Treasury Says State Tax Cuts Ok If Separated From Virus Aid
JEFFERSON CITY, Mo. Responding to concerns from state officials, the U.S. Treasury Department said Wednesday that states can cut taxes without penalty under a new federal pandemic relief law so long as they use their own funds to offset those cuts.
Republican governors, lawmakers and attorneys general have expressed apprehension about a provision in the wide-ranging relief act signed by President Joe Biden that prohibits states from using $195 billion of federal aid to either directly or indirectly offset a reduction in net tax revenue. The restriction could apply through 2024.
A treasury spokesperson told The Associated Press that the provision isnt meant as a blanket prohibition on tax cuts. States can still offset tax reductions through other means.
We should not let federal restrictions weigh in on that direction were going as a state, Hutchinson said.
Why Do The Dc Republicans Have Any Credibility
President Biden has introduced his American Jobs Plan which will fund investments in our people and our infrastructure with higher taxes on corporations and individuals who make over $400,000.00 per year. S&P predicts that Bidens infrastructure plan will create 2.3 million jobs by 2024, inject $5.7 trillion into the economy which would be 10 times what was lost during the recession and raise per-capita income by $2,400, Axios reported.
This should come as no surprise to anybody but the sabotage minded D.C. Republicans have come out in opposition to Bidens plan. One of the key talking points from the right is that the proposed tax increases would be job killers. Senator Susan Collins alleged that the proposed 28% corporate tax rate would cause the loss of jobs. Not to be outdone in the pessimism sweepstakes, Senator Tim Scott in the GOP response to President Bidens address to members of Congress last week contended that the plan contains: The biggest job-killing tax hikes in a generation.
Now what I find interesting is that the GOP has been erroneously prognosticating that tax increases on the rich would hurt the economy since way back in 1993. Its like Collins and Scott simply cut and pasted GOP talking points from the Clinton and Obama years. Lets take a little trip down memory lane and see how previous D.C. Republican predictions of doom and gloom played out.
Gop Must Stop Believing In Magic
Im not making a plea for larger government just a plea for economic sanity.;If Congress in its all-seeing wisdom wants to spend $700 billion on the military, billions of dollars on farm subsidies;and so on,;it must either raise enough money in taxes to pay for the programs it authorizes or reduce the size of government.;
Instead, although Republicans controlled the White House, the Senate;and the House from 2017 to 2019, they;chose not to make any substantial cuts to government programs that would balance the revenue lost by their;series of massive unfunded tax cuts.
Unquestioning;and unsubstantiated;belief in the magical power of tax cuts isnt a viable economic policy. The;GOP is putting America on an unsustainable path that is disastrous both for;its;fiscal future and for the hopes of people trying to get ahead.;
Steven Strauss;is a lecturer and;visiting professor at;Princeton University’s;Woodrow Wilson School;of Public and International Affairs, an economic development specialist and a member of USA TODAYs Board of Contributors. Follow him Twitter:;
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Republicans View 2017 Tax Law The Way Democrats View Obamacare: As A Signature Achievement They Will Fight To Keep
Republicans have taken an aggressive approach to President Bidens plans to finance his roughly $6trillion agenda: Dont mess with their 2017 tax cuts.
Even before Biden formally unveiled his plans, Republicans sent a message that they consider the 2017 law that slashed personal and corporate tax rates as a sacrosanct measure that theyve no intention of gutting.
Sen. Roger Wicker explained this ethos in unusually blunt fashion when he returned to the Capitol on April12 after Biden met with a small bipartisan group of lawmakers involved in infrastructure issues, telling the group he was targeting the very taxes that Republicans slashed four years ago.
Clearly there are parts of his program that are non-starters for Republicans. The pay-for, I view the pay-for as a problem, Wicker told reporters in the Capitol after that meeting. I view the 2017 tax bill as one of my signature achievements in my entire career.
In many ways, Wicker signaled to Biden that Republicans view the 2017 law in the same manner that Democrats regard the 2010 passage of the Affordable Care Act: a signature achievement of domestic policy that they will defend in every way possible.
The two laws obviously had very different goals and very different results, one trying to provide health insurance for millions of uninsured Americans and the other reducing taxes on corporations and the wealthy.
Why Do Republicans Oppose Extending The Payroll Tax Cut
NYT reports that many Republicans are opposed to extending the payroll tax cut proposed by the Obama administration.
The payroll tax cut affects SS and Medicare contributions that employers deduct from their workers paychecks. It would mostly benefit low and middle-income Americans.
Many of the Republicans who oppose extending the tax cut have demanded an extension of the Bush tax cuts for the wealthiest Americans. Why do you think Republicans support extending tax cuts for wealthy Americans while opposing the extension of tax cuts for low- and middle-income Americans?
