Yes, by now many of you have heard that a fiscal cliff deal was passed late last night in the House of Representatives. Neither side of the political aisle is completely happy with the final deal; those who wanted more spending cuts are dismayed that so-called entitlement programs were taken off the table, and those who sought more revenues are not happy that President Obama received only half of the revenues – about $600 billion – requested from an increase in taxes currently paid by the wealthiest Americans. But how many of us know about the little ‘enticements’ that were included in the deal?
According to Fox News Business, “Green energy was another big winner in the fiscal cliff bill. Roughly a dozen provisions would extend credits and incentives for plug-in electric vehicles, energy-efficient appliances, biodiesel and renewable diesel, and other alternative energy initiatives.”
Many people will see that as a positive; anything that furthers green energy and enhances the possibility of more green jobs in America is a positive.
But what about those corporate subsidies? Yes, subsidies. Given all the complaints about how we need to reduce our overall spending, it’s quite surprising that were corporate support has been provided – especially when we consider the number of large US corporations that currently pay little or no taxes.
Here are a few of my fiscal favourites:
- NASCAR – A seven year cost recovery period for motorsports racing track / entertainment complex properties. Cost: $43 million over two years. In the large scheme of things this is small potatoes but what this in the current economic environment?
- Tax credits for foreign subsidiaries – this is a provision that allows US multinational corporations to not pay taxes on income earned by companies they own abroad. Tab? About $1.5 billion.
- Goldman Sachs headquarters subsidy – the tax exempt financing for the York Liberty Zone, which uses $1.6 billion in tax-free (bonds) financing for its headquarters.
And these are just a few.
Matt Stoller, a fellow at the Roosevelt Institute, has done some rather detailed analysis of all the provisions of the fiscal cliff legislation. while there is no doubt that the implications of falling off the cliff would have been broad and deep, there is just as much doubt that the final bill is the best deal that could have been negotiated. Leading economists such as Nobel prize winner Dr. Paul Krugman and former Labor Secretary Robert Reich have long said that no deal is better than a bad deal. Subsidies such as those noted above land further credence to the thought that taxpayers didn’t fare as well as the wealthiest among us and corporations.
Here’s the bottom line: nobody is walking away from this deal unscathed, but there are quite a few smiling faces this morning among the corporate elite. As usual.