Bush Administration Demands that Congress Increase the Deficit with Tax Breaks for Business

May 23, 2008 02:02 PM | | Bookmark and Share

The White House has indicated that the President would likely veto a bill, recently passed by the U.S. House of Representatives, that would cut taxes by $54 billion because it includes revenue-raising provisions to offset the costs.

The bill (H.R. 6049) was approved by the House on Wednesday and includes extensions of several temporary tax cuts targeting various interests (commonly referred to as “extenders”) as well as renewable energy tax incentives and a few new tax cuts. Similar bills passed during the Bush years resulted in increases in the federal budget deficit because they did not include revenue-raising provisions.

The one-year “extenders” included in this bill cost a total of $27 billion and include extensions of several tax breaks targeting businesses and generally well-off individuals. The renewable energy tax incentives in this bill cost a total of $17 billion and the largest is the 3-year extension of the “section 45 tax credit” for the production of energy from renewable resources.

The new tax cuts in the bill, which cost an additional $10 billion, include a change in the AMT related to the treatment of stock options, a deduction for property taxes for non-itemizers, and an expansion in eligibility for the Child Tax Credit for low-income families.

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Surtax on Millionaires to Help Veterans Would Be a Tiny Sacrifice for the Richest 0.3 Percent

May 15, 2008 02:30 PM | | Bookmark and Share

The U.S. House of Representatives is expected today to vote on an emergency supplemental spending bill to fund military operations in Iraq and Afghanistan, to improve veterans’ education benefits and to extend unemployment insurance benefits to get jobless Americans through difficult times.

The veterans’ provisions would improve the educational benefits available to veterans by increasing them to match the highest public university tuition in a given recipient’s state and providing a monthly housing stipend.

This improvement in veterans’ education benefits would cost about $52 billion over ten years. To offset this cost, House Democrats have proposed a small surtax on those who have most enjoyed the benefits of living in and doing business in America. The surtax of 0.47 percent (just under half a percent) would apply to adjusted gross income (AGI) over a million dollars for married couples and over half a million dollars for other taxpayers.

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Capital Gains and Dividends Tax Cuts Offer Almost No Benefit to Middle-Income Americans and Add to the Nation’s Fiscal Problems

May 13, 2008 02:53 PM | | Bookmark and Share

Presidential candidates, reporters and pundits have lately perpetuated two myths about tax cuts for capital gains and dividends. The first myth is that the middle class benefits from these tax cuts for investment income. The second myth is that these tax cuts, particularly the tax cut for capital gains, have caused federal revenue to actually increase.

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