In the history of mankind, many republics have risen, have flourished for a less or greater time, and then have fallen because their citizens lost the power of governing themselves and thereby of governing their state. TR
Republicans are weighing whether to raise the federal gas tax. It’s an idea they are prone to hate, but they may need it to pay for President Trump’s infrastructure investment plan.
Supporters of the idea note that the tax hasn’t been raised since 1993 and have plenty of evidence that resistance to a hike is wearing down.
The U.S. Chamber of Commerce recently called for the Trump administration and Congress to raise the gas tax by 25 cents per gallon to help pay for an infrastructure package, projecting it would generate more than $375 billion over a decade. For 25 years, the federal tax on gasoline has held steady at 18.4 cents per gallon and 24.4 cents per gallon for diesel. It is not indexed to inflation.
The Republican chairman of the House Transportation and Infrastructure Committee, Rep. Bill Shuster of Pennsylvania, prodded colleagues at the recent GOP retreat to consider setting aside years of opposition and raise the tax.
And perhaps most revealing, some of the most conservative House members who heard Shuster’s pitch are open to it.
This morning, NBC Today Host Matt Lauer asked Treasury Secretary Mnuchin to swear President Trump’s proposed tax cuts will pay for themselves.
I wonder if Matt ever asked any member of the Obama administration to swear that people would be able to keep their doctor under Obamacare.
Of course, Mnuchin didn’t raise his hand because he knows full well the tax cuts won’t pay for themselves. They will cover their cost in part as a result of the economic stimulus they provide, but even conservative economists don’t believe tax cuts fully pay for themselves.
President Trump knows this too. What all the flummoxed pundits and politicians in Washington don’t understand is that this is not a proposal. This is an opening proposal.
A businessman who specializes in dealmaking has landed in a town, Washington, that doesn’t understand business. Trump is going big with his proposal because he knows he won’t get everything he wants. His actual goal is probably pretty clear to him, and it’s not what he is proposing. It’s less.
What is going on here is that Trump has decided, after the Obamacare repeal debacle, to start making policy from the White House and not leave it to a wonk and politician like Speaker Paul Ryan.
Ryan put out an Obamacare repeal plan that was actually his final proposal, and look what happened. He didn’t leave himself room to maneuver. And so it sunk. Trump is now left trying to revive it.
As the tax debate goes on over the next year, look for Trump to mostly stick to his guns until the last minute, and then “magnanimously” agree to jettison some of his ostensibly cherished proposals for a deal.
President Trump Wednesday is expected to propose cutting the corporate tax rate to 15 percent, fulfilling a campaign promise and eclipsing a longstanding proposal by House Speaker Paul Ryan to drop the rate to 20 percent.
I’ve got an idea. Let’s cut the rate to 0 percent.
I honestly don’t understand the corporate income tax except that it appeases some sense of “fairness” harbored by liberals and moderate Republicans. Because it’s true, corporations don’t pay taxes. Their customers do.
Years ago, when I was a bartender and waiter at a place in Washington DC, the city raised taxes on alcohol served in restaurants. I remember one day right after the new government-sponsored pickpocketing scheme went into effect, the owner of the establishment came downstairs with a list in his hand. He went into the registers and reprogrammed each and every drink price to exactly reflect the tax increase. The customers’ drink prices went up. His taxes did not, although his business might have declined a bit, thanks to the local politicians.
If the federal government set the corporate tax rate to nothing, “corporations” would continue to pay taxes because the owners and executives would still have to fork over income taxes on a graduated scale.
Okay, I don’t what it would cost. Trillions of dollars over ten years, I know. I’m speaking in principle, I’m not an economist, so don’t trust me on this.
Buhhht, presumably, you could buy back some of the revenue loss by eliminating all the corporate deductions. And imagine the taxes that would be raised by the increased business activity. Our corporations would stop fleeing overseas, while foreign companies would actually want to relocate into the United States. Who knows, maybe Apple would stop making your iPhones with Chinese slave labor. And most importantly, in the United States, salaries would rise, many more jobs would be created, and the price of certain goods would decline.
And, oh yeah, you could cut government spending.
Even if companies weren’t paying too much less in taxes because they were losing their deductions, you have to think of the psychological effect of “zero taxes.” It would be a magnet for doing business in this country.
President Obama today plans to effectively demand that taxpayers fund his jobs plans, saying tax increases that might be used to offset tax cuts long coveted by business should be rolled into financing his agenda instead of keeping things deficit-neutral.
Speaking in Chattanooga, Tennessee on the latest stop in his soak-the-rich speaking tour, Obama will propose a scheme that is effectively a new spending outlay, since the deficit would rise.
