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GIMME A BREAK

Critics Slam 'Crony Capitalism' in Fiscal Cliff Deal

More than $63 billion in corporate tax breaks given to NASCAR track owners, Hollywood producers, rum makers and others

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by Lisa Fine

Staff Writer t

Image: AP

The fiscal cliff tax compromise, which is being touted as making the wealthy pay their fair share, contains billions in corporate tax breaks.

These business tax loopholes, inserted into the bill as part of a package of tax extenders approved by the Senate Finance Committee, will cost more than $63 billion next year, according to an analysis by Congress' Joint Committee on Taxation, the Los Angeles Times reported.

The tax breaks include ones for NASCAR racetracks, rum distillers, companies operating in American Samoa (including a StarKist factory), wind-energy companies, and television and movie producers who film in the United States, especially in economically depressed areas.

Supporters say such measures boost the economy by helping businesses and creating and preserving jobs. Critics say the subsidies show the need for reform of the tax system and are sure to be part of the bigger upcoming debate in Washington on deficit reduction and spending cuts.

An editorial in today's Wall Street Journal about the deal was headlined: "Crony Capitalist Blowout." "Republicans who are looking for a new populist message have one waiting here," the editorial said. "They could start by repudiating the corporate welfare in this New Year disgrace."

Via the Wall Street Journal and the Los Angeles Times

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Comments (view in Forum)

  • jessejaymes
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    Absolutely Criminal. And it's both sides. That ain't liberals giving tax dodges to NASCAR and that ain't conservatives giving dodges to Hollywood. I'm telling you people. It happens on EVERY bill passed in Washington D.C.. The time has come. RE-ELECT NOBODY 2014
  • u
    AceLuby
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    @jessejaymes I totally agree, it's both sides and it's ridiculous. My question is why are tax breaks good, but direct spending of the same amount is bad? If we're going to be giving money away, why not do something that directly helps the American people like say... building a nationwide rail system, or a national bio diesel program, or fixing our highways and bridges, or investing in solar energy which will be cheaper than coal in southern states in TWO years? Any of these things are better than a freaking NASCAR track or Hollywood bonus and they all add to the deficit equally... we get NOTHING from these tax cuts. Absolutely nothing. It's gross.
  • jessejaymes
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    @AceLuby Why? Because we spend more money on the Military than the next 9 nations combined. 30 years ago the majority of the Chinese population had never even talked on a telephone. Today they just opened the longest, fastest, most serviceable high speed rail system in the world. but hey we spend 10 times what the Chinese spend on the Military. Go figure.
  • jessejaymes
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    @AceLuby "Governor Moonbeam" Jerry Brown of California has been trying to get high speed rail off the ground in this country for about 40 years now and they call him crazy. Meanwhile ever industrialized country in the world now has it. EXCEPT US.
  • View all 11 replies >
  • Real4WheelDrv
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    Racetracks? Rum distillers? Starkist? Is it me or is the Senate hoping we'll be too busy drinking and watching shiny horseless carriages down at the ol' hippodrome to notice Congress is giving us another rectal exam without the courtesy of a reach around/under?
  • u
    KyleMFb
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    Corporate tax breaks just allow company's to have even bigger profits corporations wright their own rules they wouldn't pay the little they pay now if it wasn't for workers unions
  • rkinsawjoe
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    Hey, take it easy there pal. Those corporations are people too,just the same as you and me. And since they are the job creators and they certainly have more money than you..they may even be a little better.
  • u
    seedtick
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    It is wrong to equate "crony capitalism" with corporate tax breaks. Giving a tax break to stimulate growth in an industry and create more jobs is good business. But, giving special preference to corporations because of political and social idealogy is absolutely wrong...and giving preference to corporations as political payback is absolutely criminal.
  • u
    AceLuby
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    One person's tax break to stimulate growth is another's special preference based on ideology or political payback.

