invest in mine safety. But it also includes these:

 

  • $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects.
  • $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.
  • $222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.
  • $70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”
  • $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.
  • $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.

And the not so Cliff Cliff notes from Bloomberg:

Wind farms, motorsports tracks, global banks and other businesses won revived tax breaks in a $75.3 billion package included in a last-minute budget deal Congress passed yesterday.

 

The tax-break extensions, mostly for companies, made it into the bill past Republican demands for spending cuts and Democratic resistance to benefits for businesses. Both parties have complained for years about some of the special-interest provisions.

 

Most of the tax breaks had expired at the end of 2011 and will be extended through 2013. The companies that benefit say the on-again, off-again breaks are important though the uncertainty makes it almost impossible to use them to plan business investments.

 

Although they are lumped together, the miscellaneous tax breaks are very different.

Some are broad, like the credit for corporate research, which is backed by a coalition of technology companies, manufacturers and lawmakers such as Representative Kevin Brady, a Texas Republican, and Senator Max Baucus, the Montana Democrat who is chairman of the Finance Committee. The two-year extension of the research credit would cost the government $14.3 billion in forgone revenue.

 

Some breaks are specialized, like the $11.2 billion, two- year extension of the active financing exception, which lets GE, Caterpillar Inc. (CAT) and Citigroup Inc. (C), among others, defer taxes on financing income they earn outside the U.S. The congressional supporters of this provision include Pat Tiberi, an Ohio Republican, and Richard Neal, a Massachusetts Democrat, both senior members of the House Ways and Means Committee.

 

Others are narrow and often ridiculed by lawmakers. They include $78 million worth of accelerated depreciation for motorsports tracks, $248 million in special expensing rules for films and television programs, and a $222 million provision that directs excise taxes on imported rum to Puerto Rico and the U.S. Virgin Islands.

 

Alex Brill, a former aide to Republicans on the House Ways and Means Committee, said tax breaks that some consider questionable -- such as the motorsports benefit backed by International Speedway Corp. (ISCA) and Senator Debbie Stabenow, a Michigan Democrat -- are often made temporary as a compromise.

 

Whirlpool Corp. (WHR) benefits from a $650 million tax credit for manufacturing energy-efficient appliances. JPMorgan Chase & Co. (JPM) and other financial institutions are aided by the $1.8 billion extension of the New Markets Tax Credit for investments in low- income areas. That is supported by Representative Jim Gerlach, a Pennsylvania Republican, and Senator Jay Rockefeller, a West Virginia Democrat.

 

Restaurants such as Cracker Barrel Old Country Store Inc. (CBRL) and McDonald’s Corp. (MCD) benefit from the $1.9 billion extension of the Work Opportunity Tax Credit for hiring workers from disadvantaged groups.

 

The bill includes a one-year extension through 2013 of the production tax credit for wind power, at a cost of $12.2 billion. That will save as many as 37,000 jobs in an industry that’s expected to stall this year, the American Wind Energy Association said.

Read more on the 2013 Corporate Recovery Act Obama Tax Cuts here.

(h/t nmewn)

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Wed, 01/02/2013 - 22:28 | 3117357 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

who would have imagined?

Wed, 01/02/2013 - 22:29 | 3117358 ThePhysicist
ThePhysicist's picture

Congress has "porked" us one more time. Our asses a sore today, but we're used to it.

Wed, 01/02/2013 - 22:55 | 3117418 Anusocracy
Anusocracy's picture

Government eats up wealth and shits out poverty.

Thu, 01/03/2013 - 03:27 | 3117912 Dr. Sandi
Dr. Sandi's picture

Felching for the Fed, anybody?

Thu, 01/03/2013 - 22:55 | 3120972 Anusocracy
Anusocracy's picture

I wish I hadn't looked up felching.

Wed, 01/02/2013 - 22:29 | 3117360 MyBrothersKeeper
MyBrothersKeeper's picture

I just regained a little respect for Boehner when I read this:

It was only a few days before the nation would go over the fiscal cliff, no bipartisan agreement was in sight, and Reid had just publicly accused Boehner of running a "dictatorship" in the House and caring more about holding onto his gavel than striking a deal.

