Treasury Secretary Jack Lew warrned congressional leaders Wednesday that he will exhaust emergency borrowing measures “no later than Oct. 17,” leaving him with less than $30 billion on hand to pay the nation’s bills. In a letter sent to all members of Congress, Lew urged immediate action to raise the federal debt limit, which now stands at $16.7 trillion. Without additional borrowing authority, Lew warned that cash on hand “would be far short of net expenditures on certain days, which can be as high as $60 billion.
Posts Tagged With: budget
President Obama has plenty of big taxes in his budget proposal.
To achieve $1.8 trillion in new revenue, the president suggested a few of the policies he’s raised while battling Republicans over the past four years: taxing higher incomes by capping itemized tax deductions, rolling back domestic-production credits for oil companies, instituting the “Buffett Rule” of a 30 percent minimum tax rate for people making over $1 million in a year, and taxing investment managers’ “carried interest” profits as regular income top the list.
But the tax code is a jungle of odd rules, and the penny-pinching side of Obama’s budget raises some new taxes (or closes some “loopholes”) that might not readily occur to most taxpayers filling out run-of-the-mill 1040s this weekend.
As laid out this week by the Treasury Department in its “green book,” a massive spiral-bound document that explains tax changes in the White House budget proposal – it is pale green, and 246 pages – here are some quirky maneuvers the president suggests to offset spending and keep the deficit just a bit lower:
1. A Tax on Flavored Vodka
President Obama wants to tax your Stoli Razberi.
Distilled spirits currently get a tax break if they include flavors, but the president’s budget proposal does away with that. Spirits are taxed at $13.50 per proof-gallon (a gallon of 100-proof liquor), but if distillers add flavorings, they can roll back some of that tax: Up to 2.5 percent of the alcohol in those flavoring mixtures is exempt from the spirits tax.
It doesn’t sound like much, but the Treasury claims this tax break gives an unfair advantage to flavored liquors, particularly foreign producers whose flavor quotients aren’t restricted, as they are for U.S. producers. Heavily-flavored, foreign-made spirits can be sold cheaper, and consumers might be more likely to buy them than they otherwise would, Treasury argues.
The new rule would be good for Jack Daniel’s, bad for Absolut Citron.
2. Golf Courses Are No Longer Tax Havens
In a creative tax maneuver, an Alabama land developer was able to deduct part of his golf course.
E.A. Drummond bought real estate on a Gulf Coast peninsula in the 1990s, created a business to build a golf course on it, and developed the land around the golf course. In 2002, he had the business place a conservation easement – a partial restriction of what can be done with a piece of land, for the purpose of conserving it or preserving “recreational amenities,” golf among them as the tax code is written – donated that easement to a conservation land trust, and claimed the value of the easement as a charitable-giving tax deduction.
Under Obama’s budget proposal, that couldn’t be done.
In explaining the proposed change, Treasury protests that such moves have “raised concerns” that the deductions, often claimed by the developers of homes around golf courses, “are excessive,” and that they mainly advance “the private interests of donors” not “bona fide conservation activities.”
3. A Higher Tax on Cigarettes
President Obama smokes from time to time, but he proposes hiking the tax on cigarettes to pay for early-childhood education.
Cigarettes have been taxed at just under $1.01 per pack, to help pay for the 2009 expansion of the Children’s Health Insurance Program (CHIP). In his budget proposal, Obama suggests raising that to $1.95 per pack.
The administration’s rationale is, essentially, that cigarettes are harmful.
Citing statistics on smoking-related deaths, Treasury writes, “Excise taxes, levied on manufacturers and importers of tobacco products, are one of the main ways that policymakers can affect tobacco production and consumption.”
4. Corporate Jets
Perhaps a dead horse by now, Obama is still beating it.
The so-called “loophole for corporate jets” works like this: Companies can write off the value of their equipment as it depreciates – to encourage investment, the government lets businesses recoup some cost of buying equipment by letting them count its depreciation against their income. The IRS has a schedule for how fast different kinds of equipment “depreciate,” and how much of their value can be written off when.
