Democrats Go After Tax Loopholes for Yachts, Vacation Homes
Democratic members of the conference committee trying to work out a budget agreement have drafted a memo listing “egregious tax loopholes” that they plan to raise publicly as early as next week if Republicans continue to balk at considering some new tax revenue to help soften sequester cuts.
The items contained on the list range from such well-tread suggestions as ending special deductions for corporate jet owners, to stopping subsidies for yachts or vacation homes, to “closing a loophole that lets hedge fund managers pay lower tax rates on their income than teachers and firefighters.” The injection of such populism is sure to exacerbate the partisan tensions in the budget talks.
The memo, a copy of which was obtained Friday by National Journal, is already causing a stir on K Street. Most of that reflects worry that it represents a Democratic “hit list” that might be an early glimpse of some of what will be contained in a Senate version of a tax-code overhaul plan—rewrite work now being done in both chambers.
Adding to those perceptions is that, almost simultaneously to this memo’s circulation, Senate Finance Committee Chairman Max Baucus, D-Mont., on Thursday night sent out a notice to committee members that they will have a “Senators Only” meeting next Thursday “to discuss tax reform.”
But Democratic sources say the budget committee strategy and the Baucus meeting are unrelated, and this is purely a coincidence.
“This is in no way a draft of the upcoming tax-reform proposal—or a ‘hit list’—completely false,” insisted one Democratic aide, speaking of the memo. But the aide said Democratic budget conferees are prepared to raise these items as early as next week as examples of how sequester and other cuts could and should be replaced or softened by ending tax breaks for special interests.
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