WASHINGTON – The next time you hear someone complaining about “government payments to wealthy farmers” direct them to the $137-billion corporate tax bill passed by the Senate Monday and sent to the president for signing.
What started out as an effort to address a World Trade Organization ruling that a tax break for American exporters was illegal turned into a grab bag of tax breaks for corporate America, according to Washington observers.
The bill includes new tax incentives for farmer-owned cooperatives that produce ethanol and extends a previous tax credit for ethanol production. It also provides a new tax credit of $1 per gallon for agri-biodiesel and 50 cents per gallon for biodiesel (recycled oil).
But critics said Congress went out of its way to provide something for practically every category of business in the United States.
“It (the bill) is the worst example of the influence of special interest groups I have ever seen,” said Arizona Sen. John McCain. He said it was “a classic example of the special interests prevailing over the people’s interests.”
One of the bill’s biggest defenders was Sen. Charles Grassley, an Iowa Republican and frequent critic of the current limits on farm program payments to producers. Grassley said the bill was needed to resolve the trade dispute with the WTO and help American manufacturers become more competitive.
“Those who want to distort this bill by describing it as a special-interest bill are ignoring a couple of things,” said Grassley, chairman of the Senate Finance Committee. “They are ignoring, perhaps conveniently, perhaps deliberately, their own efforts to advance their own interests.”
The bill, which passed the Senate by a 69-to-17 vote and the House by a vote of 280 to 141, provides more than $20 billion in tax reductions on the profits of multinational corporations. Among the recipients would be technology companies such as Oracle and Hewlett-Packard, which would be allowed to pay taxes on foreign profits at about one-seventh the normal rate.
Analysts said the bill also includes tax breaks for makers of bows and arrows, operators of NASCAR racetracks and importers of ceiling fans, among others.