This story about 55 tax breaks about to expire starts in an unlikely place: Barn 63 at the Belmont Race Track in Belmont, N.Y., at the stall of a pretty brown horse with a white star on her forehead.
She’s a two-year-old filly named Under the Moonlight, and her owner is Steve Zorn. When he’s not tending to the horse, he’s a tax lawyer. Under the Moonlight cost Zorn $15,000 up front, plus another $30,000 a year or so to train -- expenses offset in part by one of the expiring tax breaks. Zorn says those tax breaks figure into local jobs.
“If we have the horse business here,” he says, “there’s going to be a groom for every four horses.”
Plus an exercise rider for every 10 horses. And so on.
Zorn and his partners get a 3 year tax break that lets them recover some of the money they put into their horse. But on December 31st, it expires, along with breaks for teachers who buy classroom supplies, owners of NASCAR tracks, buyers of electric motorcycles, even a credit for rum in Puerto Rico and the Virgin Islands.
These 55 little bits of tax policy are akin to legislative orphans, though that comparison only goes so far, says Roberton Williams, who is senior fellow at the Tax Policy Center at the Urban Institute*.
“The problem with your orphan analogy is these folks really love their tax credits,” he says. “To them they’re not orphans. They’re little children who need loving care.”
Usually Congress gives them that care -- extending tax breaks for people and industries year after year. This year, they've been too busy fighting, which has complicated the job for lobbyists.
“We find our champions, and then we count on them to make sure the job gets done,” says the Farm Bureau's lobbyist, Patricia Wolff. “I’m here in Washington, and I’ll be spending time in the offices of the tax writers.”
And there’s work to be done -- some in Congress say they want to reform the whole tax code soon.