So Hunter has a front page post blasting the new Senate bailout bill, saying that because it includes tax cuts that the House rejected, that the bill is now "much, much worse," so much so that he believes that:
Now I want it to die a hot, flaming death. I want its ashes to be fed to goats, and the goats fed to sharks, and the sharks put on a rocket and fired into the sun.
The problem is that most of the additions to this bill are things that Democrats actually like. Indeed, the Senate just passed the bill that is being attached to the bailout 93-2 last week.
So what is in this bill? Let's take a look:
Title I: Energy Tax Incentives - Subtitle A: Energy Production Incentives - Part I: Renewable Energy Incentives - (Sec. 101) Extends: (1) through 2009 the tax credit for producing electricity from qualified wind facilities; and (2) through 2011 the tax credits for producing electricity from closed and open-loop biomass, geothermal or solar energy, small irrigation power, municipal solid waste, trash combustion, and qualified hydropower. Imposes a limit on such tax credit based upon investment in renewable resource facilities placed in service after 2009 in lieu of the current phaseout provisions for such credit. Expands the definitions of and rules for "open-loop biomass facility," "qualified trash combustion facility," and "nonhydroelectric dam" for purposes of such credit.
(Sec. 102) Includes marine and hydrokinetic renewable energy as a renewable resource for purposes of the tax credit for producing electricity from renewable resources.
(Sec. 103) Extends through 2014 the energy tax credit for solar energy, fuel cell, and microturbine property. Allows a new energy tax credit for combined heat and power system property. Increases to $1,500 the credit limitation for fuel cell property. Modifies energy tax credit rules to allow: (1) offsets of tax credit amounts against alternative minimum tax (AMT) liabilities; and (2) public utility property to qualify for such credit.
(Sec. 104) Extends through 2014 the tax credit for residential energy efficient property. Increases to $4,000 the maximum dollar amount of such credit for solar electric property. Allows a credit for 30% of expenditures for wind turbines used to generate electricity in a residence and for geothermal heat pumps.
(Sec. 105) Extends deferral rules for gain from sales or dispositions by qualified electric utilities made prior to January 1, 2010.
(Sec. 106) Allows a new tax credit for investment in qualified new clean renewable energy bonds.
Incentives to invest in alternative energy? Doesn't sound too bad to me.
Part II: Carbon Mitigation Provisions - (Sec. 111) Increases to 30% the investment tax credit rate for power generation projects using integrated gasification combined cycle and other advanced coal-based generation technology projects. Increases the maximum credit amounts allocable for such projects to $2.55 billion.
(Sec. 112) Increases to 30% the investment tax credit rate for coal gasification projects. Increases by $250 million the aggregate credit amounts for coal gasification projects.
(Sec. 113) Extends the excise tax on coal until the earlier of January 1, 2019, or the day after the first December 31st after December 31, 2007, on which there is no balance of repayable advances made to the Black Lung Disability Trust Fund and no unpaid interest on such advances.
(Sec. 114) Sets forth a special rule for refund claims of coal excise tax by certain coal producers and exporters.
(Sec. 115) Directs the Secretary of the Treasury to contract with the National Academy of Sciences for a comprehensive review of Internal Revenue Code provisions that have the largest effects on carbon and other greenhouse gas emissions. Requires the Academy to report to Congress on the results of such study not later than two years after the enactment of this Act. Authorizes appropriations.
OK, I'm not exactly sure what all this is doing, but it sounds like stuff dealing with "clean coal" or whatever.
Subtitle B: Transportation and Domestic Fuel Security Provisions - (Sec. 121) Includes cellulosic biofuel within the definition of biomass ethanol plant property for purposes of bonus depreciation.
(Sec. 122) Extends through 2009 income and excise tax credits for biodiesel and renewable diesel used as fuel. Increases the rates of such credits.
(Sec. 123) Disqualifies foreign-produced fuel that is used or sold for use outside the United States for the income and excise tax credits for alcohol, biodiesel, renewable diesel, and alternative fuel production.
(Sec. 124) Allows a new tax credit for the production of qualified plug-in electric drive motor vehicles. Defines a "qualified plug-in electric drive vehicle" as a motor vehicle weighing less than 14,000 pounds that meets certain emission standards under the Clean Air Act and that is propelled to a significant extent by an electric motor that draws electricity from a rechargeable battery.
(Sec. 125) Allows an exclusion from the heavy truck excise tax for idling reduction devices and advanced insulation used in certain heavy trucks and trailers.
(Sec. 126) Revises tax incentives for investment in the New York Liberty Zone to repeal certain additional depreciation allowances and to allow a tax credit against payroll liabilities of New York Liberty Zone governmental units (i.e., New York State, the City of New York, or any agencies or instrumentalities thereof) for expenditures involving transportation infrastructure projects in or connecting with such Zone.
(Sec. 127) Allows employees to exclude reimbursements for bicycle commuting expenses from gross income.
(Sec. 128) Extends through 2010 the tax credit for installing nonhydrogen alternative fuel refueling property. Increases the rate of the tax credit for alternative fuel refueling property expenditures from 30 to 50% and raises the dollar limit for commercial properties to $50,000.
