One of the ideas that has been proposed by Democrats as a means to raise revenues, as part of the ongoing negotiations over raising the federal debt limit, is to eliminate favorable tax treatment, in the form of accelerated depreciation, for racehorses. Senator Jay Rockefeller of West Virginia put the potential savings at $20 million for three years; I've elsewhere seen the overall pricetag for the tax break put at $126 million. Either way, it's a ludicrously small amount in the context of the $2-$4 trillion numbers in savings + new revenues that we've seen bandied about; and probably little more than a dig at the Senate Minority Leader Mitch McConnell of Kentucky, who took credit for passage of the measure in a 2008 farming bill.
The idea is being framed as closing a tax loophole for the wealthy. Senator Jeff Merkely, Democrat from Oregon:
“It’s a sport for the best-off. And why should we, in this difficult time, be subsidizing this activity for the best-off, while people are on the floor talking about cutting fundamental support for those who are hungry in America?”Well, as you might expect, I'm all in favor of the concept that wealthy individuals and corporations should pay a fair share in order to maintain, if not enrich, the safety net for those who are less fortunate amongst us. The thing is though that none of the owners or breeders that I know are particularly rich. And most, if not all, of the prominent owners that have been in the news over the last decade or so made their fortunes in other pursuits....and I think it would be a fair guess that they all benefited in one way or another from one of the tax loopholes (at least for sure from the Bush tax cuts) that the Republicans are fighting to protect. You'd think that Congress would focus on some business in which the vast majority of participants don't lose money.
However, the Republicans, particularly though not exclusively those in the House, will now apparently not agree to any means of raising revenues at this time. Speaker of the House John Boehner backed away from his having indicated that he'd be amenable to a historic package that would include such measures; even reportedly being amenable to allowing the Bush tax cuts for those making over $250,000 a year to expire. The Speaker, who seemed to be getting along with the president after their round of golf of couple of weeks ago, instead succumbed to the wishes of the radical elements of hi caucus. Funny, those Republicans came into office pledging historic change to their fanatical Tea Party supporters; but, even with the president showing willingness to buck his own party by backing significant cuts in treasured benefits programs, instead are sticking to their meme of protecting loopholes and tax rates for the rich and powerful.
Well, I could go on, and you probably didn't come hear to read this stuff. So I'll refer you to last week's must-read Op-Ed column entitled The Mother of All No-Brainers by the Times' David Brooks, who is surely no liberal, having once been an op-ed editor at the Wall Street Journal.
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.Closer to home, I could only laugh last week when I saw that Larry Schwartz was named secretary to Governor Cuomo. Schwartz held the same post for Governor Paterson, and was also interim chairman of NYC OTB in the weeks leading up to its timely demise. Schwartz was singled out in the Inspector General's report on AEG for a stunning lack of recall, and testimony which was termed as "confounding." In four pages of a transcript of his interview with the IG, Schwartz said "I do not recall" or something similar 12 times. The IG seemed to find his testimony to not be credible.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary. [NY Times]
Schwartz’s testimony reveals that, although Secretary to the Governor and self-proclaimed Chief Operating Officer of the State, he was completely uninformed of the salient facts of the bidders’ proposals, most notably financial information, and failed to provide any assistance to the Governor in processing information collected and analyzed by agencies under his control, much less expedite the process or attempt to avoid the errors of the prior round, his stated goals. While having apparently abdicated all executive responsibility, Schwartz appears to have actively participated in the process, albeit to no discernable end.However, life goes on as usual for Mr. Schwartz, as it apparently does for Senator John Sampson, still the leader of the Democratic caucus, Sens. Malcolm Smith and Eric Adams, returned to their offices by the voters, AEG lobbyinst and 5th Amendment pleader Hank Sheinkopf, to whom the press continues to run for quotes, and others. It's almost like nothing ever happened.
Nothing happening at Belmont on Wednesday, as NYRA goes to four days for the last week of the meeting. The time before Saratoga has always been a tough one to fill fields, so I guess the move makes sense. Sunday will be the final day of racing, and the gates will not open for thoroughbred racing downstate for nearly eight weeks until the fall meeting opens on September 10.