Posted: 10:19 am Sunday, December 12th, 2010
By Jamie Dupree
After the November elections, Tea Party Types were loudly proclaiming that they were going to keep their eyes on Congress. All I can figure is they must be asleep right now.
So far, there hasn’t been much outrage from the Tea Partiers on the package of tax plans included in the tax agreement between the White House and Congressional Republicans.
Obviously, Republicans are more likely to support the extension of all current income tax rates and more from the Bush tax cuts of 2001 and 2003.
But one might wonder if the “business as usual” aspect of it – related to stuffing an extension of a series of business and individual tax breaks might have received more than just spotty opposition.
That lack of outrage probably means one thing on Capitol Hlil – the fix is in – and this plan will be approved before Christmas.
The overall price tag from the Congressional Budget Office of $857 billion – all of it added to the deficit – also hasn’t prompted much hand-wringing in the Congress, either.
And as I pointed out in my other blog today – that’s more than the size of the economic stimulus law.
That’s interesting, because just six weeks ago, there were lots of people demanding an end to giant-sized bills.
Heck, last week, lots of people were hailing the work of a special deficit commission. What a difference a few days and weeks make, eh?
So what about some of the special tax provisions in this bill – let’s look first at some of the energy items in the tax deal:
Sec. 701. Incentives for biodiesel and renewable diesel.
Sec. 702. Credit for refined coal facilities.
Sec. 703. New energy efficient home credit.
Sec. 704. Excise tax credits and outlay payments for alternative fuel and alternative fuel mixtures.
Sec. 705. Special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities.
Sec. 706. Suspension of limitation on percentage depletion for oil and gas from marginal wells.
Sec. 707. Extension of grants for specified energy property in lieu of tax credits.
Sec. 708. Extension of provisions related to alcohol used as fuel.
Sec. 709. Energy efficient appliance credit.
Sec. 710. Credit for nonbusiness energy property.
Sec. 711. Alternative fuel vehicle refueling property.
You can see why one might call these provisions “tax earmarks.”
As for individual tax breaks, there are a bunch of those as well:
Sec. 721. Deduction for certain expenses of elementary and secondary school teachers.
Sec. 722. Deduction of State and local sales taxes.
Sec. 723. Contributions of capital gain real property made for conservation purposes.
Sec. 724. Above-the-line deduction for qualified tuition and related expenses.
Sec. 725. Tax-free distributions from individual retirement plans for charitable purposes.
Sec. 726. Look-thru of certain regulated investment company stock in determining gross estate of nonresidents.
Sec. 727. Parity for exclusion from income for employer-provided mass transit and parking benefits.
Sec. 728. Refunds disregarded in the administration of Federal programs and federally assisted programs.
And then in this section, you can see the special business tax deals for Puerto Rico, American Samoa and more, known as the “tax extenders,” because they are often extended for a year or two at a time, instead of just being made a permanent part of the federal tax code.
Subtitle C–Business Tax Relief
Sec. 731. Research credit.
Sec. 732. Indian employment tax credit.
Sec. 733. New markets tax credit.
Sec. 734. Railroad track maintenance credit.
Sec. 735. Mine rescue team training credit.
Sec. 736. Employer wage credit for employees who are active duty members of the uniformed services.
Sec. 737. 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.
Sec. 738. 7-year recovery period for motorsports entertainment complexes.
Sec. 739. Accelerated depreciation for business property on an Indian reservation.
Sec. 740. Enhanced charitable deduction for contributions of food inventory.
Sec. 741. Enhanced charitable deduction for contributions of book inventories to public schools.
Sec. 742. Enhanced charitable deduction for corporate contributions of computer inventory for educational purposes.
Sec. 743. Election to expense mine safety equipment.
Sec. 744. Special expensing rules for certain film and television productions.
Sec. 745. Expensing of environmental remediation costs.
Sec. 746. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
Sec. 747. Modification of tax treatment of certain payments to controlling exempt organizations.
Sec. 748. Treatment of certain dividends of regulated investment companies.
Sec. 749. RIC qualified investment entity treatment under FIRPTA.
Sec. 750. Exceptions for active financing income.
Sec. 751. Look-thru treatment of payments between related controlled foreign corporations under foreign personal holding company rules.
Sec. 752. Basis adjustment to stock of S corps making charitable contributions of property.
Sec. 753. Empowerment zone tax incentives.
Sec. 754. Tax incentives for investment in the District of Columbia.
Sec. 755. Temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands.
Sec. 756. American Samoa economic development credit.
Sec. 757. Work opportunity credit.
Sec. 758. Qualified zone academy bonds.
Sec. 759. Mortgage insurance premiums.
Sec. 760. Temporary exclusion of 100 percent of gain on certain small business stock.
