Imagine you have a family that's grown accustomed to taking annual vacations. The problem is that for the past 10 years all of those vacations have been put on the credit card. You're now deeply in debt. You decide that you're no longer going on vacation unless you can find a way to pay for the trip, up front.
Sounds pretty sensible, right? Good. Then we should all be on the same page with the following ...
****************
Last week the Republican-led House of Representatives voted to spend another $287.4 billion dollars of your money without seeking new revenues to cover the "new" spending.
This might be seen as business as usual in Washington except for one thing: Earlier this year the GOP signed off on legislation that said any new spending that increases budget deficits have to be offset with new sources of revenue. This trade-off was part of the sequestration deal that cut government spending across the board, and prohibited new spending unless new revenue sources could be found.
At the time, cutting government spending to fix our budget deficits (and our national debt) was what drove the GOP to force a government shutdown. Fiscal responsibility, you know.
Well, guess what? House Republicans have now decided they want to continue taking vacations while putting the cost on the government credit card (as it were).
Specifically, the GOP passed legislation last week that allows corporations to write off the cost of new assets and equipment more quickly than before. So, for example, if a corporate farm decides that they want to purchase new tractors and crop dusters under the Republican plan they can deduct 50% of the expenditure from what they pay in taxes. This means that if a corporate farm spends $10 million for new capital assets and improvements the American taxpayer gets to pay half the tab.
A few million here, another million there, and things begin to add up. What the Republicans did on Friday has a $287.4 billion price tag over the next 10 years. Shifting $28 billion each year from our bloated defense budgets, over the next 10 years, would have paid for this corporate subsidy. But the GOP wouldn't even consider it.
Here's Rep. Chris Von Hollen (D-Maryland) on the House floor describing what happened last week ...
Post by Chris Van Hollen.
What he's concerned about today is that the GOP's current bait & switch policy allowed them to indiscriminately cut other government programs (under threat of a shutdown), but House Republicans now feel no sense of shame by refunding and extending corporate subsidies that they promised would also be cut back (click here to see Michigan's Rep. Sander M. Levin's comments on the GOP's bait & switch tactic).
This helps explain why Americans are so frustrated with Washington, and why no one should take our current GOP-led House of Representatives seriously.
There's more, but you get the point.
- Mark
ADDENDUM: As a point of reference, these kind of subsidies are euphemistically called "bonus depreciation" deductions, or tax expenditures. They're fancy ways of saying taxpayer funded subsidy, or corporate welfare, and cost the American taxpayer about $1.1 trillion per year. The "bonus depreciation-tax expenditure" language helps this kind of corporate welfare fly under the radar. And, yeah, eliminating the $1.1 trillion in tax expenditure write offs would go a long way in fixing our deficit-debt problems.
No comments:
Post a Comment