Electric Motorcycles and Tax Extenders
Which do you think you know less about: electric motorcycles or tax extenders? That’s the motorcycle in the picture but the image of a tax extender is not suitable for a family blog.
To be fair, a second question might also be asked: what kind of person asks the first question? Well, me I guess, but if you were to include people who know quite a lot about both subjects, you would quickly get to Senate Finance Committee chairman, Ron Wyden (D-OR).
Even though we can’t show it to you, the tax extender keeps a lot of people happy and makes certain people a lot of money, often in shadowy ways.
The words “electric motorcycle” pretty much tell you exactly what it is, but the words “tax extender” pretty much tell you exactly what it isn’t.
A tax extender does not extend taxes; it extends tax breaks. Mostly for people other than you.
In one of the few bipartisan actions in recent memory, the House of Representatives voted 378-46 for a whole bunch of tax extenders that will only extend the tax breaks until December 31 of this year.
They can’t agree to keep the government open for a whole year, except by the slimmest of margins, but they have time to extend tax breaks for a month by an 8 to 1 margin.
The motorcycle doesn’t last very long either. It has a maximum range of 85 miles.
Here’s a little of what’s under the congressional Christmas tree for the good little boys and girls who passed the “naughty or nice test” by filling Santa Congress’s PAC sack with nice little goodies called political contributions: the ability for multinational corporations such as Citigroup Inc. to defer U.S. taxes on certain overseas financing income; the production tax credit for wind energy; tax breaks for individuals including a deduction for mortgage debt forgiveness, a break for state and local sales taxes paid as well as breaks for teachers and commuters. That’s the House version. The Senate is taking up a bill that also includes tax breaks for laid-off workers and Wyden’s fave, the tax break for the purchase of electric motorcycles.
Tax laws ought to have one purpose, but most have two. Ours have three. The one we can agree on is raising money. The one most countries have but shouldn’t is achieving social policy goals. The one that is truly indefensible is serving as bait for political contributions.
Just what do you think happens if your tasty tax morsel expires every year? You pay your political toll again. Congress should at least give you an EZ Pass.
We are the only country that lets big chunks of its tax law expire each year. We know Congress doesn’t plan for anything but they should not assume that nobody plans for anything based on what the tax consequences might be.
According to a former high level Treasury official, “The tax extenders package is a terrible example of log-rolling – more powerful members get something for their state, and in appreciation don’t object to benefits going to another member’s state. The provisions are enacted in short-term legislation to keep the ostensible budget cost down (since the revenue estimators can’t assume the legislation will be rolled over year after year). But the long term adverse impact on the deficit undoes almost half of what sequester accomplished in deficit reduction (so we endured all that pain for very little deficit reduction). Perhaps worst of all, the annual ritual feeds in perfectly to fundraising since companies and others must lobby the tax-writing committees hard lest their little provision be dropped never to appear again.”
Merry Christmas elected officials. See you again next year.
Stan Hatch, December 12, 2014 at 8:50 am said:
I keep hoping for meaningful tax reform. The recent budget maneuvers show it may not happen for a while.