The Obama administration wants to clarify that it definitely wants to end the Bush tax cuts, raising taxes on filthy rich American small business owners earning over $250,000 a year… it just doesn’t want to do that quite yet. Right now our Dear Ruler, Barack Obama, and the Democrats just want to target “millionaires and billionaires, oil and gas subsidies, and loopholes for corporate jets that are gifts to special interests,” according to chief dogwasher Jay Carney. He says, “This is about subsidies for oil and gas companies — $40 billion — a loophole that allows for the owners of private corporate jets to benefit enormously in the billions, compared to, say, Delta or American Airlines, and other measures that benefit millionaires and billionaires, or in some way, you know, complicate our tax code in a way that it isn’t helpful.” It’s funny how Barack Obama and the Democrats are only worried about our “complicated” tax code as it applies to wealthy folks.
Let’s start with this focus on loopholes for corporate jets. Why the focus on corporate jets? Simple .. playing the wealth envy card. There are two things that really seem to symbolize extreme wealth: yachts and private jets. Democrats tried a special tax on yachts years ago, and thousands of jobs in the boat-building industry were lost. The tax was soon repealed. So .. this time it will be the private jets. And just what hideous subsidies are the Democrats after? Depreciation. All businesses get to depreciate their capital equipment. There is nothing really sexy – nothing that can be exploited to play the wealth envy game – in taking a depreciation for a construction crane or a massive new printing press at The New York Times. Private Jets? Well that’s an entirely different matter — only rich people fly in private jets, so have at ‘em!
In reality, how much could closing the corporate jet loophole really gain the taxpayers? Well when you consider the fact that we have a $1.6 trillion deficit just this year, you’d have to be government-educated to think that this corporate jet loophole could even make a dent in that figure. The reason why Democrats are focusing on something like this is because they are pandering to the dumb masses … like this person, for example: Robert Creamer. Here’s a taste of an article he wrote for the Huffington Post:
High-end corporate jets can set you back for from $40 to $70 million. They offer huge seats, communications suites, luxury appointments — convenience that is unmatched by flying commercial. But should the other taxpayers really be subsidizing that kind of luxury travel?
If a corporation spends $40 million on a corporate jet to fly around its CEO without the hassle of airport security, and the other indignities suffered by mere mortals, is it right to require those mere mortals contribute as much as $14 million in the form of a tax subsidy for the deduction the company will take as the aircraft is depreciated over the years?
The entire article is dripping in this wealth envy attitude. The Democrats play into that because they know it works.
The other victim in the Democrat wealth-envy parade is Big Oil. So now we are back to these oil and gas subsidies. We’ve been through this charade before, and in fact, I’ve pointed you to an excellent article by Randall Hoven in the American Thinker, which gives you some of the details on these hideous subsidies … subsidies that are almost uniformly offered to all industries in this country. What makes Big Oil subsidies different and worthy of government lambasting? Nothing, other than the fact that Big Oil makes for a convenient boogie man in a sea of ignorance. OK .. for some figures:
* Domestic manufacturing tax deduction — $1.7 B. This is a tax deduction given to every manufacturer in the US. Per CNN, it was “designed to keep factories in the United States.” If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.
* Percentage depletion allowance — $1 B. Any industry can write down a portion of the cost of its capital equipment as part of the cost of doing business. Right now, oil in the ground is treated as capital equipment. Again, this “subsidy” amounts to how the cost of doing business is defined. All companies get it, not just oil companies.
* Foreign tax credit — $850 million. Companies get credit for taxes they pay to other countries. All companies get this “subsidy,” not just oil companies. Should a company pay tax on tax? Should only oil companies pay tax on tax?
* Intangible drilling costs — $780 million. According to CNN, “[a]ll industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.” Among these four tax “breaks,” this smallest one was the only one that treated oil companies differently.
As Randall Hoven, the author of the American Thinker article, points out … the only subsidy that is specific for the oil industry is the last one for intangible drilling costs. So $3.55 billion that the Democrats want to claim are tax credits that are offered to all industries and manufacturers in the United States. But what if Barack Obama and the Democrats get their way in these debt talks and eliminate these subsides? Is this really going to make a dent in tackling our debt? Hoven has the figures …
* The amount of earnings not collected in taxes is about $4.3 billion per year — about 0.2% of this year’s deficit and enough to fund about 10 hours of current US government spending.
The only tax in which the oil industry seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy? That would be $0.78 billion per year — enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.