Well, House Republicans Went Ahead With Their ‘Tax Reform 2.0’ Legislation Anyway
Despite reports surfacing last week that House Republicans were having second thoughts about pushing a second round of tax cuts this month, they must have said, “Screw it, let’s do it anyway.” House Republicans introduced legislation on Sept. 10 that would lock in individual tax provisions contained in the Tax Cuts and Jobs Act that […]
Republicans Planning to Unleash ‘Tax Cuts 2.0’ in September, Stick It to Democrats
Despite public support for the recent tax code overhaul plummeting in the past two months, Republicans think another round of tax cuts is a good idea. So, it’s likely the House of Representatives will vote on new tax legislation in September, said House Ways and Means Committee Chairman Kevin Brady (R-TX). Brady, who spoke at […]
Accounting Firm Partners Everywhere Managing Expectations at Home
CPAs’ cats everywhere are all like… It’s been a wild week in the tax world, even if it’s mostly been bluster. Talk of tax cuts has corporate executives, rich people, and sitting U.S. Presidents all hot and bothered. But it probably has a lot of accounting firm partners fantasizing too, not only because they’re dreaming […]
The Fiscal Cliff: As a CPA, People Expect You to Know this Crap
You spent five (or more) years studying to be an accountant, passed the hardest professional licensure exam that exists, and people expect you to know some shit about taxes. They don't care that you're "an auditor" because they don't know what that means. Now when you go to parties, somebody will be like, "Hey, Mark, […]
Hold the Phone, John Boehner Didn’t Say Anything About Taxes Going Up
Admittedly, The Speaker sounds like he's ready to deal but you'd be a damn fool to think that he's going to roll over: With President Obama reelected and Republicans returned to a slightly smaller majority in the House, Boehner (R-Ohio) said Tuesday’s election amounted to a plea from voters for the parties to lay down […]
Understanding the Estate Tax: The Rich Lose Because They Have To Pay It, and the Poor Lose Because They’re Poor
If I've learned anything from the Pirates of the Caribbean ride at Disneyland, it's that dead men tell no tales; however, the rich ones still pay taxes which is good news, especially for those who can't afford Disneyland. Some Americans are in favor of radically increasing the taxes on the rich while others want to […]
Chuck Schumer Won’t Have Any of This Tax Cuts for the Wealthy Talk
Sen. Charles Schumer (D-N.Y.) noted that many of the reform plans that are under discussion in Washington would cut tax rates for everyone by eliminating or reducing deductions — the same model that was used during the last major rewrite of the tax code in 1986. “But in the upcoming talks on the fiscal cliff, […]
Here’s What the Fiscal Cliff Looks Like
The Tax Policy Center released a new paper today that should be sufficient for scaring the living daylights out of anyone that doesn't like the idea of taxes going up. The paper's abstract states: Almost 90 percent of Americans would see their taxes rise if we topple off the cliff. For most households, the two biggest […]
Mitt Romney: Yeah, about those tax cuts…
Everyone needs to adjust their expectations: “By the way, don’t be expecting a huge cut in taxes, because I’m also going to lower deductions and exemptions,” Romney said, according to various news media reports. Um, yay? “All the rates come down,” Romney said. “But unless people think there's going to be a huge reduction in […]
You Can Safely Assume That Jenna Jameson Is a Fan of Tax Cuts
And by extension, might be willing to sign the Taxpayer Protection Pledge should she ever run for office: "I'm very looking forward to a Republican being back in office," Jameson said while sipping champagne in a VIP room at Gold Club in the city's South of Market neighborhood. "When you're rich, you want a Republican […]
Report Goes Out on a Limb, Suggests That Democrats Will Use Study Findings to Their Advantage in Tax Cut Debate
From Reuters: Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. The study by the Congressional Research Service is likely to be used by Democrats in the looming battle over whether to extend tax cuts […]
Congressional Leader Clearly Knows Nothing About Congress’ Capabilities
The Hill reports that jolly orange giant John Boehner is speaking at the Peter G. Peterson Foundation today and he's telling the crowd that when Congress finally gets around to tax reform, they'll be coupled with an extension of the Bush tax cuts. “Any sudden tax hike would hurt our economy, so this fall — […]
George W. Bush Still Doesn’t Like the Bush Tax Cuts Being Called the Bush Tax Cuts
