Democrats List Possible Corporate Tax Breaks to Eliminate

Oil and gas subsidies, breaks for corporate jets among the options.

Democrats gave Republicans a “menu of options” for phasing out tax expenditures benefiting corporations as part of a series of debt-reduction negotiations led by Vice President Joe Biden, said Maryland Representative Chris Van Hollen, a Democratic member of the bipartisan negotiating group.

During today’s meeting, talks centered on how to control the debt long-term through caps on the budget deficit that could include automatic spending cuts and higher taxes to control its rate of growth, which Democrats favor, Van Hollen said. Republicans favor dollar-specific spending caps.

Lawmakers and White House officials met for the tenth time today with a goal of wrapping up discussions by early next month to slash the federal debt and deficit by trillions of dollars, a condition Republicans have set for increasing the nation’s $14.3 trillion debt ceiling in the coming weeks.

“The purpose is to get a handle on the deficit and reduce the deficit, and there are two sides to that equation, spending cuts as well as revenue,” Van Hollen told reporters after emerging from an almost three-hour-long meeting.

Among the options Democrats offered are cutting oil and gas subsidies and tax breaks for corporate jets, as well as a range of special interest tax earmarks in the code, Van Hollen said.

 

Fight Over Taxes
The remarks demonstrate that the fault line between Democrats and Republicans in the closed-door negotiations continues to be a Republican pledge to prohibit revenue increases as a part of any plan to reduce the deficit.

Van Hollen said while Republicans have publicly stated their opposition to revenues, there are signs they may be willing to break with Grover Norquist, president of Americans for Tax Reform, a Washington group that has persuaded 40 of 47 Republican senators to sign its no-tax-increase pledge. Norquist considers the elimination of tax expenditures to be a tax increase and violation of the pledge.

Yesterday the Senate voted to block a bid to end a tax break and a tariff that support ethanol production. While the effort, led by Oklahoma Republican Tom Coburn, failed, the senator succeeded in getting 33 of his Republican colleagues to join him in supporting its repeal.

“It was a very important signal that Republicans were willing to get rid of special interest tax breaks for the purpose of deficit reduction,” Van Hollen said.

 

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