The House voted 251 to 178 yesterday to replace an export subsidy with a major tax cut for domestic manufacturers and multinational corporations, setting up difficult negotiations with the Senate on one of the most significant corporate tax bills in 20 years.
Passing a corporate tax measure has become imperative. Since the World Trade Organization ruled existing export subsidies illegal, retaliatory sanctions by the European Union have tacked 8 percent onto the price of a variety of U.S. exports, from leather and jewelry to timber and thoroughbreds. The penalty will rise by 1 percentage point a month until the subsidy is lifted.
But the push to repeal a $5 billion-a-year subsidy has allowed lobbyists and lawmakers to dust off tax favors that have languished for years. The centerpiece of both the House bill and the Senate's version would cut the top tax rate for domestic manufacturers from 35 percent to 32 percent, but other provisions have pushed the final House bill to 496 pages and the Senate-passed bill to 930.
[...]
The House bill would cut business taxes by more than $143 billion over the next decade, although a series of revenue raisers and tax-loophole closures would reduce the cost to the Treasury to $34.4 billion. The measure must be reconciled with a broader Senate version that would hand out $167 billion in tax cuts but more than offset that cost with tax increases and loophole closures.
Critics of both bills say the true costs will be significantly higher, since both phase in some tax cuts over 10 years while Congress is likely to extend other tax breaks set to expire after a short time as the legislation is currently written. If all those temporary provisions were implemented immediately and extended over 10 years, the bipartisan Joint Tax Committee estimated, the cost of the House bill would reach $260 billion.
But the main criticism focused on the special-interest provisions secured by business lobbyists or added in the past few days to secure votes. The House bill includes measures tailored to help restaurant owners, makers of private jets, bank directors, timberland owners, liquor distillers, Native American whalers, commodity traders and shipping conglomerates, to name a few. One last-minute provision, pushed in part by Home Depot, temporarily lifts customs duties on Chinese-made ceiling fans.
"Christmas has come on the 17th of June," said Rep. Jim McDermott (D-Wash.).
House Minority Whip Steny H. Hoyer (D-Md.) declared it the worst tax bill he has seen in his 24 years in the House and "an orgy of self-indulgence."
Although House Republicans are chiefly accountable for this blatant irresponsibility, Democrats are not blameless: "...House Ways and Means Chairman Bill Thomas (R-Calif.) secured the votes of 48 Democrats, largely with a $9.6 billion bailout for tobacco farmers and a temporary $3.6 billion measure to allow residents of states with no income tax to deduct state and local sales taxes from their federal income taxes. Those Democrats more than offset the 23 Republicans who voted against the bill."
In a Republican orgy, which is always behind closed doors, there is no sex — only the unseemly transmission of vast amounts of money.
Under Republican leadership the US Treasury has become a corporate ATM, but at least our president's God in His infinite mercy has seen to it that Home Depot has a duty-free supply of Chinese ceiling fans.