When it comes to airplanes owned by businesses, commercial and freight-carrying planes can be written off in full after seven years. Planes that aren’t used for those purposes – corporate jets, crop-dusters, and planes used for firefighting, for instance – can be written off after five years.
Under Obama’s budget proposal, noncommercial passenger aircraft are lumped in with commercial and freight planes, meaning businesses can deduct the value of their corporate jets after seven years, not five.
5. Businesses Can’t Deduct Punitive Damages
Say you’re a business, someone wins a lawsuit against you, and you’re required to pay damages. You can write them off.
Not so, under Obama’s budget proposal.
The White House plan would not only prevent businesses from deducting punitive damages from their taxable income, it would tax damages paid out by insurers, too: If a business takes out an insurance policy for some kind of liability, and that insurer ends up paying out damages on behalf of the company under its policy, those damages would be added to the business’s taxable income.
A List of Republican Budget Cuts
Notice Social Security and the military are NOT on this list.
These are all the programs that the new Republican House has proposed cutting. Read to the end!
* Corporation for Public Broadcasting Subsidy — $445 million annual savings.
* Save America ‘s Treasures Program — $25 million annual savings.
* International Fund for Ireland — $17 million annual savings.
* Legal Services Corporation — $420 million annual savings.
* National Endowment for the Arts — $167.5 million annual savings.
* National Endowment for the Humanities — $167.5 million annual savings.
* Hope VI Program — $250 million annual savings.
* Amtrak Subsidies — $1.565 billion annual savings.
* Eliminate duplicating education programs — H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.
* U.S. Trade Development Agency — $55 million annual savings.
* Woodrow Wilson Center Subsidy — $20 million annual savings.
* Cut in half funding for congressional printing and binding — $47 million annual savings.
* John C. Stennis Center Subsidy — $430,000 annual savings.
* Community Development Fund — $4.5 billion annual savings.
* Heritage Area Grants and Statutory Aid — $24 million annual savings.
* Cut Federal Travel Budget in Half — $7.5 billion annual savings
* Trim Federal Vehicle Budget by 20% — $600 million annual savings.
* Essential Air Service — $150 million annual savings.
* Technology Innovation Program — $70 million annual savings.
* Manufacturing Extension Partnership (MEP) Program — $125 million annual savings..
* Department of Energy Grants to States for Weatherization — $530 million annual savings.
* Beach Replenishment — $95 million annual savings.
* New Starts Transit — $2 billion annual savings.
Exchange Programs for Alaska Natives, Native Hawaiians, and Their Historical Trading Partners in Massachusetts — $9 million annual savings
* Intercity and High Speed Rail Grants — $2.5 billion annual savings.
* Title X Family Planning — $318 million annual savings.
* Appalachian Regional Commission — $76 million annual savings.
* Economic Development Administration — $293 million annual savings.
* Programs under the National and Community Services Act — $1.15 billion annual savings.
* Applied Research at Department of Energy — $1.27 billion annual savings.
* Freedom CAR and Fuel Partnership — $200 million annual savings..
* Energy Star Program — $52 million annual savings.
*Economic Assistance to Egypt — $250 million annually.
* U.S.Agency for International Development — $1.39 billion annual savings.
* General Assistance to District of Columbia — $210 million annual savings.
* Subsidy for Washington Metropolitan Area Transit Authority — $150 million annual savings.
*Presidential Campaign Fund — $775 million savings over ten years.
* No funding for federal office space acquisition — $864 million annual savings.
* End prohibitions on competitive sourcing of government services.
* Repeal the Davis-Bacon Act — More than $1 billion annually.
* IRS Direct Deposit: Require the IRS to deposit fees for some services it offers (such as processing payment plans for taxpayers) to the Treasury, instead of allowing it to remain as part of its budget — $1.8 billion savings over ten years.
*Require collection of unpaid taxes by federal employees — $1 billion total savings.WHAT THE HELL IS THISABOUT?
* Prohibit taxpayer funded union activities by federal employees — $1.2 billion savings over ten years.
* Sell excess federal properties the government does not make use of — $15 billion total savings.
*Eliminate death gratuity for Members of Congress.WHAT???
