- The Washington Times - Thursday, October 7, 2004

The House yesterday approved a bill to create broad tax cuts for U.S. companies and multinational corporations while singling out dog tracks, native Alaskan whalers, NASCAR, bow-and-arrow makers and an array of other interests for special breaks.

House legislators voted 280-141 in favor of the package. The Senate hopes to vote before Congress adjourns this week.

The total package would deliver roughly $140 billion in corporate tax cuts and payouts, but attempts to offset the cost by closing loopholes and eliminating other benefits.

As part of the package, tobacco farmers won a $10 billion buyout for ending an outdated system of production quotas. Several senators tried to attach the buyout to new Food and Drug Administration authority for manufacturing and marketing tobacco, but House leaders blocked the effort.

The tobacco provisions may cost the bill votes or an attempted filibuster in the Senate, though the overall package appears to have support from a majority in both chambers.

Lawmakers began formulating the bill in 2002, after the World Trade Organization ruled that an export subsidy — worth $50 billion over 10 years — was illegal.

The decision allowed the European Union to impose trade sanctions on U.S. exports, retaliation that is pricing U.S. jewelry, toys, timber, machine tools, food and other goods out of the 25-nation market.

Congress looked to reallocate the $50 billion into a tax cut for manufacturers and multinationals, but to win passage had to dole out additional billions in sweeteners.

“Unfortunately, this legislation is a cynical vote-buying scheme that relies on spreading the fat to as many congressional districts as possible,” said Keith Ashdown, vice president for policy at Taxpayers for Common Sense, a watchdog group.

The bulk of the new tax breaks — $76.5 billion — are for U.S.-based production, a broad category that includes manufacturing, oil and gas extraction, architecture and engineering, electric generation, some farming, and construction.

The bill also reduces taxes for the overseas operations of U.S. companies by $42 billion, House Democrats said.

Narrow breaks include suspension of about $44 million in duties on imported ceiling fans, $231 million in taxpayer funds to finance bonds for shopping-mall projects, tax breaks worth $27 million for foreigners who bet on American dog and horse races, $28 million for the cruise-ship industry, $9 million for archery products, $11 million for fishing tackle boxes, $101 million for NASCAR-track owners, and $336 million for Hollywood studios.

Congress’ scattershot generosity bothered the Bush administration, but yesterday White House spokeswoman Claire Buchan said the president would sign the measure if it reached his desk.

“We would liked to have seen more of the targeted tax provisions eliminated, but the overall bill is positive for American workers,” she said.

House Republicans and a broader Senate coalition — which included Tom Daschle, South Dakota Democrat — said the measure would help make U.S. companies more competitive and protect jobs.

“It’s not only the first step toward ending the Euro tax on America’s exports, but it also gives a real shot in the arm to U.S. factories and farmers, at home and abroad,” said Sen. Charles E. Grassley, Iowa Republican.

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