Amid speculation that the Federal Reserve soon might start scaling back its stimulus efforts, the International Monetary Fund cautioned that a pullback before next year could hurt economies worldwide.

Highlighting its concern Friday, the IMF lowered its forecast for U.S. economic growth next year to 2.7% from an earlier projection of 3%.

The IMF also criticized U.S. fiscal policy, calling for the repeal of the automatic federal spending cuts, known as the sequester, and urging lawmakers to act promptly to raise the nation's debt limit.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Labor/Labor Unions/Labor Market • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The Fiscal Stimulus Package of 2009 • The U.S. Government • Budget • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Baby boomers are a “fortunate generation” who have enjoyed dramatic improvements in living standards but are now “absorbing” more than their fair share of taxpayers’ money, one of the Church of England’s most senior clerics has suggested.
The Bishop of London, the Rt Rev Richard Chartres, who is 65, said there were “severe questions” about the share of government spending that goes on his own generation.
He said the world was in the midst of a transformation that had left many believing that our best days could be “behind us”.

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Filed under: * Anglican - Episcopal • Anglican Provinces • Church of England (CoE) • CoE Bishops • * Culture-Watch • Aging / the Elderly • Middle Age • Religion & Culture • * Economics, Politics • Economy • Taxes • Politics in General • * International News & Commentary • England / UK • * Theology • Ethics / Moral Theology

European governments are figuring out that taxing financial transactions won't be a magical money machine and that the proposed levy might even damage the European economy.

Reuters first reported Thursday that EU officials are scaling back a transaction tax proposal supported by 11 countries that is supposed to take effect in January. The levy could instead be introduced on a "staggered basis," one official told the news agency. The first phase might only tax sales and purchases of shares, not bonds or derivatives transactions, and at 0.01% instead of 0.1% as currently proposed. A rate of zero is more appropriate.

Enthusiasm for the tax has been dimming for a while, including in governments that have previously backed it. Christian Noyer, the Governor of the Banque de France, said in Paris on Tuesday that the levy will raise "nothing at all." One unnamed EU official told Reuters that a scaled-back transaction tax would reap revenue of less than €3.5 billion. The full-fledged levy, as proposed by the European Commission in February, was supposed to rake in €31 billion a year.

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Filed under: * Economics, Politics • Economy • Credit Markets • Currency Markets • Euro • Stock Market • Taxes • The Banking System/Sector • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010

European countries plan to scale back a proposed financial transactions tax drastically, initially imposing a tiny charge on share deals only and taking much longer than originally intended to achieve a full roll-out.

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Filed under: * Economics, Politics • Economy • Credit Markets • Currency Markets • Stock Market • Taxes • The Banking System/Sector • * International News & Commentary • Europe • * Theology • Ethics / Moral Theology

There is no evidence that an FTT would moderate market volatility — and attenuate sudden shifts of mood on financial markets.

A recent report by Anna Pomeranets from the Bank of Canada concluded that there have been instances when an FTT led to an increase in volatility — most significantly on the New York Stock Exchange and the American Stock Exchange, between 1932 and 1981, where increases in the FTT were associated with rising volatility, increased bid-ask spreads, and lower trading volumes.

Similarly, the idea that capital is under-taxed in current tax regimes is mistaken.

Read More At Investor's Business Daily: http://news.investors.com/ibd-editorials-viewpoint/052913-658027-financial-transaction-tax-in-europe-will-not-raise-much-money-and-may-hurt-growth.htm#ixzz2UmJX6SiT
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Filed under: * Economics, Politics • Economy • Credit Markets • Currency Markets • Stock Market • Taxes • The Banking System/Sector • * International News & Commentary • Europe

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Filed under: * Culture-Watch • Blogging & the Internet • Science & Technology • * Economics, Politics • Economy • Corporations/Corporate Life • Taxes

Can we get real? For starters, $642 billion is serious money, and despite the modest improvements of the latest CBO report, the basic trends in federal finances remain the same. From 2014 to 2023, the government will spend $6 trillion more than it collects in taxes. The budget never comes close to balancing. Expanding spending on the elderly and health care continues to strangle the rest of government. As a share of the economy (gross domestic product), military and domestic discretionary programs (examples: drug approval, environmental regulation, Head Start, federal courts) drop about 40 percent from 2010 to 2023.