Stop me if you've heard this before. "I wish they weren't called the Bush tax cuts. If they were called someone else's tax cuts, they'd be less likely to be raised," the former President told some people who still listen to him speak about anything. Just save us the trouble and play it on a […]
Grover Norquist Has a Solution to Warren Buffett’s Problem
RELATED: I'm starting to think that ol' Grover is purposely spelling the Oracle's surname incorrectly. [@GroverNorquist, Earlier, Earlier]
Another Festivus Miracle! Payroll Tax Compromise Reached
The Speaker of the Hizzous just finished speaking to reporters. "Sometimes it's hard to do the right thing," he said. Boehner also hinted that if some people would have been willing to stick around and work over the holidays, maybe they coulda got this thing done but you know how people can get around this time […]
It Appears That Both John Boehner and President Obama Are Prepared to Ruin Christmas for the Payroll Tax Cut
Speaker of the House John Boehner and President Obama spoke on the phone earlier today and both men seem pretty eager to get something accomplished re: the payroll tax cut. The Hill reports that Boehner reportedly told Obama, "Let’s get this done today,” while White House spokesman Jay Carney later said, "The ball is in the […]
David Cay Johnston: President Obama Has Out-Norquisted Grover Norquist
Granddaddy of tax gazetteers, David Cay Johnston, is poking at Grover Norquist again, this time over the quagmire that the Republicans find themselves in over President Obama’s payroll tax cut proposal. The very proposal that could make Obama the biggest Grinch of 2011. Ruined holidays aside, DCJ points out that if the Republicans shoot this down, they do so at the behest of what seems to be a very popular idea:
[N]umerous opinion polls show overwhelming public support for continuing tax cuts for workers and for raising taxes on millionaires. That has left Republican leaders no choice but to silently cry uncle and agree to the president’s request to extend and possibly expand the payroll tax cut.
The reason that Republicans aren’t so hot on the payroll tax cut is that it’s “temporary.” They’d rather see “permanent” tax cuts enacted, although those “permanent” tax cuts are never “permanent.” The “permanent” Bush tax cuts, for example, had to be “extended” last year because they were about to “expire” which basically makes them “temporary.” The payroll tax cut was originally enacted last year with the Bush tax cuts but as Paul Ryan says, it’s supposed to be like a holiday, which is to say, “We lived through it and we’ll just move on with our lives and never to speak of it again.” DCJ writes that this means Obama has beat the Republicans at their own game:
Having outsmarted Norquist, Obama gets to run for a second term as the champion of at least a $100 billion tax cut. Obama can even say that if Republicans had had their way, working people’s taxes would have gone up while taxes on billionaires would have gone down. And he gets to tell small business owners that, but for Republicans, their taxes would have gone down too.
This is a marketing fiasco for Republicans to rival the Ford Edsel and New Coke. Already more than 40 congressional Republicans have taken steps to distance themselves from Norquist, who scowls at the mere mention of what could have been his, but is now Obama’s, very popular tax cut.
In other words: Whose shorties are snagged now?
Republicans paint themselves into a tax-cut corner [DCJ/Reuters]
President Obama Just Might Ruin His Family Christmas for the Payroll Tax Cut
That’s what Harry Reid is saying anyway. I’m not a parent, so I’m not exactly sure how a man would explain to his daughters that they’ll have to spend Christmas on the beach without Dad but he can always Skype in from the West Wing, or he could take the Paul Ryan approach. [Reuters]
Somewhere in Mitt Romney’s 59-point Economic Plan, There’s Something About Tax Reform
That’s right boys and girls. Our economy is such a jumbled clusterfuck that Presidential Ken Doll Mitt Romney and his team had to lay out 59 specific proposals to get this thing turned around. In a USA Today op-ed, Mittens laid out a little preview of this plan and it includes – YEP! – cutting taxes and ultimately overhauling the tax code:
Marginal income tax rates and tax rates on savings and investment must be kept low. Further, taxes on interest, dividends and capital gains for middle-income taxpayers should be eliminated. Our corporate tax rate is among the world’s highest. It leaves U.S. firms at a competitive disadvantage and induces them to park their profits abroad, benefiting the rest of the world at our expense. I will fix these problems with permanent solutions. Ultimately, I will press for a total overhaul of our overly complex and inefficient system of taxation.
