Senate May Vote Today

(Washington, D.C.) – The Council for Citizens Against Government Waste (CCAGW) today chastised the House of Representatives for showering special interests with $136 billion in targeted tax breaks.  The American Jobs Creation Act (H.R. 4520) passed the House on a 280-141 vote Thursday and is expected to be considered today in the Senate.  Supporters argue the legislation eases trade tensions with Europe and provides tax relief for American factories.  The bill cuts taxes in some areas and raises taxes others, but the biggest beneficiaries of tax cuts are concentrated in swing states.   

“While the bill is touted as a sweeping overhaul of corporate tax law, all it does is further complicate an already messy system, providing no net benefit to American businesses or taxpayers,” CCAGW President Tom Schatz said.  “It also distracts Congress from considering what this country really needs – fundamental tax reform and elimination of the Internal Revenue Service.” 

The bill was originally intended to repeal a $5 billion per year export subsidy that was declared illegal by the World Trade Organization, and replace it with other incentives to help U.S. exporters.  However, members of Congress have seized on the bill to provide tax breaks to anyone and everyone with congressional clout. 

“The fairest way to cut taxes is across-the-board rate reductions,” Schatz added.  “Targeted tax breaks help only those businesses that peddle influence in Washington.  Targeted tax breaks distort the free market by conferring unfair advantages on firms with political clout.  Such tax cuts also diminish the overall efficacy of the economy by encouraging companies to divert resources from servicing customers to political lobbying.”    

In addition to the $76.5 billion in tax relief for manufacturers and other producers, the bill provides $42.6 billion in tax relief for multinational corporations.  The Associated Press points out other recipients of tax benefits:  Farmers, fishermen who purchase tackle boxes and sonar fish-finding equipment, bow-and-arrow hunters, NASCAR race track owners, Native Alaskan whale hunters and importers of Chinese ceiling fans.

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.