In 'fiscal cliff' bill, White House was key to corporate tax breaks
As the U.S. Congress rushed last week to approve a "fiscal cliff" tax bill that raised income taxes on the wealthy, Washington lobbyists were fretting over a drama that was playing out within the negotiations: whether the bill would include about $64 billion in tax breaks for businesses.
The bill extended several tax breaks backed by both parties, including $14.3 billion in credits for research and development projects for thousands of U.S. businesses. But it also had other provisions - breaks for companies involved in wind energy, auto racing, rum, Hollywood films and much more. In the end, the bill approved by Congress and signed into law by President Barack Obama included all of those things, thanks partly to the White House's interest in promoting wind and other alternative sources of energy, and in subsidizing research and development costs for companies. It also became a lesson in how Washington's taste for dishing out favors to special interests is alive and well, despite bipartisan calls for the government to reduce the tax credits it gives businesses and individuals at a time when the
nation's debt tops $16 trillion and is growing. Some business lobbyists told Reuters they were surprised that the package of tax credits - which had been approved by the
Democrat-led Senate Finance Committee in August - survived the negotiations over the tax bill. The main part of the bill extended Bush-era income tax cuts for individuals with incomes of less than $400,000 and couples who make less than $450,000. The longer
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