The Post's Dan Eggen has a good piece today on a provision you didn't hear about in the tax bill passed last week. As Eggen describes it: “Under the provision, financial services firms and manufacturers can defer U.S. taxes on overseas income from a type of financial transaction known as “active financing.”
Eggen finds on the provision the fingerprints of Democrat superlobbyist Steve Elemendorf, former chief of staff to Dick Gephardt, then the top House Democrat. Elmendorf, who represents the Active Financing Working Group, is also a top bundler — or volunteer fundraiser — for House Democrats.
I recommend the article, but I have to quibble with Eggen's wording. Eggen writes that the provision, “costs U.S. taxpayers $9 billion.”
Eggen has this completely backwards. This provision actually saves taxpayers $9 billion — the taxpayers in question happen to be those that are able to pay the lobbying fee of Dick Gephardt's old chief of staff, but still, cutting taxes doesn't cost taxpayers anything. The provision costs the U.S. Treasury $9 billion. If it costs any individuals $9 billion it would be Hal Rogers and Dan Inouye and other appropriators who now have (theoretically) less money to play with.
This may seem like a silly semantic point, but I think it's important. Government spending “costs taxpayers” money. Tax breaks — even special-interest tax breaks — only save taxpayers money.