Tag: Tax Credits

Some in New Jersey Aren’t Crazy About This Film Tax Credit Situation

A chorus of angry politicians and a national coalition of Italian-Americans called on Gov. Chris Christie Thursday to veto a controversial $420,000 film tax credit awarded to the hit MTV television show “Jersey Shore.” “The governor needs to step up for decency and veto this. If the show wants to go somewhere else, let ‘em,” said state Sen. Joseph Vitale (D-Middlesex), who said it includes negative stereotypes of young Italian-Americans. “Let us just hope against hope that New Jersey taxpayers don’t end up paying for ‘Snooki’s’ bail the next time she is arrested. What a terrible, terrible and misguided waste.” said State Sen. Paul Sarlo (D-Bergen). [NJ.com via DMWT]

Here Are the Tax Breaks That Obama Wants Cut to Pay for the Jobs Bill

If you’re in the $200k+ club, a hedge fund manager or corporate jet owner, you won’t be pleased. From Reuters:

— A limit on itemized deductions and certain exemptions on individuals who earn over $200,000 and families who earn over $250,000, which would raise roughly $400 billion over 10 years.

— A proposal to treat carried interest earned by investment fund managers as ordinary income rather than taxing it at capital gains rates, which would raise $18 billion.

— Eliminating certain oil and gas industry tax breaks that would raise $40 billion.

— A change in corporate jet depreciation rules that would raise $3 billion.

Right. Can’t forget the oil companies.

Obama seeks $467 billion in tax changes to fund jobs plan [Reuters]

A Romantic Tragedy: The Iowa Film Tax Credit Scandal

Once upon a time a little farm state was feeling sad. The state wasn’t poor. It wasn’t lonesome – strange, handsome and glamorous men were always courting her – but something was missing. What could it be?

Then a man whispered in her ear: you need glamor! And it’s in your grasp!

The little state blushed. “How can I, a little farm state, be glamorous like Hollywood?”

The man said: “You can buy glamour!” And he burst into song:

You’ve got glamor
Right here in River City!
Movies start with cash;
If I can be so brash;
Give me some tax credits!

So the smitten little state gave the man transferable film tax credits. She was so excited about glamor, she gave the tax credits away freely, and the glamor came:

We’ve relied on caucuses every four years to bring action and celebrities to town. Now, sightings are anytime, any place.

But something was wrong. The little state sensed amid the cocktail party laughter that the glamorous were laughing at her, not with her. She noticed that the glamorous people were driving away with shiny new cars that she was paying for. And she noticed that the tax credits were getting rather expensive.

So she cut off her tax credits. This made the glamorous people mad, and some of them sued her. But she caught some of the hapless glamorous people and had them locked up. She made the man who whispered in her ear about film credits confess that he had done a bad thing. She got mad at the man who handed out the tax credits for her and tried to put him in jail.

So the little state is sadder, but perhaps wiser. Which has an attraction of its own:

I flinch, I shy, when the lass with the delicate air goes by
I smile, I grin, when the gal with a touch of sin walks in.
I hope, and I pray, for a Hester to win just one more “A”
The sadder-but-wiser girl’s the girl for me.
The sadder-but-wiser girl for me.

The moral of our story? If you fund it, they will come. And loot your purse. And laugh at you.

Is This the Beginning of the End for Ethanol Tax Credits?

Key Senate lawmakers have reached a deal to end two ethanol subsidies by the end of the month, sooner than expected and a sign of how tax policy can change as attention focuses on the deficit.

Sen. Dianne Feinstein (D, Calif.) said in a statement that she had reached an agreement with Sens. Amy Klobuchar (D, Minn.) and John Thune (R, S.D.) under which a 45-cent-a-gallon tax credit for blending ethanol into gasoline would expire on July 31. A 54-cent-a-gallon tax on imported ethanol would also expire at the end of the month. [WSJ]

If You Thought Grover Norquist Was Done with Tom Coburn Just Because He Got Some Republicans to Vote for the Ethanol Tax Credit Repeal, You’d Be Wrong

As we’ve mentioned, the scourge of tax policy pragmatism, Grover Norquist, has been battling anyone that utters a word about raising taxes or eliminating tax credits without corresponding tax cuts. His main nemesis in this battle has been Oklahoma Senator Tom Coburn, who was a member of the Gang of Six until he was determined the gang couldn’t get jack squat accomplished.

Today, a vote was held in the Senate that repealed the tax credits for ethanol, something that Coburn has been advocating strongly to his GOP colleagues. The idea has been floated that many Republicans who signed Americans for Tax Reform’s Taxpayer Protection Pledge would be violating said pledge by voting for the repeal, and thus incur the wrath of Grover & Co. Yesterday, Norquist insisted that the vote for the repeal isn’t a pledge violation because Senator Jim DeMint (R-SC) has an estate tax repeal waiting in the wings that would allow these Republicans to atone for their sins and thus making Coburn a loser again:

“Coburn tried. He failed. I’m sure he’ll try again,” Norquist told The Hill, asserting that Coburn had tried to trick his colleagues into voting for a tax increase. “We checkmated him.”

As we said Coburn did try again and now that the ethanol tax credit repeal has passed, Norquist will be counting on those senators wash away their ‘impure thoughts’ with a vote on DeMint’s amendment and allowing he and ATR to prevail once again, like the Roadrunner over Wile E. Coyote or Ronald Reagan over Communism.

He added that he had commitments from Senate GOP leadership to not agree to a deal with what he calls a net tax increase: higher rates or ending tax expenditures without an offset.

