Domestic Taxes

House Majority Leader Steny Hoyer (D-Md.) said it was his preference to address expiring tax cuts before the election, but acknowledged that it could slip until after the elections.

Hoyer suggested on Tuesday he agreed with Speaker Nancy Pelosi (D-Calif.), who said this weekend that she hopes that Congress will act to extend most of the tax cuts set to expire at the end of the year before the election, while letting income taxes on the highest earners tick upward.

"The timing on that, we may well consider that over the next four weeks from September 14 to October 8," Hoyer said of the expiring tax cuts during a conference call to promote Democrats' economic stewardship during the August recess.

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Geithner is optimistic Congress will extend most tax cuts while ending those for the wealthiest taxpayers.

Republicans aren't likely to win a legislative battle to extend all of former President George W. Bush's tax cuts, a House conservative leader conceded Monday.

Rep. Tom Price (Ga.), the chairman of the conservative Republican Study Committee (RSC), acknowledged that the the Bush tax cuts, which are set to expire at the end of the year, won't be extended in their entirety, as GOP leaders have called for.

"No, I don't see it," Price said on CNBC when asked if there was any chance that all of the Bush tax cuts could be extended.

Republicans in the House and Senate, including members like Price, have pushed the Democrats in control of the House and Senate on taxes, warning voters during the summer campaign season that Democrats would raise taxes.

President Obama and congressional Democrats have said they wish to extend all of the Bush tax cuts with the exception of the breaks for households earning over $250,000 a year and individuals earning over $200,000 per year. Democrats would let those high-end tax cuts expire, a move that Republicans have attacked, reasoning that they would harm small-business owners who treat their company's income as their own.

The expiring tax cuts are setting up a pitched political battle over the tax rates this fall. House Speaker Nancy Pelosi (D-Calif.) said on Sunday that "it would be [her] hope" to hold a vote on the tax cuts — which would presumably let high-income tax rates rise — before Election Day. But holding that vote before what's expected to be a tough election for Democrats could put endangered incumbents and other centrist Democrats in a tough position on the issue of taxes.

Republicans are finding themselves in a bit of a tough situation of their own over the taxes, too, facing questions over how to pay for the hole in the budget that would be created by extended cuts. Extending allcraziness. They're going to increase taxes on virtually every single American, they're going to try to pass their national energy tax, and they're going to do some favors for unions — 'card-check,' facilitating union formation all across this country."

--Cross-posted from Blog Briefing Room. 

The Senate on Monday effectively postponed legislation providing more than $16.1 billion next year to state Medicaid programs.

The vote to table the bill was 95 to 0. 

The Medicaid proposal, part of a $26 billion proposal designed to help states weather a tough economy, ran into trouble Monday when the Congressional Budget Office estimated the package would add $5 billion to the budget deficit.

Democratic leaders say they'll tweak their proposal to pay the entire tab. A vote on the revised bill is expected as early as Wednesday. 

--Cross-posted from Healthwatch.

Businesses in the U.S. have hired more than 5 million workers this year who were unemployed for at least two months, making those employers eligible to receive more than $10 billion in total tax credits, according to a government study released Monday. 

The employers are eligible for the financial breaks under the Hiring Incentives to Restore Employment (HIRE) Act, which established tax exemptions and credits to encourage hiring in the private sector. 

The state-by-state hiring report released by the Treasury Department shows that, between February and June, U.S. business hired an estimated 5.6 million new workers who had been out of work for 60 days or more. If those 5.6 million employees remain employed for the rest of the year, their employers would be eligible for an estimated $6.2 billion in payroll tax savings. 

If 75 percent of the new hires remain employed for 52 weeks, their employers would receive another $4.2 billion in tax credits, bringing the potential tax savings to $10.4 billion, the report said.

The House failed Friday to pass a bill that would have repealed the mandate included in the healthcare law requiring small businesses to file 1099 forms to the IRS for purchases to suppliers over $600. The mandate is set to take effect in 2012. 

House Republicans were angered today at the way Democrats brought up the measure for consideration and the controversial offset to pay for its cost. 

The measure failed to get the two-thirds majority needed -- on a 241-154 vote -- with 153 Republicans voting against the measure and one Democrat opposing. 

House Ways and Means Chairman Sander Levin (D-Mich) said by defeating the bill "Republicans made clear that they care more about some companies that ship jobs overseas than small businesses that face a potential burden by this reporting requirement." 

"Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most," he said. 

House Republicans voiced dismay Friday over a measure that addresses a GOP-backed issue but uses a controversial offset to pay for the bill. 

House Ways and Means Chairman Sandy Levin (D-Mich.) offered a bill Friday on the floor that would repeal the mandate included in the healthcare law requiring small businesses to file 1099 forms to the IRS for purchases to suppliers above $600. The mandate is set to take effect in 2012. 

The measure is expected to get a vote later today before the House recesses until mid-September. Democrats put the bill on the suspension calendar today, requiring a two-thirds vote to pass.

Levin argued that bill would be good for small business and would reduce tax incentives that encourage multinational companies to ship jobs overseas. He said it also closes an "egregious loophole in the gift tax, the grantor retained annuity trust, that is only available for extremely wealthy individuals."

The House easily passed Friday a bill that encourages foreign investment in U.S. real estate by doubling the amount of foreign capital that can be invested in publicly traded Real Estate Investment Trusts (REITs). 

The measure passed by a vote of 402-11 — with 10 Republicans and one Democrat opposing the measure.

Rep. Gene Taylor (D-Miss.) was the lone Democrat opposing the bill and while the 10 Republicans were: Reps. Paul Broun (Ga.), John Campbell (Calif.), John Duncan (Tenn.), Jeff Flake (Ariz.), Scott Garrett (N.J.), Tom McClintock (Calif.), Ron Paul (Texas), Tom Petri (Wis.), Dana Rohrabacher (Calif.) and Ed Royce (Calif.). 

There is no chance of Congress implementing a value-added tax (VAT), a top House Democrat said Thursday.

Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee, said that the VAT was "as dead as a doornail," despite Republicans' caution that Democrats may try to pass one.

"No, it's as dead as a doornail," Frank said on CNBC.