is pushing the Buffet rule. Finally, a member of Congress is pushing a key piece of Obama's budget.
Obama's budget: Help for workers, taxes for the rich
By Jeanne Sahadi
President Obama on Tuesday released a nearly $4 trillion budget proposal for 2015 that includes more generous tax breaks for working families while scaling back breaks for the rich.
His budget, while not expected to be enacted by Congress, does offer the president's fiscal policy vision for the country...the White House says Obama's blueprint sticks to the topline spending limits already set by the House and Senate for 2015.
But the plan also features a $56 billion growth and investment package that includes money for universal pre-K, infrastructure and job training. Obama proposes to pay for those initiatives through additional spending restraint and increased revenue.
Impose a "Fair Share Tax": As he has called for before, Obama wants Congress to implement the so-called Buffett Rule, which would require people making over $1 million to pay at least 30% of their income, after charitable contributions, in federal taxes. <...>
Cap the value of deductions for high-income households: Obama wants to limit the value of itemized deductions, as well certain tax exclusions, to 28% of the amount claimed. <...>
Limit savers' combined balance across tax-preferred accounts: The president wants to prohibit contributions to tax-advantaged retirement accounts once a person's combined balance exceeds a certain level. Such accounts include IRAs and 401(k)s. <...>
Raise the estate tax: The president wants restore the 2009 estate tax exemption levels and estate tax rate.
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http://money.cnn.com/2014/03/04/pf/taxes/obama-budget-taxes/
I posted some analyses, but it sank. So I'll repost it here:
What’s Not DOA in the Obama Budget
It’s of course tempting to decry the President’s budget as “dead on arrival” but I wouldn’t be nearly so quick to go there. To dismiss its content because it’s not going to become the nation’s budget is painting with far too broad a stroke. Here are a number of ways that some of the ideas that administration trotted out today will be referenceda in months and even years to come.
–Though the budget, wisely, proposes to spend beyond the too-tight caps in place from earlier budget deals, that extra $55 billion may well not see the light of day. Still, while legislators, as part of the Murray/Ryan deal, agreed to top-line appropriation numbers, the President’s budget provides the White House’s recommendations as to how those spending levels should be spread across agencies and programs. That blueprint will surely be in the mix when appropriators allocate discretionary spending.
–Increasing the amount of the Earned Income Tax Credit going to childless adults is an idea that’s been espoused by partisans on both sides of the aisle...The fight will be over payfors, including closing the carried-interest loophole, which virtually no one defends—it’s awfully hard to provide a rationale for the favorable tax treatment of the earnings of private equity fund managers—but still remains in place. But I’d bet that eventually, some version of what the President proposed today will become law.
–Tax reform, at least on the corporate side. I stumbled on two articles today that ticked off tax reform ideas that both President Obama and Republican House chief tax-writer Dave Camp agree on (including carried interest, btw). Yes, it’s true that many of his fellow R’s ran from Camp (they decamped?) as quickly as they could. But especially on the corporate side, where both parties are arguing for a lower rate and broader base <...> –Transportation spending: The corporate proposals also relate to this one, as both President Obama and Rep. Camp take some one-time revenues raised from the transition to a new approach to taxing multinationals and use those resources for improving our transportation infrastructure. To be clear, Obama and Camp’s ideas for international tax reform are quite different, but any such change involves a one-time levy on something like $2 trillion in deferred foreign earnings...More broadly speaking, I’ve heard many dismiss the President’s budget as a “political document.” Um…yep. And, as such, it will play a significant role in our political debate on the role of government, much as I suggested here. In this regard, it’s far from DOA, both in the specifics noted above and in the broader case for a more activist role for government in meeting the challenges and market failures facing way too many Americans.
http://jaredbernsteinblog.com/whats-not-doa-in-the-obama-budget/
How corporate America is losing the debate on taxes
By Jia Lynn Yang
If there is one clear loser in President Obama's budget this year, it's U.S. multinationals...the 2015 budget proposes a total of more than $276 billion in higher taxes on overseas earnings for U.S. multinationals over the next decade, about $120 billion more than last year's budget....So much for the White House's attempts to strike common ground with big company chief executives, who have been howling for years about paying too much in taxes with the federal corporate tax rate at 35 percent.
The trouble with those complaints is that many companies don't pay nearly that rate. GE, for instance, in its most recent annual filing said it paid an effective tax rate of 4.2 percent. (See this graphic we ran last year showing taxes paid by companies in the Dow 30.) These firms insist that the high rate is merely forcing them to find complex ways to lower their tax bills. But with this budget, it's clear the administration isn't buying it.
"The problem is not an international tax system that unacceptably handicaps U.S. businesses," said Ed Kleinard, a professor at the University of Southern California's Gould School of Law who has done extensive research on the way companies shuffle their income overseas to lower their tax bills. "Instead the problem is an international tax system both in the United States and other countries that U.S. multinational firms have demonstrated they are highly skilled at gaming."
The president's budget is the latest sign for corporate tax lobbyists that the winds are perhaps shifting against them. Last month's tax reform plan from House Ways and Means Chairman Dave Camp (R-Mich.) also included a number of ideas unpopular with business, including a bank tax. His section on international tax reform was somewhat more generous to big firms, giving them a lower rate on overseas earnings with anti-abuse measures that Kleinbard says don't go far enough...expectations are low that either the president or Camp's policies will ever make the leap to reality. But after spending hundreds of millions of dollars on lobbyists, corporate America is not exactly seeing its worldview reflected in these blue prints.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/03/05/how-corporate-america-is-losing-the-debate-on-taxes/
From the two articles linked to in Berstein's piece:
<...>
But the overlap may one day form the basis for the first tax revamp since 1986. Here is a list of tax changes in the president's budget that Camp also highlighted for reform.
* Carried interest.
The "carried interest" tax provision lets private equity partners pay lower taxes on large portions of their incomes. Camp wants to eliminate this tax break, putting him at odds with other Republicans who steadfastly defend it. Obama's budget reiterates his longstanding call for repealing carried interest, which helped former Republican presidential hopeful Mitt Romney pay a low effective tax rate. Eliminating carried interest could raise $17.4 billion over 10 years, according to a November 2013 estimate from the Congressional Budget Office.
<...>
* Oil and gas.
While Republicans usually defend corporate oil and gas tax breaks whenever Obama targets them for repeal, Camp's reform plan would eliminate the industry's tax breaks and preferred accounting rules. Obama recommends repealing $4 billion in tax subsidies for oil, gas and other fossil fuel producers.
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http://www.reuters.com/article/2014/03/04/us-usa-fiscal-tax-factbox-idUSBREA231LI20140304<...>
Bank tax: To the chagrin of Wall Street, Camp’s plan included a tax on the biggest U.S. banks and insurance companies. Obama also proposes what he calls a financial crisis responsibility fee, designed to raise about $56 billion over 10 years. Camp’s would raise more — about $86 billion.
Cutting corporate taxes: Obama would cut the U.S. corporate tax rate to 28%, down from its current top rate of 35%. For manufacturers, however, Obama would lower the corporate rate to 25%. The difference with Camp is just a few percentage points: the Michigan Republican wants a top corporate rate of 25%.
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http://blogs.marketwatch.com/capitolreport/2014/03/04/what-tax-plans-from-barack-obama-and-dave-camp-have-in-common/
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