The Budget Deal: The View From K Street
What It Means To You If You Have A Washington Lobbyist
WASHINGTON (TIME, Aug. 11) -- Packed inside the hundreds of pages of the balanced-budget deal is the handiwork of Washington's agile lobbyists, who have carved ornate preferences for their clients. A sampling of their latest handiwork:
Smoke and Mirrors
Just when it seemed tobacco companies couldn't get a break, congressional tax writers inserted a breathtaking absolution worth perhaps $2 billion a year. The provision means the new tobacco taxes that pay for children's health insurance are credited against the $368 billion settlement that tobacco companies have promised to pay.
Easy on Hard Cider
Taxes on hard cider fall from $1.07 to 22.6[cents] per gal. Hard-cider producers argued that the drink competes with beer, not wine, and therefore should be taxed at the frosty-mug rate.
The American Way
Changes in special foreign-tax rules inserted after the House and Senate passed their tax bills give Amway, the Michigan consumer-products giant, favorable tax treatment for two of its Asian affiliates.
Truckers and airline pilots can deduct 80% of their business meals. Everyone else can still write off only half the cost of that cinnamon roll.
For Faithful Service
Employees of Texas-based Sammons Enterprises are allowed to receive stock from the founder's estate without paying estate taxes on the transfer.
This year's award for creative giveaways goes to Delaware Senator William Roth, who found a way to give Amtrak a $2.3 billion tax preference with an obscure accounting change. In effect, Amtrak gets a tax refund for payments made to the Treasury by a handful of older railroad companies that died to create it 26 years ago.
Manna for Microsoft
Software publishers are exempt from paying taxes on a portion of the income from licensing their products abroad. Producers of other intellectual property, like compact discs and movies, already enjoy this provision.
Skydiving enthusiasts are exempt from a 10% excise tax on airline tickets because they take off in a plane but almost never complete the trip on board.
Score another win for majority leader Trent Lott. Thanks to him, county clerks and sheriffs in his home state of Mississippi can deduct more of their business expenses than before.
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