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Consolidate Student Loans Twenty years ago people thought we might be able to squeeze oil out of shale or even coal, helping slash our reliance on foreign petroleum. A generous tax credit was created to encourage these "synthetic" fuels. The idea of shale oil and synthetic fuels is long gone. But the tax credit has morphed into a giveaway that lets power and other companies turn ordinary coal into tax breaks worth hundreds of millions of dollars.

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Home Equity Loans It's a scheme that costs taxpayers $600 million to $800 million a year, and it is corporate welfare that should be stopped.

The Deduction for Real Estate Taxes Next to the home mortgage interest deduction, the most important tax break for homeowners is probably the deduction for state and local taxes, including real estate taxes. Your real estate taxes are fully deductible, whether they are imposed by the state, county, city, township, or some other local government body.

Home Equity Loan Rates The financial alchemy for this scheme moves as far away from the original intent of the synthetic fuel law as possible. We don't save foreign oil, we don't get a new, cleaner-burning fuel. Instead, coal, even ordinary, high-polluting coal, is sprayed with latex, waste oil, pine tar or asphalt. It still burns like regular coal, but it now qualifies for a $26-a-ton tax credit.

In order to claim these tax breaks, you'll need to itemize your deductions. It's important to note that if you're itemizing to claim home mortgage and real estate taxes, you'll also be able to claim any itemized deductions for state and local income taxes, charitable contributions, casualty losses, employee business expenses and other miscellaneous deductions that exceed 2 percent of your adjusted gross income (AGI) and medical expenses that exceed 7.5 percent of your AGI. These deductions can save you many tax dollarsnd most people who don't own a home can't take advantage of them.

Homeowner Loans The Internal Revenue Service made a ruling early on that should have put a stop to this sleight of hand. The IRS said coal had to undergo a "significant chemical change" to qualify for the tax credit. But over the years, industry and coal-state interests managed to subvert the definition of "chemical change," so now adulterated coal qualifies.

Tax shock for those with buy to let mortgages First time buyers helped with innovative mortgages, time buyers still have debt, study shows

Equity Loan Rates The creative folks in the coal and power industries even found a way around a provision of the law that said only certain pre- existing synthetic fuel plants qualified. They picked up the plants' equipment and moved it from the West to power-generating stations in the Midwest and South.

The administration looks forward to "moving forward on initiatives that the president will outline later with members of Congress, " McClellan advised. Asked about specific recommendations made by the tax reform members, such as eliminating the state and local tax deduction or placing limits on the home mortgage tax break, McClellan said he would not comment "on something that the president has not decided on."

Student Consolidation Loans The latest example involves American Electric Power, a Midwest utility that hopes to use latex-coated coal that would produce just as much pollution as ever but would yield more than $150 million in tax credits.

Second Mortgages America could still use a genuine synthetic fuel, one that makes us less vulnerable to high gas prices and Mideast instability and helps clean our dirty air. Tarted-up coal isn't it.

Federal Consolidation Loan The synthetic fuel tax credit is a classic example of a well-intentioned government tax break gone bad. The IRS and the Treasury Department should crack down and kill it.

Equity Loan Star-Ledger - 3/26/2002

Topic: Petroleum Industry

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