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But at least congressmen back in 1913 occasionally tried to do something beneficial for the country. Today's Washington is more interested in exploiting such beneficence. Take the yacht deduction.

The luxury sailing industry was able to buy its way into the mortgage break when Congress officially declared boats as homes. But not just any boat. The rules require they have sleeping quarters, a kitchen and toilet, leaving just 3 percent of U.S. boat owners to qualify.

"The mortgage deduction was never targeted for that," says Congressman Tim Walz (D-Minnesota). "It was meant to make home ownership more affordable for the middle class."

Democratic U.S. Rep. Tim Walz (D-Minnesota) tried to pass legislation preventing the uber-rich from claiming the mortgage deduction on yachts. Dave Camp blocked that effort, too.
cursedthing/Creative Commons
Democratic U.S. Rep. Tim Walz (D-Minnesota) tried to pass legislation preventing the uber-rich from claiming the mortgage deduction on yachts. Dave Camp blocked that effort, too.
Thanks to the luxury sailing industry, taxpayers helped subsidize Microsoft CEO Steve Ballmer's $200 million yacht, Octopus
Octopus: Wikimedia Commons
Thanks to the luxury sailing industry, taxpayers helped subsidize Microsoft CEO Steve Ballmer's $200 million yacht, Octopus

So Walz wrote the Ending Taxpayer Subsidies for Yachts Act, hoping to bar the uber-wealthy from sponging off the mortgage deduction. Once again, Congressman Dave Camp refused to let it come up for a vote.

That leaves everyday taxpayers to subsidize toys like Microsoft co-founder Paul Allen's $200 million yacht, which comes equipped with an indoor pool, basketball court and its own submarine.

"It's a loophole in the tax code that benefits a few people at the very top," says Walz, a sergeant major in the National Guard and former teacher. "I certainly feel that if they want to grab their luxury liners, I'm glad they do. And I'm glad we have people making them. I'm just not certain we subsidize that."

5. Big Oil's Cadillac welfare

Last month, Mitt Romney traveled to Iowa, where wind energy has become an economic force, responsible for 7,000 jobs and 20 percent of the state's electricity.

He announced that, as president, he would kill the $3.3 billion in tax incentives that now go to this nascent form of electricity. In Romney's eyes, the industry has had more than enough time to stand on its own two feet.

"He will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits," Romney spokesman Shawn McCoy told the Des Moines Register.

It's a laughable position. After all, Romney has announced no similar crackdown on a much older and larger welfare queen: Big Oil.

The five largest U.S. oil companies collect a spectacular $20 billion a year in tax breaks. And they'd prefer that wind farms not compete for that lucrative welfare dollar. During this year's presidential race, the industry has paid Romney $3.4 million to ensure that wind goes away.

Technically, the oil giveaway is supposed to defray the cost of searching for new sources. But even George W. Bush realized the industry didn't need subsidies back in 2005, when the price of a barrel was at $55. "We don't need incentives to oil and gas companies to explore," he said at the time. "There are plenty of incentives."

These days, the price of a barrel routinely hovers around $100. But the five biggest companies — BP, Chevron, ConocoPhillips, ExxonMobil and Shell — still get their breaks, despite collective record profits of $137 billion last year.

"The oil industry is doing fine," says Johnson, the University of Texas tax expert. "They don't need or deserve a dime of subsidy. It's all money thrown away to make shareholders richer. The private market will provide any subsidies by increasing the price. It's time to get the government out of the business of special subsidies. It's like Cadillac welfare."

4. A break for shipping your job to China

In April, 750 workers at a Kimberly-Clark paper mill in Everett, Washington, lost their jobs when the company shipped them to a lower-cost facilities overseas.

Steelworkers in Stevens Point, Wisconsin, suffered the same fate. Their mill's owner, Joerns Healthcare, took away 150 jobs last month by moving operations to Mexico.

Another 170 people making auto sensors at a Sensata Technologies plant in Freeport, Illinois, will be out of work by year's end. Their jobs are being carted off to China.

In each case, American taxpayers will subsidize the evacuation.

It's not just cheap labor that pushes work overseas. The U.S. tax code allows companies to expense every last cost of sending your job abroad.

At a time of 8 percent unemployment, one would think Congress would rush to kill a loophole that actually encourages economic misery. One would be wrong.

This summer, Senate Democrats introduced the Bring Jobs Home Act, which would kill the loophole and offer a 20 percent tax credit to companies that bring work back to America.

Republicans filibustered the bill to death. Senator Orrin Hatch (R-Utah) went so far as to call the measure "a joke," ensuring another nervous Christmas for the country's blue-collar workers.

3. The behaving-like-an-asshole deduction

In 1989, third mate Gregory Cousins was negotiating the 986-foot Exxon Valdez through Bligh's Reef in Alaska while Captain Joe Hazelwood slept off a bender below deck.

The vessel crashed, spilling upwards of 25 million gallons of oil into Prince William Sound. The disaster could have been avoided if the ship's collision avoidance radar was working. It had broken a year before, but Exxon chose not to fix it due to the cost of repair and operation.

