Fiscal cliff payoffs
For a lucky few with the right political connections, the “fiscal cliff” presented an opportunity to take flight upon pork-encrusted wings. The bill, which no one in the House of Representatives had time to read before voting on it, was packed with juicy special-interest tax breaks and subsidies.
Why not get the party started with a little federally-subsidized rum? $222 million worth, to be precise. The wonderful exercise in fiscal restraint that emanated from the Senate included an extension of excise taxes – which would, technically, be a tax on the middle class, as many of them drink rum. The bulk of the money from these taxes is remitted to Puerto Rico.
They don’t guzzle a lot of rum at NASCAR rallies, but they love to consume fiscal cliff pork rinds. NASCAR lobbyists secured a $46 million tax break that allows the cost of race tracks and concession stands to be written off over seven years. They can write off maintenance costs as well.
Perhaps you’d care for a light snack of asparagus and algae dip with your subsidized rum. Producers of those products scooped up $59 million in tax credits. In case you’re wondering, yes, the algae credit ties into President Obama’s plan to create algae-fueled cars. Clearly that was something that needed to be part of the emergency last-minute fiscal cliff deal.
Hollywood, having done its part to assist the re-election of Barack Obama, was repaid handsomely with fiscal cliff pork. The $11 billion movie industry scored $266 million in extended tax credits. They get to write off the first $15 million of production costs incurred in the United States… or the first $20 million, if they spend the money in an “economically depressed area.” Small businesses with $450,000 in annual income are looking at a big tax increase to finance tax breaks for multi-millionaire Hollywood moguls. Not quite what Obama supporters generally have in mind when they dream about “wealth redistribution,” is it?
But take heart, middle class taxpayers! You get some fiscal cliff pork too… if you decide to purchase an electric scooter. Did you know the skin-of-our-teeth escape from the terrors of automatic tax rate increases and spending cuts included a 10 percent tax credit for the purchase of electric scooters? Well, you do now. Why not use the last of your Christmas money to purchase some sustainable transportation? The total cost to taxpayers is estimated at roughly $7 million. There are also extended tax credits for the manufacture and construction of energy-efficient appliances and homes, worth about $800 million altogether.
For extra environmental sustainability, hook your fiscal cliffmobile up to a taxpayer-subsidized wind farm. The wind energy “industry” got another extension of the tax credits that it is almost entirely dependent on for survival. “Since it was first offered in 1992, the tax credit has lapsed several times, only to be revived by Congress later,” the San Francisco Chronicle recalls. “The last time it died, in 2003, wind-turbine installation plunged 76 percent the following year. The wind association estimated that half of the industry’s 75,000 American workers could lose their jobs if Congress didn’t extend the credit this time.”
The total cost of the wind energy tax credits is just north of $12 billion over the next ten years. Wind power currently accounts for about 3 percent of U.S. energy production. There must be a pretty strong updraft coming off the fiscal cliff, if it’s such a great spot for windmills.
In sum, taking one year’s worth of the wind energy bonanza into consideration, that’s a little over $2.5 billion in pork-barrel spending, which actually does make the fiscal cliff bill relatively lean by Washington standards. It’s like a shopaholic coming home with maxed-out credit cards, but boasting of all the money he “saved” by taking advantage of great sale prices at the mall.
“Absolutely it is filled with pork,” complained Rep. Darrell Issa (R-CA) of the House Oversight Committee, who voted “no” on the bill. “And it is pork particularly because they couldn’t get these through any other way, except by throwing them into a bill like this.”
But there’s no “spending problem” in Washington, right?