Wonder how the Emergency Economic Stabilization Act of
2008 went from a three page proposal by Treasury Secretary
Henry Paulson to the 110 page (451 letter-size pages)
behemoth that was signed into law? Originally intended to
promote stability in the financial markets, our friends
in Washington once again complicated the process. A host
of provisions, now commonly referred to as 'tax sweeteners',
appear to have little to do with the intended purpose
of the bill but worked to entice lawmakers to approve
its passage.
The following is just a sample of some of the 'tax sweeteners'
in the final bill:
Exemption from excise tax for certain wooden arrows
designed for use by children
Certainly among the strangest of the tax sweeteners
is this provision, which exempts manufacturers from excise
taxes upon the sale of certain types of arrows. In particular
the provision states that excise taxes: "shall not apply
to any shaft consisting of all natural wood with no laminations
or artificial means of enhancing the spine of such shaft
(whether sold separately or incorporated as part of a
finished or unfinished product) of a type used in the
manufacture of any arrow…" and goes on to describe the
specifics of such wooden arrows.
But if you think this provision has no merit, at least
one proponent would like to soften your opinion. Ikey
Boykin, the President of the National Association of Manufacturers
of Wooden Arrows Designed For Use By Children (NAMWADFBC)
noted that the inclusion of the "wooden arrow" provision
was, in his words, "…a victory for all Americans".
Oregon Senators Ron Wyden and Gordon Smith had proposed
such an exemption previously. To date, both have denied
any lobbying to include the provision in the bill.
Transportation fringe benefit to bicycle commuters
This provision, initially proposed by Senator Ron Wyden
and Representative Earl Blumenauer (both of Oregon) provides
for a 'qualified bicycle commuting reimbursement' allowing
employers a tax free benefit to employees for costs associated
with bicycling to work. Eligible costs include bike purchase,
improvements, repair and storage. Specifically the provision
notes the eligible employee "regularly uses the bicycle
for a substantial portion of the travel between the employee's
residence and place of employment…"
Even proponents of the provision question its inclusion
in the bill. Additionally, concerns have been raised about
proper documentation of the employee's 'regular use',
employers' willingness to offer such a benefit, and the
ultimate worth of the benefit, which at best offers a
$20 per month reimbursement to the cyclist.
Income averaging for amounts received in connection
with the Exxon Valdez litigation
This provision allows Exxon Valdez plaintiffs to average
their punitive damages awards over a three year period
rather than incur a one-time hit. The plaintiffs are also
entitled to contribute punitive awards well in excess
of current maximum allowable contributions to an eligible
retirement plan.
Alaska U.S. Rep. Don Young, despite his support of the
proposition, voted against the "Bailout Bill".
Other 'tax sweeteners' include the following (by title
in the final bill):
And the list goes on...