In the fiscal cliff deal that was passed late last night, the American people weren’t the only ones breathing a sigh of relief. The corporate sector was a major player in the negotiations because it stood to gain or lose a lot in the deal. Matt Stoller from Naked Capitalism listed eight corporate subsidies that were included in the fiscal cliff deal.
One section extends tax exempt financing for the program that provided recovery funds after 9/11. On the surface this sounds like an OK deal, but as Bloomberg reported, the program was essentially a subsidy to build Goldman Sachs Group, Inc. (NYSE:GS) and Bank of America Corp (NYSE:BAC) corporate towers, as well as some “fancy Manhattan apartments.” In fact wealthy New York business magnate and mayor Michael Bloomberg reportedly thought the program was excessive.
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Banks received a $9 billion loop hole for off-shore financing, listed in the bill as an “Extension of the Active Financing Exception to Subpart F.” Banks and manufacturers are able to follow some lending practices like financing off-shore without having to pay taxes on the income they earn from it.
Hollywood studios also received a nod from the bill under the term “special expensing rules.” That subsidy was estimated to cost around $150 million for the years 2010 and 2011. There’s also a subsidy for mining companies to purchase safety equipment and proper training for their workers, tax credits for railroad companies to keep their tracks in good working order and assistance for companies which build racetracks and the facilities associated with them.