New tax law littered with weird, wonderful business tax breaks
When President Obama signed the new $858 billion tax bill recently, he extended the Bush-era tax cuts for families through 2012. What Obama also did was give businesses a gift, in the form of some helpful – and curious – tax breaks. The tax breaks make it easier for businesses to operate, and they even go so far as to make it easier for the wealthy to buy race horses, reports the Associated Press.
Approximately 50 business tax breaks leave homeowners cold
While tax breaks for producing television programs, erecting windmills and exporting rum are all welcome, average homeowners are less than happy with the Obama tax bill. This is because the property tax break has been taken off the table unless deductions are itemized, a method which is not cost-effective for many in the middle class.
If only the middle class had their own personal race horses upon which they could ride away to happy money land. Alas, only those who can afford race horses in the first place will enjoy Obama’s new race horse tax credit. While the Obama administration views the new tax law as a stimulus for economic activity, tax experts like Clint Stretch of Deloitte Tax LLP see the law as yet another hasty passage of stop-gap measures.
“It gives it a lot of dignity to call it a ‘system,’ ” Stretch told the AP.
Highlights of those special business tax breaks
- Profitable businesses can write off large capital expenditures all at once, rather than over time. Projected business savings: $21 billion over 10 years
- Foreign profit tax shield will save banks, insurers and financial firms. It will cost taxpayers $9.2 billion
- Research and development tax break. Will cost taxpayers $13.3 billion
- Puerto Rico and the Virgin Islands will save $262 million through 2011 with a lower rum export tax
- Wind, solar and renewable energy tax credit will cost $3 billion through 2011
- Fifty percent tax credit for railroad track maintenance cost. Will cost $331 million through 2011
- Companies that donate to charity will receive $537 million in tax breaks through 2011
- Non-sexually explicit TV production tax break. Write off $101 million through 2011
Obama signs tax bill