Right…. Then why did they vote to add $77 billion in pork to the so-called ‘fiscal cliff’ bill? But don’t get me wrong – Democrats not only voted for it but were instrumental in adding it to the bill as well. But why were the American people kept in the dark and not told that this bill like a lot of others was all about the pork?
It’s not that this bill was not discussed at great length by the punditry. Bloviators were bloviating non-stop for months. Pontificators were pontificating full time. Purveyors of bovine excrement were shoveling constantly. But no one saw it coming. Not David Gregory of Meet the Press, not Bob Schieffer of Face the Nation, not Ed Schultz or Rachel Maddow of msnbc. It’s not like pork is a recent phenomena. But it takes sheer gall to add $77 billion in tax break loopholes for the rich to a deficit reduction bill!
The Washington crowd would have us believe that this whole Shakespearean drama came down to the wire, and that, if we went over the cliff, the middle class would be ruined, we’d go back into a recession and the whole global economy would go down the tubes. Each of the central cast of actors took their turn at center stage: John Boehner, Harry Reid, Eric Cantor and a whole host of lesser lights. But none of them mentioned the impending pork that would be added to whatever bill they came up with.
What they came up with at the last minute was a 157 page bill, most of which, while raising tax rates for the richest Americans, was devoted to tax breaks for the rich. Now the punditry and the politicians would have us believe that this was a last minute deal. No it wasn’t. How do you write a 157 page bill at the last minute? Most of it was a preconceived pork bill lying in wait to be added on to whatever last minute deal they came up with to prevent us from going over the fiscal cliff.
Wendy Caputo of Riverside was outraged. She wrote a letter to the editor of the East Bay RI which said the following:
“Dozens of tax breaks for business and industry including about $70 million for a cost-recovery program for “motorsports entertainment complexes”; i.e. racetracks! Tax breaks for Hollywood producers who shoot movies and TV shows in the US at a cost of about $430 million over the next 2 years. Legislation allowing US corporations to defer taxes on some income earned from their overseas subsidiaries costing the US Treasury $10.8 billion over this year and next. An agreement to subsidize the domestic production of rum by sending federal tax revenue collected from rum production in Puerto Rico and the US Virgin Islands back to them. A $15 million dollar-a-year tax break to the asparagus industry to compensate for a cheaper product from South America. A tax break for people who buy electric scooters, Segways, and such! And, the list goes on . . .”
It takes a lot of unmitigated gall to add all this pork to a bill that was supposedly all about deficit reduction in the first place. You remember the whole purpose of the fiscal cliff was to force deficit reduction, don’t you? The pork was at the heart of the bill and consumed the most paperwork, but no politician ever spoke about it. Oh yeah, it did things like “raise tax rates on the rich while keeping middle class tax rates the same,” “keep extended unemployment insurance the same”, and “index the alternative minimum tax to inflation.” All this stuff could have been written on two pages.
That leaves 155 pages of the bill for pork. Such is the nature of compromise in Washington, DC. What this all boils down to is that, while Republicans go apoplectic over the deficit, what they really care about is tax loopholes for the class they represent – the very rich. And Democrats are totally misguided if they think that the pork that they added represents an economic stimulus. The whole American Taxpayer Relief Act was a sham. It gave taxpayers relief on the one hand while giving them a migraine on the other!
A feature of the “tax relief” bill was a $100. million tax giveaway to NASCAR race track owners (you know, Mitt Romney’s friends) and other “motorsport entertainment complexes” in the form of “accelerated depreciation.”
Now most Americans don’t have a clue about how accelerated depreciation for businesses raises tax bills for the middle class, but here’s how it works. Say you, like NASCAR, build a racetrack. Then you charge people to come and see automobiles race. You make money. Therefore, you have to pay taxes. But wait a minute. First you get to take a tax break because your asset, the race track, has lost value or depreciated, and it depreciates more with each passing year. So you subtract the amount of that depreciation from your tax bill. Now accelerated depreciation lets you subtract this depreciation at a faster rate. Even though your race track has only depreciated a little bit the first year after you built it, you get to deduct a whopping amount from your tax bill. You might not even have to pay any taxes at all.
The rationale for accelerated depreciation is guess what? It creates jobs. Only problem is that that is not true. David Cay Johnston in The Fine Print says:
“…future Nobel Prize winner Robert Solow showed that accelerated depreciation deductions do not increase economic growth. Other studies by leading tax economists, including Dale Jorgenson of Harvard University and Robert Hall of the Hoover Institution at Stanford University … came to the same conclusion. Most compelling of all, the coauthor of the study that was behind the 1954 accelerated depreciation law, Evsey Domar, acknowledged in 1957 that Solow was right and he was wrong – accelerated depreciation does not produce faster economic growth.”
Johnston goes on to say, and I paraphrase, that even that antibusiness socialist, Barack Obama, sponsored 100% immediate write-offs of all new investment during most of his first term, which should have made him a darling of the pro-capitalist business crowd. Meanwhile, as you, the American people, have your taxes taken immediately right out of your paycheck, the big business crowd gets to defer them. This means that you, the 99%, have to pay more taxes to maintain the same level of public services. Of course, the right wingers think you should go without them at all thus keeping the cost of government down while all the while they add tax breaks for themselves to deficit reduction bills.
But to be fair the pork was sponsored by both Republicans and Democrats according to an article in the New York Times.
“The tax break in the new federal law closely resembles the language of racetrack tax bills introduced by Senator Debbie Stabenow, Democrat of Michigan, home to the auto industry and the Michigan International Speedway; Representative Vern Buchanan, Republican of Florida, home of the Daytona International Speedway; and Dean Heller, a Republican senator and former representative from Nevada, home of the Las Vegas Motor Speedway.
“Among the co-sponsors, or chief backers, were Senator Pat Roberts, Republican of Kansas, home of the Kansas Speedway, and the senators from North Carolina, home base for many race teams and the Nascar industry — Richard M. Burr, a Republican, and Kay Hagan, a Democrat.
“Also supporting the legislation was Senator Jon Kyl, Republican of Arizona, whose love for the sport earned him the nickname Mr. Nascar. Mr. Kyl, who just retired from Congress, used to volunteer at the Phoenix International Raceway.
“Ms. Stabenow’s Web site includes pictures of her at a Nascar race at the Michigan track in August.”
In addition to NASCAR, the pork in the American Tax Relief Bill is helping to fund Goldman Sachs’ new headquarters in lower Manhattan and subsidize the very profitable Disney corporation. Nascar, Wall Street and Hollywood came out the big winners. But nobody in the media even mentioned it. Like it was not important. Like we should just accept it without comment. Hey, it’s just the cost of doing business. It’s “normal.” Deficit reduction be damned.
Hey, vaunted punditry, why don’t you wake up and publicize the pork in each bill before it goes down. Or is it top secret?