Romney seems to be following Jon Huntsman’s lead but for fortunately for Mittens, Huntmsan’s plan wasn’t bulleted and no one heard the speech.
GOP Congressman: All Tax Cuts Are Good But Some Are Gooder Than Others
The Associated Press is reporting that some Republican Members of Congress are fighting their natural inclination to extend all tax cuts to infinity. The tax cut at risk of expiration is employees’ share of the social security tax of 6.2%. Last year the rate was cut to 4.2% for one year. President Obama would like to extend this cut, while some aren’t so keen on it.
But wait a minute! Doesn’t this go against every fiber of Republican orthodoxy? Won’t Ronald Reagan be spinning in is his grave? Did Grover Norquist’s marching orders get lost in the mail?
Republicans say no, as this position is “consistent with their goal of long-term tax policies that will spur employment and lend greater certainty to the economy.”
Okie dokie, then. But if that’s the case, it’s a little strange to discover that House Speaker John Boehner hasn’t made up his mind on whether to extend this tax cut (or put another way “raise taxes”). Perhaps, that’s because he’s already said that tax hikes are off the table. So what gives?
Fortunately, we have Texas Representative Jeb Hensarling to explain it to us:
“It’s always a net positive to let taxpayers keep more of what they earn,” says Rep. Jeb Hensarling, “but not all tax relief is created equal for the purposes of helping to get the economy moving again.”
So wait…not all tax cuts are effective at “getting the economy moving”? Is that what he’s saying? Or is this simply an Animal Farm approach to tax policy? Grover needs to get involved ASAP so everyone can get on the same page. The troops seem confused.
GOP may OK tax increase that Obama hopes to block [AP via BI]
Letting the Bush Tax Cuts Expire May Not Be a Violation of the Taxpayer Protection Pledge But Grover Norquist Would Still Advise You Against That Course of Action
As you well know, signing Grover Norquist’s Taxpayer Protection Pledge is the equivalent to having your name written in the Fiscal-Conservative-Starve-the-Beast Book of Life. If you break t servative credentials will go up in a poof of red, white and blue smoke, you’ll be bludgeoned to death with a rolled up copy of the U.S. Constitution and hopefully Ronald Reagan will have mercy on your soul.
Lately though, partly due to this little debt ceiling debate, the Pledge has come under increased scrutiny and after the Senate approved a repeal of ethanol tax credits without a corresponding reduction in tax rates, some suggested that it is meaningless. Since this is obviously nonsense, Grover has gone on a PR offensive, in order to spell it for the RUBES out there so they can understand what constitutes a violation and what does not. Everything seemed to be back on the up and up until today, the Washington Post ran an editorial that may further muddy the waters:
Would allowing the Bush tax cuts to expire as scheduled in 2012 violate this vow? We posed this question to Grover Norquist, its author and enforcer, and his answer was both surprising and encouraging: No.
In other words, according to Mr. Norquist’s interpretation of the Americans for Tax Reform pledge, lawmakers have the technical leeway to bring in as much as $4 trillion in new tax revenue — the cost of extending President George W. Bush’s tax cuts for another decade — without being accused of breaking their promise. “Not continuing a tax cut is not technically a tax increase,” Mr. Norquist told us. So it doesn’t violate the pledge? “We wouldn’t hold it that way,” he said.
Naturally, some DOPES out there got all worked up as The Hill reports, “Democrats had jumped on that quote, suggesting it was a sign that Norquist was willing to be more reasonable on taxes than many congressional Republicans.”
As you can see, the words “Norquist,” “reasonable,” and “taxes” are in extremely close proximity which indicates that these “Democrats” are what I’d like to call “COMPLETE IDIOTS.” Problem is, whomever grabs the loudest megaphone first in DC usually gets dibs on what the dish is so Americans for Tax Reform has AGAIN clarified how this Pledge thing works:
ATR opposes all tax increases on the American people. Any failure to extend or make permanent the tax cuts of 2001 and 2003, in whole or in part, would clearly increase taxes on the American people. In addition, the failure to extend the AMT patch would increase taxes. The outlines of the plans are deliberately hazy, but it appears that both Obama’s Simpson-Bowles commission proposal and the Gang-of-Six proposal dramatically increase taxes on the American people.