“Coburn’s going to be out in the cold by his lonesome,” Norquist said.

Senate kills off ethanol tax credits in possible break with tax pledge [E2 Wire]
Norquist denies he has lost momentum in tax scrap [On the Money]

ATR to Senators: Sign the Close Big Oil Tax Loopholes Act of 2011 at Your Own Peril

Free market Norseman Grover Norquist sent a letter to “Senators” today, urging them to vote against the cleverly titled Close Big Oil Tax Loopholes Act of 2011. And for anyone that has signed the Taxpayer Protection Pledge, let it be known that you’ll be in direct violation of said pledge if you also sign the CBOTLA2011. This means you can expect ATR hellfire – in the form of sternly-worded letters – to rain upon you. If you think they’re bullshiting, just ask Tom Coburn what happens with you mess with the (Viking) horns.

From GN’s latest correspondence:

Voting for the Close Big Oil Tax Loopholes Act of 2011 is a violation of the Taxpayer Protection Pledge. Senate Democrats advocating for this legislation predicate their arguments on three false suppositions:

1. Taxing oil companies will bring down the price of gas
2. Washington needs more money
3. Oil and natural gas producers are the recipients of government subsidies

None of these presumptions are true.

Coinciding with the recent rise in gas prices were Democrat calls to raise taxes on America’s oil and natural gas producers—some of this country’s finest job creators. This line of reasoning is illogical. Raising the cost of producing crude oil will necessarily raise the price of gasoline.

As many Americans now understand, this country doesn’t have a revenue problem, we have a spending problem. Democrats are defaming oil and natural gas companies—with stunts like last week’s Senate Finance hearing—because they see these successful businesses as a way to fund a bloated federal government. President Obama’s Party has demonstrated no interest in seriously reducing spending.

So if you want to be associated with that, Senators (and I suspect The Gipper would be very disappointed), go ahead and sign CBOTLA2011. But you’re on notice.

Senate Energy Tax Hike Vote is a Taxpayer Protection Pledge Violation [ATR]

Conoco Execs Don’t Appreciate These ‘Discriminatory’ Tax Plans

ConocoPhillips CFO Jeff Sheets is warning the U.S. Senate that repealing tax credits for oil companies will make it more difficult for his company and their U.S. counterparts to compete internationally and “higher taxes will mean that oil companies will have less money to reinvest, which could lead to a decline in the supply of hydrocarbons.”

Conoco’s CEO Jim Mulva, who will be testifying before the Senate Finance Committee tomorrow, agreed saying, that these plans are “discriminatory” and “If there is less investment, there is going to be less production and less production means higher prices for consumers.” So, Max Bauchus et al., go right ahead with your plan if you can sleep at night knowing that you’re nothing but a bunch of prejudiced jerks that want to hurt the American people. [WSJ, Reuters]

Is Everyone Aware That There Is a Chicken Sh*t Tax Credit?

Tax wonk Len Burman wrote a letter-cum-blog post to Jon Stewart today over at TaxVox explaining how there really is spending in the tax code through tax credits. You see, Stewart gave President Obama a hard time last month about “reducing spending in the tax code” which JS wrongly interpreted as Newspeak. Burman then goes on to give an shitty perfect example of just how ridiculous tax credits have gotten (in case you weren’t aware already):

You don’t believe there’s spending in the tax code??? Here’s a real life example: the chicken-s**t tax credit. Really, section 45 of the Internal Revenue Code. You can look it up. The late Senator Roth of Delaware (home of lots of chickens and “poultry manure,” as it’s euphemistically called) put this little goody into our tax laws. Here’s the backstory: the EPA said that enormous chicken farms could no longer put their poultry waste in pools or bury it because it poisoned the ground water. One of the best options to meet the new requirement was to dry the vile effluent and burn it to make electricity, but that was still costly. Roth didn’t want chicken farmer profits to plummet or chicken and egg prices to rise just because farmers couldn’t use the earth as a giant toilet, so he pushed through the chicken s**t tax credit to create a profitable market for that (as well as all sorts of other crap).

Burman not only explains to Stewart that using tax credits to keep chicken feces out of the water isn’t a good thing but by mocking the President, he also may have inadvertently helped tax executioner Grover Norquist:

Arch-conservative Oklahoma Senator Tom Coburn, leader of the bipartisan “gang of six,” has said that he’d support tax increases so long as they didn’t include rate increases. That is, he wants to rein in subsidy programs run by the IRS.

This is important. Coburn was willing to take on Grover Norquist, who has very effectively prevented any sensible compromise on the budget by insisting that cutting tax subsidies would violate the taxpayer protection pledge that he strong-armed most Republicans to sign. Now Grover can use your laugh line to reinforce Republican intransigence and doom any chance of bipartisan cooperation.

And to indirectly (or perhaps directly) support taxpayer funding of chicken-shitless water.

Jon Stewart’s Fake News on Tax Expenditures [TaxVox]

Chuck Grassley Has Had It with the Hating on Wealthy People

Which makes a lot of sense since the Iowa Senator has a net worth reported to be anywhere from $2.3 million to $6 million.

The Hill reports that Senator Grassley made his annoyance known in a Senate Finance Committee meeting today, “I get sick and tired of the demagoguery that goes on in Washington about taxing higher-income people,” he said. “How high do taxes have to go to satisfy the appetite of people in this Congress to spend money?” Good question, Senator. Are you changing your tune on ethanol tax credits? [The Hill]