Tax News Dec. 13 - 17

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News
FRIDAY
13M get unexpected tax bill from Obama tax credit
About 13.4 million taxpayers may be getting unexpected tax bills because they were awarded too much money under President Barack Obama's Making Work Pay tax credit, a government audit said Thursday.
Accountants on Edge Waiting for Tax-Cut Changes
The tax-cut bill that gained final approval in Congress late Thursday, coming so late in the year, has whipped up a mild panic for accountants, payroll staffs and anyone else who handles taxes.
Congress Sends $801 Billion Tax Cut Bill to Obama
The vote sealed the first major deal between President Obama and Congressional Republicans as Democrats put aside their objections and bowed to the realignment of power brought about by their crushing election losses.

THURSDAY
Tax cut deal: How it affects you
With the Senate's passage Wednesday of Tax Hike Prevention Act of 2010, it now goes to the House for consideration and a vote.
Japan Adopts Tax-Overhaul Plan
...for the beleaguered government of Prime Minister Naoto Kan, the next part will be the hardest: gaining the necessary backing from increasingly hostile opposition parties.
Tax Deal Steams Closer to Approval
ongress moved toward final approval of President Barack Obama's tax plan on Wednesday, as the Senate approved it by a wide bipartisan margin and House leaders worked to keep liberal critics from derailing its passage.
Tax revenues fall across industrialised world
Tax receipts across the industrialised world have fallen to their lowest level since the early 1990s…

WEDNESDAY
Sweeteners' in tax cut bill called 'politics as usual'
The nonpartisan Congressional Budget Office estimates the tax bill will cost $893 billion, and Taxpayers for Common Sense recently unveiled its list of "hobo provisions trying to catch a ride" inside it.
Democrats' Opposition Fades as Tax Vote Nears
The final obstacle to President Barack Obama's tax deal—the opposition of House Democrats—appeared to be melting away Tuesday as strong Senate support for the legislation turned up pressure on liberal critics to concede.
Tea Party groups divided on tax cut deal
Before all the details were known, Tea Party Express initially supported the package. Russell said last week he thought the compromise was not ideal, but the group was willing to accept "small victories."
Democrats resist estate-tax provisions
President Obama's first postelection effort to strike a deal with Republicans is on the line in the tax-cut debate, where he finds himself fighting House Democrats who say he conceded too much to the GOP on an estate-tax cut.
Save the Children Breaks With Soda Tax Effort
In October, Save the Children surprised activists around the country with an e-mail message announcing that it would no longer support efforts to tax soft drinks.
Tax Deal Paves Way for Reform
This week's great debate over the fate of the Bush-era tax cuts is doing something more important than determining tax levels for a couple of years: It's helping set the table for a fundamental reform of the tax system.
Tax Deal Possibly Endangered by Error in Legislation
...a program to extend low income housing tax credits for people who lost homes during Hurricanes Katrina and Rita was left out of the bill even though it was a deal that all sides approved.

TUESDAY
Tax-cut deal clears Senate hurdle
An agreement between President Barack Obama and Republicans on extending Bush-era tax cuts cleared a key procedural hurdle in the Senate on Monday, setting up a vote on final Senate passage this week.
Soda Tax Would Boost Government Revenue, Not Solve Fat Problem, Study Says
Imposing a 40 percent tax on soda and non-carbonated drinks would raise $2.5 billion a year and translate to an average annual weight loss of 1.3 pounds per person, researchers wrote in the Archives of Internal Medicine yesterday.
Moody's Warns It May Cut US Rating if Tax-Cut Deal Becomes Law
Moody's warned Monday that it could move a step closer to cutting the U.S. Aaa rating if President Barack Obama's tax and unemployment benefit package becomes law.

MONDAY
Senate set to debate tax plan compromise
Senators are expected to open debate on the tax compromise reached by President Barack Obama and Republicans Monday, but House Democrats will likely try to change the deal, one of their leaders said.
The State of the Estate Tax
At Long Last, It Appears That Washington Has Agreed on New Estate-Tax Rules. Here's What You Need to Know
Cost of the Senate Tax Bill
The tax cut measure scheduled for a Senate vote Monday would cost $857.8 billion over 10 years, according to an estimate from the Joint Committee on Taxation.
Payroll tax cut worries Social Security advocates
President Barack Obama's plan to cut payroll taxes for a year would provide big savings for many workers, but makes Social Security advocates nervous that it could jeopardize the retirement program's finances.
Democrats Signal Tax Deal Will Pass House
Van Hollen says Democrats won't stand in the way of passage.
Bill Clinton: Tax deal the best we can reach
Former President Bill Clinton took to the White House podium Friday and delivered a ringing endorsement of the tax compromise struck earlier this week by President Obama and Republican lawmakers.

Economist Comments
FRIDAY
Do Estate Taxes Matter?
Estate taxes have long generated political heat. Would other kinds of taxes work just as well?

