Jun 17, 2011
This week’s Republican Presidential debate made it pretty clear how the candidates feel about taxes. They really, really don’t like them…
How will all of this play into what is happening on Capitol Hill? For starters, in the ongoing debt ceiling debate it draws the Republican line in the sand on no new taxes that much deeper…
Jun 17, 2011
Updates on deficit reduction negotiations as of June 17th, 2011:
Earlier this week, Politico reported that Vice President Joe Biden’s deficit reduction group resumed talks in earnest, with a focus on bridging the $1.1 trillion gap in spending cuts that has emerged between Democrats and Republicans. As a start, some Democrats have proposed a 3:1:1 ratio, where every $3 in spending cuts would be coupled with $1 in new taxes and $1 in stimulus. In addition, the idea of joining deficit reduction with an employee payroll tax reduction to stimulate the economy has been gaining steam. The New York Times reports that a job-creation plan of some sort is likely to emerge from these talks. In addition, various Members of Congress from both parties have renewed the call to allow multinational companies based in the United States to bring back profits from overseas at reduced tax rates.
Jun 3, 2011
Updates as of June 3rd, 2011:
May 20, 2011
Update as of May 20, 2011:
Treasury Reaches the Debt Ceiling
On Monday, May 16th, Treasury Secretary Timothy Geithner announced that the Treasury had reached the debt ceiling and would take “extraordinary measures” to prevent the United States from defaulting on debt payments. Without Congressional approval to raise the debt limit, the U.S. government would ultimately stop paying its bills. However, Geithner has also announced that the Treasury Department will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay any defaults until August 2nd.
May 19, 2011
On Monday (May 16th), the federal government hit the debt ceiling of $14.3 trillion. What does that mean? The best analogy we’ve seen is that it is much like maxing out on a credit card. To make matters more difficult, that ceiling can’t be raised without Congressional approval and there is no deal in sight to do that. So what happens next?
May 6, 2011
Update as of May 6th, 2011:
All eyes in D.C. are turning toward the impending debt ceiling debate. Treasury Secretary Tim Geithner sent an open letter to Congress outlining “extraordinary” steps the Treasury will use to stave off hitting the debt ceiling until August 2nd. In his letter, Secretary Geithner reiterated that a failure to raise the $14.3 trillion debt limit “would have a catastrophic economic impact that would be felt by every American.” The next few weeks will give us a better sense of how Congress plans to tackle this issue.
May 4, 2011
This week (Tuesday, May 3rd), Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, raised the fairness of the charitable deduction as an issue for Congress to consider during talks on a tax reform. Wealthy taxpayers can write off a (larger) portion of their charitable gifts while those in the middle and lower brackets (who may not itemize their tax returns) aren’t able to do the same.
Baucus notes, “Only one-third of taxpayers itemize their returns. That leaves two-thirds of all Americans unable to receive a tax benefit for charitable deductions.”
ACR’s Sandra Swirski warns the philanthropic community to take the senator’s comments and concerns seriously saying, “Any position [Sen. Baucus] takes has to be taken seriously, because he is an important player in tax reform.”
Read the full article below.
Apr 21, 2011
Here’s something we’ve just started to digest – the April 4th decision by the U.S. Supreme Court in the Arizona Christian School Tuition Organization v. Winn case.
In a 5-4 decision, the Supreme Court ruled that Arizona taxpayers don’t have the right to challenge an Arizona state law which allows state income tax credits for charitable contributions that go to religious schools. What does this mean in practical terms and why should the philanthropic community care?
Apr 21, 2011
Update as of April 21st, 2011:
Tax Reform
Tax-writing committees for both the House and the Senate are conducting 40 hearings this year to examine all aspects of comprehensive tax reform. Last week, the Senate Finance Committee held a hearing that explored global tax administration, which essentially examined how other countries collect their taxes. During the hearing, Ranking Member Orrin Hatch (R-UT) asked the witnesses about the Canadian system of incentivizing charitable giving, which occurs through a tax credit instead of a deduction. Also last week, the House Ways and Means Committee held a hearing that explored the burden of tax incentives on individual payers. Amidst a discussion on corporate tax incentives, witnesses unanimously agreed that the biggest burden for all taxpayers is uncertainty. They cited the expiration and renewal cycle of the IRA charitable rollover as an example of how tax payer behavior can hinge on Congress’s action.
Apr 21, 2011
Update as of April 21st, 2011:
Deficit Reduction
President Obama has signed H.R. 1473, a spending deal containing $40 billion in cuts and funds the government through September 30th, the end of the 2011 fiscal year. After signing that legislation, nearly all discussion in Washington has turned towards comprehensive deficit reduction, often in conjunction with raising the “debt-ceiling,” (the amount the federal government is legally allowed to borrow). On Wednesday, April 14th, the President outlined his deficit reduction plan that seeks to trim $4 trillion from the deficit over the next 12 years. As The New York Times reports, Obama’s plan uses a mix of spending reductions and tax reform in order to accomplish this goal, but does not include cuts to entitlement programs such as Medicare and Medicaid. President Obama also appointed Vice President Biden to head a bi-partisan group of Senators and Representatives to work out a compromise deficit reduction deal.