Nothing of consequence has changed. A few numbers have shifted slightly. That’s all. They moved in a favorable direction. Next time, they might go the other way. What’s also constant is the unwillingness of leaders of both parties, beginning with the president, to discuss budget choices candidly. The budget passed by the Democratic Senate barely touches entitlements for the elderly, which constitute the largest chunk of federal spending. The budget passed by the Republican House avoids a large tax increase only by making draconian and unrealistic spending cuts that would never pass Congress or be signed by the president.

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicaid • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Washington is now sinking its teeth into a real scandal: the Internal Revenue Service (IRS) using ideological criteria to choose the targets of its attention. What we already know is bad enough. Given the seriousness of the charges and the unreliability of IRS disclosures so far, purposeful, sober investigation is exactly what is needed.

At first, the IRS’s admission that it flagged applications for tax-exempt status from tea party-type groups brought reaction that broke along partisan lines. But on Monday, President Obama called the news “outrageous,” adding: “I’ve got no patience with it. I will not tolerate it. And we will make sure that we find out exactly what happened on this.” Senate Majority Leader Harry M. Reid (Nev.) joined other Democratic lawmakers to support an investigation in his chamber, something Republican leaders in the House had pledged on Friday.

Any unequal application of the law based on ideological viewpoint is unpardonable — toxic to the legitimacy of the government’s vast law-enforcement authority.

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Taxes • The U.S. Government • Politics in General • * Theology • Ethics / Moral Theology

The staffers in the Cincinnati field office were making high-level decisions on how to evaluate the groups because a decade ago the IRS assigned all applications to that unit. The IRS also eliminated an automatic after-the-fact review process Washington used to conduct such determinations.

Marcus Owens, who oversaw tax-exempt groups at the IRS between 1990 and 1999, said that delegation “carries with it a risk” because the Cincinnati office “isn’t as plugged into what’s [politically] sensitive as Washington.”

Owens, now with the firm Caplin & Drysdale, said that before the agency’s most recent reorganization, it had a series of “tripwires in place” that could catch unfair targeting, including the fact that the IRS identified its criteria for special scrutiny in a public manual.

“There’s no longer that safety valve, and as a result, the IRS has been rolling the dice ever since.....

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Taxes • The U.S. Government • Politics in General • * International News & Commentary • America/U.S.A. • * Theology • Ethics / Moral Theology

This week, legislators here will consider excise and sales taxes on marijuana of up to 30 percent combined. The proposal emerged from a task force of health officials, representatives of the state’s rapidly developing marijuana industry and others that was commissioned last year to help develop rules for marijuana.

The goal, task force members and lawmakers say, is to set taxes high enough to finance the administration of new laws, but not so high that customers are driven back to the black market.

“We should see a financial benefit as a state that can help pay for enforcement and other fundamental issues,” said Christian Sederberg, a Denver lawyer on the panel whose firm helped draft Amendment 64, the measure legalizing recreational marijuana. “The other side is that if you tax something too high, then you simply crowd out the regulated market. We’re confident we’ll find the right balance.”

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Filed under: * Culture-Watch • Drugs/Drug Addiction • Health & Medicine • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • Politics in General • State Government

At this time of year, when most Americans have just filed their returns, exasperation with the income tax system reaches a peak. Hardly anyone denies it's a complex mess. In 2010, calculating their taxes cost Americans $168 billion, estimates the Taxpayer Advocate Service of the Internal Revenue Service. That's about 15 percent of taxes collected — a heavy overhead. Almost 60 percent of taxpayers pay accountants or other tax preparers. Public esteem for the tax system is low; in a 2011 Pew poll, 55 percent judged it unfair. Disaffection was fairly even politically: 47 percent among Republicans, 58 percent among Democrats and 56 percent among independents.

