Domestic Taxes

The Senate Finance Committee met on Thursday in what appeared to be the beginning stage of discussions on the fate of tax policy. 

---

"It was more exploratory to try and figure out what's the best policy for our country," said Senate Finance Chairman Max Baucus (D-Mont.) after the meeting concluded. 

Committee members from both parties met to discuss a broad ranges of tax issues, such as energy and reform, but talks seemed to focus on what to do about the tax cuts enacted by President George W. Bush that are slated to expire at the end of the year. 

How to handle the Bush tax cuts is a complicated question. The sluggish economic recovery has more than a few senators pressing to extend all of them, but doing so would cost more than $1 trillion and probably would add to the deficit.

"We're going to have to dig down and try to figure out a way to answer the big questions, namely what about the '01, '03 cuts in rates, what about the deficit, and AMT and so forth," Baucus said.

Members did not make a decision about marking up the Bush tax cuts before the August break.

"We raised that question," he said. "There's no strong feeling about any of those things." 

Committee member John Cornyn (R-Texas) said there was talk of marking up a bill in September. 

"My impression was they are talking September in terms of markup," he told reporters. 

Cornyn said that talks covered a number of tax matters, like the alternative minimum tax, energy, tax reform, and the Bush tax cuts. He also said there was some discussion about whether some of those issues could be combined. 

"The issue is whether to go small or go big and what can be done in the limited timeframe that we have," he said, adding. "We're dealing with the 2001, 2003 tax provisions, or are we talking about other things like energy or are we talking about a whole laundry list of tax [issues] like reform."

 

 

House Financial Services Chairman Barney Frank (D-Mass.) took the long, winding, possibly yellow brick road to explain.

Read more...

Federal Reserve Chairman Ben Bernanke said extending the tax cuts enacted during President George W. Bush's administration could provide a boost to the economy. 

Bernanke said while the tax cuts would help, lawmakers need to find a way to offset them. 

"In the short-term, I would believe that we ought to maintain a reasonable degree of fiscal support, stimulus for the economy. There are many ways to do that. This is one way," Bernanke told the House Financial Services Committee on Thursday. "There are other ways as well."

"In the longer term, I think we need to be taking steps to reassure the American people and the markets that our fiscal situation is going to be well-controlled."

Read more...

The battle over deficit spending got heated on the House floor Thursday as lawmakers voted to extend unemployment benefits for six more months. 

The House voted 272-152 to pass a $34 billion six-month extension of unemployment benefits, retroactive back to the June 2 expiration. 

After a war of words on the floor, 31 Republicans supported the bill and 10 Democrats opposed the measure. 

Republicans and Democrats were free-flowing with their comments, blaming the other party for the recession and the lack of a faster economic recovery. 

Read more...

Sen. Chuck Grassley (R-Iowa), the ranking member on the Senate Finance Committee, appeared to have some trepidation about a committee meeting slated Thursday evening on the fate of the Bush tax cuts. 

Read more...

Sen. Judd Gregg (R-N.H.) said, though, that he believes the large majority of the proposal should be composed of spending cuts.

Read more...

The sluggish economic recovery has some key Senate Democrats wondering if the Bush tax cuts for the wealthy should be extended. 

Read more...

The Bush tax cuts shouldn’t be allowed to expire at the end of the year, Sen. Kent Conrad (D-N.D.) said Wednesday. 

Conrad, chairman of the Senate Budget Committee, said taxes — individual income taxes and capital gains rates — on the nation’s wealthiest Americans shouldn’t be allowed to rise until the economy is in better shape, according to news reports. 

Conrad said that neither spending should be cut nor taxes raised while the economy grapples for a solid grip on recovery. 

The Senate Finance Committee is weighing whether to move forward on a markup to extend some of the tax cuts enacted under President George W. Bush. 

Read more...

House Ways and Means Chairman Sandy Levin (D-Mich.) said on Wednesday that the Senate would take the lead in extending tax cuts enacted by President George W. Bush. 

Read more...

The unlikely duo of AFL-CIO President Richard Trumka and former Treasury secretary Robert Rubin told reporters on a conference call Wednesday that the estate tax — which has lapsed since the beginning of the year — should be put back in place before the August congressional break.

When asked why they both support reinstating the tax despite past differences, Trumka joked, “The reason we agree is Bob has finally seen the light.”

Rubin and Trumka have often clashed, with labor leaders warning Democrats to distance themselves from the free-trade policies advocated by Rubin and other Democrats with ties to Wall Street. During the 2008 presidential campaign, Trumka prepared a slideshow presentation arguing it was “hard to tell the difference” between the policies of Rubin and then-Treasury Secretary Henry Paulson, who served under a Republican president.

Both Rubin and Trumka said restoring the tax would be “sound policy.”

Read more...