    When it comes down to it, tax breaks add to the deficit and spending adds to the deficit. The question should be is why is one good and the other bad?
  • u
    seedtick
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    @AceLuby Spending must be limited to necessary things. Corporate tax breaks must be limited to instances that stimulate the economy as well as grow the GDP and must never be permanent. The problem in Washington DC today is idealogical craziness and political payback on a massive scale. We The People cannot afford this any longer. The return we are receiving has become far less than the investment we are making. It is unsustainable.
  • u
    AceLuby
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    @seedtick And what is 'necessary' is in the eye of the beholder and tax breaks are an extremely weak form of stimulus, but both add to the deficit equally. We also stopped making investments a long time ago. 3% toward education, bridges and highways in disrepair, sewer systems from the 50's... when you make no investment you get no return and we stopped making investments 30 years ago... is it really that surprising that we're now no longer getting a sustainable return?
  • u
    seedtick
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    @AceLuby Since when does the federal government do sewers? Those are municipal projects. Oh, I know some local governments try to get federal grants for everything, but mostly that is done by local bond issues.
    I hope you don't consider Barack Husssein Obama's direct form of crony stimulus to be the right way to do things.
  • PNWest
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    Unfortunately this is just about the only area where we see any real bipartisanship in America. Not for the good of the country mind you but as a payback to their corporate masters by a bunch of greedy and immoral elected officials.
  • PNWest
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    @David944 Even a conservative should have enough sense to realize that we liberals don't blame GW Moron for everything. Only those things he was responsible for screwing up like eliminating the Clinton budget surpluses, ignoring at least 28 warnings prior to 9/11, failing to catch bin Laden, 2 unfunded wars, giant unfunded Rx give away to big pharm, cratering the economy, mishandling Katrina, etc. The blame this time is on representatives of both parties that shoved in gifts to their corrupt corporate masters. Liberals place the blame where the blame belongs. Conservatives can only blame democrats.
  • PNWest
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    @David944 Yes it is. And he is doing a good job of paying for the mistakes that GW Bush left for him in spite of GOP obstructionism.
  • View all 10 replies >
  • kirbstomp1
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    This proves to everyone that America is ran by a one party system. The democratic run senate is giving corporate tax breaks. Open your eyes people.
  • DerivePI
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    sigh - "Dear Jim Gerlach,- Just as I was getting over your absolute failure to listen to us for passing TARP 1, you had to go and renege on what little cost cutting measures congress had already agreed to. I can only not vote for you once, but I'll try to convince all of your other constituents who I know to vote for the Libertarian candidate in 2 years. My actions might get Dinniman (D) elected to your position, but at least he won't betray our trust"
  • DerivePI
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    The really sad thing is that they were probably going to lose the re-election in two years anyhow. Now they can't even look back at their record and say they did the right thing.
  • DARSB
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    I don't have a problem with corporate tax breaks per se - tax credits do create new jobs (in fact, the wind power industry now employs more people than the coal industry). But even the appearance of quid pro quo must be avoided, something Congress is terrible at.
  • justapirate
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    I had a short rant about this under another topic. This has GOT to stop. If we can't get a line-item veto in this country then we need to AT LEAST prohibit any amendments to a bill that aren't directly concerning the issue the bill is addressing. If this stuff is so necessary let it stand or fail on its own merits and not because some dipfart politician slips it into the bill just because he can.
  • Bobolinsky
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    Oh look... Chris Dodd got in on the money grab too.

    But a special award goes to Chris Dodd, the former Senator who now roams Gucci Gulch lobbying for Hollywood's movie studios. The Senate summary of his tax victory is worth quoting in full: "The bill extends for two years, through 2013, the provision that allows film and television producers to expense the first $15 million of production costs incurred in the United States ($20 million if the costs are incurred in economically depressed areas in the United States)."
  • Bobolinsky
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    From the LA Times article...

    "Sen. Tom Coburn (R-Okla.), one of the few who voted against the measure in committee, said he fought vigorously against what he called "tax goodies for special groups."

    "I lost every vote," he said.

    "I'm sure there were people on both sides that wanted it in" the fiscal cliff deal, Coburn said. "You have people calling for fairness, but they want to protect the wealthy or their supporters. And that's on both sides of the aisle."

    The only reason I was willing to give the "Gang of Six" much chance to come up with something that's better than nothing.

    Maybe what we need in Congress is a whole lot of doctors who have had their own practice... especially eye doctors and children of eye doctors.

    "Coburn's father was an optician and founder of Coburn Optical Industries... After recovering from an occurrence of malignant melanoma, Coburn pursued a medical degree and graduated from the University of Oklahoma Medical School with honors in 1983. He then opened a medical practice in Muskogee, Oklahoma..."
    http://en.wikipedia.org/wiki/Tom_Coburn