So “tax reform” ought to be a cinch, right? Well, no.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Personal Finance • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • The National Deficit • Politics in General • Office of the President • President Barack Obama • Senate • * International News & Commentary • America/U.S.A.

There is a great graphic here and some comment there.

Filed under: * Culture-Watch • Aging / the Elderly • Health & Medicine • Middle Age • Teens / Youth • Young Adults • * Economics, Politics • Economy • Consumer/consumer spending • Personal Finance • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • * Theology • Ethics / Moral Theology

To tax reform advocates, the federal tax code is a shambling behemoth, its immense girth weighing down corporations and Jane and Joe Taxpayer alike. The code is more than 4 million words long and has been tweaked 4,680 times since 2001, or more than once a day, according to the Internal Revenue Service's National Taxpayer Advocate, whose job is to champion the poor schlubs who have to contend with the US tax system. Compliance takes more than 6 billion person-hours a year and costs $168 billion, the advocate's office reports.

Tax expenditures – the sober name for myriad loopholes, carve-outs, and incentives in the code – shield almost as much in revenue, at just over $1 trillion, as the $1.4 trillion collected each year.

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Filed under: * Culture-Watch • Globalization • * Economics, Politics • Economy • Corporations/Corporate Life • Personal Finance • Taxes • The U.S. Government • Politics in General • House of Representatives • Office of the President • Senate • * Theology • Ethics / Moral Theology

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Filed under: * Economics, Politics • Economy • Stock Market • Taxes • The U.S. Government • * International News & Commentary • America/U.S.A. • England / UK • Europe

France's experiment with the Tobin Tax has proved a spectacular flop. Its finance ministry admits that the scattershot levy on financial transactions has raised just a third of the money expected since August.

Total takings will be a paltry €800m in 2013, but that overlooks the much greater damage inflicted on French finance, industry and the government's own tax base. "France is shooting itself in the foot," said Paul-Henri de La Porte du Theil, head of French finance industry AFG.

Jean-Yves Hocher from Crédit Agricole said it would cost his company €17bn. One French banker told Les Echos that the tax was "a weapon of mass destruction that is going to ruin our financial sector".

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Stock Market • Taxes • * International News & Commentary • America/U.S.A. • England / UK • Europe • France

A political class that botched the fiscal cliff so badly are not going to be capable of a gigantic deal on complex issues. It’s like going into a day care center and asking a bunch of infants to perform “Swan Lake.”

--David Brooks in a piece on today's NY Times Op-ed page entitled "The Next Four Years"

Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * Theology • Pastoral Theology

Late one night 20 years ago, when I was an oil executive rather than an Anglican bishop, I had run out of steam and patience toward the end of a complex multinational acquisition. We came to yet another bit of box ticking and I suggested we skip it, because we knew the material was accurate.

“Justin,” our wise investment-bank director said quietly, “you know that’s not how we do it.”

Under pressure, everyone is prone to make bad decisions and that story remains in my mind as I sit on the U.K.’s Parliamentary Commission on Banking Standards, listening to people talk about banks, bankers and their failures.

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Filed under: * Anglican - Episcopal • Archbishop of Canterbury • --Justin Welby • * Culture-Watch • Globalization • Law & Legal Issues • Religion & Culture • * Economics, Politics • Economy • Corporations/Corporate Life • Credit Markets • Currency Markets • Labor/Labor Unions/Labor Market • Stock Market • Taxes • The Banking System/Sector • * International News & Commentary • England / UK • * Theology • Ethics / Moral Theology

Public debt as a percentage of gross domestic product was around 38 percent in 1965. It is around 74 percent now. Debt could approach a ruinous 90 percent of G.D.P. in a decade and a cataclysmic 247 percent of G.D.P. 30 years from now, according to the Congressional Budget Office and JPMorgan.