"Go f— yourself," Boehner sniped as he pointed his finger at Reid, according to multiple sources present.

Reid, a bit startled, replied: "What are you talking about?"

Boehner repeated: "Go f— yourself."

 

I consider Reid the biggest obstructionist to legislation the last 3 years

Wed, 01/02/2013 - 22:39 | 3117380 Zer0head
Zer0head's picture

please that boner story has been the echoed by the Whore media all day no doubt released by boners people to elicit a response such as yours

Thu, 01/03/2013 - 03:33 | 3117920 John_Coltrane
John_Coltrane's picture

Never-the-less, consider this dilemma, I hand you my S&W .45 magnum with only two rounds.  You see Pelosi, Reid, and Bohner walking down an  alley.  Who emerges from that alley?  I think every ZH reader knows the answer to that one.  See, there are major distinctions when it comes to the parties.  When it comes to human evil you need a log scale and on that scale Pelosi and Reid are orders of magnitude more evil than Bohner.

Thu, 01/03/2013 - 09:35 | 3118252 exi1ed0ne
exi1ed0ne's picture

If you position the shot right, one round will do.  45 magnum packs a punch.

Thu, 01/03/2013 - 09:51 | 3118288 LFMayor
LFMayor's picture

45, 46... what ever it takes

Thu, 01/03/2013 - 10:35 | 3118435 flattrader
flattrader's picture

I could take out all three with two rounds.

>>>I think every ZH reader knows the answer to that one.<<<

If you think Boner survives, you're a fool who takes a lot for granted.

Thu, 01/03/2013 - 03:31 | 3117916 Dr. Sandi
Dr. Sandi's picture

I thought Reid was the one who was telling people to go fuck themselves on the Senate floor lo those many years ago when it was a BAD thing. It takes a real man to tell somebody to 'go fuck yourself.' What do politicians do after that, empty their colostomy bags on each other?

Of course, it takes an even bigger man to say go f___ yourself. I for one don't even know how you'd pronounce f___ . Do you make some kind of farting noise with your lips after the initial 'f'?

Wed, 01/02/2013 - 22:32 | 3117361 Insideher Trading
Insideher Trading's picture

There's gotta' be something in there for an about-to-be-bankrupt solar manufacturer in there.

No taxpayer provided Bloomberg Terminals for members of congress/senators to trade on at work?

On the for real-for real. Remember any of this?

 a $2 million tax benefit for makers of wooden arrows for children; a $100 million tax break to benefit auto racetrack owners; $192 million in rebates on excise taxes for the Puerto Rican and Virgin Islands rum industry; $148 million in tax relief for U.S. wool fabric producers; and a $49 million tax benefit for fishermen and other plaintiffs who sued over the 1989 tanker Exxon Valdez spill.

http://www.sfgate.com/politics/article/Billions-in-earmarks-in-Senate-s-...

That was from Obama's bailout in 2008. We have a black president, you didn't really expect him to be responsible with money did you?

Wed, 01/02/2013 - 23:40 | 3117547 Just Ice
Just Ice's picture

I think there were clean energy tax credits left intact and the handout to railroads to maintain their own property is probably a nugget thrown crony capitalist Buffett's direction.

Thu, 01/03/2013 - 03:34 | 3117921 Dr. Sandi
Dr. Sandi's picture

Speaking of racist stereotypes, I'll bet Obama's dick is a lot bigger than yours.

And he gets to use it on all of us, regardless of race, gender or favorite sports team.

Wed, 01/02/2013 - 22:31 | 3117365 zorba THE GREEK
zorba THE GREEK's picture

All that pork and nothing for NY or NJ for Sandy. What a slap in the face.

Maybe they will join the states who wish to secede from the union. 

Wed, 01/02/2013 - 22:35 | 3117371 foodstampbarry
foodstampbarry's picture

Chubby Butt kissed Barry's ring. Payback's a bitch blue state.

Wed, 01/02/2013 - 22:42 | 3117390 zorba THE GREEK
zorba THE GREEK's picture

Rim-job proves to be a bust. Life's a bitch for the fat boy.

