Manufacturing Tax Cut Would Help Few (1.1% of Corporations benefit)

[papau]

New corporate tax cuts help only about 1.1 percent of the nation's 2.2 million corporations - sound familiar?

Companies prefer National Health Plan.

http://www.washingtonpost.com/wp-dyn/articles/A52893-2004Aug9.html

Manufacturing Tax Cut Would Help Few
Fight Could Scuttle Broad Legislation

By Jonathan Weisman and Jeffrey H. Birnbaum
Washington Post Staff Writers
Tuesday, August 10, 2004; Page E01

The centerpiece provision of the sweeping corporate tax cuts steaming through Congress would help only about 1.1 percent of the nation's 2.2 million corporations, leaving some of the most troubled domestic manufacturers with no benefit at all, according to an analysis by the nonpartisan staff of Congress's Joint Committee on Taxation.

The new analysis is fueling a quiet war between major, profitable companies that stand to gain from $63.3 billion in reduced manufacturing income taxes over the next 10 years and old-guard steel and automobile giants that already pay little or no tax under the current system. The steelmakers and auto giants instead want the government to pay as much as 10 percent of their burgeoning health care bills by granting billions of dollars in tax credits.<snip>

The findings "confirm my worst fears," Sen. John D. Rockefeller IV (D-W. Va.) said in a letter sent to colleagues last night. "More than 95 percent of manufacturing corporations -- the presumed targeted beneficiaries of the provision -- receive either no benefit or less than $50,000 of benefit."

Though advertised as a lifesaver for the nation's ailing manufacturing sector, the legislation would primarily benefit a handful of large corporations that have remained highly profitable during the country's long manufacturing slide -- companies such as Gillette Co., Dell Inc. and Johnson & Johnson.

Fewer than 25,000 companies would divide virtually all of the $63.3 billion in tax relief for domestic manufacturing contained in the Senate tax provision, the analysis found. Of manufacturing companies, fewer than 5 percent would benefit significantly. <snip>

[Robert Oak]

1. demons and devils

America is now showing evidence of being in big trouble and all
that our representatives do...is give legislative paybacks to their
lobbyist donor pals.

Rome burns and they speculate on land value is the analogy that comes
to mind.

[idlisambar]

2. Grassley not willing to do what it takes...

Rockefeller and Sen. Arlen Specter (R-Pa.) are pushing an alternative that would offer manufacturers a choice between the tax rate cut and a federal tax credit to offset health care costs. In an interview yesterday, Specter argued that this would more fairly distribute benefits by helping companies saddled with huge health care liabilities from retirees and aging workers.
.....
.....
"Creating a refundable general tax benefit for businesses would cross a very controversial line, one that could have taxpayers paying for a company's ordinary business expenses," Grassley said in a statement.

Ridiculous. Grassley's arbitrary "discomfort" with the form of the subsidy is preventing a more effective bill from being passed. Idealogy over pragmatism once again.