| || |
Special treatment in 'fiscal cliff' deal erodes faith in equality
January 7, 2013 - Mike Maneval
It likely should surprise no one that the "fiscal cliff" deal was packed with tax breaks for specific industries. Even as the Obama administration and congressional leadership were raising payroll taxes on hard-working Americans, politicians were favoring, among others, the manufacturers of electric motorcycles, railroads, and TV and film producers with preferential treatment, according to an Associated Press article published in Friday's Sun-Gazette.
Perhaps no example of the special treatment granted to some privileged interests interests should rankle as much as a measure to shield the foreign profits of banks, insurance companies and similar financial-sector institutions from U.S. taxes. While the measure, estimated to be worth $11.2 billion in lost revenue, is not the most costly of the incidents of special treatment, it is close behind a tax credit for research and development worth $14.3 billion in lost revenue. Together, and along with the other examples of favoritism and distortion of equality before the law such as tax breaks for rum manufacturing in Puerto Rico and the U.S. Virgin Islands and for race tracks hosting motorsports, potential tax revenue was sacrificed.
If the U.S. must decline to collect the money, there were better ways. An expansion of the one tax break on the list easiest to defend, deductions for companies donating food to the needy or books to libraries, is foremost on my mind after reading the list of preferential breaks. As it stands, the value of this break is estimated at $314 million. How many libraries and soup kitchens could've been helped if its value rose to $25.5 billion and banks and manufacturing companies didn't get their special treatment? Cutting the earned income tax, or payroll taxes, would be another, better way for the U.S. government not to collect the billions in dollars.
Debate on the merits and flaws of the deal likely will - and should - continue. Some will argue, with good cause, that the compromise did not go far enough, and was not specific enough, in cutting spending. But for the philosophical differences on the appropriate size and scope of national government inherent in that discussion, it pales in comparison to how the special treatment certain industries received erodes faith in the principle that all men and women are equal as citizens and constituents of a legitimate and democratic government.
No comments posted for this article.
Post a Comment