Tim Carney has a revealing piece in the Washington Examiner that chronicles how certain tax credits were incorporated into the Fiscal Cliff Deal. He reports:
Here’s what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.
Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.
General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision — known as the “active financing exception” — is the main tool GE uses to avoid nearly all U.S. corporate income tax.
Liquor giant Diageo also retained Breaux and Lott to win extensions on two provisions benefitting rum-making in Puerto Rico.
It gets worse if you read the entire article. This is a textbook example of why things are so broken in Washington. Our government no longer serves the people–it serves the special interests. Were it otherwise, we wouldn’t be running massive deficits, we wouldn’t be celebrating tax hikes on America’s most productive, and we wouldn’t be cultivating a culture of dependency and entitlement.
I wonder if the Senate had more than three minutes before voting on this bill to read it if things would have been different…