GOP Backs Tax Breaks That Add $300 Billion To Deficit

GOP Backs Tax Breaks That Add $300 Billion To Deficit

WASHINGTON -- The House Ways and Means Committee pushed ahead a set of tax breaks Thursday that would add another $304 billion to the deficit over 10 years, on top of $310 billion in loopholes it voted for last month.

If all the measures were to become law, they would wipe out the deficit savings Congress passed less than two years ago in the deal that headed off the so-called fiscal cliff. In that deal, Bush-era tax cuts were allowed to expire only on income above $400,000, returning about $600 billion to the treasury over 10 years.

Many of the loopholes that the tax-writing committee voted to extend Thursday are popular, including breaks for charitable deductions. The biggest change made permanent one of the tax cuts used recently for economic stimulus, called bonus depreciation, which allows companies that would normally have to write off new capital investments over many years to get 50 percent of the break right away.

Bonus depreciation has been used in the last two recessions to convince companies to speed up investments to spur the economy. But making the cut permanent -- as well as including things like the planting of fruit vines and trees as eligible investments -- would add $287 billion to the deficit over a decade, according to the Joint Committee on Taxation.

The previous temporary cuts had bipartisan support, but Democrats objected to the new round, arguing that making them permanent would just reward companies for making investments they would have made anyway, and spur little growth. They pointed to a Congressional Research Service report that noted bonus depreciation is a "relatively ineffective tool for stimulating the economy."

"Like the ancient alchemists who thought they could change straw into gold, this bill won't stimulate our economy," said Rep. Lloyd Doggett (D-Texas).


Democrats argued that the GOP's backing of $614 billion in deficit spending wasn't the only irony on display in the session. While Republicans have insisted repeatedly in recent years that any spending on individuals -- be it on food, unemployment benefits or disaster relief -- be paid for by cuts elsewhere, they hold their favored tax breaks to no such standard.

"As far as things being paid for, if there wasn't a concern for 30 some years for this to be paid for, why all of a sudden now is this [a] great thing that you've got to pay for this stuff?" said Rep. Mike Kelly (R-Pa.). Kelly argued for a bill that would give tax filers more time to claim charitable deductions, which would add $2.9 billion to the deficit.

Camp contended that making the breaks permanent without paying for them was just a matter of being upfront with America, since many of them, especially bonus depreciation, have not been paid for in the past. He also noted that the Senate is considering another temporary, two-year extension.

"Look, if we're not going to pay for things on an ongoing temporary basis every two years, which we haven't done in the three or four times this has been extended, I think we should just be honest about it and call it what it is," Camp said. "We're going to extend this."

Democrats pointed out that the breaks voted on Thursday applied only to a relatively small portion of taxpayers -- the third or so who itemize deductions and are largely more well off. At the same time, they noted, the GOP did not seem interested in considering cuts that benefited broad swathes of the middle class.

Wow, so adding $614 BILLION in tax-cuts, that WON'T spur the economy or "create jobs", is okay WITHOUT an offset, or a pay-for, as long as it's the Republicans giving to the wealthy again...

Imagine my surprise....

:pop

Lest we forget:

U.S. Senate Republicans blocked legislation on Thursday that would have expanded federal healthcare and education programs for veterans, saying the $24 billion bill would bust the budget.

So, it's okay to approve $614 BILLION in unpaid-for tax-breaks...But the TeaPublicans can't find $24 Billion to fund Veterans healthcare and education programs....

Oooooookay.... :Speechless2:

Nobody that matters wrote: Just curious.... where were the democrats proposing to cut to get the $24 million?

Just curious..... Where were the TeaPublicans proposing to cut to get the $614 Billion?

Great reporting Jazzer! Keep up the good work!

LOL wrote: Great reporting Jazzer! Keep up the good work!

I plan to.

I'm also planning on the usual teabaggers to ignore the facts.

300 billion? If these tax breaks stimulate the economy they may reduce the deficit. Your source aren't facts they are only economic predictions of tax effects on simply proposed legislation. They are called negotiating posistions. Like you demand $5000 more a year and the key to the executive washroom and your boss offers you $10 and a coupon for toilet paper.

It doesn't change the fact that they are proposing the $614 Billion with NO OFFSETS or PAY-FORs like they were requiring for the VA funding bill, and all other budget items. As long as it's the Republicans giving to the wealthy again, "We don' need no steenkin' offsets...."

Imagine my surprise....