Sunday, June 28, 2009

The Dirty Underbelly of TARP

If you think TARP bailed out a bunch of banks, you're right.

But that's hardly all it did.

That legislation included $20 billion in tax breaks for companies that produce energy from wind and other alternative sources as well as $1.6 billion in relief related to the tax treatment of canceled debt for Sprint Nextel Corp., the third- largest U.S. mobile-phone-service company, and other firms.

Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, spent much of 2008 searching for a way to enact the tax provisions, says Russ Sullivan, the committee’s staff director. Baucus recommended to Majority Leader Harry Reid of Nevada that the tax breaks be included in the October bailout bill, Sullivan says.

Think that stuff is stupid? We're not done yet.

The legislation, which includes dozens of narrowly written provisions, created a new class of bailout beneficiaries.

One, championed by Michigan Representative
Dave Camp, the top Republican on the tax-writing House Ways and Means Committee, and supported by Baucus, is saving Nascar track builders $109 million in taxes this year by allowing more generous write-offs. ...Another shaves $478 million during the next decade from tax bills to movie and television producers as a better way of encouraging them to shoot in the U.S.

Fred Rosenthal, president of Beltsville, Maryland-based Jasper’s Restaurants, says his industry needed shorter cost-recovery periods for renovations to restaurants.

The October bill changed that time to 15 years from 39 and 1/2 years.
That will cost the IRS $8.7 billion over the next decade, according to the JCT

And then there's Captain Morgan Rum. But you'll have to read the linked story for that part.

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