Congress avoided the so-called “fiscal cliff” only by passing tax hikes and leaving out-of-control federal spending practically untouched. But, to those with friends in political places, Congress rewarded special tax breaks.

As the Wall Street Journal reports, Congress rewarded various special tax breaks in the “fiscal cliff” legislation, including the following:

  • “An accelerated tax write-off for owners of Nascar tracks (cost: $78 million).”
  • “A tax credit for companies operating in American Samoa ($62 million), including a StarKist factory.”
  • “A $222 million rum tax rebate.”
  • For “businesses located on Indian reservations . . . $222 million in accelerated depreciation.”
  • Special breaks for “film and television producers.”
  • A $12 billion “wind production tax credit.”
  • A $59 million “algae-based fuel” tax credit.
  • A $7 million “plug-in motorcycle” tax credit.
  • A $154 million tax credit for “builders of energy-efficient homes.”

Although the Wall Street Journal is wrong to call these special tax breaks “subsidies”—as I have argued, a subsidy involves the government taking money from one person and giving it to someone else, not letting someone keep more of his own money—the newspaper is right to express outrage over the unequal treatment before the law.

The problem here is not that Congress let some producers pay less in net taxes; the problem is that Congress refuses to cut federal spending and forces some Americans to pay even higher taxes. Nascar, StarKist, rum distillers, movie producers, and so on, all deserve to keep the fruits of their labor—and so does everyone else. Congress’s proper function is not to tax and spend but to pass laws that protect rights.

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Image: Wikimedia Commons

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