Senate extends tax cuts through 2010
KAI RYSSDAL: Don't know if you were wondering, but we sure were. Nobody's saying how much the government's paying for all those records. Lost in all the hub-bub over the phone company story today was a little matter of $70 billion. The House approved a tax-cut package last night. Today was the Senate's turn. You might have read about the headline items: Extending tax breaks for investors; protecting some of us from the Alternative Minimum Tax for another year . . . But Marketplace's Scott Tong has been reading a bit deeper into the fine print. And he found some special considerations for a couple of pretty big industries.
SCOTT TONG: The main point that Citigroup, JP Morgan Chase and ExxonMobil made before Congress is, the tax code isn't fair. Financial companies have been hit with a tax meant to punish companies that use offshore shelters to hide from the taxman.
Clint Stretch is with Deloitte and Touche:
CLINT STRETCH: The argument the banks and insurance companies have made, that Congress has listened to, is "Wait a minute. When we have big piles of money offshore, it's often in connection to our active business.You would expect a bank to have deposits, you would expect an insurance company to have reserves."
The companies were excused from the tax — a $5 billion item. Big oil companies escaped a potential new tax — also worth $5 billion. Lawmakers ditched an item to force refineries to change how they count inventory.
Bob Slaughter represents refineries:
BOB SLAUGHTER: And it changes the rules after the game has started to be played. Refiners made investments based on an assumption that they would continue to be covered by this particular accounting methodology.
This arcane stuff always shows up in tax bills.
Steve Ellis of the nonprofit Taxpayers for Common Sense says it's because politicians like to craft tax breaks always in need of rejiggering. It keeps the price tag down. And makes lawmakers look good.
STEVE ELLIS: If you fix something for good, you never get to fix it again. But if you only fix it for a short-term time, you can claim credit for fixing it all over again.
Ellis says the tax-cut train always attracts extra passengers. By the way, there's another coming down the tracks soon. He calls it the trailer.
In Washington, I'm Scott Tong for Marketplace.