What's this about 'wooden arrows' in the bailout bill?

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By By MATTHEW DALY Associated Press Writer

WASHINGTON (AP) - Oregon's two senators say they did not ask for a tax break for toy wooden arrows included in the financial bailout bill.

The break benefits an Oregon company and was among a lengthy list of add-ons to the rescue bill Congress approved this week.

It drew ridicule from commentators and watchdog groups, who call it an example of how lawmakers loaded the bill with "sweeteners" to help it pass.

Luke Kintigh, a spokesman for Sen. Gordon Smith, R-Ore., said Democratic leaders in the Senate did not consult Smith before adding the tax provision to the rescue bill.

"He did not ask for it," Kintigh said.

Jennifer Hoelzer, a spokeswoman for Sen. Ron Wyden, D-Ore., said he did not ask for the provision either - and Wyden did not vote for the bailout.

Wyden and Smith have introduced the tax provision in each of the last two sessions of Congress. They say a tax on arrows was meant for more expensive archery arrows and is untenable for makers of toy arrows that may cost only about 30 cents apiece.

One of the leading makers of toy arrows is Rose City Archery Inc. of Myrtle Point, Ore.

The company's president, Jerry Dishion, said the tax break was not aimed at arrow makers, but at camp programs and Scouting groups that found the tax made the toy arrows cost-prohibitive.

"Rose City Archery does not make one penny on this," Dishion told The Associated Press. "We do not save one penny."

The beneficiaries of the bill are children in archery programs across the United States, Dishion said, including schools, Boy Scouts and Girl Scouts and Christian camps.

Many youth programs have discontinued archery because of the tax, Dishion said.

The tax break is one of dozens included in the bailout bill as part of an effort to entice those who had rejected it in the House to change their votes. The House approved the bailout bill on Friday, two days after the Senate.

"This is how Washington works," said Keith Ashdown of Taxpayers for Common Sense. "A big pot of pork is their recipe for final passage."

Ashdown's group labeled arrow provision the No. 1 "tax sweetener" in the bailout bill.

Jay McAninch, president of the Archery Trade Association, said toy arrows should never have been included when Congress changed how U.S.-made arrows were taxed in 2004. The law imposed a flat tax of 39 cents per arrow - a fee that more than doubled the cost of toy arrows.

While arrows for hunters or adult archers can cost $8 or more apiece, toy arrows sell for as little as 30 cents.

About six companies nationwide would be affected by the tax loophole, said McAninch, who said he did not ask for the provision to be included in the financial rescue bill, either.

"We had no idea that this provision, which had been laying there for over a year, would be picked up, and we had no idea that anybody would throw it into this rescue package," McAninch told the Bend (Ore.) Bulletin.

Dishion hopes there is one positive outcome from the controversy.

"Now that the tax is removed, we hopefully will be able to get these (archery) programs back implemented again," he said.

 

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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