Tax credits for electric vehicles? Promotion of cellulosic biofuel? Doesn't sound bad to me.
Subtitle C: Energy Conservation and Efficiency Provisions - (Sec. 141) Authorizes the issuance of qualified energy conservation bonds to finance local government conservation and greenhouse gas reduction projects. Imposes a national limitation of $3 billion on the issuance of such bonds.
(Sec. 142) Extends the tax credit for nonbusiness energy property expenditures through 2008. Includes energy-efficient biomass fuel stoves as property eligible for such tax credit.
(Sec. 143) Extends the tax deduction for energy efficient commercial buildings through 2013.
(Sec. 144) Revises the amounts allowable under the tax credit for energy efficient appliances produced after 2007 (i.e., dish washers, clothes washers, and refrigerators) and extends such credit through 2010.
(Sec. 145) Allows an accelerated 10-year recovery period for the depreciation of qualified smart electric meters and smart electric grid systems.
(Sec. 146) Extends through FY2012 the authority to issue tax-exempt bonds for qualified green building and sustainable design projects.
Energy conservation and efficiency is usually a good thing.
Title II: One-Year Extension of Temporary Provisions - Subtitle A: Extensions Primarily Affecting Individuals - (Sec. 201) Extends through 2008: (1) the election to deduct state and local sales taxes in lieu of state and local income taxes; (2) the tax deductions for qualified tuition and related expenses and for certain expenses of elementary and secondary school teachers; (3) the exemption from withholding for interest-related and short-term capital gain dividends received from a regulated investment company; (4) tax-free distributions from individual retirement plans (IRAs) for individuals called or ordered to active military duty and for charitable purposes; (5) the election to include combat pay as earned income for purposes of the earned income tax credit; (6) authority for use of qualified mortgage bonds to finance residences for veterans; (7) special rules and definitions relating to regulated investment companies; and (8) the tax exclusion for amounts received under qualified group legal services plans.
Subtitle B: Extensions Primarily Affecting Businesses - (Sec. 221) Extends through 2008 the tax credit for increasing research activities. Sets forth a special rule for the computation of such tax credit for taxable years in which it terminates.
Extends through 2008 other business-related tax provisions, including: (1) the tax credits for Indian employment and railroad track maintenance; (2) accelerated depreciation for qualified leasehold and restaurant improvements, for motorsports racing track facilities, and for business property on Indian reservations; (3) the expensing allowance for environmental remediation costs; (4) the tax deduction for income attributable to domestic production activities in Puerto Rico; (5) the special rule for the tax treatment of certain payments to tax-exempt organizations by a controlled subsidiary; (6) the authority for issuance of qualified zone academy bonds; (7) tax incentives for investment in the District of Columbia, including tax-exempt economic development bonds and a first-time homebuyer tax credit; (8) the economic development credit for American Samoa; (9) the special rules for charitable contributions of food and book inventories; (10) the increased tax deduction for corporate contributions of computer equipment and technology for educational purposes; (11) the special rule relating to reductions in the basis of S corporation stock for charitable contributions of property; and (12) work opportunity tax credit eligibility for Hurricane Katrina employees (through August 28, 2008).
Extends through 2009: (1) the new markets tax credit; (2) the Subpart F income exemption for active financing income; and (3) expensing of qualified film and television production costs.
Subtitle C: Other Extensions - (Sec. 251) Makes permanent the authority for the Internal Revenue Service (IRS) to disclose tax return information related to terrorist activities.
(Sec. 252) Makes permanent the authority for the IRS to conduct undercover operations.
(Sec. 253) Makes permanent the authority for disclosure of tax return information to the Department of Veterans Affairs (VA) for veterans benefit determinations.
(Sec. 254) Extends through 2008 the increased payment ($10.50 to $13.25 per proof gallon) of distilled spirits excise tax to the Treasuries of Puerto Rico and the Virgin Islands.
(Sec. 255) Extends through 2008 parity requirements applicable to mental health benefits offered by group health plans.
Extensions of tax credits and the like which seem to be pretty much non-offending.
Title III: Additional Tax Relief - Subtitle A: Individual Tax Relief - (Sec. 301) Allows individual taxpayers an additional standard tax deduction in 2008 for state and local real property taxes. Limits the amount of such deduction to $350 ($700 for married individuals filing a joint tax return).
(Sec. 302) Lowers in 2008 (from $10,000 to $8,500) the earned income threshold amount for determining the refundable portion of the child tax credit.
(Sec. 303) Increases the alternative minimum tax (AMT) refundable credit amount for individuals who have long-term unused minimum tax credits from prior taxable years. Abates any underpayment of tax attributable to the application of special AMT rules for the treatment of incentive stock options.
Subtitle B: Business Related Provisions - (Sec. 311) Allows attorneys a tax deduction in the current taxable year for reimbursable expenses and court costs which they pay or incur in connection with contingency fee cases.
(Sec. 312) Modifies rules relating to the expensing of film and television production costs.