By 2025, entitlement spending and debt payments are projected to suck up all federal revenue. Obligations to the elderly are already squeezing programs for the young and the needy. Those obligations will lead to gigantic living standard declines for future generations. According to the International Monetary Fund, meeting America’s long-term obligations will require an immediate and permanent 35 percent increase in all taxes and a 35 percent cut in all benefits....

[The final 'solution didn't] involve a single hard decision. It did little to control spending. It abandoned all of the entitlement reform ideas that have been thrown around.

Whom should we blame for this? Again, we should not blame Obama and Boehner. In their different ways, they and a number of other people in the Congress are trying to find a politically palatable way to deal with these hard issues. They got what conditions allowed.

Ultimately, we should blame the American voters. The average Medicare couple pays $109,000 into the program and gets $343,000 in benefits out, according to the Urban Institute. This is $234,000 in free money. Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren. They have decided they like borrowing up to $1 trillion a year for tax credits, disability payments, defense contracts and the rest. They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living. They have made it clear that they will destroy any politician who tries to stop them from cost-shifting in this way.

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Filed under: * Culture-Watch • Aging / the Elderly • Health & Medicine • History • Psychology • * Economics, Politics • Economy • Taxes • The U.S. Government • Medicare • Social Security • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * Theology • Ethics / Moral Theology

On top of the possible employment losses, what messages are we sending when the government penalizes marriage at any level? One message is clear. The decision by Congress to impose a marriage penalty only discourages couples from getting married and subsidizes cohabiting households. The Marriage and Religion Research Institute studies the social science data and research on the impacts of marriage and religious practice on the lives of children and the future of the nation. Statistics show that homes headed by married couples are less likely to need government assistance. Analyzing the data, they have found that children in homes headed by married couples are more likely to be higher-achieving students and better citizens, and are less likely to become dependent on the failing government subsidy system.

Add in the higher taxes (an average of $2,425 per employee) from the 2 percent tax increase in everyone’s paychecks to pay for Social Security and the myriad tax increases all families will pay thanks to the malady known as Obamacare, and it is likely that families will end this year with their own personal fiscal cliffs. If Congress is serious about tax reform, easing the burdens on all families should be at the center of any transformation.

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Filed under: * Culture-Watch • Marriage & Family • * Economics, Politics • Economy • Personal Finance • Taxes • The U.S. Government • Politics in General • City Government • Office of the President • Senate • * Theology • Ethics / Moral Theology

Congress' hectic resolution of the "fiscal cliff" crisis is the latest in a long series of decisions by lawmakers and the White House to do less than promised — and to ask Americans for little sacrifice — in confronting the nation's burgeoning debt.

The deal will generate $600 billion in new revenue over 10 years, less than half the amount President Barack Obama first called for. It will raise income tax rates only on the very rich, despite Obama's campaign for broader increases.

It puts off the toughest decisions about spending cuts for military and domestic programs, including Medicare and Social Security. And it does nothing to mitigate the looming partisan showdown on the debt ceiling, which must rise soon to avoid default on U.S. loans.

In short, the deal reached between Obama and congressional Republicans continues to let Americans enjoy relatively high levels of government service at low levels of taxation. The only way that's possible, of course, is through heavy borrowing, which future generations will inherit.

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

The budget deal passed by the U.S. Senate [and House]... would raise taxes on 77.1 percent of U.S. households, mostly because of the expiration of a payroll tax cut, according to preliminary estimates from the nonpartisan Tax Policy Center in Washington.

More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes. Among the households facing higher taxes, the average increase would be $1,635, the policy center said. A 2 percent payroll tax cut, enacted during the economic slowdown, is being allowed to expire as of [December 31]

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Personal Finance • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Congress approved a plan to end Washington’s long drama over the “fiscal cliff” late Tuesday after House Republicans surrendered to President Obama’s demand to let taxes rise on the nation’s richest households.

