Florida

FISCAL CLIFF

For a lesson on Washington, examine tax breaks in fiscal cliff law

 

The vote by Congress to deal with the so-called fiscal cliff included a generous tax break for Daytona Beach-based NASCAR.

FISCAL CLIFF “PORK”

Some of the tax credits and subsidies Congress inserted into the

fiscal cliff legislation include:

•  $78 million in tax subsidies for NASCAR track owners.

•  $59 million for algae growers producing biofuel.

•  $62 milllion tax credit for employers in American Samoa designed to

benefit StarKist Tuna.

•  $222 milion in tax rebates for rum makers.

•  $248 million in tax credits for movie makers.

•  $2,500 tax credit for purchases of electric scooters.

Note: Some of these credits existed before, but were set to expire

before Congress extended them.


Tampa Bay Times

Democratic Sen. Bill Nelson said his vote was a vote for the average guy. So did Republican Rep. Vern Buchanan of Sarasota.

"With a $16.3 trillion national debt and 7.7 percent unemployment, the last thing we need is a massive tax increase on hard-working Americans," Buchanan said following last week’s tumultuous conclusion of the fiscal cliff standoff.

But neither Florida lawmaker mentioned the benefits delivered to another constituent they look out for in Washington: Daytona Beach-based NASCAR.

Despite alarm over the country’s financial health, the fiscal cliff deal was packed — at the last minute — with billions of dollars in special interest tax incentives for rum makers, a tuna fish company, algae producers, Hollywood studios, racetracks and more.

The deals, still drawing scrutiny a week after being signed into law by President Barack Obama, provide a powerful lesson in the way Washington works. Special interests curry favor with lawmakers through political donations and employ teams of lobbyists to push for the breaks, which are sprinkled into sweeping legislation to attract votes.

Perpetuating a messy, pockmarked tax code, the more than $46 billion in new business tax incentives underscore how difficult it will be to achieve tax reform, a goal lawmakers say they must accomplish in the coming year as part of efforts to tackle the deficit.

"Politicians of both parties keep saying they want to ’close loopholes,’ " said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group focused on restraining government spending. "If they are serious about it, they blew a great chance to prove it. This certainly does not bode well for tax reform."

Steve Ellis, vice president of the budget watchdog Taxpayers for Common Sense, said the deals are "policy cockroaches" that feed voter cynicism: "Even when it can’t be business as usual, it comes back to being business as usual."

Nelson defended his support for NASCAR by saying it could boost jobs. Buchanan has made similar arguments.

Nelson, who along with Buchanan has sponsored legislation to make the NASCAR break permanent, said after his vote that "now we’ve got to finish the job of fixing our country’s financial ills with more targeted spending cuts and reforming our tax code."

But the tax handouts he supported work in the opposite direction. Many of the tax breaks had expired and the deal gives them new life, for at least a year, a favorable defensive position as talk of reform grows.

The race track benefit is worth $46 million in 2013 and estimated at $78 million over a decade.

Florida Republican Sen. Marco Rubio, one of only eight senators to vote against the fiscal cliff deal, this week assailed the "political pork" as part of a "total avoidance of our real fiscal problems."

Dan Houser, senior vice president of International Speedway Corp., which owns Daytona International Speedway, Homestead-Miami Speedway and 11 other race tracks across the country, denied his company was getting a cozy deal. He noted the tax benefits go to other track owners and are eventually poured back into the facilities, creating jobs.

The tax break, he said, puts tracks on equal footing with amusement parks and sports facilities, often built with considerable public subsidy. "This is in a sense stimulus for the private sector."

Contact Alex Leary at leary@tampabay.com.

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