Latest perk? No. It's been around for years. Tax reform efforts have done nothing about it. It's the kind of perk producing the kind of profits that a Mitt Romney proudly ascribes to his own talents. "This valuable perk — the ability to finance a variety of business projects cheaply with bonds that are exempt from federal taxes," the Times reports today, "has not only endured, it has grown, in what amounts to a stealth subsidy for private enterprise."
In all, more than $65 billion of these bonds have been issued by state and local governments on behalf of corporations since 2003, according to an analysis of Bloomberg bond data by The New York Times. During that period, the single biggest beneficiary of such securities was the Chevron Corporation, which issued bonds with a total face value of $2.6 billion, the analysis showed. Last year it reported a profit of $26 billion.
At a time when Washington is rent by the politics of taxes and deficits, select companies are enjoying a tax break normally reserved for public works. This style of financing, called “qualified private activity bonds,” saves businesses money, because they can borrow at relatively low interest rates. But those savings come at the expense of American taxpayers, because the interest paid to bondholders is exempt from taxes.
What is more, the projects are often structured so companies can avoid paying state sales taxes on new equipment and, at times, avoid local property taxes....NYT
Did Congress rush back to work before the sequester began in an effort to end this costly giveaway? Uh, no.
While it is difficult to calculate the precise dollar amount of the subsidy, given the number and variety of these bonds, experts say the annual cost to federal taxpayers could run into the billions. ...NYT
Just to add to the folly, investigations have shown that some of the profits from one bond deal wound up making weaponry used against our forces in Afghanistan.
Suppose the House -- instead of taking endless vacations and blaming everyone but themselves -- were to settle down and do something about the tax code, do you think it would need to impose economic austerity on the least fortunate among us?