Subtitle C: Modification of Penalty on Understatement of Taxpayer's Liability by Tax Return Preparer - (Sec. 321) Modifies the standards for imposing penalties on tax return preparers for understatements of tax to require: (1) substantial authority for a position with respect to an item on a tax return if such position was not disclosed with the return; and (2) a reasonable basis for a position that was disclosed with the return.
Requires tax return preparers to have a reasonable belief that a position with respect to a tax shelter or a reportable transaction (a transaction having a potential for tax avoidance or evasion) will more likely than not be sustained on its merits.
Subtitle D: Extension and Expansion of Certain GO Zone Incentives - (Sec. 331) Allows taxpayers who claimed a casualty loss deduction for damage to a personal residence caused by Hurricanes Katrina, Rita, or Wilma and who subsequently received a grant as compensation for such damage to file an amended tax return to disallow the casualty loss deduction without payment of any tax penalty. Waives deadlines for starting construction for property in the Gulf Opportunity (GO) Zone eligible for bonus depreciation. Includes Colbert and Dallas Counties in Alabama within the GO Zone for purposes of tax-exempt bond financing.
Makes the child tax credit more available, alters the AMT, and a couple other things. Again, still not seeing much which would make the original bill "much, much worse" yet.
Title IV: Revenue Provisions - (Sec. 401) Requires the inclusion in gross income for income tax purposes of employee compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity when there is no substantial risk of forfeiture of the rights to such compensation. Defines "nonqualified entity" as any foreign corporation unless substantially all of its income is: (1) effectively connected with a trade or business in the United States; or (2) subject to a comprehensive foreign income tax. Includes certain partnerships within such definition.
(Sec. 402) Delays until 2019 the application of special rules for the worldwide allocation of interest for purposes of computing the limitation on the foreign tax credit.
(Sec. 403) Amends the Tax Increase Prevention and Reconciliation Act of 2005 to: (1) repeal the adjustment to the estimated tax liability of corporations with at least $1 billion in assets for the third quarter of 2012; and (2) increase the estimated tax payments of such corporations in the third quarter of 2013 by 37.75%.
So this is the bill which is supposed to make the new bailout so horrible that it should be shot into the sun with goats and sharks? Really? The only thing that I know is added on top of this is increasing the FDIC insurance, which isn't a bad idea, either.
And why did the House fail to pass this bill? Not because they were opposed to the tax cuts, per se, but because they weren't all paid for.
I would suggest people know what is being added to the bill before they condemn it as the worst thing every created.
I should note that I'm not trying to argue here that those against the bailout for it's core are wrong because of this. If you think the core is bad and this doesn't change your mind, then fine, I respect that. But if one is going to say that adding this on to the bailout makes it some horrible monster, it'd be nice to explain how it does that, exactly.
Added Note 2
I should note that I find the argument that adding this stuff will make the Republicans suddenly want to vote for this bill dubious myself. Though that's rather beside the point that I'm trying to make in this diary. I'm not particularly arguing that this is a good idea or tactic, just that it isn't this horrible thing.
Added Note 3
For those brave enough, this is the actual text of the bill being attached to the bailout, as passed by the Senate.
OK, apparently that link expires after a while. To get to the full text go here and click "Text of Legislation" and then "5. Energy Improvement and Extension Act of 2008 (Engrossed Amendment as Agreed to by Senate)[H.R.6049.EAS]"
From the Senate bill (the bailout bill is actually going to be an amendment to the bill linked above), a part on mark-to-market. Not exactly sure if this is axing it or not. Perhaps someone who can read this stuff better than I can say. (I'm also looking for a link to this bill):
SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING.
(a) AUTHORITY.—The Securities and Exchange Commission shall have the authority under the securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, the application of Statement Number 157 of the Financial Accounting Standards Board for any issuer (as such term is defined in section 3(a)(8) of such Act) or with respect to any class or category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with the protection of investors.
(b) SAVINGSPROVISION.—Nothing in subsection (a) shall be construed to restrict or limit any authority of the Securities and Exchange Commission under securities laws as in effect on the date of enactment of this Act.9
I'm looking at this bill (I'm trying to get it online so people can look at it) and it says something about being an amendment to H.R. 1424. Except that's not the bill that was suggested it would be attached to. I'm trying to figure out if I'm missing something here.
OK, what it looks like it's doing is using an old House bill - H.R. 1424 - as a shell so that they can pass this in the Senate first and then go to the House. The added stuff
from the old bill from H.R. 6049 is attached to the end of the bailout bill which is being attached as an amendment in the nature of a substitute. I'm about to go through that now to make sure it is the same as the above bill.
The Senate Bill (I hope that works for everyone)
OK, this is the breakdown of the bill:
Division A is the bailout bill. It runs through about page 113. It looks like the FDIC provisions are in Section
126 135 and as noted above, the "Mark-to-Market" provision is in Section 132 of that division.
Division B appears to be Division A of what was H.R. 6049, the bill that I talk about above.
Division C is what was Division B in H.R. 6049.