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October 23, 2004

If I Get Mine, Why Should I Care About Yours?

As many Washingtonians know, last week not-gonna-be-President-for-much-longer Bush signed a $136 billion corporate tax break into law. Although the bill was signed with little fanfare, it's been getting coverage here in Washington, because the bill has a provision that allows Washington State taxpayers to deduct sales tax from their federal income taxes (only if you itemize, but that's another story.)

Lisa Hymas over at Gristmill nicely summarizes the larger picture that our local media has been loudly ignoring. Lisa quotes Connie Rice of NPR's Tavis Smiley Show:

Unlike the Leave No Child Behind bill, this corporate boondoggle is fully funded. ExxonMobil, Home Depot, cruise ships, corn farmers, coffee roasters, and makers of fishing tackle boxes, bows and arrows and ceiling fans all have special tax breaks specially tailored for their needs. And unlike the nation's children, who will be paying down our trillion-dollar deficit their whole lives, 60 percent of these corporations will likely continue to pay zero federal taxes, because their armies of lawyers will figure out how re-open newly closed loopholes that allegedly will pay for this bill. ... And get this: [Congress] also cut the charitable car donation deduction that middle-class people take, cut the child tax credit for the poor, blocked restoration of overtime for millions of workers, cut unemployment benefits, cut and then restored war veterans hospital benefits, and made it harder for regular folk to apply for bankruptcy.

The corporate tax break bill has earned condemnation from independent thinkers on both sides of the aisle, as reported by the Washington Post:

Sen. Edward M. Kennedy (D-Mass.) dismissed [the corporate tax bill] as "a lobbyist's dream and a middle-class nightmare." Sen. John McCain (R-Ariz.) called it "the worst example of the influence of special interests that I've ever seen."

But hey, so long as we homeowners here in Washington State get a tax break, who's to ask too many questions about the costs to our nation?

Posted by Jon Stahl on October 23, 2004 at 08:32 PM in Policy | Permalink

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Comments

Let me be clear from the start that I do not agree with all of the handouts contained in this bill.

One part of me is steadfast in my belief -- simplistic as it may be -- that tax cuts for big corporations = bad news, special interest favoritism, etc.

However, I can't help overlooking some obvious benefits contained in this bill. Take for example the significant tax breaks for producers of ethanol and biodiesel. The quote from Connie Rice pointedly refers to this as a "tax break specially tailored to fit their needs."

One could also argue that producers of corn and soybeans are now being paid to grow these crops for the purpose of grwoing the market for renewable energy in lieu of leaving their fields lie fallow. Instead of receiving subsidies for doing nothing, they are being empowered to produce renewable energy, in turn, reviving their depressed local economies.

I'd like to add further that while I love the idea of a grassroots renewable energy movement, it's going to take huge corporations to grow this industry. If they have to receive tax breaks in order to pass along lower costs to the consumer, so be it. It's going to take a litte push to reach economies of scale.

I realize that I've latched on to one issue contained in this bill, and given the larger picture, I'd probably share the same opinion that cruise ship directors and makers of bows and arrows probably shouldn't get huge breaks.

But I also recognize that this is the first tax break for biodiesel ever, and a significant one at that. It will likely bring costs inline with petroleum diesel. The same can be said for ethanol. If this market grows significantly for these renewable fuels, I think the whole world benefits.

Posted by: Dave Manelski | Oct 25, 2004 9:57:55 AM

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