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Gop Lawmakers’ Education Spending Bump Buys Down Property Taxes
Republicans on Thursday also unveiled a plan to increase state support for public schools. The plan increases state money paid to schools, but doesn’t increase the amount of money schools will have to work with, because it simply replaces school funding previously provided;through property taxes with funding from the state.
Under the plan, the state would:
- Buy down property taxes that fund schools by increasing;state general school aid funding by $408 million over two years.
- Provide $167 million to replace property tax funding sent to charter schools associated with the City of Milwaukee, University of Wisconsin-Milwaukee, and UW-Parkside.
- Spend $72 million on buying down property taxes directed to;the Wisconsin Technical College System.
Overall, the plan would cost $647 million over two years.;
The proposed spending plan is a sizable state spending increase;from the education plan approved by the Republican-controlled budget committee last month, which would have spent $1.4 billion less than Evers proposed on K-12 schools. That;Republican plan spurred concerns from the U.S. Department of Education, which said it could mean the state would fall short of federal requirements for Wisconsin to receive $2.3 billion in school aid under the two most recent coronavirus aid packages.;
According to the Legislatures nonpartisan budget office,;the new school funding proposed Thursday would bring Wisconsin into compliance with the federal requirements to receive the aid.;
An Exhaustive Lobbying Campaign
Almost immediately after Mr. Trump signed the bill, companies and their lobbyists including G.E.s Mr. Brown began a full-court pressure campaign to try to shield themselves from the BEAT and GILTI.
The Treasury Department had to figure out how to carry out the hastily written law, which lacked crucial details.
Chip Harter was the Treasury official in charge of writing the rules for the BEAT and GILTI. He had spent decades at PwC and the law firm Baker McKenzie, counseling companies on the same sorts of tax-avoidance arrangements that the new law was supposed to discourage.
Starting in January 2018, he and his colleagues found themselves in nonstop meetings roughly 10 a week at times with lobbyists for companies and industry groups.
The Organization for International Investment a powerful trade group for foreign multinationals like the Swiss food company Nestlé and the Dutch chemical maker LyondellBasell objected to a Treasury proposal that would have prevented companies from using a complex currency-accounting maneuver to avoid the BEAT.
The groups lobbyists were from PwC and Baker McKenzie, Mr. Harters former firms, according to public lobbying disclosures. One of them, Pam Olson, was the top Treasury tax official in the George W. Bush administration.
This month, the Treasury issued the final version of some of the BEAT regulations. The Organization for International Investment got what it wanted.
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Csb Bancorp Inc Declares Third Quarter Cash Dividend
But together, Biggs said he’s not sure how well it works. “Those people who do save more than $2,400 may take that figure as a cap and reduce their saving, even if they could benefit from the Roth treatment,” he said. “Moreover, if bosses or human resource managers who decide whether a firm sponsors a plan don’t like the cap, they may be less willing to have a 401 for their employees.”
Money For Roads And Schools
The bigger question for Democrats and think tanks like Policy Matters Ohio is whether income tax cuts would be better spent on state services.;
The Senate plan would cut $874 million from Ohio’s budget.;
That’s money Senate Minority Leader Kenny Yuko, D-Richmond Heights,;would rather see spent funding public schools, repairing roads, fixing lead pipes and;increasing internet access in underserved communities.;
“Making our middle class stronger is crucial for a robust economic recovery. However, the majoritys proposed tax cuts will not achieve that goal,” Yuko said in a statement. “For almost 20 years, the General Assembly has prioritized income tax cuts that disproportionately benefit the wealthy, instead of policies that support workers and families.”
Anna Staver is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.
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Democrats Hope To Undo Many Trump Tax Cuts To Fund Biden’s $35 Trillion Budget Plan
Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee, has proposed rolling back much of the 2017 GOP tax cuts to help pay for President Biden’s $3.5 trillion social spending plan.hide caption
Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee, has proposed rolling back much of the 2017 GOP tax cuts to help pay for President Biden’s $3.5 trillion social spending plan.
Democrats hope to unwind many of the tax cuts Republicans enacted under former President Donald Trump as a way to pay for the majority of the $3.5 trillion spending bill currently under consideration in Congress.
House Ways and Means Committee Chairman Richard Neal, D-Mass., released details Monday of a plan that includes increasing the top corporate tax rate to 26.5%, up from the current rate of 21%, and restoring the top rate to 39.6% for individuals earning more than $400,000 and married couples earning over $450,000.
The changes are part of the tricky balancing act plaguing Democrats’ efforts to approve the bulk of President Biden’s domestic agenda. Leaders are attempting to prove to skeptics within their own party it is possible to finance a vast expansion of federal spending on everything from housing and health care to financial support for families and climate change all without increasing taxes on everyday Americans.
Republicans Not Biden Are About To Raise Your Taxes
President Trump built in tax increases beginning in 2021, for nearly everyone but those at the very top.
