What are the largest tax expenditures? Tax expenditures make up a substantial part of the federal budget. Some of them are larger than the entire budgets of the programs or departments that spend money for the same or related purposes; for example, the value of the tax breaks for homeownership exceeds total spending by the Department of Housing and Urban Development.
The largest tax expenditure is the exclusion of employers’ contributions for their employees’ medical insurance premiums and medical care. Under this provision, contributions are excluded from the employee’s gross income, while the employer may deduct the cost as a business expense. The next-largest tax expenditure is the combined net exclusion of contributions to and earnings of employer-provided and individual pension plans. These include 401(k) plans, Individual Retirement Accounts (IRAs), the savers’ credit, and Keogh plans. Wonkbook: Tax spending vs. government spending. If you had to pick the most encouraging development in tax policy over the last year, it's clear which you would choose: The sudden focus on the $600 billion in loopholes, breaks, and deductions known as tax expenditures. The U.S. Capitol is seen Feb. 15, in Washington. (Haraz N. Ghanbari - AP) A few years ago, no one talked about tax expenditures at all.
Tax wonks knew about them. That's in part because closing tax expenditures can, at least in theory, give both parties what they want. David Brooks picks this argument up in his column today. "David Bradford, a Princeton economist, has the best illustration of how the system works. I would go further even than that. Second, when the government buys a plane from Boeing, then that's pretty much what happens: It buys a plane. As bad as it can be when the government makes poor spending decisions, it's even worse when the tax code leads hundreds or thousands of firms to make poor spending decisions.
Top stories But... Top op-eds Economy. The reason the White House didn’t embrace Simpson-Bowles. President Obama speaks with former Republican Senate Whip Alan Simpson (R) as he walks out of the Oval office to deliver remarks in the Rose Garden. (YU+RI GRIPAS - REUTERS) Perhaps the most common Washington criticism of the White House is that they didn’t embrace the Simpson-Bowles plan. That was, in the eyes of many pundits, the moment when President Obama revealed himself as a typical liberal rather than a postpartisan reformer. But the New York Times today suggests that much of Washington is misreading a tactical decision as an ideological one. It’s a frustration for many White Houses that the best way to get things done is not necessarily to support them. In her long takeout on the Obama administration’s decisionmaking around the Simpson-Bowles proposal, this is essentially what Jackie Calmes suggests happened.
The Republicans did make their move. This mistake of tactics for ideology happens often. The Real Reason Obama Wouldn't Embrace Simpson-Bowles. Obama to businesses: Bring jobs home. White House Offers Plan to Lure Jobs to America. Yes, we’re creating jobs, but how’s the pay? | David Rohde. Update: The December job numbers released this morning continued the same trend described in yesterday’s column.
Of the 200,000 new jobs created last month, 78,000 – or nearly 40 percent — were in transportation, warehousing and retail, sectors known for low pay and seasonal hiring. In a far more positive sign, manufacturing gained 23,000 workers in December after four months of little change. A vast expansion of that trend would benefit the middle class tremendously. WASHINGTON — Between now and November, middle class Americans are going to hear an enormous amount of bragging about job creation.
Mitt Romney will tout his role in the creation of Staples, The Sports Authority and Domino’s, three firms that he says created 100,000 jobs. The central question for middle class Americans, however, is: What quality of job is being created? In a rare moment of bipartisan agreement, Republicans and Democrats both recognize the problem. That business model has disappeared. Obama Administration Says Corporations May be Held Liable Under Alien Tort Statute.
Record GM profit rekindles bailout debate - Feb. 16. GM posted record profits for 2011, just two years after the federal bailout. NEW YORK (CNNMoney) -- The debate over the 2009 federal bailout of the U.S. auto industry heated up this week, as General Motors reported a record profit. It's the first year the three major U.S. automakers are all profitable at the same time since 2004. And they continue to show more signs of a remarkable comeback. That this has been an amazing comeback is indisputable. But the good news has reignited the fierce debate about whether or not the automakers -- which were reduced to begging Congress for a bailout in December of 2008 -- really needed to be saved by the government. "I just gotta say "I told you so" to all the naysayers like Mitt and those Republican southern senators who tried to kill of the domestic auto industry," crowed Virg Bernero, the Democratic mayor of Lansing, Mich., in a tweet and Facebook posting Thursday morning.
The stock would need to roughly double in price for taxpayers to break even. 12 Scary Debt Facts for 2012. As President Obama unveiled the 2013 fiscal year budget, the nation's financial situation came back into sharp focus. Experts say partisan gridlock in Washington means the budget will probably go nowhere.
Considering this is an election year, however, expect politicians to harp on facts, figures and terms that most Americans weren't taught in high school. To help out, it's time to dredge up lots of scary facts to make you pay attention. Before we get going, a quick primer on the number TRILLION: $1 trillion = $1,000 billion or $1,000,000,000,000 (that's 12 zeros)How hard is it to spend a trillion dollars? If you spent one dollar every second, you would have spent a million dollars in 12 days.
