Fiscal Cliff Winners: NASCAR, Hollywood, Railroads, Goldman Sachs, Outsourcing Corporations
While neither Democrats nor Republicans can claim victory in the wake of the fiscal cliff deal, there were some definite winners emerging as details of the agreement have been pored over.
The mainstream corporate media have mostly ignored the devils in the details of the fiscal cliff deal. Luckily, you read Moral Low Ground, so you get the all the dirt. It turns out that the deal hammered out in Congress heartily rewards those who don’t need rewarding, while doing little to avert a looming debt ceiling crisis.
Here are some of the big fiscal cliff winners:
NASCAR- You may or may not know that tens of millions of your tax dollars fund US Army NASCAR and drag racing sponsorships. But did you know that the fiscal cliff bill extends the “seven year recovery period for motorsports entertainment complex property,” meaning that NASCAR will receive as much as $70 million in tax breaks for building new racetracks?
Hollywood- If extending tax breaks to NASCAR was red meat for the Republican base, the bill’s “extension of special expensing rules for certain film and television productions,” a straight-up subsidy for the entertainment-industrial complex, is a boon for some big Democrat backers. This will supposedly help movie studios shoot more productions in the United States instead of fleeing for film-friendlier (read: cheaper) climes.
Railroads- Included in the fiscal cliff deal are $165 million in tax credits for railroad corporations to finance track maintenance. “It’s unclear why private businesses should be compensated for their costs of doing business,” Matt Stoller writes, but such is the world of revolving-door Washington politics.
Goldman Sachs/Bank of America/Wall Street- It should come as no surprise that a Wall Street corporation as influential and as ingrained in Washington politics as Goldman Sachs would get a piece of the proverbial pie, and a fat one at that. And thanks to the extension of tax-exempt financing for the so-called “Liberty Zone” around Ground Zero in Lower Manhattan, Goldman Sachs stands to reap huge gains. The company has alreadyfinanced $1.5 billion of its new headquarters with Liberty Bonds, and the Bank of America tower was built with $650 million in Liberty Bonds. Tax-free.
Corporations- The deal extends a provision that allows US corporations to avoid paying taxes on income earned by foreign subsidiaries. Stoller says this cost $1.5 billion in 2010-2011. More importantly, companies will benefit from a $9 billion provision that “allows manufacturers and banks to defer taxes when they engage in a special type of financial transaction known as ‘active financing,’” which proponents claim helps US firms remain competitive by ensuring they aren’t taxed twice. But critics argue that active financing encourages companies to create jobs– foreign ones.
“This loophole creates an enormous tax shelter for the companies who have lobbied it into law,” Steve Wamhoff, legislative director at Citizens for Tax Justice, told the Washington Post in 2010.
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