Entries in Tax Cuts (8)


Reps. Pelosi and Price Offer Their Views of Avoiding Fiscal Cliff

Hemera/Thinkstock(WASHINGTON) -- There were few signs Sunday that Republicans and Democrats are willing to agree on ways to avoid the looming fiscal cliff despite an earlier White House meeting that President Obama called "constructive."

Towing the administration's line to end tax breaks for the wealthy is House Minority Leader Nancy Pelosi, who told ABC's This Week that the president must insist that any raising of revenue has to mean “higher income people have to pay their fair share."

The GOP wants the Bush-era tax breaks extended for all income brackets, a scenario Obama and Pelosi find untenable.  Instead, Republicans maintain that revenue can be produced by closing certain tax loopholes.

Pelosi argued that loopholes won’t raise enough money on their own.  Yet, in spite of the differing proposal, the California Democrat believes that a deal can be struck by the middle of December so that 98 percent of Americans can continue paying lower taxes along with blocking some of the $600 billion in automatic spending cuts due in January.

On CNN's State of the Union, Republican Congressman Tom Price of Georgia was adamant that allowing tax breaks to end for the rich is a non-starter when it comes to avoiding the fiscal cliff.

Price, who sits on the House Ways and Means Committee, said that "Tax increases to chase ever higher spending is a fool’s errand," asserting that small businesses which create jobs will be the real victims. He called for a balanced approach to solve the problem, namely, a combination of reforming the tax code and spending reductions.

Copyright 2012 ABC News Radio


House Passes Small Business Tax Cut

iStockphoto/Thinkstock(WASHINGTON) -- The House of Representatives voted Thursday to pass a $46 billion small business tax cut that Republicans hope will lead to economic growth by enabling entrepreneurs to deduct 20 percent of their income. Democrats condemn the cut as another giveaway for the richest American taxpayers.

By a mostly ideological vote of 235-173, the House approved the cut, which was a top priority for Majority Leader Eric Cantor and Ways and Means Chairman Dave Camp. Just 18 Democrats crossed the aisle to vote with the GOP majority, although 10 Republicans voted against it.

House Speaker John Boehner, R-Ohio, said the cut takes “the opposite approach of the stimulus” by empowering employers to make decisions on how more of their hard-earned money is spent. The bill faces a tough road ahead, with overwhelming opposition in the Democrat-controlled Senate. Still, Boehner called on President Obama and Senate Majority Leader Harry Reid to get behind the legislation, instead of “pushing for higher taxes to fuel more government spending.”

“This week, Democratic leaders in the Senate demonstrated their desire to continue the spending binge that’s hurting our economy by punting on a budget for the third straight year,” Boehner stated. “With millions of Americans still asking, ‘Where are the jobs?,' I hope the president and Senate Democrats will relent and work with Republicans to find common ground so we can help the private sector put people back to work.”

Most House Democrats voted against the measure, decrying the measure for providing further breaks to the wealthy and adding to the deficit.

“You have to give [Republicans] credit. They are consistent, and they stick with the guy that [brought] them to the dance, and that’s the wealthiest people in America,” House Minority Leader Nancy Pelosi, D-Calif., told reporters at a news conference following the vote. “Fifty-six percent of this tax giveaway goes to the top three percent earners in our country. It gives an average of $58,800 -- $58,800 to the 125,000 millionaires, and they don’t have to create one job. They can create them overseas.”

Copyright 2012 ABC News Radio


Lew Defends Tax Increases in 2013 Budget

JIM WATSON/AFP/Getty Images(NEW YORK) -- Less than 24 hours before President Obama’s 2013 budget is delivered to Congress, White House Chief of Staff Jacob Lew aimed to pre-empt the inevitable onslaught of criticism Sunday, defending the budget’s $1.3 trillion in additional deficit spending and $1.5 trillion in added tax revenue.

