Georgetown University law professor David A. Super refers to that particular corporate tax break as a “license to steal”—because it “allows a business to pretend that its buildings and equipment wear out far faster than they actually do.”Those type of “common-sense but against the DC grain” votes are among many reasons I am damn glad to have Pocan as my Congressman. We need a whole lot more like him that’ll lay it out, vote based on reality, and tell the truth about what is actually in these bad “bipartisan” DC deals - especially on the Dem side.
“As economic stimulus, bonus depreciation does not work. Studies of a similar measure enacted to combat the 2001 recession found that only a tiny minority of businesses even considered the new tax benefit as an important factor in making investment decisions,” explains Super. Yet, he adds, “The cost [of bonus depreciation is] staggering: nearly $300 billion over the next decade, more than three times what we spend on nutrition supplements for pregnant women, infants and young children. That would wipe out roughly one-third of the deficit reduction from higher tax collections from the wealthy as a result of last year’s ’fiscal cliff’ deal.”
Only the most sold-out, corporate-hack Republican could back such a fundamentally flawed scheme, right?
Of the 378 “yes” votes for the House measure, 202 did come from John Boehner’s Republicans. But the remaining 176 “yes” votes came from Nancy Pelosi and her fellow Democrats.
Of the forty-six “no” votes, twenty-six were cast by Republicans—some libertarian-leaning foes of crony capitalism, others trickle-down zealots who would do even more for corporations and mega-rich CEOs. The twenty Democrats who opposed the measure pretty much make up the caucus of House members who actually get that something is very wrong with an economic calculus that says the richest individuals and corporations in America should be first in line for government assistance.
Compromise-prone Democrats tried to argue that they had to back the measure because it extended some programs that benefit working Americans. However, [Wisconsin Congresssman Mark] Pocan explains, “almost all of the significant tax extenders were going to corporations, not to working people. And they were retroactive. You couldn’t even argue that they would create jobs—except in the last two weeks of the year.”
All making this bonus depreciation retroactive does is allows corporations to get a bigger tax refund this spring. This move has not and likely will not change their behavior by encouraging them to speed up investment in 2014 (the alleged reason for such a tax credit), but instead allows them to put more money in their pockets to…look good to investors, I guess. It sure won’t help the average citizen much.
What a total fraud. And it’ll add to our deficit for this fiscal year while adding next to no jobs. But I bet there’ll be a nice kickback to some of the Congresspeople that got this through, won’t there? Nice priorities, DC. Now we know why your approval rating is around 10%.