Listening to the pure garbage now spewing out from both Indiana Republican Dan Coats and Oregon Democrat Ron Wyden on the US Senate floor is so disappointing to informed American people. It is a perfect illustration of how tax loopholes get placed into tax legislation.
It is not just Republicans who insert tax loopholes favoring Big Business and the Wealthy into tax legislation. Democrats are just as egregious in inserting tax loopholes favoring Big Business and the Wealthy into tax legislation.
Lobbyists for Big Business and the Wealthy have control of the US Senate Finance Committee.....both the Republicans and the Democrats. These Lobbyists get listened to since they are making massive campaign contributions to both the Republicans and the Democrats. It is a flat out filthy situation happening here on both sides of the aisle.
Wyden and Coats both keep asserting with their Tax Extender Legislation that they are preventing a huge tax increase. Give me a break! The are misleading the American people on this and they know it.
These tax extenders, nearly all of which are simply the granting of unnecessary tax loopholes, are not in the current tax law. If the US Senate votes them into tax law now, instead of preventing a tax increase, they are giving out massive tax breaks.
The CBO is the only one here clearly telling the truth on the Tax Extenders. The CBO properly scores the insertion of these tax loopholes mostly to Big Business and the Wealthy into tax law as a substantial increase in the US debt in the form of massive tax cuts.
Democrats rail out against Income Inequality. But if these Tax Extenders get passed, the vast economic gap between the Wealthy and Everyone Else is even further expanded.
Nearly every one, if not all, of these Tax Extenders are simply the attempt to give a favor to a constituent.
They are nearly all obscene. Believe it or not, there are 62 Tax Extenders. And to show how deceptive these US Senators on the Senate Finance Committee are, they call this tax loophole legislation "Expiring Provisions Improvement Reform and Efficiency Act". What a complete crock! They should instead call it what it is "The New Tax Loophole Act of 2014 with an Added Boost to Expanding Income Inequality".
Let me address just one of the 62.
The economic life of a retail building and leasehold improvement is very long, and thus the tax law says that you properly use a very long life to depreciate the leasehold improvements made for US federal income tax purposes.
But the tax extender here permits these leasehold improvements to be depreciated for income tax purposes over an extremely short life which has absolutely nothing to do with economic reality. It is simply a massive tax loophole granted mostly to Large US Retailing Businesses like Walmart.
But there is also a huge unfairness here. The US jobs being created since the Great Recession are to a large extent retail jobs and other service jobs where the pay is at or slightly above the US Federal Minimum Wage. So with this tax extender, the US Senate is effectively rewarding these very large US Retailers with a massive tax loophole when at the same time these Large US Retailers are paying their employees so little.....clearly a further expansion of the huge economic gap between the worker, who gets nothing, and the Large Business and all of its wealthy stockholders who effectively receive the economic benefit of this tax largesse.
Effective fair legislation would do just the opposite. The goal should be to narrow the massive income gap between the wealthy and everyone else. Don't give another tax break to the Wealthy, but instead give an economic break to the worker by increasing the US Federal Minimum Wage.
But it's not just this Retail Industry Accelerated Tax Depreciation Tax Extender which substantially benefits the Wealthy over Every One Else. Nearly all 62 of these Tax Extenders do likewise. But I haven't heard a single Senator on the Senate Finance Committee say a word about how Income Inequality is expanded by any one of the 62 Tax Extenders.
Frankly, I can think of only one of these 62 tax loophole tax extenders which passes the smell test....the Research & Experimentation Tax Credit. That one really does directly create US jobs and good paying ones at that. But that one shouldn't be a temporary tax extender passed, it should be a permanent tax credit.
When you go through this list of Tax Extenders, clearly the most egregious tax loopholes being granted also happen to be the ones that are the most expensive to the US Government and also have no benefit except to Big Business and to the Wealthy.
To give just one illustration, by far the most expensive of the 62 Tax Extenders is #35 "Exceptions under Subpart F for Active Financing Income". The beneficiaries here are US Big Financial Multinational Companies, many of whom caused the 2008 financial meltdown, which substantially expanded Income Inequality, particularly so with all the US job losses.
But all of the Republicans and even the majority of the Democrats on the US Senate Finance Committee rewarded these Big Financial Multinational Companies by voting for this massive tax loophole to be given to the large US Financial Multinationals, one of which has paid in the aggregate very minor amounts of US federal income taxes for the most recent 10 years combined, even though it has earned Consolidated Pretax Income in the hundreds of billions of dollars over this same time span. Obviously, this Big Financial Company has control of the US Senate Finance Committee, both Republicans and Democrats.....as do some of its brethren Big Financial Multinational Corps.
Just a suggestion from a full financial transparency standpoint. Before these tax extenders are passed by the US Senate, there should be a clear simple explanation made in writing that can be easily accessed by American citizens as to what each tax extender is, what it accomplishes, who are the main economic beneficiaries of it, an income inequality assessment of it, what it costs the US Government and the pros and cons of it.
And here's another suggestion. Since it so key to overall US economic success and fairness for all US citizens, the CBO should give an Income Inequality Number Score for every piece of legislation proposed, including each one of these 62 Tax Extenders. My hunch is that most of the 62 Tax Extenders would get close to a horrible-as-you-can-get Income Inequality Score of 0%.
On the other hand, Increasing the US Federal Minimum Wage, Extending Unemployment Benefits and Allowing Student Loan Citizens to refinance both their US Federal Government Loans and Private Loans at the current market interest rate would probably all three get an Income Inequality Score of very close to 100%.
And let me go one step further. If you really want to objectively find out why there is such massive Income Inequality in the US, have the CBO give an Income Inequality Number Score for all key historic US legislation. Doing a critical research study like this is how you can get to the root of a problem.
