Major Companies Push the Limits of a Tax Loophole

[TruthOut10]

It began more than 90 years ago as a small tax break intended to help family farmers who wanted to swap horses and land. Farmers who sold property, livestock or equipment were allowed to avoid paying capital gains taxes, as long as they used the proceeds to replace or upgrade their assets.

Over the years, however, as the rules were loosened, the practice of exchanging one asset for another without incurring taxes spread to everyone from commercial real estate developers and art collectors to major corporations. It provides subsidies for rental truck fleets and investment property, vacation homes, oil wells and thoroughbred racehorses, and diverts billions of dollars in potential tax revenue from the Treasury each year.

Yet even with those generous terms, some major American companies — including Cendant, Wells Fargo and General Electric — have routinely pushed the boundaries while claiming lucrative tax savings, according to evidence recently presented at a federal trial in New York.

President Obama and Congressional leaders agreed New Year’s Day to a limited agreement to raise taxes on the wealthy, and the president said over the weekend that he would press this year for broader reform in the tax code. The expansion of the tax break once intended to help farmers illustrates the challenges ahead and how special interests have learned to use the tax code to maximum effect.

The federal government now allows more than $1.1 trillion a year in this and other tax expenditures. Each of those incentives — which include hundreds of exemptions, exclusions, deferrals and preferential rates — either adds to the budget deficit or shifts the cost of government to other taxpayers.


http://www.nytimes.com/2013/01/07/b...sset-exchanges-trial-evidence-shows.html?_r=0

Feel free to link to sources and quote samples from those sources in your posts. Just don't post all or significant amounts of someone elses material and think the addition of a link makes it ok.

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~Oddball

 

[EdwardBaiamonte]

The federal government now allows more than $1.1 trillion a year in this and other tax expenditures.

you seem to lack the IQ to understand much. Republicans want to shrink the government and use a simple flat tax with no deductions.

Democrats want the opposite. They want to powerful big government that doles out corporate crony capitalist fascist welfare. They want to be to be in bed with socialized corporations. Did you notice that they took over the health care industry????