% | $
Quotes you view appear here for quick access.

Petróleo Brasileiro S.A. - Petrobras Message Board

  • ilap2004 ilap2004 Jan 3, 2013 12:05 PM Flag

    How corporate tax credits got in the 'cliff' deal


    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.

    The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios -- and their lobbyists. So, if you're wondering how algae subsidies became part of a must-pass package to avert the dreaded fiscal cliff, credit the Biotechnology Industry Organization's lobbying last summer.

    Here's what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.

    Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.

    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.

    Besides financial clients like Citi, Goldman Sachs and Morgan Stanley, CTP represented green energy companies like GE and the American Wind Energy Association. These companies won extension and expansion of the production tax credit for wind energy.

    Hollywood hired CTP, too: The Motion Picture Association of America won an extension on tax credits for film production.

    After packing 50 tax credit extensions into the bill, the committee voted 19 to 5 to pass it. But then it stalled. The Senate left for the conventions and the fall campaign. Meanwhile, House Republicans signaled resistance to some of the extensions -- especially for green energy.

    One lobbyist said he didn't worry too much about the Baucus bill because "we knew the House wasn't going to pass it." But there never was a fight. Baucus' bill sat ignored until last week, when the White House sat down with Senate Republicans to craft a deal averting the fiscal cliff.

    A Republican Senate aide familiar with the cliff negotiations tells me the White House wanted permanent extensions of a whole slew of corporate tax credits. When Senate Republicans said no, "the White House insisted that the exact language" of the Baucus bill be included in the fiscal cliff deal. "They were absolutely insistent," another aide tells me. (The White House did not return requests for comment.)

    Sure enough, Title II of the fiscal cliff legislation is nearly a word-for-word replication of the Family and Business Tax Cut Certainty Act of 2012.

    This topic is deleted.
    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Sounds like the Hurricane Sandy legislation to help rebuild.

      only one-third of that 60 billion dollar legislation was related to hurricane related spending and the main reason it got tossed.

      Might be nice to know what else was in it and who put it there.

      A study of failed bills with attribution to the authors might be enlightening.

      No doubt both parties have abused the process and got their pork but it seems its getting worse and more blatant in recent years.

      the pols have become far too unaccountable and that's what the elites like because it is the pols that do their dirty work through various lobbying efforts.

      (I'm speaking to informal undisclosed lobbying that does not involve third parties here ---i.e. the type of relationships where campaign financing and various other help allows a pol to get into the limelight -------in return for financial and other later career benefits.)

5.12-0.45(-8.08%)Nov 25 4:02 PMEST