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.