It is a violation of the Taxpayer Protection Pledge to trade temporary tax reductions for permanent tax hikes.
In other words, if you let the “Bush Tax Cuts” expire that’s fine but you just be sure replace them with “Obama Tax Cuts” to ensure there’s no trouble.
Out from under the anti-tax pledge [WaPo]
Grover Norquist tries to clarify Bush tax cut remarks [The Hill]
ATR Statement on Washington Post Editorial [ATR]
Bill Clinton Wants a Lower Corporate Tax Rate
“We’ve got an uncompetitive rate,” Clinton told a crowd at the Aspen Ideas Festival on Saturday.
“We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay.” [HP]
Paul Ryan: Payroll Tax Cuts Are Economic Red Bull
The Hill reports that Congressman Paul Ryan isn’t interested in getting the economy all hopped up like an adolescent trying to cram for a mid-term,“I’m not a Keynesian, so I don’t think sugar-high economics works.”
And that this discussion is old hat, “We’ve sort of proven this already, a number of times. Temporary tax rebates don’t work to create economic growth. Permanent tax changes do.” [The Hill]
Deloitte Tax Expert Makes Statement That He’s Likely to Regret
“If there are Republicans who break with Grover Norquist’s position, I think that’s an important thing,” said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington.
“I think it signals a willingness on their part to have the fight with him over whether every tax expenditure is a legitimate reduction in effective tax rate, or whether there are some that should be regarded the way they regard spending programs.” [Bloomberg, Earlier, Earlier]
Presidential Candidate Tim Pawlenty Doesn’t Want to Bore You with the Gory Details About How He’ll Pay for His Proposed Tax Cuts
Former Minnesota Governor Tim Pawlenty wants to cut taxes. He’s a Republican after all and Grover Norquist probably has lewd photos and several sternly-worded letters waiting in the wings should TP give the impression that he’ll do anything but slash rates.
Pawlenty’s plan calls for two rates, 10% for on the first $50k/$100k (single, married) earned and 25% for anything above that. He’s also proposing a flat 15% corporate tax rate. He would eliminate the capital gains, dividends, interest and estate taxes.
Pretty expensive proposition so it’s got to be paid for, right? Pawlenty’s got a plan for that too:
To pay for the tax cuts, Pawlenty said he would eliminate unspecified tax loopholes and subsidies. “The Tax Code is littered with special interest handouts, carve-outs, subsidies and loopholes,” he said. “That should be eliminated.”
This is one of those instances where a reporter may ask the follow-up question, “Governor, which tax credits would you eliminate?” To which Pawlenty answers, “Yes.”
Newt Gingrich Has Some Imaginary Tax Policy Proposals for His Imaginary Presidency
To trigger job growth, Gingrich proposed to cut the U.S. corporate tax rate from 35 percent to 12.5 percent, a deeper cut than some other Republican politicians have offered. He would extend income tax cuts that expire in 2013, which were the subject of a pitched battle late last year when President Barack Obama tried to let tax reductions for wealthier Americans expire. And he would completely eliminate the capital gains tax on stock profits. Gingrich, proposed that the country move toward an optional flat tax for Americans of 15 percent, and strengthen the dollar by returning to “Reagan-era monetary policies,” and reform the Federal Reserve to promote transparency. [Reuters]
Paul Ryan Is No Ronald Reagan
Charles Krauthammer […] writes that the “most scurrilous” criticism of House Budget Committee Chairman Paul Ryan’s fiscal plan is that it would cut taxes for the rich. This would, he says, be akin to making the same claim against the Ronald Reagan-Bill Bradley 1986 tax reform. Krauthammer goes on to assert that Ryan’s plan is “classic tax reform” that … broadens the base by eliminating loopholes. The facts are otherwise. The Ryan plan, at least what we know of it, would inarguably cut taxes for the rich. It in no way resembles the 1980s tax reforms of either President Reagan or Senator Bill Bradley and Representative Dick Gephardt. And it most assuredly fails to eliminate loopholes. [TaxVox, WaPo]
More Appeasement in Obama’s Proposed Budget
President Obama presented his nearly $4 trillion budget, proposing to cut more than $1 trillion from Federal programs over the next ten years, with $200 billion in cuts to occur over the next two years. Although these cuts may appear, at first glance, significant to the average American, in light of the recently enacted tax cuts of $858 billion over the next two years, that $200 billion of proposed spending cuts leaves $658 billion of tho ted for.