The House voted 257 to 167 to send the measure to Obama for his signature; the vote came less than 24 hours after the Senate overwhelmingly approved the legislation.

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Update: Here are the new numbers for 2013 in Congress--Democrats control of the Senate by 55 to 45 (change of 2) and Republicans control of the House of Representatives by 234-201 (change of 8)

Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Personal Finance • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * Theology • Ethics / Moral Theology

A US Senate-backed deal [by a vote of 89-8] to stave off a "fiscal cliff" of drastic taxation and spending measures has passed to the House of Representatives.

President Barack Obama has urged the House to pass the bill "without delay".

However, several representatives have spoken out against it, with one calling it "bad for America".

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Senate leaders are racing against the clock to reach a "fiscal cliff" deal the House and Senate can approve on New Year's Eve.

Leaders in the upper chamber narrowed their differences Sunday as Republicans agreed to drop a demand to curb cost-of-living increases to entitlement benefits, while Democrats showed flexibility on taxes.

Yet after months of talks on ways to avoid the fiscal cliff of tax hikes and spending cuts at the end of 2012, House and Senate lawmakers find themselves approaching the new year without a bill to present to their members.
Significant differences remain over two key parts of a deal — the automatic spending cuts known as the sequester and the estate tax.

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Update: a BBC article is there.

I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.

Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

When President Obama talks about taxing the rich, he means the top 2 percent of Americans. John A. Boehner, the House speaker, talks about an even thinner slice. But the current and future fiscal imbalances are too large to exempt 98 percent or more of the public from being part of the solution.

Ultimately, unless we scale back entitlement programs far more than anyone in Washington is now seriously considering, we will have no choice but to increase taxes on a vast majority of Americans. This could involve higher tax rates or an elimination of popular deductions. Or it could mean an entirely new tax, such as a value-added tax or a carbon tax.

To be sure, the path ahead is not easy. No politician who wants to be re-elected is eager to entertain the possibility of higher taxes on the middle class. But fiscal negotiations might become a bit easier if everyone started by agreeing that the policies we choose must be constrained by the laws of arithmetic.

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Filed under: * Economics, Politics • Economy • Personal Finance • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Whether or not there is a deal, the weeks since the election have produced a stark display of political gridlock. "The government is not working," said Steve Bell, senior director of the Bipartisan Policy Center, who was a senior budget adviser to Senate Republicans for many years. "There is no doubt that the policy-making apparatus in this town has collapsed."

Following the tea-party wave in the 2010 election, the 112th Congress looks set to be the least productive in recent history. By the end of November, the House had passed 146 bills over the previous two years, by far the smallest number for any Congress since 1948. The Senate passed fewer bills in 2012 than in any year since at least 1992.

Rather than smoothing over differences, the November election appears to have hardened them. "We came out of the election with both sides thinking they won and had an equal mandate," said Ross Baker, a professor at Rutgers University who is now interviewing lawmakers on Capitol Hill for a book on bipartisanship. "One problem is we don't have a common narrative to guide us."

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I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.

Filed under: * Culture-Watch • History • Psychology • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * International News & Commentary • America/U.S.A.

A long line of America's top chief executives have rotated through Washington in recent weeks, loudly urging lawmakers and the White House to reach a broad deal to fix the budget. They once sounded optimistic. Now many of them aren't talking, and if they are, they're gloomy.

Mark Bertolini, chief executive of health-insurance company Aetna Inc., called the state of play "pitiful and embarrassing," saying the chances are growing that a deal might not be reached by the end of the year to avert $500 billion in tax increases and spending cuts.

"Set aside my interest as the CEO of a participant in the economy here—as an American, I'm embarrassed if that's where we end up," Mr. Bertolini said in an interview. "It feels like it's starting to fall apart."

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Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Taxes • The U.S. Government • Budget • Medicare • Social Security • Politics in General • House of Representatives • Office of the President • President Barack Obama • State Government

The shape of a deal to avert the US fiscal cliff is at last emerging, with at least $1tn in new taxes, up to $1tn in fresh spending cuts and an increase in America’s debt ceiling, as negotiators scramble to reach an agreement before the end-of-the-year deadline.

