-By Warner Todd Huston
Americans for Tax Reform has a must read piece on some of the provisions in the tax deal that Obama is trying to work out with Republicans. Many on the left are saying that the business extenders in the deal are pork, or are an earmark, or are even "costing the government." Ryan Ellis explains why these claims are incorrect re the business extenders.
The first thing he mentions is that business extenders aren't new to this tax deal and that they've been around for a long time. For the left and the Old Media to be focusing on them as if they are new policy is simply wrong.
In any case, whatever else is wrong with this idea -- such as the pork that is being added every other hour at this point -- the business extenders are not a detraction here.
The tax compromise between President Obama and Congressional Republicans has attracted specific criticism today. Namely, some have called the "business extenders" things like "earmarks," "pork," "bailouts," etc.
Business extenders are various deductions and credits which have been in the tax code for many years. There is nothing special or different about them. They are deductions and credits in the same way the student loan interest deduction is. The only difference is that Congress puts an expiration date on these deductions and credits so that a "must-pass" legislative tax vehicle is manufactured every year or two.
Business extenders are far from ideal tax policy, as are permanent deductions and credits such as the student loan interest deduction, the state and local tax deduction, and many others. On the merits, they should not exist in a broad-base, low-rate tax code.
However, American employers face the highest corporate income tax rate in the developed world (40 percent with states). These business deductions and credits are what make this confiscatory tax rate tolerable. Getting rid of them is a good idea, but only in the context of fundamental tax reform that is revenue-neutral and lowers marginal tax rates....
Read the rest at ATR.org.