Along with a $1.1 trillion spending bill that will keep government funded through September, the U.S. Congress is on the verge of passing a Republican-backed, $629 billion package of tax cuts that one group calls “a lobbyist-wrapped Christmas present for our nation’s biggest corporations.”
The package of bills unveiled Wednesday is facing criticism for its lifting of the long-standing oil export ban, as well as its inclusion of a controversial cybersecurity measure that watchdogs say will quietly expand mass surveillance. The budget bill also repeals a law requiring Country Of Origin Labels (COOL) on meats—a move Food & Water Watch decries as “a holiday gift to the meatpacking industry from Congress.”
“The real winner…appears to be the Grover Norquist-style principle of ‘starve the beast,’ the idea that you can endlessly cut taxes as a pretext to crying poor about funding for government services.”
—David Dayen, The New Republic
To be sure, the package also includes tax incentives for wind and solar energy and permanent extensions for the enhanced child tax credit and earned income tax credit, which will help working families.
But Bob McIntyre, director of Citizens for Tax Justice, says the “good things” in the package “come at far too high a price.”
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Specifically citing the “active financing exception” for multinational financial corporations and the “much-abused research credit,” McIntyre said: “It is outrageous that lawmakers have fought all year over how to pay for essential public investments like our highway program, yet they have no problem putting hundreds of billions in mostly wasteful corporate tax breaks onto our nation’s credit card.”
The active financing exemption, which dates to 1990, is a Wall Street priority that would permanently allow financial companies to defer taxes paid on interest and dividends earned overseas. As David Dayen wrote Thursday at the New Republic, “This creates incentives for accounting tricks to make it look like interest, dividends, or other income comes from overseas. It effectively legalizes foreign tax havens.”
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