The government didn't just kick the can down the road rather than tackle runaway entitlement spending in today's fiscal cliff bill; a whole host of pork-barrel tax credits for various favored industries were extended en masse.
An entire section of the – Oh, good lord, they named this thing the "American Taxpayer Relief Act of 2012," really? – is devoted to detailing extensions in tax credits for loads of favored renewable or biofuel energy programs. Wind energy tax credits will be extended for a year, as well as credits for ethanol producers (relevant to Ron Bailey's blogging today on crop yields slowing). The biofuel program will actually be expanded to add algae farmers to the list of producers, which is relevant as the Navy is spending millions on algae-based biofuels. This ultimately means the government is giving these guys tax credits to produce something that they then sell for a profit back to the government.
There's also a whole section of non-energy-based tax credits that doesn't even have a pretense of government-incentivized innovation to justify its status as crony capitalism. US News notes a couple of the big winners:
Hollywood Making movies in America is big money, and Congress is doing its best to ensure the movie industry doesn't pack up and leave. Television and movie makers can continue to gross $15 million in breaks for filming in the U.S., $20 million for filming in low-income areas, an incentive for Hollywood that costs the country about $430 billion to maintain. Motorsport Race Track Owners A program that allows race track owners to deduct a total of more than $40 billion a year for their tracks, bleachers and concession stands also passed in the bill. Groups like NASCAR can continue to write off the maintenance costs of their tracks in a tax break that is similar to one amusement parks benefit from. The only catch is that the venue must have held an event on the premise sometime in the last three years.
In my eyes, the unfairness is not that some folks get these tax breaks, but rather that some folks don't. I don't confuse not taking money from businesses or individuals with giving money to them. But since the government isn't actually cutting spending, those who don't qualify for credits ultimately make up the difference for those favored crony capitalists who do get the write-offs.
So, while you will likely be paying more taxes even if you fall under the $450,000 annual income threshold, it's going to be business as usual for a handful of corporate cronies who have the ears of Congress.
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