House Republicans return to Washington today to vote on a two-month payroll tax extension. If news reports are correct, the bill is likely to fail, leaving in doubt how lawmakers will resolve their differences before the year draws to a close. These year-end squabbles are now routine business in the nation’s capital. At issue in this case is the short-term extension of the payroll tax rate through February. “I believe that two months is just kicking the can down the road. The American people are tired of that. Frankly, I’m tired …
Sen. Kay Bailey Hutchison (R-TX), in an exclusive interview with Heritage, criticized her liberal colleagues for opposing Social Security reform, warning that they would rather increase taxes on businesses. Hutchison singled out Senate Majority Leader Harry Reid (D-NV) for his repeated assertions that Social Security is not in trouble. Reid has gone so far as to call it a “myth” perpetuated by conservatives. “It’s clearly in trouble if its own trustees say its going bankrupt in 25 years,” Hutchison said in the interview. “If that’s not a signal to …
If you’re following the evolving terms of the budget debate, the hip new phrase is “new revenues.” It sounds so much cooler than “tax increases.” Both parties are massaging their rhetoric in the debt ceiling fight, and the media are using the phrase “new revenues” to describe proposals to reduce the U.S. deficit. Samples: Washington Post blogger Greg Sargent tweeted, “Can someone please settle the question of whether GOP is also saying No to new revenues?” Reuters reported that Senator Max Baucus (D–MT) “said new revenues had to be part …
In a timely Heritage in Focus, Heritage expert Curtis Dubay discusses part of President Obama’s budget proposal to raise taxes on the wealthy – those earning over $250,000. The president’s budget this year is $3.6 trillion. Confiscating every single penny from every income earner making more than $114,000 – everyone in the top 10 percent of income earners – would still only generate $3.4 trillion. Not enough to cover the entirety of the 2011 budget. On top of that, Medicare alone, with its current unfunded liabilities, is anywhere between $45 …
The obvious reason to prevent a tax hike by extending current tax rates is that doing so will prevent further economic harm to an already flat economy. How do we know that tax increases will cause economic harm? Three examples: 1932, 1937 and 1993. After the 1929 stock market crash, the Smoot-Hawley tariff of 1930 raised import prices and more importantly threw a bucket of cold water on global trade flows, helping send the economy into deep depression. The economy had very little chance to recover. Along with gross and …
Reducing budget deficits by cutting government spending has a stronger record of economic stimulus than either reducing the deficit with tax increases or increasing government spending. That’s what Harvard economists Albert Alesina and Silvia Ardagna have found in their recent research. They examined 107 instances of large reductions (at least 1.5 percent in one year) in budget deficits as well as 91 instances of large increases (over 1.5 percent in one year) in budget deficits over the past 40 years. They found that when an economy expands following deficit reduction, …
Faced with predictions of staggering losses for his party in November’s midterm elections, President Barack Obama today appeared on ABC’s “Good Morning America” and said, “If the election is a referendum on ‘are people satisfied about the economy as it currently is,’ then we’re not going to do well, because I think everybody feels like this economy needs to do better than it’s been doing.” The prospect of that referendum is casting a long shadow over Washington as the President and candidates alike wrestle with America’s frustration over a still-stagnant …
The U.S. House of Representative could vote as early as Wednesday of this week to increase the estate tax (known popularly as the death tax). The bill it will consider, sponsored by Rep. Earl Pomeroy (D-North Dakota), would extend permanently the death tax at its current 45 percent rate and $3.5 million exemption. This extension would be a drastic tax increase since the death tax expires on January 1, 2010. In addition, the Pomeroy bill would be a repudiation of the policy stands of several past Congresses that all agreed …
Leaders in the House of Representatives recently discussed the possibility of extending the death tax at its current rate and exemption levels for one year through 2010. If this proposal becomes law it would be a massive tax hike. Under current law, the death tax has a top rate of 45 percent and an exemption of $3.5 million ($7 million for couples) this year. But on January 1, 2010 it expires. It only stays expired for one year, however, as it springs back to life in 2011 with a top …
The new House health care bill (H.R. 3962) unveiled by Speaker Nancy Pelosi (D-CA) yesterday clocks in at 1,990 pages and about 400,000 words. As written, the bill purports to cost only $1.05 trillion over the first ten years and is paid for by over $700 billion in tax increases and cuts to Medicare Advantage and Medicare prescription drug payments. But as troubling as those numbers are, the scariest thing about the bill is the solid foundation it lays for a complete government take over of the health care sector …
