55 tax breaks set to expire! That's was the basic headline that ran on Dec 30th and 31st announcing that our congress had failed to renew tax breaks for various groups, industries and interest groups. Oh, bad, bad congress how could you!
Not so fast ! This appears to be an annual event for congress who in years past has walked this road before and eventually (and well before the tax filing deadline) restores many, if not all of the tax breaks; an adds a few more. Most of the tax breaks aren't relevant to the average wage earner who must file their tax's by April 15th, the earned income credit, home mortgage interest and medical bill deductions aren't going anywhere (Yet).
The breaks, for the most part appear to hit larger businesses and interest groups the hardest. But may in the long run result in higher costs to consumers and less business investment (and the impact that might have had on improving the economy).
Some of the breaks include:
A tax credit for manufacturers, pharmaceutical makers and high tech companies for research and development that saved these industries approximately $6.2 billion dollars.
Renewable energy companies like, wind and solar, will lose a tax credit totaling approximately $112 million in 2013, but almost $12 billion over the next ten years.
A tax rebate paid to Puerto Rico and the Virgin Islands for imported rum from a $13.50 tax per gallon, total loss of about $199 million based on last years rebates.
I didn't know that my favorite rum had a $13.50 tax, hmmmmm. The tax isn't going away, just the rebate paid back to Puerto Rico and the Virgin Islands.
You can Google "55 tax breaks set to expire" to get a variety of stories covering the rest of the breaks. The one I read most extensively is from TheLedger.com
Damn, $13.50 per gallon of rum, I hope congress doesn't start tinkering with the gas tax!
Photo courtesy of www.de-taxes.com