THURSDAY
Romney: Tax deal, bad deal
Of course, delay now is better than an immediate tax hike. But because the extension is only temporary, a large portion of the investment and job growth that characteristically accompanies low taxes will be lost.
Van Hollen: Deal Will Pass Even Without Estate Tax Revision
The bill passed by the Senate pegs the rate at 35 percent, with a $5 million exemption.
What Are Taxes For?
Should the primary purpose of taxation be to support the government or maximize economic growth?
Opposing view on inheritances: 'Death tax' is unfair
The economic question is simple: Does the estate tax help create jobs, grow the economy or improve our country. In every case, the answer is no.
For Family-Run Small Businesses, Estate-Tax Uncertainty Adds Costs
What's unavoidable to many family businesses, however, is the cost of lawyers, accountants, family business advisers and business appraisers—and all that, owners say, has increased in the past decade as the estate-tax rate has continually changed.
MILLOY: Tax on coal in nation's stocking
New greenhouse rules do nothing but unravel red tape.

WEDNESDAY
Tax deal makes everyone unhappy -- except most Americans
What most economists agree on is that raising taxes in January, which will happen if this deal isn't passed, will cause further economic damage.
The 'Tax The Rich' Con, Part III
It's a classic bait-and-switch that eventually leads to higher taxes for everyone.
Cracking the tax code
The countless exemptions, credits and deductions cost the government more than $1 trillion annually in foregone revenue. It's time for an overhaul.
Billionaires On the Warpath'?
Thus the heart of the tea party's objections to the Beltway status quo is fundamentally a moral one: that Washington is arrogant about how it takes and spends our money.

TUESDAY
RAHN: Tax facts and fantasies
The rich already pay more than their fair share.
Temporary' Tax Code Puts Nation in a Lasting Bind
In the late 1990s, there were typically fewer than a dozen tax provisions that had just a limited lease on life and needed to be renewed every year or so… Today there are 141.
FEULNER: A misdeal on tax cuts
As tax-cut deals go, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 was never a winner.
Democrats Are Right to Attack Obama's Tax Deal: Amity Shlaes
The payroll tax break of 2011 encapsulates what’s wrong with our entire tax system. This one piece of the compromise plan also explains why growth after next year is likely to be weaker, not higher, than the current optimistic predictions.
The Tax The Rich Con Part II
The middle class will foot the bill for higher taxes on the rich.
Welcome to tax reform redux
Barack Obama is not the first president to use sweeping reform of the income tax as a way of distracting attention from more urgent, if not more important, issues. But early signs are that he is going about it all wrong.

MONDAY
Government Unions vs. Taxpayers
The moral case for unions—protecting working families from exploitation—does not apply to public employment.
Obama May Tackle the 800 Pound Gorilla—Tax Reform
By embracing tax reform, President Obama opened the door to a long and contentious debate over the cumbersome and loophole-ridden U.S. tax code.

Blogs
FRIDAY
The Reality of the Tax Deal
It is an interesting topic because it showcases the enormous gulf between what makes good political sense and what policies are economically beneficial.

THURSDAY
In Support of the Tax Compromise
The main reason why is that I don’t necessarily see an extension of the Bush tax laws as a tax cut. American individuals and businesses have been living with the current rates for nearly a decade. And its not that there will be a cut into the current state of revenues.
U.S. to have Highest Corporate Tax Rate in the World
Japan’s reduction will leave the U.S. in the uncomfortable position of having the highest corporate income tax rate in the industrialized world.
Why Democrats Should Support the Extension of the Bush-Era Tax Rates
The attitude switch won’t be so hard once they actually look at the data, since it shows that the main impact the rate reduction had in the first place was to make the rich pay an even bigger share of taxes that they paid before.

WEDNESDAY
Would a Permanent Extension of Tax Rates Really Create Certainty?
Even if the Congress were to make current tax provisions permanent, there would still be an enormous amount of uncertainty in current tax policy. This is because, over the long run, government expenditures are on an unsustainable path and by the simple arithmetic of budgeting, taxes will eventually have to go (way) up or spending will have to go down.
Tax Compromise Makes Reform More Urgent, Not Less
...a temporary extension of tax rates not only kicks the can down the road on comprehensive tax reform, but itself inserts uncertainty into the marketplace.
How to Fix the Tax Code: Five Pro-Growth Policies for Congress
Among the many undue burdens that the current tax code places on American taxpayers and the economy, five stand out as particularly detrimental to job creation, investment, and economic recovery.

MONDAY
Killing Obama’s ‘Build America Bonds’ Is a Big Reason to Like the Tax Deal
The tax deal ends the “Build America Bonds” tax preference, which was one of the most destructive provisions of Obama’s so-called stimulus. Here’s an excerpt from a Bloomberg report.
Rep. Paul Ryan: Tax Deal Not a Stimulus Package
Speaking with WSJ’s Jerry Seib, Congressman Paul Ryan (R, WI) insisted that the deal between Republicans and the White House on the Bush Tax Cuts was not a second stimulus and that the agreement would promote growth despite adding to the deficit.
Mayor Bloomberg Imposes a Victim Tax on New Yorkers
Firefighters will begin charging accident victims for their emergency services to the tune of hundreds of dollars, even if the victim was not at fault.

Reports
TUESDAY
Uncertainty and Taxes
As this paper will show, tax reform is necessary. However, given our current tax structure, any increase in marginal income-tax rates will actually retard economic growth and stall recovery further.