Hoping to break an impasse, President Barack Obama today will extend a new offer to congressional Republicans in which he would back an overhaul of the corporate tax system in exchange for a guarantee that a resulting one-time windfall be used to underwrite various job creation proposals . . .
“As part of his efforts to focus Washington on the middle class, today in Tennessee the president will call on Washington to work on a grand bargain focused on middle class jobs by pairing reform of the business tax code with a significant investment in middle class jobs,” said Dan Pfeiffer, senior adviser to the president.
Republicans want to use any tax revenues that come in to offset the breaks given to business, holding harmless the deficit instead of creating new debt-financed social spending.
Tax neutrality is the cornerstone of “tax reform,” a concept long pushed by both Democrats and Republicans under which the code is made more efficient in a revenue-neutral way. But Obama and Congressional Democrats are trying to change the formula to make reform a net tax increase.
With just ten days remaining before Election Day, the White House has let word leak out that it is supposedly considering a tax cut as part of a new plan to stimulate the moribund economy.
From the Washington Post:
The new tax cut could provide hundreds of dollars or more a year to workers and show up in every paycheck. It may be similar to a tax cut Americans received in 2009 and 2010, which provided up to $400 for individuals and $800 for married couples, sources close to the administration said.
The tax cut would replace the current reduction in Social Security taxes, which is set to expire at the end of the year.
There are two things that are interesting about this. At least two things.
One, the Obama camp has decided to put word out that the president is moving to the center, adopting the Republican notion of cutting taxes.
And two, the White House is acknowledging that the economy is not quite on the gradual, strong track to recovery President Obama is claiming.
A stimulus four years after the first one? This is as likely to make voters think something’s wrong as it is to make them believe Obama is going to set things right.
The White House today suggested it may consider raising its $250,000 income level threshold for increasing tax rates, refusing to rule out acceptance of a new proposal by House Speaker Nancy Pelosi to raise the level to those earning $1 million or more.
While saying President Obama’s position on setting the tax increase trigger at $250,000 is “clear,” White House Press Secretary Jay Carney did not rule out a change of position and said the White House is continuing to “have discussions” with Democrats on the tax measures.
“We’re continuing to work with leaders in Congress on how best to move forward,” Carney said.
President Obama has long held the position that the Bush-era tax cuts should be maintained except for those earning greater than $250,000.
President Obama paid a total federal tax rate in 2011 on adjusted income of $789,674 that may be lower than that of his secretary, even though she earned substantially less.
Obama has spent the past week touting the Buffett Rule, which calls on those who make $1 million – just a little more than Obama made – to pay at federal tax rate of at least 30 percent. The rule was inspired by Buffett’s comment that he paid a lower tax rate than his secretary.
The most recent information about salary regarding Obama’s secretary is for his former secretary, Katie Johnson, who is listed by the White House as having made $90,000 in 2010.
According to Wikipedia, Johnson is 31 years old and now attends Harvard Law School. I don’t know about her personal life or what her deductions would be, so I can’t assume any children or extra deductions.
On a $90,000 salary, she would pay $16,578 in federal taxes, $3,780 to Social Security, and $1,305 in Medicare taxes.
That adds up to a total federal tax burden of $21,663 on $90,000 in adjusted gross income, or a tax rate of 24 percent.
Obama’s federal income tax rate was 20.5 percent. If you include the Medicare and Social Security taxes paid by Obama, his total federal tax liability is 21.8 percent, fully two percent less than that of his secretary even though his adjusted gross income was nearly nine times hers.
President Obama chose not to subject himself to his own proposed Buffett Rule, paying only a 20.5 percent federal tax rate instead of the 30 percent rate called for under the proposal he has been talking about all week.
The Buffett rule would apply to those making $1 million, and Obama did not quite make $1 million last year – he clocked in at $789,674. But he made enough to be considered comparably rich to those making a million, and still paid a rate ten points below the threshold he is proposing.
What’s more, he paid a lower rate than Vice President Biden, who made less than half what Obama did. Biden paid a 23.2 percent rate on $379,035 in income.
Some of the difference is due to deductions for charitable contributions – the Obamas contributed substantially more last year than the Bidens.
Workers are beginning to be informed of major health reform-mandated changes to their health care flexible spending accounts that will make the accounts far more difficult to use and that will limit the sum of health related products that can written off from taxes.
The changes will result in higher taxes paid by workers making less than a quarter million dollars a year. President Obama promised that wasn’t going to happen.
The accounts allow employers to set aside an unlimited amount of salary for employees to use to purchase health related products, like prescription and non-prescription medicines.