“We have tax cuts that go to people who don’t need them,” Lew said on This Week.  “We have tax cuts going to the wealthiest people in America who are going to have to pay their fair share.”

Similar to his 2012 budget, the president’s 2013 budget calls for a minimum tax rate of 30 percent for millionaires and ends the Bush tax cuts for high-income earners.

Lew said that for every dollar of revenue, the budget includes $2.50 of spending cuts, including cuts to Medicare, Medicaid, agriculture subsidies and federal civilian workers’ pensions. Over the next decade, Lew said the president’s proposal will reduce spending so it will no longer add to the deficit and create stability in the economy.

But despite these cuts, the president’s budget would mark the fourth straight year deficit spending that exceeds $1 trillion. This deficit spending comes after Obama pledged upon taking office in 2009 that he would “cut the deficit we inherited by half by the end of my first term in office.”

Lew defended that failed pledge on Sunday.

“When we took office, the economy was falling so fast that the first thing we had to do was put a bottom in,” Lew said. “That cost money in the Recovery Act.  It cost money in terms of lost revenue and slower economic growth.  We’re on track now.  We’ve seen several months of sustained economic growth and job creation, but we’re not out of the woods yet.”

Lew said the “American people should be pleased” with the recent uptick in the economy, but emphasized that the slow recovery is still in need of an “extra push,” which Lew said should come in the form of a payroll tax holiday extension.

The tax cut extension is currently stalled in a conference committee as the House and Senate seek to reconcile how to pay for extension. Lew called on Congress to “finish their work” and pass the payroll tax cut “on time.”

Copyright 2012 ABC News Radio


Poll: Americans Are Split on Tax Proposals for Businesses, Wealthy

Ingram Publishing/Thinkstock(NEW YORK) -- Americans broadly support increasing taxes on businesses that move jobs overseas and boosting levies on the very wealthy, according to a new ABC News/Washington Post poll.  But two other tax proposals -- cutting taxes for companies that bring overseas jobs here, and boosting the capital gains tax -- are substantially less popular. 

The latest poll finds that 72 percent of those surveyed support raising taxes on people with household incomes more than $1 million a year.  Moreover, 73 percent favor raising taxes on businesses that move manufacturing jobs overseas -- President Obama proposed removing tax incentives available to such companies in his State of the Union address last month.

But some of Obama’s other proposals are far less popular. His desire to reduce taxes on companies that bring jobs here gets substantially lower support, 51 percent, suggesting hesitancy among some to support cutting business taxes even when job-creation is proffered as a payoff.

Additionally, just two in 10 are in favor of increasing capital gains taxes on profits made by selling stocks and bonds, which Obama supports. Given information that the current capital gains tax rate is less than the earned income tax rate for many taxpayers, support for increasing the capital gains tax rises, but still just to 36 percent, indicating general resistance to broad-based personal tax increases.

Previously released results from this poll, produced for ABC by Langer Research Associates, found broad suspicions of the tax system, with Americans by 68-28 percent saying they feel it favors the wealthy.

When Langer's questions specifically targeted Governor Mitt Romney, opinions about taxes appeared to split along along ideological fault lines. By 66-30 percent, those polled say Mitt Romney is not paying his "fair share" of taxes, based on his roughly 14 percent tax rate on 2010 income of about $22 million, income that came chiefly from capital gains and dividends. Support for raising the capital gains tax is higher, 45 percent -- at least among people who think Romney is not paying his "fair share." 

Among those who think Romney is paying a fair amount in taxes, however, just 19 percent favor a hike in the capital gains tax.

Similarly, among people who question Romney’s tax burden, 84 percent support raising taxes on millionaires; among those who say he is paying enough, support for a higher tax on the very wealthy falls to 48 percent.

Copyright 2012 ABC News Radio


CBO Calls for Major Steps to Slash Federal Deficit

Stephen Chernin/Getty Images(WASHINGTON) -- The U.S. is running a deficit this year of $1.3 trillion, the third largest on record.  But, as the nonpartisan Congressional Budget Office said Wednesday, things could get markedly better if those much-disputed 2001 Bush-era tax cuts are allowed to expire.