Mr. Stiglitz, a university professor at Columbia, is a Nobel laureate in economics.
The Trump administration has a dirty little secret: Its not just planning to increase taxes on most Americans. The increase has already been signed, sealed and delivered, buried in the pages of the 2017 Tax Cuts and Jobs Act.
President Trump and his congressional allies hoodwinked us. The law they passed initiallylowered taxes for most Americans, but it built in automatic, stepped taxincreases every two years that begin in 2021 and that by 2027 would affect nearly everyone but people at the top of the economic hierarchy. All taxpayer income groups with incomes of $75,000 and under thats about 65 percent of taxpayers will face a higher tax rate in 2027 than in 2019.
For most, in fact, its a delayed tax increase dressed up as a tax cut. How many times have you heard Trump and his allies mention that? They surmised correctly, so far that if they waited to add the tax increases until after the 2020 election, few of the people most affected were likely to remember who was responsible.
Looking at the analyses of the nonpartisan Congressional Budget Office and the Joint Committee on Taxation at the time the December 2017 tax bill was enacted, we see very clearly how different income groups are affected by the Trump tax plan. And its disturbing.
They must be stopped.
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The Tax Cut Will Pay For Itself
It was an article of faith among Republicans that their tax cut wouldnt just boost economic growth, but would actually generate more revenue than the old, higher tax rates. Not only will this tax plan pay for itself, but it will pay down debt, Mnuchin said. Kevin Hassett, then chair of the White House Council of Economic Advisers, agreed: You dont really need to have a big growth effect to have Secretary Mnuchin be correct. Former Rep. Jeb Hensarling, chair of the House Financial Services Committee, insisted that economic growth would be more than enough to make up for the lower tax rates.
That growth failed to materialize. Unsurprisingly, so have higher tax revenues. Corporate tax receipts plummeted from $240 billion to $140 billion in the first quarter after the tax cut passed, and have stayed at that level ever since.
So what happened to the federal deficit? Republicans lied about the effect of their cut on tax receipts and at the same time they also decided to stop worrying about keeping spending down. As a result, the federal deficit has gone upand thats not even accounting for the COVID-19 stimulus spending. This comes as no surprise to anyone who has heard the same Republican tax arguments for decades and now recognizes them for the fabrications they are.
Who Truly Wants Tax Cuts For Rich
Donald TrumpTexas announces election audit in four counties after Trump demandSchumer sets Monday showdown on debt ceiling-government funding billPennsylvania AG sues to block GOP subpoenas in election probeMORE and Republicans for handing out tax breaks to their wealthy friends and donors. Joe Biden last week at the national convention called Democrats the party for the working class and blue collar Americans. But is that really the case? Let us take a look at the two main tax stimulus proposals in front of Congress.
The plan from Trump would cut the payroll tax over the rest of the year. It would provide 140 million low and middle income Americans a 6 percent tax cut and would lower payroll costs for 30 million small businesses. The typical family with an income of around $60,000 would receive a $1,000 pay raise for the rest of the year. Nancy PelosiNancy PelosiOvernight Energy & Environment Presented by the League of Conservation Voters EPA finalizing rule cutting HFCsDemocrats steamroll toward showdown on House floorPanic begins to creep into Democratic talks on Biden agendaMORE has stated she opposes the idea, even though she supported this when Barack Obama was president. Trump signed an executive order to at least delay the payroll tax for those who make less than $100,000 during the rest of the year.
Stephen Moore is an adviser at Freedom Works and a member of the White House economic recovery task force. Find him on Twitter .
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Why Do Republicans Want To Repeal Obamacare So Much Because It Would Be A Big Tax Cut For The Rich
There are going to be so many tax cuts for the rich, you’re going to get tired of tax cuts for the rich. You’re going to say, Mr. President, please don’t cut taxes for the rich so much, this is getting terrible.
And it will start;when Republicans repeal Obamacare.
This is the Rosetta Stone for understanding why conservatives have acted like subsidized health care was the end of the republic itself. It wasn’t just that it had the word Obama in its name, which, in our polarized age, was enough to ensure that 45 percent of the country would despise it. No, it was that Obamacare was one of the biggest redistributive policies of the last 50 years. The Republican Party, after all, exists for what seems like;the sole purpose of reversing;redistribution.
A quick recap: Obamacare is a kind of three-legged stool. First, it tells insurance companies that they can’t discriminate against sick people anymore; second, it tells people that they have to buy insurance or pay a penalty, so that everyone doesn’t just wait until they’re sick to get covered; and third, it helps people who can’t afford the plans they have to buy be able to. Which is to say that you need to come up with a whole lot of money to make this work money that Obamacare gets by taxing the rich. Indeed, at its most basic level, it raises taxes on the top 1 percent to pay for health insurance for the bottom 40 percent.
Getting tired of tax cuts for the rich yet?