Thursday, December 18, 2014

10 Outrageously Pricey Tax Breaks ‘Gifted’ by Congress

By Eric Pianin and
Rob Garver,
The Fiscal Times
December 18, 2014

The Senate, on its way out at the close of the 113th Congress, approved the extension of more than 50 tax breaks, collectively known as “tax extenders,” which had expired at the end of last year. The provisions cover everything from business research costs to NASCAR tracks and will now apply to tax year 2014.

The extenders will expire again in two weeks, however, and Congress will have to revisit their renewal in the New Year. It’s a process that tax experts abhor, as many incentives inherent in the extenders can’t have their full effect without providing the beneficiaries a degree of certainty about their continuation into the future.


ONE: A break for NASCAR track owners.
Owners of NASCAR tracks and other “motorsports entertainment complexes” may write off the cost of facilities on their taxes over seven years, instead of the standard 39 years for nonresidential property and 15 years for “improvements,” such as roads. This is provided the venue hosts an event within three years of its completion. Est. cost in FY 2015: $11 million.

TWO: Extension of some racehorses’ classification as 3-year property. ••• Est. cost in FY 2015: $74 million.

THREE: Expensing breaks for film and TV productions. ••• Est. cost in FY 2015: $245 million.

FOUR: Research & development tax credit.
This tax credit, which has an extraordinarily broad definition of “research,” generally goes to larger corporations. Companies that have benefited in the past include Microsoft Corp., Boeing Co., United Technologies Corp., Electronic Data Systems Corp. and Harley-Davidson. Est. cost in FY 2015: $3.786 billion.

FIVE: Bonus depreciation. ••• This break was designed to help stimulate the economy during hard times. But surveys have shown it has little or no effect. Est. cost in FY 2015: $45.3 billion.

SIX: Rum excise tax revenues in Puerto Rico and the Virgin Islands. ••• Est. cost in FY 2015: $168 million.


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