Merkley on Special Interest Tax Programs: No Triple Crown Tax Treatment For the Wealthy While Workers Get Put Out To PastureJune 30, 2011
Washington, D.C. – Today, Oregon’s Senator Jeff Merkley spoke on the Senate floor about the “Bluegrass Boondoggle,” a special interest tax subsidy for racehorse owners. Merkley noted that Republicans have placed special interest tax spending, like the Boondoggle, off limits as part of the deficit debate, while pushing for cuts to programs that middle class families rely on, like after-school programs, Medicare, and student financial aid.
Below are excerpts of his remarks:
“We’re involved in a very important national debate over our finances, over our deficits, over our debt, over investment in our economy, the creation of jobs, and how we take those on in the most effective manner to build a strong financial foundation for our nation going ahead. A strong set of opportunities for families to thrive.
“In the course of that debate, there’s been a very interesting development that merits our attention, and that development is this: some of my colleagues across the aisle have, over time, chosen to put key programs for the wealthy and well-connected not in the appropriations bill but in the tax legislation, and there’s advantages to doing so. With appropriations, you have to come and defend a program year after year. It has to be reviewed in committee. It may have to go through an authorization as well as an appropriation. But if you place a program for the wealthy and well-connected in the tax code, then, unless you’ve inserted a sunset clause, that program is a gift that keeps on giving, unexamined in the course of the standard appropriating process.
“It’s been a quarter century since we’ve had a serious review of the programs embedded in the tax code. I must say, we have every reason to examine every program funded, whether through the Appropriation code or the tax code. Because we face serious, serious financial circumstances and so it is in this context that I would have expected to hear the echoes of 1986. That every program is up for examination, every program is going to be tested against a rigorous set of circumstances, say, is this the best use for the dollar?
“But instead my colleagues across the aisle have taken the position of putting up a very high fence around the tax provisions for the wealthy and well-connected, saying that is their number one goal, protect those. Oh, programs for seniors? Those are on the table. Dismantling Medicare? That’s the Republican plan. Programs for those who don’t have enough food to eat? Those are on the table. Unemployment? That has been on the table. Funding for infrastructure that we need to rebuild our country? That is on the table. But not this set of sacred cows, this set of sacred programs for the wealthy and well-connected.
“Quite frankly, colleagues, that is wrong. That must change. And we must carry that debate here on the floor of the Senate as our colleagues did a quarter century ago, as our colleagues did 35 years ago. So when it comes to these programs, there must be no sacred cows – and there must be no sacred horses.
“One of the programs that my colleagues across the aisle are insisting be walled off from examination is a special write-off for thoroughbred racehorses.
“Yes, racehorses. This is the ‘Bluegrass Boondoggle’ which allows millionaire and billionaire racehorse owners to write off the cost of their horses in an accelerated manner, reducing the normal seven-year period for write-off to just three years. Well, this Bluegrass Boondoggle will cost U.S. taxpayers over the course of the coming years $126 million. CBO estimates that after modeling the impact of this tax provision. Now, this is equivalent to the U.S. writing a check over this coming decade for $126 million. This is equivalent to a grant program. No program simply because it is in one bill, the tax bill, rather than in another bill, the appropriations bill, should be off-limits. Horse racing may have been called the ‘sport of kings,’ but that doesn’t mean that the owners of horses, those millionaires and billionaires owning those horses, need royal tax treatment.
“As long as these tax subsidies are preserved, the richest and best-off will remain in the winners’ circle, while working families don’t even get a chance to compete.
“Now, there’s no doubt that closing this loophole alone isn’t going to solve our deficit problem. But it is a good place to start. Because otherwise we’re going to cut $126 million from Head Start or $126 million from Medicare for our seniors, or programs that help retrain laid-off workers.
“Giving Triple Crown treatment to millionaires while workers are put out to pasture? That’s not right. And it’s not the American way.
“I have proposed searching through the tax code to find wasteful tax subsidies and eliminate unnecessary giveaways. This year is the right moment to start, and no, not just one program should be singled out. We should set a series of standards and test each tax program against those standards on whether they create jobs, whether they make a stronger economy, whether they take America forward and whether or not that $126 million spent in this category or that is more important to the nation than other cuts that we might be entertaining.
“Those are the tests that need to be applied in a thoughtful and thorough manner. It is time not to wall off the programs for the wealthy and well-connected while attacking programs that make working America go forward in a stronger fashion.”