Last week, in what Reuters called “a rare show of bipartisan unity,” the Senate Finance Committee approved a package of so-called tax extenders by a 19-5 vote. The extenders package contains a variety of expiring tax provisions that are regularly renewed.
The senators on the committee were slapping themselves on the back for achieving some modicum of tax reform — with Sen. Orrin Hatch (R-UT) even saying, “By doing this, we’ve come a long way toward functionality” — but the package includes several problematic provisions, including:
— A tax break for NASCAR;
— A tax break for producing rum;
— The extension of two provisions that help corporations offshore their profits and avoid taxes.
Citizens for Tax Justice noted that, if Congress actually allowed the latter two corporate tax provisions to expire, “many U.S. companies will have much less incentive to send their profits (and possibly jobs) offshore.” Overall, the bill would spend $40 billion next year on special interest tax breaks.
The tax code is absolutely plagued by preferences and subsidies, which are essentially spending programs that are administered through the tax code. These tax expenditures total $1 trillion every year. However, senators on the Finance Committee seem content to celebrate their work, even after leaving some of the most egregious examples of these giveaways untouched.