Overnight, 1,300 miles of pristine shoreline turned to blacktop. Wildlife caked in oil looked like a Hollywood casting call for an Al Jolson biopic. The remote locale made cleanup difficult. Twenty-three years later, fish stocks have yet to return to their pre-spill levels.

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10 comments
TruthHurts
TruthHurts

Wow, just wow. What uneducated drivel. Why hasn't Obama told us about these tax loopholes? Just hasn't done a good job of telling the story? We have one of the most progressive tax policies in the world, on average the more one makes, the more taxes they pay. The buffet/secretary line has proven to be incorrect (look up what an effective tax rate is), stop pandering to the lies. #10. If the US corporate tax rate was competitive (ie. lower) corporations wouldn't do this. The same happens when a state with a higher income tax sees citizens move to one with a lower rate. #9. Capital gains are not taxed the same as dividends, maybe do some research. Dividends are taxed lower because as profit (ie. earnings) they are already taxed once at the corporate level. Looks like you forgot to mention that Senior citizens (anyone over 60) are the largest group of citizens dependent on dividends for income, that is why this has not changed and has actually been lowered over time (buying votes). #8. Agreed, that's just nonsense, this shows how corrupt Congress is. #7. While yes, the corporation gets the write-off, the individuals will pay taxes on the capital gains. This money does not just get handed out freely as you infer. #6. Yes, it is absurd Yacht's can be claimed, but there are still restrictions on how much interest can be claimed (both monetary and on only up to 2 homes) and there are habitation restrictions as well. Agreed this is dumb. #5. Agred, end all energy subsidies. Solyndra, A123, wastes of money. Let China do it cheaper and better than America can (as is the case already). #4. "It's not just cheap labor that pushes work overseas. The U.S. tax code allows companies to expense every last cost of sending your job abroad." Wow, thanks for the insight, what a joke you are. There are no tax breaks for shipping jobs overseas, only MUCH cheaper costs vs paying payroll taxes of 20%+ of salary/employee in taxes (Medicare/SS/SUTA/FUTA), not to mention healthcare costs that are rapidly rising. #3. Agreed, this is bullshit. #2. See #10. Maybe more states should follow Delaware's lead to be competitive? Sounds like a lot of whining, especially from the caymen islands. #1. Moving a business to a state willing to work with you, instead of against you is blackmail? Im sure California's higher taxes and pro-union atmosphere had nothing to do with this decision. Typical liberal bullshit, read a book or two Chris, maybe start with the tax code if you're going to pretend to know what you're talking about.

RouseMouse
RouseMouse

We can only assume those off shore companies, that have recently been declared individuals by the supreme court, at their request for political reasons, are paying common personal income tax or the AMT (alternative minimum tax) on their personal income like the rest of the individuals living in the country allowed to use the same forms, and those stating their residence out of the country have the appropriate work visas for their business dealings inside the U.S. like any other individual needs and are no longer able to finance any U.S. election campaigns and are registered as foreign lobbies?

 

Does Apple have a work Visa to do business in the U.S.? and do they have to leave in 3 to 6  months or some time limit like every other foreign individual must comply with?

cowade45
cowade45

So the many years the Democrats had control of both houses and the White House they couldn't have eliminated these loopholes. Sounds like a lot of "Loopholes" in your article. Your bias was definitely on display.

raktmn
raktmn

Unfortunately the only way to get rid of this tax code problem is to get rid of the lobbyists.  The problem is that the 5 Republican-leaning US Supreme Court justices keep ruling over and over (like Citizen's United) that businesses can use unlimited money to influence politicians.  They claim that buying off the government is "free speech".  A claim that is tantamount to claiming that bribery is the same as writing a newspaper.

 

There is no way to solve this problem without getting rid of these Supreme Court justices who derail all legislation designed to remove corporate influence from government.  Once this is solved, only then can the lobbyists be defeated.  Only after the lobbyists have been dealt with can we make meaningful changes to our tax code.  Otherwise we are just playing whack-a-mole trying to eliminated individual tax loopholes, and 100 new loopholes will be added for every 1 loophole that gets public ridicule like the loopholes in this story.

 

Elect people who will fix the Supreme Court, or don't bother complaining about the results...

trollmeat
trollmeat

Romney 2012. The president had 4 years to fix this and he hasn't so whats that really say?

Mary Durocher
Mary Durocher

Great article!! Just wish others could read it without thinking someone must be "lying"....since lying has just become the new "truth"....

cowade45
cowade45

 @trollmeat So the many years the Democrats had control of both houses and the White House they couldn't have eliminated these loopholes. Sounds like a lot of "Loopholes" in this article. Chris Parker's bias was definitely on display.

moreliberalthanjesus
moreliberalthanjesus

 @trollmeat Of course you choose to ignore the many references to Congress trying to close these loopholes, with zero success.  The president can't just change the tax code on a whim.  

 

“If you vote against Obama because he can’t get stuff done, it’s kind of like saying ‘This guy can’t cure cancer. I’m gonna vote for cancer.’”~Chris Rock  

 
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