Aerial view of the Washington Monument and Mall/ Sgt. Andy Dunaway
If you want a story about the illogic that rules Washington, look no further than this.
There are a bunch of “temporary” corporate and other tax breaks that Congress extends every year like clockwork. Actually Congress extends them so reliably that these tax breaks are collectively known as “tax extenders” in Washington-speak. And despite the long list of things you might think Congress should be working on at this very moment – like extending unemployment benefits or addressing failing schools or crumbling infrastructure – Congress is working on extending those tax breaks, most of which benefit corporations.
Here’s a major reason Congress always extends these tax extenders: it’s a whole bunch of different tax breaks bundled together, and each one has an interest group to protect it. Just one in the bundle – called the “Active Finance Exception” – helps General Electric avoid billions of dollars in taxes annually. You can imagine heroic efforts on the part of GE’s “government relations” team to make sure this tax break is always written back into law.
In total, the tax extenders are worth about $700 billion in potential tax revenue over a decade. To put it in terms we can all understand, that’s a hell of a lot of money. It’s enough money to roughly double all federal education spending over the same time period.
Back to the present and Congress’s current push to, once again, extend the tax extenders. Lawmakers are likely to pass an extension of these tax breaks and thus add $700 billion to budget deficits over the next 10 years. That’s a big deal in light of another issue under discussion in Washington: extending emergency unemployment benefits for the long-term unemployed. Why, you might ask, hasn’t Congress extended these emergency benefits for people who can’t find jobs? One of the major hold-ups was about offsetting the $10 billion cost so it doesn’t add to the deficit.
You heard me right. In Congress’s logic, it’s fine if tax breaks for corporations add to the deficit (and by the way, we’re not in a deficit crisis – but that’s another story). But when it comes to unemployment benefits for the long-term unemployed – we just can’t spare the change.
For more on this important issue, check out what our friends at Citizens for Tax Justice have to say.