- Peter Kinder resigns federal agency post, concludes position unnecessary and waste of tax dollars (6/16/18)2
- Stormy Daniels to visit East Cape Girardeau (6/13/18)20
- Longtime downtown Cape bartender Marcellus Jones remembered by friends (6/12/18)2
- Committee to start planning process for indoor aquatic center in Cape (6/20/18)1
- A community rallies behind Honorable Young Men's Club (6/16/18)1
- Southeast to spend $150,000 to refresh brand with Ohio firm (6/19/18)6
- New urban dance studio opens on Broadway (6/15/18)2
- Jackson natives compete in 260-mile canoe race (6/16/18)1
- Couple charged in beating death at Brick's (6/13/18)
- Mother, child reportedly hit by car in Cape Girardeau (6/18/18)
New tax law contains breaks for businesses
WASHINGTON -- Tucked into the "fiscal cliff" tax package approved by Congress are billions of dollars in tax breaks for businesses of many stripes, including film producers, racetrack owners and makers of electric motorcycles.
More than 50 temporary tax breaks were renewed through 2013, saving businesses and individuals about $76 billion. Congress routinely renews the tax package, attracting intense lobbying -- and campaign donations -- from businesses and trade groups that say the tax breaks help them prosper and create jobs.
Businesses have grown used to many of the long-standing tax breaks, but they also have had to get used to the uncertainty of whether they will be renewed each year. This time around the tax breaks were allowed to expire at the end of 2011 as lawmakers struggled to reach consensus on a wide range of tax issues.
The package passed by Congress this week and signed by President Barack Obama renews the tax breaks retroactively, so taxpayers can claim them on their 2012 and 2013 tax returns.
The biggest of the bunch, a tax credit for research and development, helps U.S. manufacturers compete against foreign competition, according to the National Association of Manufacturers. Another provision helps restaurants and retailers expand by allowing them to more quickly write off the costs, according to the National Restaurant Association.
These provisions have widespread support in Congress; others are more obscure.
For example, there is a tax credit for producing electricity from windmills, a tax credit for buying electric-powered motorcycles, and tax rebates to Puerto Rico and the Virgin Islands from a tax on rum imported into the United States.
Sen. John McCain, R-Ariz., said the package is filled with "special-interest handouts" that make it difficult to justify his vote in favor.
"It's hard to think of anything that could feed the cynicism of the American people more than larding up must-pass emergency legislation with giveaways to special interests and campaign contributors," McCain said.
Lawmakers are wary of making the tax breaks permanent because of the cost, even though they inevitably renew almost all of them each year. Annual angst about whether the tax breaks will be renewed also provides incentives for businesses to lobby key lawmakers.
Among the provisions in the new law are:
* A tax credit for research and development, benefiting a wide range of industries, including manufacturers, pharmaceutical companies and high-tech companies.
* An exemption that allows banks, insurance companies and other financial firms to shield foreign profits from being taxed by the U.S. The tax break is important to major multinational banks and financial firms.
* A tax break that allows profitable companies to write off large capital expenditures immediately -- rather than over time -- giving some companies huge tax shelters. The tax break, known as bonus depreciation, benefits automakers, utilities and heavy equipment makers. Cost: $5 billion.
* A tax credit for the production of wind, solar and other renewable energy.
* A provision that allows restaurants and retail stores to more quickly write off the cost of improvements.
* Increased tax rebates to Puerto Rico and the Virgin Islands from a tax on imported rum. The U.S. imposes a $13.50 per proof-gallon tax on imported rum, and sends most of the proceeds to the two U.S. territories.
--A 50 percent tax credit for expenses related to railroad track maintenance through 2013. Cost $331 million.
--A provision that allows motor sport race tracks to more quickly write off improvement costs. Cost: $78 million.
--Enhanced deductions for companies that donate food to the needy, books to public schools or computers to public libraries. Cost: $314 million.
--A tax break that allows TV and movie productions to more quickly write off expenses. Sexually explicit productions are ineligible. Cost: $248 million.
-- A tax credit of up to $2,500 for buying electric-powered vehicles was expanded to include electric-powered motorcycles. Golf carts, however, were excluded. Cost: $7 million. Sen. Ron Wyden, D-Ore., took credit for this tax break, saying it would help Oregon-based Brammo, which manufactures electric motorcycles.
"The electric motorcycle industry is poised to create tens of thousands of U.S. jobs over the next five years, led by companies like Oregon's Brammo," Wyden said. "This amendment helps promote the development of a promising U.S. industry and support the transition to a low-carbon American economy."