OK, let's get started! 1. 2. 3. 4. 5. 6. Under President Bush: At the end of calendar year 2000, the debt stood at $5.629 trillion. 8. 9. [Also see: States with the most homes in foreclosure] 10. 11. 12. You can track the national debt on a daily basis here. Soaking the Poor, State by State. Column: Doing the math on Obama’s deficits. (Graph: Todd Lindeman/Ezra Klein; data: Center on Budget and Policy Priorities) The campaign trail can be a lonely place, so Mitt Romney frequently invites friends to accompany him. New Jersey Gov. Chris Christie is an occasional companion. So is Virginia Gov.
Bob McDonnell. But more often, Romney brings a large clock. Romney’s people made the clock themselves. It has two giant flat-screen televisions pushed side by side. There are two answers: more than $4 trillion, or about $983 billion. When Obama took office, the national debt was about $10.5 trillion. But ask yourself: Which of Obama’s policies added $4.7 trillion to the debt? There is a way to tally the effects Obama has had on the deficit. The Center on Budget and Policy Priorities was kind enough to help me come up with a comprehensive estimate of Obama’s effect on the deficit. Obama, for instance, is clearly responsible for the stimulus. In two instances, this made Obama’s policies look more costly. Did Obama really make government bigger? - Jan. 25.
Did President Obama increase the size of the federal government? NEW YORK (CNNMoney) -- President Obama = big government. Or so say the Republican presidential candidates. Newt Gingrich has labeled him the "food stamp president" for expanding entitlements, while Mitt Romney has said the size of the federal government has "exploded" under Obama. By many measures, the federal government has indeed grown during Obama's tenure. Spending as a share of the economy has gone up. The number of federal employees has risen. More Americans are relying on federal assistance. But not all of those things were the president's doing.
CNNMoney takes a look at the facts. Spending: Government spending as a share of the economy has hovered around 24% during the Obama administration, several percentage points higher than under President Bush, according to Congressional Budget Office data. Much of that increase has come from mandatory spending, including Medicare, Social Security and Medicaid.
Friday Facts: Middle-Class Tax Cuts. Obama's 30% millionaire tax - Jan. 26. President Obama further defined the 'Buffett rule' during his State of the Union address. In attendance: Debbie Bosanek, secretary to billionaire investor Warrren Buffett. NEW YORK (CNNMoney) -- President Obama this week defined what he believes should be the minimum "fair share" for millionaires and billionaires to pay in taxes. His answer: At least 30% of their income. "If you make more than $1 million a year, you should not pay less than 30% in taxes," Obama said during his State of the Union address. The 30% marker is the first real detail Obama has offered since proposing the so-called Buffett Rule last September. It's named, of course, after billionaire investor Warren Buffett, who has repeatedly asserted that he pays a lower percentage of his income to the IRS than his secretary.
The Congressional Research Service this fall estimated that a quarter of millionaires don't pay enough in federal taxes to satisfy the Buffett Rule. Billionaires with 1% tax rates. Senate OKs short-term extension of payroll tax cut. WASHINGTON (AP) — Senators racing for the exits after a year of bitter battles passed legislation Saturday that would extend a Social Security payroll tax cut and jobless benefits for just two months, setting the stage for the next fight until February. While a partial victory for President Barack Obama's year-end jobs agenda, the measure awaiting House approval next week contains a provision demanded by Republicans to pressure the White House into approving construction of a Canada-to-Texas oil pipeline that promises thousands of jobs. Democratic and GOP leaders option for the short-term extension after failing to agree on big enough spending cuts to pay for a full-year renewal of the payroll tax cut. The 2 percentage point tax cut affects 160 million taxpayers.
The weekly jobless payments average about $300 for millions of people who have been out of work for six months or more. The measure was approved by an 89-10 vote during a Saturday session. View gallery Sen. Sen. Sen. Obama's tax record - Jan. 30. President Obama last week promised lower taxes for most Americans and certain industries, while proposing tax hikes for the rich and some businesses. NEW YORK (CNNMoney) -- Republicans portray President Obama as the tax-hiker-in-chief.
Obama portrays himself as a tax cutter for the masses but not the rich. The truth isn't so cut and dry. The fact is, the president's record on taxes is a mixed bag. In three-plus years in office, Obama has raised some taxes even as he has cut others. The end result: Both sides get their election-year talking points, and families and businesses get a maze of temporary or soon-to-expire tax laws mixed in with some new ones on tap.
Low- and middle-income households: The president wants to make the Bush tax cuts permanent for anyone making less than $200,000 ($250,000 for couples). Obama focuses State of the Union on income inequality Mostly in the context of stimulus, he created several new -- if temporary -- tax breaks. Take the Bush tax cuts, for example.