Under the health reform law, workers will now need a doctor’s prescription to use FSA’s to buy even mundane over the counter items such as Advil, antacid, or cold medicines. In addition, the accounts will now be limited to $2,500.
Were you aware of this?
Look at this message I just received yesterday from my health care flexible savings account provider.
Eligible Over-the-Counter Medicines and Drugs Will Require a Prescription to be Reimbursed – Effective January 1, 2011
Beginning January 1, 2011, currently eligible over-the-counter (OTC) products that are medicines or drugs (e.g., acne treatments, allergy and cold medicines, antacids, etc.) will not be eligible for reimbursement from your Health Care FSA – unless – you have a prescription for that item written by your physician. The only exception is insulin – you will not need a prescription from January 1, 2011 forward. Other currently eligible OTC items that are not medicines or drugs, such as bandages and nasal strips, will not require a prescription.
THIS IS A TAX INCREASE. Who is going to go to their doctor to get a prescription for Maalox?
Well, a small percentage will, driving up paperwork for already besieged doctors. But most of us will take the hit and no longer be able to buy over the counter medicines tax free. And if your employer offers accounts larger than $2,500 and you use them, you’re out luck. THAT’S WHAT IS CALLED A TAX INCREASE.
Now who said this:
If you make less than $250,000, less than a quarter-million dollars a year, then you will not see one dime’s worth of tax increase.
OBAMA SAID IT.
But I just got a note today saying my taxes are going up. And guess what? As my wife will tell you, I AM MAKING LESS THAN $250,000 A YEAR.
Do people making more than that bother with these accounts? My guess is if you are getting hit by this new law, you’re in the group whose taxes weren’t supposed to go up under the current regime.
Now, interestingly enough, the $2,500 limit does not take effect until 2013, which of course is after Obama’s first term ends. This is just way too cute. I want to wrap it up and give it to my niece.
Sorry, Mr. President, but even if the tax takes effect after your first term, you’ve still raised taxes.
Also, starting in 2018, FSA’s will be counted toward the determination of whether an employer’s health plan is so generous that it qualifies for an excise tax – another incentive not to offer them.
Workers do not seem to be aware of the change, and providers of the accounts aren’t quite sure what to tell them, according to Judy Dietel, chief compliance officer at WageWorks, the leading third party administrator of FSA’s.
“We’re waiting for guidance,” she says, noting that industry officials are not yet clear which type of medical professionals will be able to write prescriptions and which won’t.
Having spent $1 trillion on health care reform, Democratic leaders have checked the books and discovered to their dismay that THE UNITED STATES IN RUNNING UNBELIEVABLE DEFICITS.
Sorry, let me get a hold of myself. It’s just that they’ve taken the big overindulgence at dinner that existed under GOP rule and turned it into an endless engorgement at a sumptuous buffet on the Titanic.
Wait, of course, I remember now, the health bill was all “paid for” with $1 trillion in tax increases and spending cuts . . . THAT WE NOW CAN’T USE TO CUT THE DEFICIT.
Alright, I’m okay, just give me a minute.
So it looks like Congress is going to have to dig a little deeper into your pockets, with Democratic leaders talking about middle class tax increases and suggesting Obama may need to break his pledge not to raise taxes for anyone making less than $250,000 per year.
Well, the White House has been working on an opening for doing just that.
Here’s a pretty cocky sounding candidate Barack Obama making it as clear as humanly possible that he’s not raising any kind of taxes on those making less than $250,000 per year.
Now below in his weekly Message to America, broadcast just this past April 10, the now President Obama restates his promise.
As you can hear . . . wait a second. Roll that again. No go ahead, roll it. Did he just say “income” taxes?? Excuse me, but there THERE WASN’T ANY TALK BEFORE OF LIMITING THIS TO INCOME TAXES. Excuse me, I’m getting excited again.
Here’s Obama speaking a few days later – on April 15 as a matter of fact – to the DNC:
One thing we haven’t done is raise income taxes on families making less than $250,000 a year – another promise that we kept.
Well, with all due respect, Mr. President, that wasn’t the promise at all. I thought we were “absolutely clear?”
For those of you who are hearing impaired – and Obama apparently assumed this included most of you – here is what he said in the first video as a candidate:
Let me be absolutely clear. If you are a family making less than $250,000 a year, you will not see your taxes go up. Not your capital gains tax, not your payroll tax, not your income tax – no taxes. Your taxes will not go up.
So for those of you making $250,000 or less, get ready for the new “absolute clarity:” It’s only your income taxes that are off the table. Until, you know, they’re on the table.