As tax bills go, the $1.35 trillion cut George W. Bush signs into law this week is relatively free of special provisions to satisfy special interests. Yes, there are education tax breaks slipped into the final bill that'll make college presidents and private school headmasters drool. Republican and Democratic senators on the tax-writing panels are sure to get a few thank-you notes from millionaires and corporate CEOs. But by and large, Bush got the clean bill he wanted. And more important he got it before Democrats took control of the Senate. "I'm really pleased that we've already passed the tax bill," relieved Republican Whip Don Nickles told me.
Does that mean the special interests can pack it in? With the Democrats running the Senate, will the lines of lobbyists outside the House Ways and Means Committee and Senate Finance Committee disappear?
Don't bet on it. Whenever you start a tax-cut feeding frenzy in Washington it's almost impossible to turn it off. A sampling of special interest cuts lawmakers are eager to attach to future tax bills:
Maine Sen. Olympia Snowe has an amendment drafted to allow Navy shipyards to pay taxes on the profit from a ship contract after the vessel is built instead of while it's under construction. That would mean Bath Iron Works, the shipyard in her state, would have more cash on hand during the years a ship is being built. Snowe insists her measure "would not reduce the amount of taxes ultimately paid by a shipbuilder. It simply would defer payment until the profit actually is known."
Sen. Bob Graham wants to stretch out the taxes citrus growers must pay for the $83 million they got in federal aid when they lost trees to citrus canker. Citrus canker has been sweeping through Florida and the only way farmers can stop it is to cut down the trees. Graham wants his farmers to have a longer time to pay taxes on the compensation they get from the federal government for their loss.
Coin dealers in Louisiana have gotten their senator, John Breaux, to propose an amendment they're itching to get passed: allowing investments in rare coins that are traded by brokers to be put in individual retirement accounts. The coin market has gone into orbit the last 20 years with some rare currencies commanding million-dollar price tags. Numismatists have a powerful lobby on Capitol Hill, and coin dealers have been fighting hard to repeal a 1981 law barring rare coins from being included in IRAs. No, you couldn't turn that penny jar you've got stored in the closet into an IRA. But if you've got a coin broker making money for you in a nationally recognized coin-trading network, Breaux's measure would let you sock those profits away in a tax-deferred account.
Still reeling from the $1.35 trillion tax cut he came under fire for supporting, Sen. Max Baucus, the new Democratic chairman of the Finance Committee is wary of taking on any more big slices. But that doesn't mean that cuts won't get through. So there's still hope for ships and oranges and old coins.
