The House voted 257-167 Tuesday to pass the Senate-backed “Job Protection and Recession Prevention Act of 2012.” For all intents and purposes, the bill steers the country away from the so-called “fiscal cliff,” a combination of year-end spending cuts and tax increases that would have gone into effect had Congress failed to act.
But now that this hastily written bill has passed both chambers, here’s a question: Who won and who lost?
We’re glad you asked. That’s what we’re here for. Below are some of the winners and losers from last night’s “fiscal cliff” vote:
Winner: The Wind-energy Industry
The “fiscal cliff” bill includes a one-year extension of tax credits for the wind-energy industry that will “cost taxpayers an estimated $12.1 billion,” Fox News reports.
“The extension was part of a tax-extender package that the Senate Finance Committee approved in August and was included in the final package that Congress approved before sending it to the president,” the report notes.
“Congressional Republicans and other fiscal conservatives opposed the extension, arguing the deal between Congress and the White House was supposed to include cuts to federal spending, not additional subsidies for alternative-energy programs,” it adds.
Despite the fact that Hollywood already receives millions of dollars in federal subsidies, last night’s bill funnels even more in filmmakers’ direction:
The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.
“Yes,” he adds, “this was just one of many such ‘pork’ efforts slipped into the fiscal cliff deal … it’s stories like this that explain why so few people trust Congress, and why they’re fed up with “crony capitalism.”
Yes, booze. Via the Washington Post:
Another longstanding item—this one dates back to 1917. Congress currently levies an excise tax worth $13.50 per gallon on all rum produced in or imported to the United States. Most of that money is transferred to Puerto Rico and the Virgin Islands, who use the revenue to support their rum industries. In 2009, this tax raised some $547 million. The cliff deal would extend the current 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.)
Winner: Goldman Sachs
Even Goldman Sachs (yes, that Goldman Sachs) came out on top with the “fiscal cliff” bill.
“Section 328 of the bill extends tax-exempt financing for the ‘Liberty Zone,’ the area around the former World Trade Center, for another year,” the Washington Post reports.
“[T]his tax provision was supposed to help fund reconstruction after 9/11. Yet a recent Bloomberg investigation found the bonds have mostly helped finance new luxury apartments, not to mention the construction of Goldman Sachs’ new headquarters.”
“Developers say the bonds were necessary to revitalize downtown Manhattan, but there’s a fierce debate over how they’ve been used,” the report adds.
Per the conservative news site CNSNews.com and the Republican Study Committee, there are several reasons for the right to be upset over last night’s vote. In fact, there are at least a dozen:
First, the bill supports the “Death Tax”:
After many years of effort, conservatives succeeding in eliminating the death tax for one year, 2010. This legislation would permanently reestablish the death tax at a 40% rate with a $5 million exemption.
Second, conservatives argue the bill penalizes marriage:
The new permanent tax brackets set at $400,000 for single individuals and $450,000 for families would continue to penalize married Americans as the bracket for married filers is not set at twice the amount of the single bracket. Many conservatives fought for tax reforms in 2001 and 2003 that eliminated the marriage penalty for lower-income filers, and hold that the principle of equal treatment for income of married and single taxpayers should be universal, not only for certain income groups.
Lastly, it delays spending cuts from the Budget Control Act:
Some conservatives may be concerned that H.R. 8 would delay FY 2013 sequestration for two months. The cost of that delay would be offset by lowering the discretionary spending caps for FY 2013 and 2014 and through increased short-term revenue by allowing 401(k) to Roth IRA conversions. Some conservatives expressed concern at the time of passage of the Budget Control Act that it exchanged an immediate increase in the debt limit in exchange for future spending cuts that may not occur. Similar concerns may arise here as additional current spending is offset by unspecified future spending cuts.
Click here to see CNSNews’ complete list of why conservatives lost last night.
Losers: The Taxpayers
This is really all you need to know: Regardless of your income bracket, your taxes are going to go up.
“The bill that passed the Senate and the House did not reinstate the payroll tax holiday that has been around for the past two years. So even though income taxes aren’t going up for most people, actual take home pay will be going down,” Walter Hickey writes for Business Insider.
“In order to aid the recovery Congress and the White House cut the payroll tax from 6.2 percent for all workers to 4.2 percent for all workers effective 2011,” he adds. “The deal that was reached did not renew that, so everyone’s taxes are going up.”
The following graph illustrates how the deal will affect your taxes:
An explanation of the graph via BI:
The column under the red arrow tells you how many more dollars taxpayers in that income bracket can expect to pay as a result of the payroll tax holiday expiration.
The column under the blue arrow shows how much your effective tax rate increased. If that number is less than two points you’re not affected by the President’s plan to raise taxes on upper income Americans. If that number is less than two for your income bracket, that is just the impact of the payroll tax holiday’s scheduled end. The total average rate increase is 1.8 percent.
The column under the green arrow shows the average effective federal tax rate for members of each income bracket. The total average effective federal tax rate is 21.7 percent.
And in case you were wondering, here’s a complete list of the 85 Republicans who voted “yes” to the Senate-backed measure:
Here’s a complete list of the Republican’s who voted against the bill (along with those who didn’t vote at all):
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Featured image courtesy Getty Images. This post has been updated.