In balancing our national budget, Obama and Congress are focusing on the wrong side of the financial equation. The projected deficit in 2011 is $1.65 trillion; however, the whole non-defense discretionary spending budget in 2010 was $477 billion. Even if all non-defense discretionary spending were eliminated, there would still remain a deficit of over $1.1 trillion. The math is clear that Congress cannot eliminate deficit spending by budget cuts. Taxes will need to be raised.
Some of the cuts that President Obama is proposing in his budget include $300 million for community block grants, $2.35 billion for low income home energy assistance program, and $400 billion from a five-year domestic spending freeze, as well as reductions in pell grants, graduate school loans, community access, etc. But all of these cuts do not come close to offsetting the lost revenues from the extension of the tax cuts to the rich.
A pattern has emerged in Obama’s dealings with the Republicans. Obama agreed with the Republican argument to give tax cuts to the rich to help the economy. Now he is proposing to cut programs for the middle class and the poor to balance the budget. In doing such, Obama is moving the political fulcrum to the right. His approach of pre-emptively offering something—whether it be tax cuts for the rich or budget cuts affecting the poor and middle class—instead of negotiating a quid pro quo, is effectively pushing the Republicans further to the right, seeing the prospect of gaining even more ground.
Although compromise is demanded in politics, leadership cannot be defined by compromise alone. There are principles worth fighting for; and leaders must be willing to mobilize public opinion in support of those principles. Since our political system is rigged because of campaign finance and lobbying, a leader professing change and reform needs to present a different narrative to the populace. Churchill, Teddy Roosevelt, and Franklin Roosevelt recognized the value of the bully pulpit. Despite his rhetorical skills, Obama has failed to do so. His posture of appeasement will in all likelihood allow the Republicans to balance the budget on the backs of the working class and low income Americans to the benefit of Wall Streeters and Multinational Corporations, who offshore jobs, brought about the financial crisis, and robbed trillions from the American people. Since Obama is seeking re-election in 2012, and is charting his own course, he will not lead the American people to the Promised Land.
America needs major tax reform. The extension of tax cuts to people who need them the least was the last thing Congress needed to do. Some Democrats want to cut $40 billion in subsidies to the oil companies for five years; however, Republicans refuse to cut these subsidies to the oil companies, preferring to cut programs for the poor and middle class. Moreover, in spite of two wars costing $120 billion per year and an inflation adjusted military budget larger than those in the Bush years and the Cold War, neither party desires to cut military spending, which constitutes 58% of the discretionary spending budget.
Reform will never come from Congress nor a President like Obama. It will require people outside of Washington working with allies inside Congress in order to stop this disconnect between what is transpiring in Washington and what this country needs. It will require people coming together as they did in Egypt in a pro-democracy movement. The question is, can and will the people of America come together before it is too late.
Poll: This Balanced Budget Idea Starts with Higher Taxes for the Wealthy
Republicans take control in the House of Representatives this week and boy, are they ever ready. With the ink safely dry on the extension of the Bush tax cuts, the GOP is moving on to spending cuts, supporting the troops, restoring honor, launching investigations and whatever hell else was in that pledge. Wait, that last one wasn’t in there?
Anyhoo, the idea of lower taxes and spending cuts to get the federal budget in ship shape has been the GOP song and dance long before Ronnie had his own float at the Tournament of Roses Parade but a recent poll has discovered that lots of people don’t agree with that sentiment:
Raising taxes on the rich beats out cuts to defense spending, Medicare and Social Security as U.S. adults’ top preference on how to close the deficit, according to a 60 Minutes/Vanity Fair poll.
Sixty-one percent of Americans said that increasing taxes to the wealthy should be the first step toward balancing the budget.
