How Corporate Tax Credits Got in the "Cliff" Deal
January 14, 2013
The deal on the fiscal cliff not only provided families with relief from tax hikes, but also helped many lobbying groups trying to secure their interests, says Timothy P. Carney, the Washington Examiner's senior political columnist.
- The fiscal cliff legislation included $76 billion in special interest tax credits for several companies.
- Attached to the bill was the Family and Business Tax Cut Certainty Act of 2012, which passed the Senate Finance Committee in August, providing subsidies for biotech companies, wind-turbine makers and biodiesel producers, among others.
- Altogether, about 50 tax credit extensions were passed.
In July, before talks over the fiscal cliff legislation began, Senator Max Baucus (D-Mont.) announced that the Senate Finance Committee would craft legislation to extend many expiring tax credits. This attracted lobbyists from several different industries to secure their interests.
Companies like General Electric and Citigroup hired former senators John Breaux and Trent Lott to lobby for provisions that defer U.S. taxes, functionally allowing these companies to dodge nearly all of the corporate income tax.
The law firm Capitol Tax Partners also represented powerful clients such as Goldman Sachs, Morgan Stanley, the American Wind Energy Association and even Hollywood to lobby for an extension to special tax credits.
Before the fiscal cliff legislation, the Family and Business Tax Cut Certainty Act was stalled because of the election season and resistance from House Republicans that didn't want to subsidize green energy. The bill remained stalled until last week when the White House insisted that the exact language from Baucus' bill be included in the fiscal cliff legislation.
Source: Timothy P. Carney, "How Corporate Tax Credits Got in the 'Cliff' Deal," American Enterprise Institute, January 2, 2012.
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