Wed, 01/02/2013 - 22:45 | 3117394 espirit
espirit's picture

Sandy's victims will have relief by friday, just ask those still waiting on aid from the Haitian Earthquake.

Bottlenecks tighter than a Bud Light.

Wed, 01/02/2013 - 22:47 | 3117398 GMadScientist
GMadScientist's picture

What did you want...a tax credit for Jersey Shore and N'yorican BJs?

Wed, 01/02/2013 - 23:29 | 3117516 Darksky
Darksky's picture

If NY and NJ want to secede from the union then we Texans want to stay in.

Wed, 01/02/2013 - 22:31 | 3117366 PrintemDano
PrintemDano's picture

Gimme som dat Obama Algae Bitchezzzz

Wed, 01/02/2013 - 22:48 | 3117400 GMadScientist
GMadScientist's picture

Uhhh...I'll stick with the peas, thanks.

Wed, 01/02/2013 - 22:39 | 3117382 jim249
jim249's picture

There is no hope. We are doomed!

Wed, 01/02/2013 - 23:02 | 3117432 Bollixed
Bollixed's picture

Not if you're Ricky Bobby...

Wed, 01/02/2013 - 23:53 | 3117593 Mr Pink
Mr Pink's picture

Shake...n Bake  Bitchez!

Wed, 01/02/2013 - 22:43 | 3117391 Cognitive Dissonance
Cognitive Dissonance's picture

"Fiscal Cliff (Pork) Notes"

I subscribe to the Clara Peller school of thought. "Where's the beef?"

Thu, 01/03/2013 - 03:38 | 3117925 Dr. Sandi
Dr. Sandi's picture

Wanna see my 'beef' list. Where do I start?

I think my biggest beef has to be the total disintegration of contract law in the U.S. No real production goes on without a binding contract between 'gentlemen.' With that obviously gone, there little to prevent the total hollowing out of the economy by thieves.

Some bastards came and took the beef, replaced it with oatmeal and told us to shut the fuck up about it. And the kids who are supposed to stop it have all been paid to go to their rooms.

There's the beef.

Wed, 01/02/2013 - 22:45 | 3117393 tooriskytoinvest
tooriskytoinvest's picture

The Good, The Bad And The Ugly From The Fiscal Cliff Deal

http://investmentwatchblog.com/the-good-the-bad-and-the-ugly-from-the-fi...

Wed, 01/02/2013 - 22:48 | 3117402 Caviar Emptor
Caviar Emptor's picture

Why is anyone surprised? The pork is where the REAL action is. 

You didn't really think they were Representing YOU, now did ya??

 

We are entering into early innings of the political consequences of a depression: fighting over everything and anything you can grab. The country that emerges won't resemble the one that entered before the crisis. 

From now on when they cry "Austerity", they mean for you. 

Wed, 01/02/2013 - 23:32 | 3117520 GeorgeHayduke
GeorgeHayduke's picture

You've hit the nail on the head. This whole fiasco is about mining the consumers (as we are no longer citizens) for anything and everything the owners and their minions can pry from us.

This latest fiscal cliff show is just an opening salvo to see how the herd reacts. If they get the usual insignificant response, they they will come at us for even more in two months. Then they will do it again two months or six weeks later as they'll do another half-assed, short-term bill at that time too. They won't pass any long-term stuff at this point as more and more consumers are becoming insolvent each month and they need to keep adjusting their parasitic attacks much more often than once a year to keep feeding from the diminishing few with anything left to steal.

My question for some time has been: How long before the herd no longer recognizes the authority of these so-called leaders?

Wed, 01/02/2013 - 23:48 | 3117580 Caviar Emptor
Caviar Emptor's picture

I totally agree. But for now the consumers remain comatose. They still believe that what they're experiencing is a hangover after a wild party. "They deserve it". Up to now they could easily reach for assistance from Uncle Sugar. The more the programs they rely on get cut (and they will), the more they'll start to feel pain. Then we'll see

Wed, 01/02/2013 - 23:53 | 3117590 fonzannoon
fonzannoon's picture

Other than this slap on the wrist with Sandy, which will probably get passed soon....what other programs have been cut off? I thought we had a money printer? All is well......?

