Speaker of the House proposes tax hike for millionaires
In a recent proposition made by the Speaker of the House, John Boehner, an increase in federal income tax for the wealthiest Americans could be made, but only in exchange for an agreement by President Obama to make a major cut to entitlements.
This proposition would mark the first time that Speaker Boehner has offered a rise in marginal federal income tax rates since the talks regarding the fiscal cliff have begun. The offer proposed suggested a hike in Bush-era federal income tax rates for those who have an annual income of one million dollars or more.
As a part of the proposition Speaker Boehner also is looking to implement a new method, “Chained CPI”, for calculating the benefits of entitlement programs. By using this method the growth of federal health programs, such as Medicare, would slow down, saving billions of dollars over the next ten years.
Although the proposition did make strides in terms of federal income tax increases, there was nothing included to extend the federal unemployment benefits and no mention was made about how sequestration would be addressed.
A deal is not close to be made, but a phone conversation, after a recent face to face session, between President Obama and Speaker Boehner suggested that both parties are making progress in their negotiations.
The offer on federal income tax by Speaker Boehner was a significant move towards the position held by President Obama. Unfortunately the overall proposal still is unacceptable to the Democrats considering the level of revenue, the hit beneficiaries would take from the changes to entitlement programs, and the lack of extension to the federal unemployment benefits.
Categories: Federal Tax, Income Tax, Tax Law Tags: buffet rule, federal income tax, federal tax, fiscal cliff, fiscall cliff, take hike, tax code, tax cuts, tax law, tax pledge, tax reform, tax the rich
Are new taxes fair?
The presidential election may have decided in favor of Obama, but a creepy reminder of Mitt Romney tax policy keeps creeping into view. With the fiscal cliff just around the corner every American is waiting with bated breath for these tax talks to be resolved.
A new idea from an unlikely source is getting bipartisan attention as a way to broaden the base of taxpayers while limiting loopholes and deductions taken by the wealthy. This proposal that just so happens to be the brainchild of the failed presidential contender Mitt Romney would limit the amount of itemized deductions to a certain monetary limit.
“There’s renewed interest” in the cap on deductions, Senator Kent Conrad, the North Dakota Democrat who heads the Senate Budget Committee said.
This seems like a too good to be true generic way of taxing everyone equally without getting any sore feelings from lobbyists or or powerful interests. Since it seems as if no one can pin down the actual specifics of any plan a politician puts forward until the thing is passed and already effecting our lives. Tax experts disagree that this methodology would serve as a quick fix for our broken tax system claiming that it would disproportionately effect different tax bases.
But this solution doesn’t tackle the larger tax preferences, which make up a large part of the Buffet rule, saying that no wealthy person should be paying less in taxes than their secretary.
These experts have their suspicions that this tax proposal may be a wolf in sheep’s clothing that disproportionately increases the tax burden on the poor and middle class while do nothing to curb the favorable tax environment for the wealthy. This would also effect the entire donor model which so many nonprofits, schools, and museums require to survive.
Martin Feldstein, a Harvard economist and the chairman of the Council of Economic Advisers under President Reagan, thinks that this methodology is a great way to lower the deficit. His proposal calls for capping deductions at 2 percent of income for all individuals.
But this cap on deductions would hit the lower socioeconomic classes where they need it the most… in the charitable sector. That is because this deduction is largely discretionary and at the will of the taxpayer to how much he or she would deduct from their tax bill.
Will this cap on deduction send the charitable sector or our economy into dire straights or is capping deductions that silver bullet needed put the breaks on the economy that is heading towards a fiscal cliff.
Categories: Federal Tax, Income Tax, Tax Law Tags: buffet rule, charitable deduction, corporate tax, federal income tax, federal tax, mitt romney, tax deduction, tax increase, tax reform
Republican Crash
The election message should have rang out loud and clear to top ranking Republicans that the American people would much rather prefer to let the wealthy make a sacrifice this time around to divert falling off the fiscal cliff…seeing as how we have one of the largest income gaps in US history. President Obama hears this message loud and clear and he will be darned if he gives them an inch on what the American people want. Now the GOP facing the blame game for this issue and beyond must walk on eggshells to determine the best way to avert a whitewash of their party and a political comeback for the forthcoming elections.
Now it seems as if the republicans are backed into a corner left to the will of Mr. Obama trying to save face under the public eye while trying to fight for tax cuts for their constituency. Mr. Boehner has felt his ranks falling out from under him as rationality takes over conformity. It seems as if the only chance the Republicans have to recoup their losses is give up on the tax hikes for the wealthy and try to look amiable when entitlements are on the table without looking like the bad guy…which is quite a tough sell since they are rallying against the popular vote.
One by one the rank and file slowly fall out of line and realign with the American People. Bob Corker, a Tennessee Senator just recently made his case on Fox News that these tax cuts will allow for congress to ” shifts to entitlements and maybe it puts us in a place where we actually can do something that really saves the nation.”
Is this just wishful thinking on the Republican’s part? Now with Republican’s on the run maybe Mr. Obama won’t back down on entitlements needed so desperately by the middle class. Maybe, just maybe, he will turn his laser focus on trimming the bloated defense budget that has been growing for too long. Maybe with his newfound power he will finally revise the tax system further refining the tax brackets for the wealthy. The Republicans hope that this small sacrifice will make them stronger in the long run but I say that Grover and all of the anti tax Republicans will take note of this fact and the party will hurt as a result. F
But what of the Republicans threats of raising the tax on the wealthy will only lead to economic demise and the fall of the great United States? Well with the rich paying their fair share we will finally see the reality of this statement. If raising taxes on the wealthy doesn’t hurt growth or small businesses..what argument will the Republicans have to stand on. Even their own party is beginning to question the very foundation the Republicans sit on. Because we all didn’t fall in line with the Romney vision of servitude does that mean that the core principles of the Republican party are at stake. Only time will tell.
Categories: Federal Tax, Income Tax Tags: buffet rule, federal income tax, federal tax, republican, Republican Tax, tax code, tax reform