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Tax extenders are “temporary” subsidies — most often in the form of tax breaks — provided to a specific company or industry by Congress.
Nevertheless, they’re usually not temporary at all. Though tax extenders are meant to last only a short while, they are instead extended year after year by Congress.
Make no mistake: Tax extenders are corporate welfare. They are generally given to politically favored companies at the expense of hardworking taxpayers.
Congress has handed out countless tax extenders to countless industries and to the pet projects of lawmakers over the years. These projects to which Congress has granted tax breaks range from the silly to the flatly strange.
Here are four such tax extenders that you won’t believe Congress has on the books:
1) A tax break for racehorse owners: This credit began as a perk to allow racehorse owners to depreciate the value of some horses to avoid tax liability for seven years. While originally written to expire in 2008, it was extended to include a three-year depreciation for all racehorses.
According to the Joint Committee on Taxation, this tax extender was estimated to have cost the Treasury over $35 million in 2018.
2) Handouts for brewers, distillers and vintners: That’s right, the alcohol industry benefits from tax extenders, albeit ones established recently, in 2017. While they’re set to expire this year — there is no guarantee they will — they’re also set to make a sizable dent in tax revenues.
The Joint Committee on Taxation estimated that these handouts will cost the Treasury $4.2 billion before 2020. Industry representatives are pushing for these handouts to be extended.
3) Motorsports racetracks get a handout: These handouts for motorsports, including NASCAR, had been on the books for a while, but expired in 2017. Still, lawmakers on both sides have included this provision in their new tax extender bill. They allow track owners to deduct the cost of improving their tracks and stadiums at a faster rate than other businesses. This credit expired in 2013, but was revived shortly thereafter. According to the International Speedway Corp., this credit can be worth up to $10 million each year.
4) Tax extenders for film, television and, later, theater: For over a decade, Congress has extended tax breaks for the film and television industries. Then, in 2015, live theater was able to get in on that action.
This handout allows producers to deduct costs for expenditures incurred when creating films, television shows and theatrical productions. The 10-year cost of this subsidy sits at $433 million. That’s money that ultimately comes out of taxpayers’ pockets.
Each year, tax extenders leave those taxpayers not lucky enough to get special treatment on the hook for billions of dollars. It isn’t fair that our lawmakers can pick winners and losers — and soak taxpayers to do it.
The job of our government is to act as an umpire. Instead, it rigs the game by tipping the scales in favor of one team over another. It’s time for this practice to end. Tell Congress: End cronyism. Don’t renew any tax extenders.
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