If you are curious about the reason for the stalemate in the debt ceiling negotiations, it has to do with GOP insisting there be no tax increases or ending of any tax subsidies, which they also view as a tax increase. All newly elected Republicans are asked to sign a pledge given to them by Grover Norquist that essentially says they will never vote for any tax increase, and all current Republicans serving in office have signed this pledge.
This has created a road block in efforts to fix our budget crisis. Economists, conservative, liberal, and nonpartisan, have gone on record saying there is no way to balance our budget without tax increases. We cannot cut our way (Medicare, Medicaid, Social Security) out of this financial mess.
Are you curious about some of the tax subsidies the Republicans are protecting? An estimated $40 million in write-offs that owners of motorsports entertainment complexes are given; the $162 million in expensing rules for U.S. film and television productions; and $30 million (over ten years) that could be saved by eliminating a withholding provision for those lucky enough to win at horse and dog race tracks.
Taxpayers for Common Sense compiled a list of some of the tax expenditures Democrats are looking to end. The money that would be saved in comparison to our fiscal crisis is not a large amount but it is a starting point, however, the GOP will not even agree to end these expenditures. Keep in mind our tax code is full of these kind of expenses, and Democrats feel all should be put on the table.
What do you think….could our government do without this kind of spending (aka corporate socialism)?
Extension of Seven Year Straight Line Cost Recovery Period for Motorsports Entertainment Complexes (NASCAR tracks)
Estimated cost to taxpayers in 2011: $40 million
Extension of Special Expensing Rules for U.S. Film and Television Productions
Estimated cost to taxpayers in 2011: $162 million
Extension of Temporary Increase in Limit on Cover Over of Rum Excise Tax Revenues to Puerto Rico and the Virgin Islands
Estimated cost to taxpayers in 2011: $235 million
Extension of American Samoa Economic Development Credit
In general, this credit allows certain corporations operating in American Samoa to offset a portion of their U.S. tax liability on income earned in American Samoafrom active business operations, sales of assets used in a business, or certain investments in American Samoa. This credit would be extended for two years (through 2011).
Estimated cost to taxpayers in 2011: $15 million
Special tax withholding break on Horse & Dog track winnings
The American Jobs Creation Act of 2004 eliminated a 30% tax withholding on income earned by foreigners who gamble at American horse racing and dog racing tracks. Other forms of gambling such as lotteries do not receive this special treatment.
10-year savings: $30 million
Starbucks Roasting Provision
The American Jobs Creation Act of 2004 jobs bill also declared that coffee roasting, but not coffee preparation, is a manufacturing activity. This special classification allows Starbucks to qualify for a corporate tax reduction designed for hard-hit domestic manufacturing companies.
10-year savings: not estimated
Race horse owners depreciation
The 2008 farm bill permitted racehorse owners to depreciate horses over three years instead of the normal seven year period.
10-year savings: $126 million