Budget deal is brimming with special tax breaks

The Bipartisan Budget Act that Congress is set to pass Thursday is brimming with tax provisions for a variety of special interests, including racehorse owners, small private colleges and television and film companies.

At least two of the tax breaks help the constituents of Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellDems ready aggressive response to Trump emergency order, as GOP splinters Green New Deal Resolution invites big picture governing ‘Contingency’ spending in 3B budget deal comes under fire MORE (R-Ky.), who negotiated the deal with Democratic Leader Charles SchumerCharles (Chuck) Ellis SchumerNational emergency declaration — a legal fight Trump is likely to win House Judiciary Dems seek answers over Trump's national emergency declaration Mandatory E-Verify: The other border wall MORE (N.Y.). 

Altogether, the special tax provisions amount to $17.4 billion over the next four years, with most of the costs incurred — $13.3 billion — in fiscal year 2018, according to an analysis released by the Joint Committee on Taxation (JCT).

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One provision limits the excise tax on investment income at private colleges and universities to schools with at least 500 tuition-paying students, shielding smaller institutions and costing the government an estimated $2 million a year in revenue over the next decade.

It’s a win for small schools such as Berea College, which is based in Kentucky.

Senate Republicans tried to exempt small colleges such as Berea in the tax-reform bill that passed in December, but the provision was removed after the parliamentarian said it violated procedural rules.

Another provision in the deal extends the three-year tax depreciation for racehorses, allowing owners to depreciate the value of their investment over the most productive span of their racing careers instead of the old seven-year schedule. 

That provision was a top priority of the National Thoroughbred Racing Association, which also happens to be based in McConnell’s home state.  

It also extends special expensing rules for film and television productions, giving a boost to Hollywood, a Democratic fundraising hub, and to live theater productions, a boon to Schumer’s home state of New York.

Schumer has argued that live theater productions should reap the same tax benefits as film and television and warned in the past that without tax incentives, production companies would move away from costly New York City. 

That provision will cost the government $1.3 billion in fiscal year 2018. 

NASCAR track owners will get to share in $37 million in tax benefits thanks to an extension of the seven-year recovery period for motorsports entertainment complexes.

That tax break has been supported by Sen. Debbie StabenowDeborah (Debbie) Ann StabenowCongress must step up to protect Medicare home health care The Hill's Morning Report - Presented by the American Academy of HIV Medicine - Will there be any last-minute shutdown drama? Overnight Health Care — Sponsored by America's 340B Hospitals — Utah tests Trump on Medicaid expansion | Dems roll out Medicare buy-in proposal | Medicare for all could get hearing next month | Doctors group faces political risks on guns MORE (D-Mich.), one of Schumer’s closest allies. Her state is home to major automobile manufacturers and the Michigan International Speedway.

Sen. Dean HellerDean Arthur HellerTrump suggests Heller lost reelection bid because he was 'hostile' during 2016 presidential campaign Trump picks ex-oil lobbyist David Bernhardt for Interior secretary Oregon Dem top recipient of 2018 marijuana industry money, study finds MORE (Nev.), who represents the Las Vegas Motor Speedway, Sen. Pat RobertsCharles (Pat) Patrick RobertsGOP senators offer praise for Klobuchar: 'She’s the whole package' The Hill's Morning Report - House Dems prepare to swamp Trump with investigations The Hill's Morning Report — Will Ralph Northam survive? MORE (R-Kan.), who has the Kansas Speedway, and Sen. Richard BurrRichard Mauze BurrThe Hill's 12:30 Report — Presented by Kidney Care Partners — Lawmakers scramble as shutdown deadline nears Drama hits Senate Intel panel’s Russia inquiry Cohen to testify before three congressional panels before going to prison MORE (R), whose home state of North Carolina is a NASCAR hotbed, also support the provision. 

Republican senators won other tax breaks they endorsed. 

Sens. Johnny IsaksonJohn (Johnny) Hardy IsaksonOn The Money: Lawmakers wait for Trump verdict on border deal | Trump touts deal as offering B for security | McConnell presses Trump to sign off | National debt tops T | Watchdog details IRS shutdown woes Trump criticizes border wall deal: 'Can't say I'm happy' GOP senators offer praise for Klobuchar: 'She’s the whole package' MORE (R-Ga.), Tim ScottTimothy (Tim) Eugene ScottSenate approves border bill that prevents shutdown Senate passes bill to make lynching a federal crime Partnerships paving the way to sustain and support Historically Black Colleges and Universities MORE (R-S.C.) and Lindsey GrahamLindsey Olin GrahamPence met with silence after mentioning Trump in Munich speech The Memo: Trump and McCabe go to war Graham seeks new Rosenstein testimony after explosive McCabe interview MORE (R-S.C.) scored with the inclusion of an energy tax credit for advanced nuclear power facilities, which will cost $12.2 billion in 2018.

Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyHigh stakes as Trump, Dems open drug price talks Senate approves border bill that prevents shutdown Grassley raises voice after McConnell interrupts Senate speech MORE (R-Iowa), a champion of whistleblowers, will be happy about a provision unifying the tax treatment of awards to people who uncover corruption. That and language clarifying whistleblower awards will cost $187 million over 10 years.  

The bill provides $594 million in tax relief for people affected by the devastating California wildfires, including an employee retention tax credit for employers who suffered losses such as wineries in North California. 

It’s a victory for Sen. Dianne FeinsteinDianne Emiel FeinsteinFeinstein says she thinks Biden will run after meeting with him Trump judicial nominee Neomi Rao seeks to clarify past remarks on date rape Bottom Line MORE (D-Calif.), who faces a primary challenge this year. She and other members of the California delegation had pushed for wildfire victims to get the same treatment as hurricane victims. 

Businesses affected by hurricanes Harvey and Irma will also benefit from an employee-retention tax credit.

Another provision extends tax relief for the plug-in electric motorcycles, which will help manufacturers such as Zero Motorcycles, based outside of Santa Cruz, Calif..  

Richard Walker, the CEO of the company, has touted the tax break as helping to create jobs and invest in clean technology.

The deal also extends for one year the alternative motor vehicle credit for qualified fuel cell vehicles, at a cost of $4 million. 

It’s one of many environmentally friendly tax credits, including breaks for biodiesel, energy-efficient home construction and modifications, non-wind renewable power facilities, and second-generation biofuel plants.