Are Tariff Breaks Tax Cuts or Earmarks?
The Wall Street Journal has a new article out about the battle to define tariff breaks as tax cuts, rather than earmarks. Heritage Action has written on this issue before, highlighting the danger for Republicans if they return to the practice of earmarking. The Wall Street Journal explains how these breaks will run afoul of the earmark ban:
“Defenders say they aren’t earmarks because any U.S. manufacturer could take advantage of them, at least in theory. In practical terms, many cover specialized chemicals and other materials used by one manufacturer, or at most by a handful.
“[Representative Tom Reed’s (R-NY)] 18 proposed cuts include two on behalf of Corning Inc that he said may benefit several firms. But Mr. Reed said others, such as a request for lower tariffs on ‘certain narrow-woven fabrics’ for Vere Sandal Co. in Geneva, N.Y., would probably help just one company. Vere declined to comment.
“Many of the requests are hard to decipher but critical to the manufacturer. Mr. Reed is seeking a tariff suspension, for example, on ‘shaped bodies designed for high-intensity discharge lamps,’ to help Philips Lighting make light bulbs, and on ‘vacuum-grade ferroniobium’ for Nucor Corp. and other steelmakers. Other lawmakers’ requests are similar.
“In recent years, about 90% of the tariff cuts have benefited 10 or fewer companies, and roughly 40% have helped just one firm, according to figures that Sen. Jim DeMint (R., S.C.) obtained from the Department of Homeland Security.
“Mr. DeMint and other critics say the process for winning these tariff reductions mirrors what they dislike about earmarks—companies hire lobbyists to persuade lawmakers to insert favorable provisions into large, complex legislation. That forces businesses to ‘grovel for attention from politicians just to be heard,’ Mr. DeMint said.”
You can read the full article here.