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Published On: Fri, Jan 4th, 2013

Details of fiscal cliff deal reveal special loopholes for Hollywood, banks, insurance companies and race track owners

Now that President Obama signed of on the “Fiscal Cliff” tax deal, many of the details are surfacing.

Friday analysis revealed more than 50 tax breaks tied to lobbyists, special interests or big businesses.

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Photo/donkeyhotey donkeyhotey.wordpress.com

For example, there is a tax credit for producing electricity from wind mills, 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.

 “All these provisions have a lobbying arm behind them, for the most part,” said Mark Luscombe, principal tax analyst for CCH, a consulting firm based in Riverwoods, Ill. “If they only extend them for a year or two then the lobbyists have to keep coming back and bestowing their favors on congressmen to get the thing extended again. If they made it permanent, then the lobbyists would go away.”

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. Cost: $14.3 billion.

—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. Cost: $11.2 billion.

—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. Cost: $12.2 billion.

— A provision that allows restaurants and retail stores to more quickly write off the cost of improvements. Cost: $3.7 billion.

—Increased tax rebates to Puerto Rico and the Virgin Islands from a tax on rum imported into the United States. 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. Cost: $222 million.

—A 50 percent tax credit for expenses related to railroad track maintenance through 2013. Cost $331 million.

—A provision that allows motorsport 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.”

 

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About the Author

- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON

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