Congress waves green flag for NASCAR tax break
The fiscal cliff deal has been passed by Congress, and analysts are now digging into the minutiae of the bill's text to see what sweetheart deals may have slipped in.
Roosevelt Institute fellow Matt Stoller has identified some $205 billion worth of tax breaks and other give-aways to corporations, including the extension of the controversial "NASCAR loophole."
Title III, Section 312 of the fiscal cliff bill includes "extension of 7-year recovery period for motorsports entertainment complexes," e.g. NASCAR tracks. That means that when NASCAR track owners spend money to add seats or make other improvements, they can write off the depreciation costs at an accelerated rate -- seven years, instead of the usual 15 or more.
It's estimated the NASCAR loophole costs taxpayers more than $40 million a year.
The tax break became law in 2004, when NASCAR was booming and expanding to a national audience. For decades, NASCAR had used the seven-year depreciation, saying they were the same as theme parks like Disney, which enjoy the same benefit.
When the IRS changed the rules, Congress -- including members who received campaign contributions from NASCAR executives -- rallied to enshrine the favorable rate in the American Jobs Creation Act of 2004.
The tax breaks were sold as an economic development tool, but unsurprisingly politics played a role as well, as the Associated Press noted at the time:
While track owners are the primary beneficiaries, politicians are conscious of the latest political target demographic: "NASCAR dads." They're white, working-class men who like President Bush but could be persuaded to vote Democratic, particularly in state and local races.
The renewed tax breaks come at a troubled time for NASCAR: Attendance at races is way down from its peak in the early 2000s, forcing the sport to reinvent itself. Ticket sales have dropped 38 percent over the last five years.
But don't feel too bad for NASCAR executives. Fans may be passing on tickets that cost $80 or more, but TV deals are still bringing in big money: In October, NASCAR signed a $2.4 billion deal with Fox to cover just the first half of NASCAR season for the next eight years.
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