By contrast, 20 percent of respondents preferred cuts to defense spending as the first option, while 4 percent said that cutting Medicare would be the best way to start cutting the deficit. Three percent said they preferred cutting Social Security.
Now you might expect a major backlash from the more affluent citizens, you know, grumbling at polo matches, yacht races and beside the swimming pools filled with gold doubloons but surprisingly, quite a few of them are okay with it:
Increased taxes on the wealthy tops those four options even among higher earners who might be most affected by a tax hike, the poll suggested. Fifty-eight percent of respondents making between $50,000 and $100,000 per year rated tax hikes as the best first step to balancing the budget, while 46 percent of those making more than $100,000 said it was their top choice, as well.
But as we have learned, the GOP isn’t really down with this. Besides, tax rates won’t be an issue again the until the second and third weeks of December 2012, so they’d prefer we concentrate on things that aren’t already safely chiseled into the political dogma.
Let’s Watch President Obama Use a Ridiculous Number of Pens to Sign the Tax Cut Bill
Running late as usual. At least they aren’t using whiteboard markers. Since it’s Friday and we’ve got nothing better to do, we’ll be live-blogging below.
4:02: Starting in two minutes? You’re already 12 late Mr President. We realize you’re the President but some of us have holiday cheer to spread, get with it.
4:05: Filing in. Finally. Biden in the Hizzous. Cracks about a “big deal,” without the F-bomb, this time. Shout out to half-man, half-tortoise, Mitch McConnell. Bipartisanship lives!
4:08: The big guy is up. Applause. Biden is semi-beaming. BHO gives a shout out to the Veep. Biden grins like only Biden can. Love for McConnell and Dave Camp. Shot of Larry Summers is less than flattering. Did his mother teach him anything about sitting up straight? Yeesh. Bipartisanship, bipartisanship, bipartisanship. We get it. You managed to play nice, what do you want, reelection?
4:13: Al Sharpton? Golf clapping? Can someone explain why the Rev is at this thing?
More name-dropping. Nancy, T Geith, Boehner. Sigh.
4:17: John Hancock time. Hugs, handshakes, back slapping. OUT!
Some People Need to Get Some Perspective on This Tax Cut Compromise
“The fact that the Republicans got a reduction in the death tax from 55 percent to 35 percent I think made the deal even better. […] I’m a little surprised that some Republicans are scoffing at it.”
~ Steve Forbes can’t quite believe what he’s hearing.
George W. Bush Would Prefer if the Bush Tax Cuts Were Called Something Other Than the Bush Tax Cuts
As far as the policy is concerned, W is obviously cool with it but if the name could get tweaked (hint being: drop the “Bush”) maybe getting it through Congress wouldn’t such a BFD.
(UPDATE 2) Bernie Sanders Didn’t Convince Too Many People (Pretty Much No One!)
~ Update includes clarification on vote tally and addition to first paragraph. ~ Update 2 includes finally vote tally.
Despite Friday’s epic speech by Bernie Sanders, the Senate
passed elected to finish debate on the tax cut/unemployment compromise this afternoon to set up the final vote before it moves on to the House.
At 4:12 ET, the vote was 62-7 with Sanders, Patrick Leahy (D-VT), Russ Feingold (D-WI),
Tom Udall (D-NM) (CSPAN originally showed Tom as voting “no” and has now disappeared), Jeff Bingaman (D-NM), Kirsten Gillabrand (D-NY) and Sherrod Brown (D-OH) voting “no.”
If you’ve got nothing better to do, you can watch the live feed here.
UPDATE, circa 5:00: Vote is 73-10 with John Ensign (R-NV), Mark Udall (D-CO), Kay Hagan, (D-NC), Carl Levin (D-MI) voting “no.”
UPDATE 2, circa 6:30: Finally vote of 83-15.
Bernie Sanders Is Technically an Independent but Don’t Hold Your Breath
“So in my opinion, this is a good bill. And I hope that my fellow Democrats will support it.”
~ Former President Bill Clinton, at press conference today with President Obama (who bailed early), on the tax cut compromise. Meanwhile, Bernie Sanders, at the time of publication, is still going strong.
Obama’s Appeasement on Tax Cuts
The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.
For those of you unfamiliar with the history of World War II,