Wed, 01/02/2013 - 23:15 | 3117468 catacl1sm
catacl1sm's picture

this worked for FDR as well. How do you think he got reelected 3 Times?

Wed, 01/02/2013 - 23:15 | 3117470 A Lunatic
A Lunatic's picture

I'm just glad they passed it so we could finally see what's in it..........

Wed, 01/02/2013 - 23:34 | 3117530 zombiebank
zombiebank's picture

Our lawmakers suck!  At what point will we revolt against their destruction of our country? 

Thu, 01/03/2013 - 03:48 | 3117936 Dr. Sandi
Dr. Sandi's picture

It's glaringly obvious that there will be no revolt for quite some time yet.

Except for an apparent anomaly in Arizona, nobody is taking shots at these bastards when their show their badly tanned faces in public. Until congress creatures are afraid to be seen by the public during daylight, you can be sure it's crooked business as usual.

Now if unhappy voters were to skin and eat a couple of these bastards on the same day, you might want to start taking citizen unrest seriously.

But as long as you idiots (and you know who you are) keep putting these vermin back in office, they will keep fucking us and laughing about it to friends and family.

Terrified politicians = Real Democracy

So relax, have some popcorn and enjoy the show for awhile. You'll know it's turned nasty when you smell bacon on the wind.

Thu, 01/03/2013 - 01:15 | 3117764 dumpster
dumpster's picture

drink Rum .. and live the tax subsidy blues

Thu, 01/03/2013 - 01:55 | 3117824 The Joker
The Joker's picture

Looks like they offset that $15b "spending cut" almost dollar for dollar.

Thu, 01/03/2013 - 02:34 | 3117867 awakening
awakening's picture

'$430 million for Hollywood'

I would not be surprised to see that work it's way back to Capital Hill (and similar internationally) in the form of (bribes) lobbying with regards to the 'War on Piracy' (copyright).

Thu, 01/03/2013 - 03:21 | 3117902 laosuwan
laosuwan's picture

only in the usa could they pass a tax increase and actually increase the deficit. someone ought to call transparancy international, helloooooo.

 

 

  • $430 million for Hollywood  obama supporters
  • $331 million for railroads warren buffet
  • $222 million for Puerto Rico and the Virgin Islands Bayer, McKessen, Pfizer, etc.
  • $70 million for NASCAR no idea, probably some real estate deal
  • $59 million for algae growers Go green, go broke, do not go to jail, collect 200 million dollars
  • $4 million for electric motorcycle makers see above

Thu, 01/03/2013 - 08:57 | 3118160 Disenchanted
Disenchanted's picture

 

 

Why was this fiscal cliff pork subsidy left off of the above list?

 

5) Subsidies for Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing for  York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.” Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston’s The Fine Print, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.

Read more at http://www.nakedcapitalism.com/2013/01/eight-corporate-subsidies-in-the-fiscal-cliff-bill-from-goldman-sachs-to-disney-to-nascar.html#m3GThYm5PjCywD2c.99

 

edit: and this one as well...

 

 

6) $9B Off-shore financing loophole for banks – Sec. 322 is an “Extension of the Active Financing Exception to Subpart F.” Very few tax loopholes have a trade association, but this one does. This strangely worded provision basically allows American corporations such as banks and manufactures to engage in certain lending practices and not pay taxes on income earned from it. According to this Washington Post piece, supporters of the bill include GE, Caterpillar, and JP Morgan. Steve Elmendorf, super-lobbyist, has been paid $80,000 in 2012 alone to lobby on the “Active Financing Working Group.” 

Thu, 01/03/2013 - 10:41 | 3118464 flattrader
flattrader's picture

Yes.  I wondered that as well.  Those two were by far my "favorites" of the bunch.

What's up Tylers?  You don't think tax perks for big banks rates as ZH red meat?

Thu, 01/03/2013 - 09:03 | 3118170 djsmps
djsmps's picture

And if you bought more house than you could afford, and then used it as a piggybank, fret no more. There's an extention of the tax credit where you don't have to report the shortfall in a short sale as income.

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