Friday, December 19, 2014

Before Leaving Town, the Senate Passed a Corporate Tax Giveaway. Who were the only 8 Ds to vote NO?

n Tuesday, before leaving town, the Senate voted to pass H.R. 5771, the so-called Taxpayer Increase Prevention Act. The House had voted for this corporate tax giveaway two weeks ago in a strong bipartisan vote of 378 to 46 because everybody loves giving out tax cuts for Christmas.

Sheldon Whitehouse (D-RI) gave a strong floor speech on the folly of the bill:
The so-called “tax extenders” package includes the one-year extension of a hodgepodge of over four dozen tax provisions.  This extension is not for the year ahead of us, as one might reasonably expect, but rather for the year that’s mostly past us.  In other words, we will be extending for 2014 tax programs that expired at the end of 2013.  This means that, for the most part, the bill will offer credits and deductions to reward things that have already happened while doing absolutely nothing to help businesses and individuals plan for the future.
If tax policy is intended to influence behavior, the extenders bill is a double failure: it spends money rewarding things that have already happened and offers no incentives for businesses and individuals for the year ahead.
Let’s take for example the production tax credit for wind energy, a program I strongly support that encourages the construction of wind farms.  The provision in the extenders bill offers this incentive for properties for which construction has commenced by the end of 2014.  That’s three weeks from now.  Instead of giving energy companies time to plan and prepare wind projects, we’re saying: if you happen to have one ready to go, you’ve got until the end of the holiday season to break ground.  The clock is ticking.
In contrast to Congress’s temporary, year-to-year treatment of the wind tax credit and other incentives for renewable energy, Big Oil and Gas enjoy permanent subsidies in the tax code.  It’s long past time to reform the tax code so it reflects America’s 21st Century energy priorities.  Permanent incentives for oil and gas and temporary programs for renewable energy is simply upside-down public policy.    
In total, there are 50 or so extensions in this bill, and the only thing they seem to have in common is that Congress repeatedly packages them together.  It’s truly a mix of the good, the bad, and the ugly.  Let’s start with some of the good provisions.  In addition to clean energy incentives, the bill extends a popular tax credit that encourages businesses to hire veterans, a host of incentives for energy efficiency, and a provision that ensures that families that lose their homes in foreclosure don’t incur tax bills for the deficiencies.  These provisions have strong bipartisan support.
Then there’s the bad: the unjustifiable tax giveaways.  These include so-called “bonus depreciation,” a program that allows corporations to deduct the costs of equipment right away instead of spreading out the deductions over the life of the equipment.  Congress first included this provision in 2009 in the Recovery Act when it made some sense.  The idea was to encourage businesses to accelerate their purchases when the economy most needed the investments.  We’ve extended it so many times, though, that now we’re just giving money away to corporations for buying things they would have bought anyway.  That’s a nice subsidy for the businesses, but not a wise use of taxpayer dollars.
The bill also includes tax giveaways for NASCAR tracks and racehorses.  While I know these sports are popular, it’s hard to justify subsidizing them with taxpayer dollars at a time when we’re running large deficits and face the prospect of more budget sequestration.  
And then there’s the ugly, the stuff that does actual harm.  There’s a pair of provisions in the bill--the “active financing” and “controlled foreign corporation look through” provisions--that reward U.S. corporations for shifting money overseas to avoid paying taxes.  Sadly, there are already a number of provisions in the tax code that encourage companies to move operations and assets overseas.  We should repeal those provisions, not enhance them as the extenders bill does.
He also called out Republican hypocrisy: the same Republicans demanding that an extension of emergency unemployment compensation be offset have no problem with increasing the deficit by $41 billion via tax giveaways.

Unfortunately, just like in the House, the bill passed easily: 76-16.

44 Democrats, 1 Independent (Angus King), and 31 Republicans voted for it.

8 Democrats and 8 Republicans voted against it.

Who were the 8 Democrats who voted against it?

Michael Bennet (D-CO)
Sherrod Brown (D-OH)
Pat Leahy (D-VT)
Joe Manchin (D-WV)
Jeff Merkley (D-OR)
Elizabeth Warren (D-MA)
Sheldon Whitehouse (D-RI)
Ron Wyden (D-OR)

Senators Bernie Sanders (I-VT) and Barbara Boxer (D-CA) were not present for the vote. Bernie, I believe, was already en route to Iowa for previously scheduled talks.

Brown, Manchin, and Warren had all voted to filibuster and reject the CRomnibus bill Saturday night. Merkley, Whitehouse, and Wyden had voted against its final passage with them, but had voted for cloture.

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