October 19, 2004

2 Shipbuilders Get Big Breaks in New Tax Bill

As always, the rest of us get to pay. Evidently our senators, Russ Feingold (Yes) and Herb Kohl ("Present") support these very narrow non populist measures. Edmund Andrews:

Under the bill, Navy shipbuilders would be allowed to once again defer paying most federal income taxes on a project until the contract was completed. Because it takes about five years to build an aircraft carrier and three years to build a destroyer, the shipyards would be able to delay their tax bills for years, allowing more opportunity to offset taxes against future losses.

....

"This provision takes dramatic steps to remedy the inequity of how naval shipbuilders pay their taxes," Ms. Snowe said in a statement last week, just after House and Senate negotiators agreed to include the provision in a broader bill that would shower $140 billion in tax cuts across almost every segment of industry.

But critics said the provision would not create jobs, the stated intention of the tax bill, because employment at naval shipyards is determined almost entirely by federal spending on ships and submarines rather than by tax incentives.

"We're not going to buy any more war boats if we give them a tax incentive," said Robert S. McIntyre, director of Citizens for Tax Justice, a liberal research group here that has long scrutinized corporate tax practices. "We're going to buy more boats if the government decides we need more boats."

Posted by James Zellmer at October 19, 2004 12:55 AM | Subscribe to this site via RSS:
Posted to Politics | Taxes