Author: Alex Welch

August 1, 2006 04:07 PM | Permalink |

The latest budget-busting tax cut passed by the U.S. House of Representatives on July 28 is likely to be considered by the Senate this week. The bill, HR 4, would make permanent so-called “savings incentives” tax breaks that benefit higher-income families who need the least help in trying to save—and reduce federal revenues by billions of dollars at a time when deficits remain worryingly large.

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July 14, 2006 02:24 PM | Permalink |

What is the United States trying to do when it comes to taxing multinational corporations?

Companies that do business only in the United States have to pay federal income taxes on their profits (at least as the tax code defines “profits”). We want multinational corporations—both American-owned and foreign-owned—to pay taxes on their U.S. earnings, too. That’s the main goal.

In addition, at least some of the time, we try to make American-based multinationals pay U.S. taxes on the profits they earn in low-tax foreign tax havens. The purposes here are both to raise revenue and to avoid giving American companies a tax incentive to move their operations—or artificially shift profits—to low-tax foreign countries.

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July 11, 2006 02:18 PM | Permalink |

Having slashed personal income taxes, primarily on the wealthy, over the past six years, the Bush administration would like the public to believe that tax revenues are nonetheless doing just fine, and that the budget deficit is not really a problem. Nothing could be further from the truth, as a close look at the administration’s own new estimates in its July 11 “Mid-session Review” reveals.

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June 29, 2006 03:44 PM | Permalink |

Last month, President George W. Bush signed into law another round of tax cuts. The latest cuts provide temporary capital gains and dividends tax cuts and AMT relief. But these tax cuts are being paid for entirely with borrowed money. In fact, over the fiscal 2002-07 period, the national debt, including amounts owed to the Social Security Trust Fund, will balloon by $3 trillion. The cost of this borrowing binge will ultimately come out of taxpayers’ pockets, either through spending cuts or future tax hikes.

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June 29, 2006 02:21 PM | Permalink |

Despite the fact that tax breaks enacted since 2001 are responsible for almost half of the U.S. federal budget deficit, President Bush and Republican leaders in Congress claim that they need new budget rules that will encourage deep cuts in federal programs — but mandate no changes in tax policy — in order to get deficits under control.

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June 22, 2006 02:08 PM | Permalink |

Last week, Senate Republicans failed in their effort to permanently repeal the federal estate tax. Now tax writers in the House of Representatives are working to enact “compromise” legislation that would cost almost as much as full repeal—and GOP leaders are adding “sweeteners” to the estate tax bill to encourage more Senators to support this legislation. One of these provisions, a special capital gains tax break for timber companies, would likely result in profitable timber companies paying no tax. According to the Washington Post, the provision is designed to sway the votes of two Democratic Senators from Washington State (a major timber-producing state) who opposed estate tax repeal in last week’s Senate vote.

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June 9, 2006 02:09 PM | Permalink |

The failure of a procedural vote this week in the U.S. Senate means that Republican efforts to make permanent the Bush administration’s 2001 estate tax cuts have failed— for the moment. If nothing else is done, in 2011 the federal estate tax cuts pushed through by Bush will expire. Will the resulting “pre-Bush” estate tax be sufficiently generous to American family farms? This CTJ issue brief evaluates the special estate tax breaks for farmers that existed before the 2001 Bush tax cuts were enacted—and will exist again in 2011 if the Bush tax cuts are allowed to expire as currently scheduled.

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June 8, 2006 02:10 PM | Permalink |

Earlier today, a procedural vote in the United States Senate failed by a 57-41 vote, ensuring that the federal estate tax will not be fully repealed. Citizens for Tax Justice congratulates the U.S. Senators who decided today that estate tax repeal is not in the interest of the vast majority of Americans. The failure of today’s cloture vote sends an important signal to Congress and the Bush Administration that Americans are concerned about the growing inequality of wealth in America—and that we believe the estate tax can play an important role in preventing the creation of a new American aristocracy.

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June 5, 2006 02:12 PM | Permalink |

Republican Senate leaders are pushing to enact permanent repeal of the federal estate tax, a move that would cost nearly $1 trillion over the first full decade. Meanwhile, other Senators are seeking a “compromise” that would cost nearly as much as full repeal. But new data from the Internal Revenue Service, describing estate tax payments in each state for 2004, show that more than ever, the estate tax is virtually irrelevant for most Americans—raising the question of why Congress is so intent on repealing a tax that affects so few estates.

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May 18, 2006 03:45 PM | Permalink |

Congressional Republicans are now trying to claim that the tax cut they recently enacted on capital gains and dividends actually favored low-income Americans. The May 17 release from the Senate Finance Committee is an exercise in outrageous statistical chicanery.

To defend their preposterous conclusion, GOP lawmakers apparently started with a reasonable estimate of the effects of the capital gains and dividends tax cut by the Joint Committee on Taxation. The implied (but unpublished) JCT figures appear to be similar to those published by Citizens for Tax Justice — which is to be expected since they were calculated on very similar computer tax models.

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