According to the CBO, the tax breaks should end along with the payroll tax reduction, federal emergency unemployment benefits and reduced Medicare payment rates to physicians.

If that all happens, the CBO says projected deficits would be trimmed by $3.3 trillion over the next decade, provided that the debt-reduction agreement signed earlier this month also comes into play.

All this is a best-case scenario.  While President Obama wants tax breaks for the rich and corporations to expire by the end of 2012, Republicans are fighting him at every turn, charging him with hurting the job creators and fueling class warfare.

Copyright 2011 ABC News Radio


Tax Tip: Tax Changes for 2011

Comstock/Thinkstock(NEW YORK) -- Back in December, President Obama and Congress agreed on a number of tax cuts for this year.

“One of the little goodies in there was this two percent payroll tax holiday, and that's a reduction of Social Security tax," said Kathy Pickering of H&R Block. “You don't have to file anything, you don't have to do anything, it's just automatically calculated in your paycheck."

That's a big saving for wage earners and the self employed.

“If you make $50,000 a year you could be getting back $1,000 across the year in your paycheck," Pickering said.

That tax deal brought other benefits, including one that involves paying for college.

"The American Opportunity Credit got extended because that was set to expire,” Pickering said of the tax deduction for tuition and fees. 

Pickering says there was another benefit for home owners in the tax deal.  “The energy credit was extended, but that's being reduced from $1,500 to $500.”

Copyright 2011 ABC News Radio


Senate Tax Cut Plan Has Something for Everyone

Photo Courtesy - Getty Images(WASHINGTON) -- Like gluttons at a buffet party, politicians couldn't help loading their plates with goodies for various industries and individuals in this week's 83-15 Senate tax package vote.

Not only did the Senate vote to extend the Bush-era tax cuts, they carved out special provisions for everything from tax credits to Hollywood producers to breaks for rum production in Puerto Rico and the Virgin Islands.

These 60 or so benefits or business "extenders" that assist specific industries added substantially to the estimated $858-billion cost of the bill over the next two years, a gargantuan meal at the U.S. taxpayers' expense that will have to be paid for in future years.

"These extenders come up every year or so in Washington just when you think they're going to expire," said Mark Robyn, staff economist with the Tax Foundation. He said the extender provisions are meant to stimulate the economy and investment but there are ongoing debates about whether they work.

More than two dozen amendments to the Senate bill have been filed addressing breaks for even more sectors -- it's unclear if or when these will come to a vote. The House has yet to get its collective hands on a bill.

Copyright 2010 ABC News Radio


Lowest Wage Earners Could Come Out ‘Behind’ In Tax Compromise

Photo Courtesy -- ABC News(WASHINGTON) – The Director of the National Economic Council has acknowledged in an interview with ABC News that the new tax cut compromise, if passed, could leave some low wage earners ‘behind.”

Despite attempts by Director Larry Summers to dust over the issue, he told ABC’s Jake Tapper that if some low-income earners “don't benefit from the unemployment insurance, if they don't benefit from the economic growth, if they don't benefit from the EITC or the child care or the American Opportunity Credit -- might be $80 behind.”

As The New York Times first reported, low wage earners who currently receive tax credits through the Making Work Pay tax credit may get a sour deal in the new compromise which replaces that tax credit with a tax reduction of two percent. For some however, the Making Work Pay credit is larger than two percent of their income – which means that some low income earners would pay more in 2011 than in 2010.
Summers argued that the deal would be better for low wage earners than the House deal that failed in the Senate or than if everything expires and nothing passes.
After being asked by Tapper, however, about how those on the lowest end of the spectrum would fair, Summers acknowledged that those who would get $400 in tax credits this year would get only $320 under the new compromise.

Copyright 2010 ABC New Radio

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