“Fiscal Cliff” Deal Packed With Corporate Welfare
Posted in: Uncategorized
What may be unknown to many who observed the “fiscal cliff” legislative brawl is that nestled within the legislation was a smorgasbord of corporate goodies. The corporate welfare provisions within the bill received scant attention as the chief concern for most was whether or not the Republican Congress would kill the deal and plunge America off “the cliff.”
Some were not so easily distracted. As Matt Stoller reported the bill is packed with corporate handouts:
Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations…
The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. The corporate sector is here in force as well.
The extenders include name brand companies such as NASCAR, Goldman Sachs, and Disney as well as tax credits for foreign subsidiaries and off-shore financing.
And according to other reports these were not last minute deals but the endgame of a long lobbying process:
The “fiscal cliff” legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren’t the fruit of eleventh-hour lobbying conducted on the cliff’s edge — they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week…
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.
The K Street firm Capitol Tax Partners, led by Treasury Department alumni from the Clinton administration, represented an even more impressive list of tax clients, who paid CTP more than $1.68 million in the third quarter…
GE, Goldman Sachs, Diageo — they planted their seeds over the summer. They’ll enjoy the fruit in the new year.
While Republicans and Corporate Democrats begin discussions on all the social welfare programs they plan to cut let’s not forget they love welfare when it’s for people who will have enough money left over to give a campaign contribution – talk about promoting dependency.