THE LOOPHOLE FACTORY
April 16, 2008
Congress is becoming a tax loophole production factory for the powerful, says the Wall Street Journal.
- The "Foreclosure Prevention Act" passed the Senate last week and contains $25 billion in tax subsidies for home builders and industry interests hurt by the housing crunch.
- Builders will be able to offset current losses against taxes paid in the past three years, which will mean billions of dollars of tax rebate checks from Uncle Sam.
- Other winners include the large Wall Street banks that have lost money in the subprime mortgage meltdown.
This giveaway came only a few weeks after the National Association of Home Builders threatened to suspend their PAC contributions to Congress "until further notice" -- meaning until they saw more return on their political investments, says the Journal.
With this loophole factory open for business on Capitol Hill again, business lobbies are spending more money than ever to curry Congressional favor:
- The real-estate industry may be in dire financial straits, but housing industry PACs have already contributed $56 million to political campaigns this election cycle, according to the Center for Responsive Politics.
- Forty new business lobbying firms have registered since January to represent the likes of concrete makers, home builders, Freddie Mac and the Realtors, reports Politico.com.
- Wall Street investment banks are also pumping up the volume of campaign contributions as they seek financial relief from the subprime mess.
Source: Editorial, "The Loophole Factory," Wall Street Journal, April 15, 2008.
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