Dems Tackle Doc Fix, Plus A Handful Of Other Goodies

Jillian Bandes
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Posted: May 24, 2010 8:06 AM
On the agenda this week is the "Promoting American Jobs and Closing Tax Loopholes Act," a $200 billion expenditure that is "almost" meets pay-go rules. It's part of solving the "doc fix" problem, which some analysts say is a misnomer. After all, you're not fixing anything — you're simply making up for the pitfalls of government ineptitude.

Instead of just implementing doc fix, however, the House has gone a step further, upping unemployment benefits, welfare benefits, Build America Bonds, and tax breaks to individuals and businesses that expired last year. Notably, the bill includes a provision that provides remuneration to black farmers. I'm curious what this guy has to say about that.

How is the bill paid for? It raises taxes on "carried interest," the money that goes to investors who perform well. Carried interest is a strong motivating factor for money managers to make the right investments, and part of that motivation is to let them skirt the Fed's 35% income tax.

The bill is also "paid for" by allowing companies to delay funding their workers' pensions, with no details about when they'll be expected to pay back those funds. It as new "treaty shopping" rules, which currently allow companies to avoid taxation by locating their business in a country with more favorable tax rates. Then, there's the prohibition of "splitting" foreign tax credits, which allows families who work abroad to avoid double taxation.

As expected, it will be a major union agenda item for the coming week...