    He was elected to the House as part of the fiscally conservative wave that swept into Congress in 1994 and has been a buoy for fiscal sanity ever since.
  • dlw
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    I feel tax breaks for the little guy is good but not to sure about the big guys. On the local level the little guy is taking it in the shorts by never ending tax increases by city, county and state. Tax breaks may or may not be good for the big guy. It might be incentive for the ones that went offshore to return, or give the ones thinking about going offshore enough money to leave.
  • frigginhell
    !
    "Republicans who are looking for a new populist message have one waiting here," the editorial said. "They could start by repudiating the corporate welfare in this New Year disgrace." Yes, and every single member of that party who tries to speak openly against it will be slammed for the hypocrisy of his actions. Both parties are guilty of this garbage. The system is broken. They don't even attempt to try and fix it because it's broken in their favor, the career politician. Earmarks should be either removed or have to be signed by the member attatching them to a bill. It's that simple. You want to give a break or handout to someone somewhere, then let your constituents know about it and let the rest of the voters in this country know about it. They've done this back room BS for far to long. This is the kind of garbage that bogs us down. I don't want to hear some partisan bickering on this shit. Both parties are to blame and neither is less guilty than the other.
  • justapirate
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    @Politicskid While it would be easy to agree with you there were also things Obama didn't like in the bill that he 'declared victory' about. I'd rather blame the moron that did the dirty deed than the figurehead.
  • Politicskid
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    @justapirate Fine, is this better?

    Oh, so Reid and the senate Democrats had to give their stupid Hollywood friends a little something for making them win.
  • View all 19 replies >
  • Keyjo
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    I thought you are a staunch capitalist: all about the rich getting richer. Lower taxes for the wealthy. You should be clicking your heels!
    If you think this is bad, you should be thankful your boy Romney lost, or this would be just the tip of the iceberg.
    This is just business as usual for American capitalism.
    Small businesses and us little guys are in the same boat, some people just don't realize it. We are all getting screwed by that one percent at the very top.
  • Politicskid
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    @Keyjo We shouldn't regulate like this. Let's put this into perspective. Giving tax breaks to a particular industry is essentially the same things as giving money to certain industries, which all true free market capitalists are against.
  • Politicskid
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    @Keyjo I'd much prefer taxes were just lowered a little bit for everybody, not a lot just for liberal campaign donors in Hollywood.
  • View all 6 replies >
  • artjeb
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    @justapirate I'd bet that CHUCKY CHEEZE SCUMER from N Y wont do it. He would rather hold a photo op stating he would look in to it tho he is part of the crap
  • Politicskid
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    Also, any of you liberals think that this fiscal cliff deal will help pay off the debt, you're way wrong. With all these exemptions, the Congressional Budget Office projects the fiscal cliff deal will add $3 trillion over the next ten years.
  • justapirate
    !
    No, it wasn't gonna help the debt situation. The problem stemmed from no one outside of politics knowing what kind of financial decisions to make. It didn't cure all and the politicians weren't about to let that happen anyway. But, at least now some of us 'real' Americans have some clue of what we're gonna do.
  • PayThatCEO
    !
    So what are you doing about it? What are any of us doing about it?

    Let's look at it this way. Neither you nor I nor the majority of Americans had anything to do with this deficit or where our country is financially today. We sat back and gave permission to Washington to spend like fools for the better part of a decade. Now that there's no more money to spend, all of a sudden they want to punish US.

    Pray tell, who has benefitted most from this decade of unbridled spending? Well, the rich have grown significantly richer. All reports point to the fact that this has been the decade to be rich and get rich in America. From war-profiteering to business bailouts and strategies that have created a wealthy echelon above and beyond anything we've ever seen before, the average American taxpayer has picked up the tab. Now they're wanting even more.

    Stupid people we are because we can't even see when we're being manipulated, robbed, and scammed out of what little we have. We're so worried about protecting our political territory that God forbid we'd open our eyes and see what's really taking place. God forbid we would look to the past to see how we've gotten to the present and how the future will continue to destroy us.

    Look. For at least ten years now, OUR tax dollars have been going away. They've been sucked up a pipeline and dispersed to those in control. America has no money because the money is gone. Those at the top have it. Now they want more. They know we won't fight back. They know we won't do anything but sit and complain. So, they'll take more. And they'll grow fatter and richer and we'll grow thinner and weaker.

    When do we say enough is enough? Is the deficit your fault? Is it my fault? No. Why should we have to pay for years of mismanagement and greed? Why should we have to pay make DOD investors rich beyond their wildest dreams? Being rich is fine, but not if it's funded by the rest of us; not if it's a detriment to the country as a whole. We'd better wake up. We'd better get angry.
  • PayThatCEO
    !
    @JustTheFacts

    And that's what we need, my friend. But until everyone puts their stupid bipartisanship aside and looks at the real problems, we will continue to be the suckers that we are. Washington knows it can make us to ANYTHING it wants.
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