Domestic Taxes

The GOP co-chairman of the White House fiscal commission said a value-added tax would require income tax changes.

Citigroup CEO Vikram Pandit has pledged support for financial regulatory reform, according to a letter obtained by The Hill. 

A liberal lawmaker on the White House fiscal commission warned its Republican co-chairman against relying on cuts to seniors’ entitlement benefits to craft a plan to rein in the deficit.

Rep. Dan Lungren (R-Calif.) on Monday introduced legislation repealing the business reporting requirement in the new healthcare law. 

Starting in 2012, businesses purchasing more than $600 of goods or services from another business must provide detail of those transactions to the IRS. The new requirement is expected to capture lost revenue from companies that under-report on their tax returns and generated $17 billion over 10 years. Lungren argues it will create costly compliance headaches for store owners. 

A proposed financial regulatory reform bill contains loopholes allowing for future bailouts and Republicans will stand united against the bill, Senate Minority Leader Mitch McConnell (R-Ky.) said Monday on the floor. 

McConnell expects all 41 Senate Republicans will vote against moving to debate the measure at 5 p.m. today. 

"A vote for cloture is a vote that says we're doing listening to the American people on this issue," he said. "A vote against ending this debate is a vote for bipartisanship, for working out an iron-clad solution to the problem of 'too big to fail."

Democrats need 60 votes tonight to end a Republican filibuster on the bill and bring the debate to begin on the measure. 

"As we consider this legislation today, Republicans are also acutely aware of the fact that government solutions to big, complex problems like this one are rarely as effective as they're made out to be, especially when they're rushed," McConnell said. 

Democrats and Republicans have been trying to reconcile the major components of the bill but hadn't reached an accord by Monday afternoon while Senate Banking Chairman Chris Dodd (D-Conn.) and the panel's ranking member Richard Shelby (R-Ala.) met this afternoon to discuss the bill. 

House Democrats are encouraging members to make the tax cuts they’ve delivered a key part of their reelection strategy.

The groups blasted tax increases on businesses and wealthy individuals and families in the budget in a letter to lawmakers.

Rep. Chaka Fattah (D-Penn.) on Thursday called for President Obama's debt commission to condider legislation that would tax all transactions to help reduce the country's growing deficit and $12.8 trillion debt. 

Obama's Bipartisan National Commission on Fiscal Responsibility and Reform will begin discussions next week on ways to stem the tide of red ink in Washington.

Fattah has introduced legislation imposing a 1 percent tax on all transactions, retail and financial, except stock sales. The tax would be broadly applied to any transaction involving cash, check or credit card, and would replace existing federal taxes on individuals and businesses. 

The White House is looking at several revenue raisers to pay for legislation extending several expired tax breaks, lobbyists told The Hill. Read more...

Sen. Chuck Grassley (R-Iowa) on Thursday said findings by the nonpartisan Congressional Budget Office show that the new health care mandate is a tax that will hit people President Obama vowed to protect from tax increases. 

"The mandate is a tax increase that hits middle-class America the hardest," he said in prepared remarks. "And these people make less than $250,000, which breaks the president's pledge to not raise taxes on individuals earning less than $200,000 and families earning less than $250,000 a year." 

The new healthcare law obligates the IRS to penalize taxpayers who fail to purchase adequate health insurance, a rule known as the health care mandate. Grassley argues that since the mandate amends the Internal Revenue Code the penalty is actually a new tax.

The CBO predicts 3.9 million people will pay $4 billion to the IRS between 2017 and 2019 for not having adequate health coverage. It also projects that 76 percent of them will make no more than roughly $59,000, for individuals, and $120,000, for families. Grassley contends these are not wealthy taxpayers by Obama's definition and therefore should not have to face a tax increase. 

"These individuals and families are middle-income and lower income," Grassley said. "They aren't wealthy. The president and his supporters in Congress are celebrating the benefits of health reform, but they also have an obligation to acknowledge the other side of the coin."

The CBO estimates that 21 million non-elderly residents will be uninsured in 2016, but won't be penalized. Some will be exempt based upon income or because premium costs exceed a certain percentage of their income. Others will be waived from having to comply with the mandate because of hardship or religious beliefs.