Senate Tax Cut Plan Has Something for Everyone

Dec. 14, 2010— -- Like gluttons at a buffet party, politicians couldn't help loading their plates with goodies for various industries and individuals in this week's 83-15 Senate tax package vote.

Not only did the Senate vote to extend the Bush-era tax cuts, they carved out special provisions for everything from tax credits to Hollywood producers to breaks for rum production in Puerto Rico and the Virgin Islands.

These 60 or so benefits or business "extenders" that assist specific industries added substantially to the estimated $858 billion cost of the bill over the next two years, a gargantuan meal at the U.S. taxpayers' expense that will have to be paid for in future years.

"These extenders comes up every year or so in Washington just when you think they're going to expire," said Mark Robyn, staff economist with the Tax Foundation. He said the extender provisions are meant to stimulate the economy and investment but there are ongoing debates about whether they work.

More than two dozen amendments to the Senate bill have been filed addressing breaks for even more sectors -- it's unclear if or when these will come to a vote. The House has yet to get its collective hands on a bill.

Here's some of the special-interest provisions in the Senate bill:

Hollywood Freeway

• "Special expensing rules for certain film and television productions" allow studios to deduct up to $15 million of movie production property costs if at least 75 percent of the total compensation for production is in the country. If a significant amount of production expenses take place in low-income or distressed communities, studios can deduct up to $20 million.

Rumming it Up

• Puerto Rico and the Virgin Islands will receive the increase of rum excise tax revenues from $10.50 to $13.24 per proof of gallon. It is a temporary excise tax imposed on distilled spirits produced or imported into the U.S., but does not apply to distilled spirits exported from the U.S.

Gentlemen, Start Your Tax Engines

• The bill calls for a special accounting provision for motorsports entertainment complexes like NASCAR to have a 7-year "cost recovery period" instead of standard depreciation.