Congress Continues to Perpetuate Crony Capitalism
Article from Reason by Veronique de Rugy.
Here we go again. We’re approaching another deadline to pass a government spending bill or risk a government shutdown. Legislators routinely manufacture this sort of “crisis” to ram through provisions that wouldn’t survive scrutiny standing on their own. Congress is reportedly likely to push the budget deadline into December, but whenever the next full funding bill is finally taken up, there will inevitably be an effort to load it up with crony handouts.
At the top of the wish list will be “tax extenders.” These are tax provisions that generally bestow benefits on particular business interests, but they expire every year or so. They must be renewed regularly if the benefits are to continue.
Not all tax extenders are corporate favoritism. Some alleviate economic distortions in the tax code. But most of those provisions were either mooted by the 2017 tax reform or have already been made permanent. What is left, by and large, is cronyism, especially for various forms of renewable energy.
There are a number of negatives associated with the system of temporary tax extenders beyond the fact that many of them consist of corporate handouts and other bad policies. For one, the current list of tax extenders includes provisions that have been expired since 2017 or 2018. Often when this happens, Congress makes their renewal retroactive. This practice only exacerbates the economic distortions and uncertainty surrounding extenders. Tax accountants, however, love it.
Read the entire article at Reason.