Author: Alex Welch

July 7, 2008 02:16 PM | Permalink |

Representative Paul Ryan (R-Wisc.), the ranking Republican on the House Budget Committee, introduced legislation on May 21 that would cut Social Security benefits and create private accounts, end Medicare as it is currently structured, dramatically reduce the revenues available to fund federal public services, and radically reduce the fairness and revenue sufficiency of the federal tax system.

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July 2, 2008 01:43 PM | Permalink |

In the past month, lawmakers beholden to the oil industry blocked consideration of a bill (S. 3044) that would shift tax subsidies away from oil and gas companies to alternative energy investments. This legislation also included a windfall profits tax on oil companies.

If Congress wants to raise revenue to encourage the development of alternative energy, it makes sense to start, as this bill would, by closing the tax loopholes that favor oil and gas companies. These loopholes in effect provide a subsidy to oil and gas companies that other firms do not receive.

Many of these subsidies have existed for years and have surely helped boost the profits of oil company shareholders. As this paper explains, the American public has received little, if anything, in return. Congress can recoup some of the benefits showered on the oil and gas industry over the years by implementing a windfall profits tax.

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June 20, 2008 12:32 PM | Permalink |

The House Ways and Means Committee approved a bill (H.R. 6275) this week that would temporarily prevent the Alternative Minimum Tax (AMT) from expanding its reach to families who are mostly well-off, but not as wealthy as those the tax was originally intended to target. Almost all lawmakers agree that this step should be taken. But President Bush and Republican leaders oppose the Ways and Means bill because it offsets the cost of AMT relief with revenue raising provisions in order to avoid an increase in the budget deficit.

The AMT was created to ensure that wealthy Americans pay at least some federal income taxes no matter how skillful they are at finding loopholes. It is reasonable that Congress wants to prevent it from affecting more families, but there is no reason why the deficit should be increased to provide tax relief for those who are relatively well-off. The Ways and Means bill would offset the cost of AMT relief mainly by closing unwarranted tax loopholes, which will in turn make the tax code fairer and more economically efficient.

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May 23, 2008 02:02 PM | Permalink |

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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May 15, 2008 02:30 PM | Permalink |

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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May 13, 2008 02:53 PM | Permalink |

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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State by State Fact Sheets

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April 14, 2008 02:56 PM | Permalink |

April 15 will mark the eighth “tax day” during the administration of President George W. Bush. How has tax day changed? The answer for most Americans is: very little. Despite claims made by the President and his supporters, the tax breaks enacted after 2000 provide little benefit for the middle-class. However, for the richest one percent of American families, tax day is considerably easier. Once the President’s tax cuts are fully phased in, the majority of the benefits will flow to this small group of lucky families.

What has changed for most Americans is the very real threat posed by the increased national debt resulting from these tax cuts. The national debt must eventually be paid off with tax increases or cuts in public services that Americans — particularly the middle-class — rely on.

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April 7, 2008 02:55 PM | Permalink |

The Foreclosure Prevention Act introduced in the Senate last week includes several measures that lawmakers argue will address the home mortgage foreclosure crisis and the problems plaguing the home construction industry. Unfortunately, the bill includes tax provisions that are likely to help large corporate homebuilders and yet do little for ordinary Americans who are either struggling to keep their homes or who are hurt by the downturn in the home construction industry.

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March 20, 2008 04:02 PM | Permalink |

Last week, the House and Senate both passed their own versions of the fiscal year 2009 federal budget resolution. There are some important differences between them that must be worked out by a House-Senate conference committee, which will negotiate a final resolution to be passed by both chambers. Even though the budget resolution is not law and is not binding, it does serve as a blueprint for the tax and spending policies that Congress will pursue in the coming year. This blueprint can also include procedural rules that make it easier or more difficult to pass certain types of legislation.

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March 6, 2008 02:02 PM | Permalink |

The federal estate tax continues to have no effect on the vast majority of Americans. The most recent figures released from the IRS, combined with data on deaths in each state from the Center for Disease Control, show that less than one percent of deaths result in estate tax liability under the tax rules currently in effect.

Under the Bush tax cuts, those rules are scheduled to change to allow even more estates to escape the tax. In 2004 and 2005 estates worth up to $1.5 million (or $3 million for estates owned by a married couple) were exempt from the estate tax. (Most of the estates listed below were subject to that exemption.) Since then, the exemption has increased to $2 million ($4 million for married couples) and in 2009 the exemption will increase to $3.5 million ($7 million for married couples). In 2010 the estate tax will disappear entirely. After 2010 all the Bush tax breaks expire, including this generous treatment of estates. Some lawmakers want to make permanent the complete repeal of the estate tax, which would cost over a trillion dollars over a decade and clearly benefit only the very wealthiest families in America.

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