So, why did most of our taxes go up? Corporate Welfare

[Vette_Newb]

The "fiscal cliff" legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren't the fruit of eleventh-hour lobbying conducted on the cliff's edge -- they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week.

The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios -- and their lobbyists. So, if you're wondering how algae subsidies became part of a must-pass package to avert the dreaded fiscal cliff, credit the Biotechnology Industry Organization's lobbying last summer.

Some tax lobbyists mostly ignored the August bill "because they thought it would be just a political document," one K Streeter told me. "They were the ones that got bit in the butt."

Here's what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.

Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.

General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision -- known as the "active financing exception" -- is the main tool GE uses to avoid nearly all U.S. corporate income tax.

Liquor giant Diageo also retained Breaux and Lott to win extensions on two provisions benefitting rum-making in Puerto Rico.

The K Street firm Capitol Tax Partners, led by Treasury Department alumni from the Clinton administration, represented an even more impressive list of tax clients, who paid CTP more than $1.68 million in the third quarter.

Besides financial clients like Citi, Goldman Sachs and Morgan Stanley, CTP represented green energy companies like GE and the American Wind Energy Association. These companies won extension and expansion of the production tax credit for wind energy.

Hollywood hired CTP, too: The Motion Picture Association of America won an extension on tax credits for film production.

After packing 50 tax credit extensions into the bill, the committee voted 19 to 5 to pass it. But then it stalled. The Senate left for the conventions and the fall campaign. Meanwhile, House Republicans signaled resistance to some of the extensions -- especially for green energy.

One lobbyist said he didn't worry too much about the Baucus bill because "we knew the House wasn't going to pass it." But another lobbyist, who had worked on the Puerto Rico issues, said he saw Baucus' bill as an important starting point that "set the parameters" of a future fight with House Republicans.

But there never was a fight. Baucus' bill sat ignored until last week, when the White House sat down with Senate Republicans to craft a deal averting the fiscal cliff.

A Republican Senate aide familiar with the cliff negotiations tells me the White House wanted permanent extensions of a whole slew of corporate tax credits. When Senate Republicans said no, "the White House insisted that the exact language" of the Baucus bill be included in the fiscal cliff deal. "They were absolutely insistent," another aide tells me. (The White House did not return requests for comment.)

Sure enough, Title II of the fiscal cliff legislation is nearly a word-for-word replication of the Family and Business Tax Cut Certainty Act of 2012.

So, this wasn't a case of lobbyists sneaking provisions into a huge package at the last minute. That probably wouldn't have been possible, many lobbyists told me Wednesday, because the workload in the past two weeks was too large and the political stakes were too high.

One lobbyist who worked on the bill over the summer said he would never ask a member " 'Hey, can you do this for a client,' when their political lives are on the line."

"The legislators and the staff go underground when things get so intense," another Hill staffer-turned-lobbyist told me. "Nobody has time for a meeting. Nobody wants to talk about what's going on. ... The key is to plant the seed months in advance."

GE, Goldman Sachs, Diageo -- they planted their seeds over the summer. They'll enjoy the fruit in the new year.

http://washingtonexaminer.com/tim-ca...7#.UOUN33d0zzW

[Texdentist]

Good article. It sounds like what you would expect from these yahoos.

[Vette_Newb]

Fiscal Cliff (Pork) Notes

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.

http://www.zerohedge.com/news/2013-0...iff-pork-notes

[blckslvr79]

You guys seem surprised.

[Vette_Newb]

Originally Posted by blckslvr79

You guys seem surprised.

Not in the least.. one thing I always expect from the duopoly, is a good screwing for the middle class.

[walleyfisher]

Originally Posted by Vette_Newb

Not in the least.. one thing I always expect from the duopoly, is a good screwing for the middle class.

Too bad it didn't feel any better this time

[Bill Davies]

Originally Posted by Vette_Newb

Not in the least.. one thing I always expect from the duopoly, is a good screwing for the middle class.

Oh come on now. I thought tax breaks for job creators was a good thing. It allows them to expand and create jobs and stuff.

[blckslvr79]

Originally Posted by Bill Davies

Oh come on now. I thought tax breaks for job creators was a good thing. It allows them to expand and create jobs and stuff.

How many job creators are in the middle class?

[Bill Davies]

Originally Posted by blckslvr79

How many job creators are in the middle class?

Define middle class.

[blckslvr79]

Originally Posted by Bill Davies

Define middle class.

Define create jobs.

[Texdentist]

Originally Posted by blckslvr79

How many job creators are in the middle class?

There is a difference in handing money to job creators and fostering a regulatory environment that encourages job creation. Conservatives are not for picking winners and losers (of course, the government rarely picks winners - they just keep supporting losers). We are for allowing the greatest economic machine ever seen to work without constantly having regulatory monkey wrenches thrown in it.

[Bill Davies]

Originally Posted by blckslvr79

Define create jobs.

http://dictionary.cambridge.org/dict.../job-cre-ation

job creation noun - the process of providing new jobs, especially for people who are unemployed

[c6vettedude]

Not surprised at all. Darn, sure wish the american people had a lobbyist.

[blckslvr79]

Originally Posted by Bill Davies

http://dictionary.cambridge.org/dict.../job-cre-ation

job creation noun - the process of providing new jobs, especially for people who are unemployed

http://en.wikipedia.org/wiki/Middle_class

The middle class is a class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class. The common measures of what constitutes middle class vary significantly among cultures. Within capitalism, middle class initially referred to the bourgeoisie and petite bourgeoisie. However, with the immiserisation and proletarianisation of much of the petit bourgeois world, and the growth of finance capitalism, middle class came to refer to the combination of labour aristocracy, professionals and white collar workers.

So how many people in the middle class are "job creators"?

[PredatorC6]

Originally Posted by blckslvr79

http://en.wikipedia.org/wiki/Middle_class

The middle class is a class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class. The common measures of what constitutes middle class vary significantly among cultures. Within capitalism, middle class initially referred to the bourgeoisie and petite bourgeoisie. However, with the immiserisation and proletarianisation of much of the petit bourgeois world, and the growth of finance capitalism, middle class came to refer to the combination of labour aristocracy, professionals and white collar workers.

So how many people in the middle class are "job creators"?

Not sure how you define middle class. I suspose the guberment defines it as those households that make $450k / year ? If that is the case. I am under that, waaay under that number!
Anyway, my small company provides jobs. Directly, a total of 4, but, indirectly, my small company, along with those also in my industry, are responsible for thousands of jobs. So, anyone that thinks the middle class doesn't creat jobs is a blind fool.