Some provisions:
- would make permanent 10 provisions, including an expanded research and development tax credit, which businesses and the Obama administration have wanted to make permanent for years (worth $15.6 billion per year)
- a measure allowing small businesses to deduct virtually any investment (worth $7.3 billion per year)
- the deduction for state and local sales taxes
- the American Opportunity Tax Credit for college costs (worth $9.7 billion per year)
- deductions for employer-provided mass transit
- four different breaks for corporate and charitable giving (worth $1.6 billion per year)
- Smaller measures already passed by the Senate Finance Committee, from tax breaks for car-racing tracks to benefits for racehorse owners, would be extended for one year and retroactively renewed for the current tax year
- The tax credit for wind power, a Democratic priority, would phase out and end after 2017
- tax credits for biodiesel
- tax credits for coal produced in Native American communities
- breaks for energy efficient homes and commercial buildings
I bolded the only good ones. The first one is probably a combination of good ones and bad ones. So overall yes, good move by Obama.
The deduction for employer-provided mass transit is good, as well. More or less.
Eliminating it would be particularly scandalous seeing as there is also a similar deduction for parking expenses, which
of course is both a) higher than the transit benefit ($245 as opposed to $130, which won't even be enough for an unlimited MetroCard soon), and b) seemingly not in any danger here or anywhere else. This situation is obviously
prima facie absurd and perverse.
But it gets
worse! I won't bore you right now with all the basic reasons why transit is in general a public good and parking in general a public bad. But the specific shape of the parking deduction leads to
especially perverse incentives. In short, the parking benefit primarily subsidizes upper-income individuals driving their individual vehicles into downtown, where the costs for driving and parking are highest, and the necessity of doing so lowest (because that's where th best transit is). Think about it: if you live a car-dependent life out in the burbs with a job in some office park or mall, parking is plentiful and free, so it's not like this deduction actually
helps you. It only helps where parking has a cost that isn't
entirely hidden from the driver.
Now... if we got rid of both the parking and the transit benefit, that would in fact be much better than the status quo. But there's no indication that that parking benefit is on the chopping block, so I must defend the transit benefit (and push for it to be raised to parity). And I wouldn't really object to a counterfactual reality where we had transit deductions but no parking deductions, either.