* Eliminate Mohair Subsidies — $1 million annual savings.
*Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change — $12.5 million annual savings�WELL ISN’T THAT SPECIAL
* Eliminate Market Access Program — $200 million annual savings.
* USDA Sugar Program — $14 million annual savings.
* Subsidy to Organization for Economic Co-operation and Development (OECD) — $93 million annual savings.
* Eliminate the National Organic Certification Cost-Share Program — $56.2 million annual savings.
*Eliminate fund for Obamacare administrative costs– $900 million savings.
* Ready to Learn TV Program — $27 million savings..
* HUD Ph.D. Program.
* Deficit Reduction Check-Off Act.
*TOTAL SAVINGS: $2.5 Trillion over Ten Years
My question is, what is all this doing in the budget in the first place?
Maybe this is why the Democrats are attacking Paul Ryan. .
Politicians on both sides of the aisle might heed a new survey showing that nine in 10 young adults say the poor economy negatively impacts their life, and just 38 percent believe today’s leaders represent their interests.
Why pay attention? Because the poll by Generation Opportunity also disclosed that 76 percent of Americans ages 18 to 29 plan to vote in the presidential election.
“These numbers should put elected leaders on notice. What you see is a very pointed story of the impact the failed policies coming out of the White House over the course of the last three years are having on the daily lives and the long-term plans of young Americans,” said Paul T. Conway, president of Generation Opportunity and former chief of staff of the U.S. Department of Labor.
“Frankly, it is not a pretty picture — millions of young Americans are paying the price, in a very personal way, for failed leadership and failed policies.
“Millennials are savvy. They know national policies have personal impact — they feel it first-hand. So it is no surprise that so few believe their interests are being represented in Washington, and it is no surprise that they plan to make their voices heard this November.”
In the poll of more than 1,000 young adults conducted at the end of July, 89 percent of respondents said the poor economy is negatively impacting their life.
Among those impacted young people, 51 percent reduced their entertainment budget, 40 percent skipped a vacation, 38 percent drove less, 27 percent sold personal property including electronic appliances and cars, 17 percent skipped a wedding, family reunion, or other significant social event, and 26 percent moved in with their family, took extra roommates, or moved to a “downgraded” house or apartment.
The survey also revealed that 84 percent of respondents had planned to make a major life change but now might delay or not make it at all due to the current economy.
Among the changes cited: buying their own place (38 percent will not make the change), starting a family (31 percent), paying off student loans or other debt (26 percent), saving for retirement (25 percent), and getting married (23 percent).
Generation Opportunity is a nonpartisan organization that seeks to engage and mobilize young Americans on the important issues facing the nation.
The nation would be plunged into a deep recession during the first half of next year if Congress fails to avert nearly $500 billion in tax hikes and spending cuts set to hit in January, congressional budget analysts said Wednesday.
The massive round of New Year’s belt-tightening – variously known as the fiscal cliff or Taxmageddon – would disrupt recent economic progress, push the unemployment rate back up to 9.1 percent by the end of 2013 and cause economic conditions “that will probably be considered a recession,” the nonpartisan Congressional Budget Office said.
NEW YORK – During a time of escalating world tensions, it is generally considered unwise to reduce U.S. military preparedness.
With Iran racing toward nuclear-weapons capability, Syria on the brink of all-out civil war and Russia rebuilding its Cold War-era bases in the Middle East, now would be the time for any president to push for increased funding for U.S. forces.
Instead President Obama’s plans for military cuts, should he win a second term, make his drastic first-term defense slashes – about the only area in which he’s reduced government spending – look like child’s play.
A handful of key progressive organizations behind much of Obama’s first-term agenda have now submitted even more radical proposals to the White House to “transform” the U.S. military.
If these progressive groups have their way, U.S. armed forces will be reduced to a social work-style organization designed to combat “global warming,” fight global poverty, remedy “injustice,” bolster the United Nations and increase “peacekeeping” forces worldwide. The massive, second-term slashes to the military budget are to be used, shockingly, to invest in a defense posture based on “sustainable energy” and fighting worldwide climate change. There is also a plan to wrest control of the military budget from Congress.