Domestic Taxes

House GOP Conference Chairman Mike Pence (Ind.) criticized President Obama’s call for business taxes on Wednesday and said Obama should support an extension of all of the Bush tax cuts.

The No. 3 House Republican said it would be a “profoundly bad idea” to implement Obama’s proposal for certain business tax cuts if Obama also raises taxes on wealthier taxpayers.

“You don’t pay for tax breaks with tax increases, it would be a profoundly bad idea for this administration to advance a few, good boutique tax cuts but pay for them with across-the-board tax increases on job creators in this country,” Pence told reporters on a conference call Wednesday morning.

The National Association of Manufacturers (NAM) on Wednesday launched a multi-state, multi-million-dollar ad campaign opposing the energy tax increase President Obama seeks to pay for his $50 billion infrastructure initiative. 

The ad's message is that tax increases will limit job growth in the country. 

House Ways and Means Committee ranking member Dave Camp (R-Mich.) on Wednesday supported the call by House Minority Leader John Boehner (R-Ohio) to continue the George W. Bush-era tax cuts for the next two years.

Senate Finance ranking member Chuck Grassley (R-Iowa) offered tepid support for the tax proposals President Obama is expected to outline later Wednesday. 

"It's the old saying, the devil is in the details," Grassley said in prepared remarks. "Business investment incentives sound fine, but will they be paid for in a way that hurts job creation?" 

House Majority Leader Steny Hoyer (D-Md.) on Tuesday reiterated his opposition to continuing tax cuts for the wealthy that were enacted by President George W. Bush while continuing those measures that benefit the middle class. 

Eliminating the estate tax would be a "major mistake" and "would only benefit the wealthiest estates in the country," a policy analyst said Tuesday. 

"Our country is facing very large budget deficits," said Chuck Marr, the director of federal tax policy for the left-leaning Center for Budget and Policy Priorities in a blog post. "If we repeal the estate tax, deficits and debt will go up even more, pressure will grow to cut health care, education, and other key programs that people rely on. Sacrificing these priorities in order to give a tax cut to people who already are extremely wealthy is not a wise trade-off.

"We need a robust estate tax, and at a minimum we should keep the law as it was in 2009, which essentially exempted more than 99 percent of estates," Marr wrote.

Before Congress passed legislation in 2001, the exemption was a $1 million per-person tax-free exemption. The legislation gradually raised the exemption of $3.5 million per person and $7 million for a couple with a rate of 45 percent in 2009. The tax was repealed this year. 

Lawmakers have been trying to work out an agreement on the estate tax for 2011 but have yet to reach an accord. 

Sens. Ron Wyden (D-Ore.) and Judd Gregg (R-N.H.) on Tuesday said recent suggestions by President Obama's tax-reform panel mirror many of the proposals contained in their tax-reform bill that was introduced earlier this year.

The ranking Republican on the House Ways and Means Committee says the Obama administration's latest proposals to stimulate the economy could have little effect if taxes rise. 

Rep. Dave Camp (Mich.) on Tuesday praised the president’s plan for a permanent research and development tax credit for businesses, calling that action "long overdue." But the congressman said any economic boost from the White House’s proposals is likely to be negated if the Bush tax cuts are allowed to expire.  

"If Democrats in Washington want to finally talk about taxes I suggest we first start with eliminating this massive, job-killing tax hike Americans are already facing," Camp said in a statement.

Tax cuts signed into law by former President George W. Bush are set to expire at the end of the year unless Congress takes action. The White House wants lawmakers to extend the Bush-era tax cuts for the middle class while letting cuts for upper-income filers expire. 

Camp said raising taxes to cut taxes is "at best a zero sum game that will not improve our economy or the job market and is particularly disappointing in light of the billions of dollars of wasteful stimulus spending that could be cut instead."

The Obama administration is rolling out a series of proposals this week that are intended to boost the flagging economy. Besides the research and development tax credit, which would cost an estimated $100 billion, the White House is calling for a $50 billion infrastructure fund and a tax credit for new capital investments by businesses.   

The president is expected to detail the plan in full during a speech on Wednesday in Cleveland.

The White House was quick to say this morning that President Obama is unlikely to change his mind about letting tax cuts expire for the nation's wealthiest taxpayers. 

"The president has been clear about his support for extending tax cuts 
for the middle class and about ending the tax cuts for the wealthiest 2
 percent of Americans, which would cost $700 billion over 10 years to 
extend at a time when we are dealing with a fiscal crisis and the
 independent CBO [Congressional Budget Office] has listed it as the least effective form of growing the economy," White House spokeswoman Amy Brundage told The Hill on Tuesday. 

Peter Orszag, the former director of the Office of Management and Budget, argued Tuesday that Congress should extend the Bush-era tax cuts for two years and then let them all expire. 

In his speech Wednesday, President Obama is expected to propose allowing businesses to write-off 100 percent of new investments in plants and equipment, according to several reports.