I don't like having a Fox News type organization representing "liberal" positions. Huffington Post has become downright dishonest, especially in its Drudge-like headlines.
Today it's: LOBBYISTS WIN, TAXPAYERS LOSE (Again): Homebuilders Who Helped Spur Financial Crisis Get Massive New Tax Break.
Here's a link to the article. The headline quoted above is currently on the HuffPo front page; the article itself is here: http://www.huffingtonpost.com/...
Of course, as anyone familiar with tax law or with the Worker, Homeownership and Business Assistance Act of 2009 knows, that is not an honest characterization. Here's why:
- The provision in questions applies to all businesses. Homebuilders are not mentioned in the law, nor are they given any special benefit. IF they receive any benefit it is only because they are not discriminated against. The provision applies to barbershops, landscapers, bike shops, travel agencies, manufacturers... virtually all businesses, and even to individuals like me who have business losses on their tax returns.
- The provision in question is the Net Operating Loss Carryback. It's nothing new. It works this way: if a business has an operating loss for a year, it can carry it back to previous years and amend the previous years' tax returns to lower taxes in those years. (A sort of income averaging). Then, if there is still some left over, it is carried forward to future years and used to offset the next year's income.
- The new law changes the carryback period to five years instead of two. (The stimulus bill had already done that for small businesses, but this makes the rule the same for all businesses).
- The net effect, over time, is zero. A business that can't use up its losses by carrying them back, carries them forward to future years until, eventually, they are used up. Over time, the taxpaying business saves (and the Treasury loses) the same amount of money. Changing the period to five years instead of two means larger refunds in 2010... but smaller refunds in the future. In other words, this is a stimulus action, to give businesses some cash for hiring and expanding, and it is fully paid for. It's a no net cost jobs bill (as long as businesses use their refunds for hiring... which they will do if they have confidence in the recovery and won't if they don't).
- The NOL carryback provision has been part of our tax law since at least the 1950s. It's nothing new, and it's no big lobbyist tax break. At times, the carryback period has been five years, at times, two, and at other times there was an option.
I don't know if such articles are deliberately dishonest or negligently dishonest. But they are dishonest. If the Huffington Post is trying to be the "new journalism," then give me the old journalism.