The Hightower Report

Cable television promised savings with deregulation … and we're still waiting; and, the "synfuels" loophole has just become a bad joke.


The powers that be -- both political and corporate -- are experts at fooling themselves ... while mistakenly thinking that they're also fooling us.

The latest culprits in this fool's game are the barons of cable television. Lobbyists for such outfits as Time Warner, Cablevision, and Cox rammed a deregulation law through Congress in 1997 that allows them to set their own rates. Trust us, they said at the time, promising that the elixir of unregulated competition would magically cause our monthly cable charges to fall.

Like rubes at their first medicine show, Congress swallowed this tonic of lies -- and now, you and I are stuck with an unregulated cable-TV monopoly in each of our towns that, far from lowering our rates, has jacked up our monthly bills by 40% in just six years!

Well, yes, say the cable giants, but we now give you more channels than before. Who do they think they're fooling? Yes, we get more channels, but they show the same old junk, including repeats of repeats and dozens of channels we never requested and never watch. Indeed, we pay for about 63 channels, but mostly watch about eight.

Well, yes, say the giants again, still believing they're fooling us, but the fees we pay for programming are up, too, so we're being forced to raise our rates. Hey, Flimflam Man, in many cases you are the programmer! For example, Time Warner owns CNN, TBS, TNT, Cartoon Network, and many others, so it is paying itself for the higher program costs. Besides, the cost of all the programs you get on cable is only about $7 of your monthly cable bill, which now averages nearly $37.

Well, yes, say the giants, trying one more trick on us, but we need higher rates to survive. Survive? Your profit margins are running above 30% -- about three times the average of other industries!

To fight this tomfoolery and price gouging by these greedheads, call Consumers Union: 202/462-6262.


Old loopholes never die -- they just get loopier and loopier.

One such is a special tax break gouged into federal law back in 1980 by corporate lobbyists. In response to the energy crisis of the time, this loophole was ostensibly created to give companies an incentive to devise marketable alternatives to imported oil. But all it really has done is give companies an excuse to dodge paying the taxes they owe to Uncle Sam.

The loophole is the "synfuels" tax credit for companies that reprocess coal to create new synthetic fuels. But the law's provisions are so vague that corporations have been able to claim the tax break even if their reprocessing doesn't work, doesn't reduce our dependence on oil, actually uses oil products in the so-called reprocessing, is never marketed ... or is just plain silly.

How silly? So silly that the IRS has given the synfuels tax credit to companies that have done nothing but spray starch or diesel fuel or even Elmer's glue on coal.

Corporations -- ranging from utilities to the Marriott hotel chain -- have leapt through this loophole like wolves leaping for a lamb chop. The result is that they have dodged about $2 billion a year in taxes they owe -- a wad that the rest of us ordinary taxpayers have to make up, either in increased taxes or reduced services. This scam will soon grow to $10 billion a year, for more corporations have spied the lamb chop and are going for it.

Finally, the IRS decided to crack down by reviewing whether the companies' so-called synfuels actually worked. Yet, even this long-overdue step was assailed by synfuel profiteers, their lobbyists, and their puppets in Congress. They went after the IRS, threatening the agency's enforcement budget and hauling the IRS commissioner to the woodshed. Unsurprisingly, the IRS recently succumbed to the corporate pressure.

So the loopiness keeps getting loopier ... and the rich keep getting richer.

For more information on Jim Hightower's work – and to subscribe to his award-winning monthly newsletter, The Hightower Lowdown – visit You can hear his radio commentaries on KOOP Radio, 91.7FM, weekdays at 10:58am and 12:58pm.

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cable television, Time Warner, Cablevision, Cox, Consumers Union, synfuels, tax loopholes, IRS

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