WASHINGTON — By now, we've heard all about the big stuff in the fiscal cliff bill that finally passed on Tuesday. The Bush administration tax cuts will become permanent for all individual income below $400,000 (and family income below $450,000). The sequester spending cuts will be delayed two months. And so on.
But Congress also managed to stuff all sorts of corporate tax breaks and other arcane provisions into the bill, covering everything from electric scooters to NASCAR racetracks to taking the subway to work. Most of these tax breaks already existed — they're just being extended again for another year or two, at a total cost of roughly $77 billion.
Here are 10 of the more curious tax provisions in the fiscal cliff bill:
1. A $9 billion "sop for Wall Street banks and major multinationals."
Section 322 of the bill allows manufacturers and banks to defer taxes when they engage in a special type of financial transactions known as "active financing." The break costs $9 billion per year, and critics claim it encourages firms to create jobs overseas. But it's a lobbying priority for companies like General Electric and JPMorgan, who say that it helps them compete abroad, and it will get extended another year.
Now, there are a ton of other costly business tax breaks in the deal, too, from tax credits for research and development to bonus depreciation (which studies have found are ineffective at stimulating the economy).
2. A rum tax for Puerto Rico.
Congress currently levies an excise tax worth $13.50 per gallon on rum produced in or imported to the United States. Most of that money is transferred to Puerto Rico and the Virgin Islands to support their rum industries. In 2009, this tax raised some $547 million. The cliff deal would extend this arrangement another year. (By the way, Puerto Rico's non-voting representative in the House, Pedro Pierluisi, thinks this tax set-up is too favorable to rum distillers.)