http://www.motherjones.com/news/feature/2005/03/corporate_tax_bill.htmlMake Your Taxes Disappear!*
*Offer limited to cruise ship owners, shopping mall developers, ceiling fan importers, natural gas distributors, and other corporations with suitable K Street connections.
By Michael Scherer
March/April 2005 Issue
IN A SEASON OF campaign rallies and million-dollar ad buys, President Bush opted for one decidedly understated ceremony. On October 22, just 11 days before the election, he boarded Air Force One to sign $137 billion in new tax breaks for corporate America, one of the largest industry giveaways in two decades. This was his fifth major tax cut, but this time there was no glad-handing, no photo op—just a one-sentence press release. The president had nothing to brag about. His signature expanded exactly the sort of tax avoidance he had railed against at a campaign rally that morning: "The rich hire lawyers and accountants for a reason when it comes to taxes," Bush had told a roaring audience at a hockey arena in Wilkes-Barre, Pennsylvania. "That's to slip the bill, and stick you with it."
It was an apt description of the vaingloriously named American Jobs Creation Act of 2004. Though the law began as an effort to end a $5 billion-a-year corporate tax subsidy that had been declared illegal by the World Trade Organization, it had grown into a hydra-headed beast. The law's principal author, Ways and Means Committee chairman Bill Thomas (R-Calif.), jokingly referred to it as "Miss Piggy" on the House floor. Arizona Senator John McCain decried "the worst example of the influence of special interests that I have ever seen." The president's own Treasury secretary, John Snow, bemoaned the myriad "tax provisions that benefit few taxpayers." Top White House economists protested one new loophole that would cut $3 billion, primarily from the taxes of pharmaceutical and high-tech companies, without yielding "any substantial economic benefits."
Almost every industry in America received special favors. The tax cuts included half a billion for shipbuilders Northrop Grumman and General Dynamics, $100 million for NASCAR racetrack owners, and $9 million for arrow manufacturers. Importers of Chinese ceiling fans—like Home Depot—got a break, as did energy companies angling to build a natural gas pipeline in Alaska. About $231 million went to reduce the taxes of shopping-mall developers in the states of key House and Senate members. Four Texas companies received special dispensation to shelter their profits in the Caribbean. The law also cut taxes on railroads, coffee roasters, timber firms, and Hollywood studios. General Electric received tax benefits worth more than $1 billion over the next decade.
"From the beginning to the end, this was designed by lobbyists," says C. Eugene Steuerle, codirector of the Urban-Brookings Tax Policy Center, who spearheaded corporate tax reform as a member of the Reagan Treasury in 1986. "The only question was whether this was the worst tax bill in our lifetime or the worst tax bill in U.S. history."
..more..
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
