By Jim Popkin, NBC News Senior Investigative Producer
When House members today approved the $700 billion financial-industry bailout bill, they also voted to approve dozens of so-called "tax extenders." Fiscal watchdogs have another word for these "tax extenders"--pork.
You'd need to be a forensic accountant, or a CSI detective, to comprehend the bureaucratic language in the 451-page Senate bailout bill, called H.R. 1424. In tortured English, under the heading "Extension of Business Tax Provisions," the bill lists dozens of tax breaks for companies and industries large and small.
"Subpart F exception for active financing income," reads one section. "Extension of look-thru role for related controlled foreign corporations," reads another.
Watchdog groups including Taxpayers for Common Sense have been tracking some of these obscure tax breaks for years, and have published the most glaring examples. They say the small-print provisions represent billions in tax breaks for certain American industries, and were added as "sweeteners" to encourage reluctant House members to approve the bailout bill.
Tucked into pages 262 and 263 of the bill, for example, are provisions that will aid the manufacturers of "certain wooden arrows designed for use by children." The bill will exempt the arrows from an excise tax of 39 cents. There are also tax breaks for race-track owners, for rum imported from Puerto Rico, for worsted wool makers, Hollywood film and television production companies and on and on.
"This is unfortunately how Washington works," said Keith Ashdown of Taxpayers for Common Sense. "Lawmakers piled billions of dollars of pork into the bailout bill and dared detractors to vote against it. Many of these provisions are tax provisions that benefit narrow interests that have been waiting to hop on a legislative train that was leaving Washington."
Here's a link to the "Top Ten Sweeteners" in the bailout bill.
Update: The distilled spirits lobby called late today to clarify that the bill does not constitute a "tax break" for the rum industry. Instead, it said, it rebates taxes to the governments of Puerto Rico and the Virgin Islands. And the bill is merely extending the rum tax rebate, the Distilled Spirits Council added.