Bush Tax Cuts: Same Old Washington Game

Fifty two subsidies, tax credits and handouts added to the Bush Tax Cut Extension Bill

Last week President Obama announced The Deal.  He and Republican leaders agreed to resolve the pending expiration of the existing (Bush) tax rates by enacting a two year extension.  If Congress takes no action to amend legislation passed in 2003 all income tax bracket rates will rise January 1.

Democrats immediately attacked The Deal as costing many billions (the exact number of billions varies from hysterical commentator to hysterical commentator)  by “giving” money to the undeserving rich.  Democrats apparently believe all income is government property and thus any that is not collected by the IRS is a cost to the government, just like food stamps or medicare or the subsidies shoveled out to politically connected, “green” companies, to unions, to farmers, etc.

So how will Democrats’ concerns be addressed?  Senate Majority Leader answered that question Thursday night.  He proposed a Christmas bonanza to please those who apparently have enough influence to help Democrats forget their hatred of Bush and “the rich.”

We couldn’t create a Christmas tree large enough for all the subsidies and tax credits so here’s the complete list, courtesy of the folks at The Journal of Accountancy.

  1. RC § 25C credit for nonbusiness energy property (which would also be returned to the limitations and standards applicable before amendment by the American Recovery and Reinvestment Act of 2009, PL 111-5);
  2. IRC § 30C alternative fuel vehicle refueling property credit;
  3. IRC § 40 credit for alcohol used as fuel;
  4. IRC § 40A credit for biodiesel and renewable diesel fuel;
  5. IRC § 41 research and development credit
  6. IRC § 45(d)(8) credit for refined coal facilities;
  7. IRC § 45A Indian employment tax credit;
  8. IRC § 45D new markets tax credit;
  9. IRC § 45G credit for certain railroad track expenditures;
  10. IRC § 45L new energy-efficient home credit;
  11. IRC § 45M energy-efficient appliance credit;
  12. IRC § 45N mine rescue team training credit;
  13. IRC § 45P employer wage credit for active duty members of the uniformed services;
  14. IRC § 51 work opportunity credit;
  15. IRC § 54E qualified zone academy bonds
  16. IRC § 1400C credit for first-time D.C. home buyers;
  17. IRC §§ 6426 and 6427 excise tax credits for alternative fuels;
  18. American Samoa economic development credit under the Tax Relief and Health Care Act of 2006.
  19. IRC § 62(a)(2)(D) deduction for elementary and secondary school teachers;
  20. IRC § 163(h)(3)(E) treatment of mortgage insurance premiums as interest;
  21. IRC § 164 state and local sales tax deduction;
  22. IRC § 168(e)(3)(E) 15-year straight-line cost recovery for qualified leasehold improvements and for qualified restaurant improvements;
  23. IRC § 168(i)(15)(D) seven-year cost recovery period for motor sports entertainment complexes;
  24. IRC § 168(j) accelerated depreciation for property on Indian reservations;
  25. IRC § 170(b)(1)(E) contributions of capital gain real property made for conservation purposes;
  26. IRC § 170(e)(3)(C) enhanced deduction for contributions of food inventory;
  27. IRC § 170(e)(3)(D) enhanced deduction for contributions of book inventory to public schools;
  28. IRC § 170(e)(6) enhanced deduction for corporate contributions of computer equipment for educational purposes;
  29. IRC § 179E(g) election to expense advanced mine safety equipment;
  30. IRC § 181(f) expensing treatment for certain film and television productions;
  31. IRC § 198(h) expensing of environmental remediation costs;
  32. IRC § 199(d)(8) deduction for income attributable to domestic production activities in Puerto Rico;
  33. IRC § 222 deduction for tuition and related expenses;
  34. IRC § 1367(a)(2) basis adjustment to stock of S corporations making contributions to charity.
  35. IRC § 132 parity for exclusion from income for employer-provided mass transit passes and parking benefits;
  36. IRC § 168(n) expensing and special depreciation allowance for qualified disaster assistance property (extended through 2012);
  37. IRC § 408(d)(8) allowance for tax-free distributions from individual retirement plans for charitable purposes;
  38. IRC § 451 special rule for sales or dispositions to implement FERC or state electric restructuring policy for qualified electric utilities;
  39. IRC § 512(b)(13) special rules for certain amounts received by tax-exempt organizations from controlled entities;
  40. IRC § 613A(c) suspension of limitation on percentage depletion for oil and gas from marginal wells;
  41. IRC § 871(k) treatment of regulated investment company dividends and assets;
  42. IRC § 897(h) qualified investment entity treatment of regulated investment companies under the Foreign Investment in Real Property Tax Act of 1980;
  43. IRC §§ 953(e) and 954(h) exceptions for active financing income;
  44. IRC § 954(c) look-through treatment of payments between related controlled foreign corporations;
  45. IRC § 2105(d) look-through of certain regulated investment company stock in determining gross estate of nonresidents;
  46. IRC § 1367(a) basis adjustment to stock of S corporations making charitable contributions of property;
  47. IRC § 1391 empowerment zone incentives;
  48. IRC §§ 1400, 1400A and 1400B District of Columbia Enterprise Zone incentives;
  49. IRC § 1400L(b) New York Liberty Zone bonus depreciation;
  50. IRC § 1400N Gulf Opportunity Zone incentives;
  51. IRC § 7652(f) “cover over” of tax on distilled spirits to Puerto Rico and the U.S. Virgin Islands;
  52. Grants under the American Recovery and Reinvestment Act of 2009 for specified energy property in lieu of tax credits.

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