And before you tell me that this is because the Democrats are running the show in Congress right now, let’s go back to 2006, when the GOP was running the House, Senate and controlled the White House.
What follows are the basics of HR 6111, which was approved in Decmeber of 2006 and contained tax extender provisions. You will see how similar they are to the provisions that will be voted on this week in the Congress.
TITLE I–EXTENSION AND MODIFICATION OF CERTAIN PROVISIONS
Sec. 101. Deduction for qualified tuition and related expenses.
Sec. 102. Extension and modification of new markets tax credit.
Sec. 103. Election to deduct State and local general sales taxes.
Sec. 104. Extension and modification of research credit.
Sec. 105. Work opportunity tax credit and welfare-to-work credit.
Sec. 106. Election to include combat pay as earned income for purposes of earned income credit.
Sec. 107. Extension and modification of qualified zone academy bonds.
Sec. 108. Above-the-line deduction for certain expenses of elementary and secondary school teachers.
Sec. 109. Extension and expansion of expensing of brownfields remediation costs.
Sec. 110. Tax incentives for investment in the District of Columbia.
Sec. 111. Indian employment tax credit.
Sec. 112. Accelerated depreciation for business property on Indian reservations.
Sec. 113. Fifteen-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant property.
Sec. 114. Cover over of tax on distilled spirits.
Sec. 115. Parity in application of certain limits to mental health benefits.
Sec. 116. Corporate donations of scientific property used for research and of computer technology and equipment.
Sec. 117. Availability of medical savings accounts.
Sec. 118. Taxable income limit on percentage depletion for oil and natural gas produced from marginal properties.
Sec. 119. American Samoa economic development credit.
Sec. 120. Extension of bonus depreciation for certain qualified Gulf Opportunity Zone property.
Sec. 121. Authority for undercover operations.
Sec. 122. Disclosures of certain tax return information.
Sec. 123. Special rule for elections under expired provisions.
TITLE II–ENERGY TAX PROVISIONS
Sec. 201. Credit for electricity produced from certain renewable resources.
Sec. 202. Credit to holders of clean renewable energy bonds.
Sec. 203. Performance standards for sulfur dioxide removal in advanced coal-based generation technology units designed to use subbituminous coal.
Sec. 204. Deduction for energy efficient commercial buildings.
Sec. 205. Credit for new energy efficient homes.
Sec. 206. Credit for residential energy efficient property.
Sec. 207. Energy credit.
Sec. 208. Special rule for qualified methanol or ethanol fuel.
Sec. 209. Special depreciation allowance for cellulosic biomass ethanol plant property.
Sec. 210. Expenditures permitted from the Leaking Underground Storage Tank Trust Fund.
Sec. 211. Treatment of coke and coke gas.
TITLE IV–OTHER PROVISIONS
Sec. 401. Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico.
Sec. 402. Credit for prior year minimum tax liability made refundable after period of years.
Sec. 403. Returns required in connection with certain options.
Sec. 404. Partial expensing for advanced mine safety equipment.
Sec. 405. Mine rescue team training tax credit.
Sec. 406. Whistleblower reforms.
Sec. 407. Frivolous tax submissions.
Sec. 408. Addition of meningococcal and human papillomavirus vaccines to list of taxable vaccines.
Sec. 409. Clarification of taxation of certain settlement funds made permanent.
Sec. 410. Modification of active business definition under section 355 made permanent.
Sec. 411. Revision of State veterans limit made permanent.
Sec. 412. Capital gains treatment for certain self-created musical works made permanent.
Sec. 413. Reduction in minimum vessel tonnage which qualifies for tonnage tax made permanent.
Sec. 414. Modification of special arbitrage rule for certain funds made permanent.
Sec. 415. Great Lakes domestic shipping to not disqualify vessel from tonnage tax.
Sec. 416. Use of qualified mortgage bonds to finance residences for veterans without regard to first-time homebuyer requirement.
Sec. 417. Exclusion of gain from sale of a principal residence by certain employees of the intelligence community.
Sec. 418. Sale of property by judicial officers.
Sec. 419. Premiums for mortgage insurance.
Sec. 420. Modification of refunds for kerosene used in aviation.
Sec. 421. Regional income tax agencies treated as States for purposes of confidentiality and disclosure requirements.
Sec. 422. Designation of wines by semi-generic names.
Sec. 423. Modification of railroad track maintenance credit.
Sec. 424. Modification of excise tax on unrelated business taxable income of charitable remainder trusts.
Sec. 425. Loans to qualified continuing care facilities made permanent.
Sec. 426. Technical corrections.
So, before you start ripping this deal for extending special deals to Puerto Rico, the District of Columbia, mine rescue training, energy breaks and more – it’s not the first time stuff like this has been approved by the Congress.
Like I said, the Fix seems to be in.