Barack Obama, US president, and John Boehner, Republican speaker of the House of Representatives, held their third face-to-face meeting in eight days at the White House amid signs of growing momentum in the talks. If they strike a deal in the coming days, and are able to pass it through Congress, it would remove a huge cloud of uncertainty hanging over the global economy.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The U.S. Government • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Greece could generate budget revenues amounting to 5 percent of national output annually if it reforms tax collection and clamps down on tax cheats, the European Union's tax chief told a Greek newspaper.

Athens plans reforms next year to combat rampant tax evasion as it struggles to shore up public finances and achieve a primary budget surplus, both necessary to continue receiving bailout aid from international lenders.

The euro zone agreed on Thursday to provide nearly 50 billion euros ($64 billion) in long-delayed aid to Greece, averting a catastrophic default and securing its survival in the zone after months of doubt and political turmoil.

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Taxes • Politics in General • * International News & Commentary • Europe • Greece • * Theology • Ethics / Moral Theology

Budget negotiations between the White House and Republican House Speaker John Boehner have progressed steadily in recent days, people close to the process said, breathing life into talks that appeared to have stalled.

Both sides still face sizable differences before any agreement might be reached by the end of the year, and talks could well falter again over such controversial issues as taxes and Medicare before any deal is ultimately reached.

The people familiar with the matter say talks have taken a marked shift in recent days as staff and leaders have consulted, becoming more "serious." Both sides have agreed to keep details private, according to the people, who declined to detail where new ground was being broken.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama

For more than a year, politicians have been fighting over whether to raise taxes on high-income people. They rarely mention that affluent Americans will soon be hit with new taxes adopted as part of the 2010 health care law.

The new levies, which take effect in January, include an increase in the payroll tax on wages and a tax on investment income, including interest, dividends and capital gains. The Obama administration proposed rules to enforce both last week.

Affluent people are much more likely than low-income people to have health insurance, and now they will, in effect, help pay for coverage for many lower-income families. Among the most affluent fifth of households, those affected will see tax increases averaging $6,000 next year, economists estimate.

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Filed under: * Culture-Watch • Health & Medicine • --The 2009 American Health Care Reform Debate • * Economics, Politics • Economy • Taxes • The U.S. Government

From there:

[Here is a list of]...the most expensive tax breaks in the current tax code, based on what those breaks would cost the U.S. Treasury in lost revenue from 2013 to 2017:

1) Exclusion of employer contributions for medical insurance premiums & medical: $1 trillion

2) Mortgage interest deduction: $606 billion

3) Deduction for 401(k) plans: $429 billion

4) Accelerated depreciation of machinery & equipment: $375 billion

5) Exclusion of net imputed rental income: $337 billion

6) Capital gains: $321 billion

7) Charitable contributions: $293 billion

Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * Theology • Ethics / Moral Theology

....seasoned Washington hands say that once this rather gloomy back and forth has played out - and it might take another week or more - the work towards reaching a solution that both sides can sell to their parties and their lawmakers will begin in earnest.

A deal by Christmas, a week before the fiscal cliff deadline, remains uncertain but not out of the question. The so-called fiscal cliff is a combination of U.S. government spending cuts and tax increases due to be implemented under existing law in early 2013 that may cut the federal budget deficit but also tip the economy back into recession.

The pattern of little happening until very close to a holiday is well-established on Capitol Hill. The past three pre-Christmas seasons brought important eleventh-hour developments on health care in 2009, tax cut extensions in 2010 and the payroll tax holiday in 2011.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Personal Finance • Stock Market • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

....President Obama's call for a return to Clinton-era tax rates is misleading: If the Bush upper-income tax cuts go away, tax rates will exceed those in place at the end of the 1990s.

The top effective federal marginal tax rate on work income would rise to roughly 44.6% from 37.9% in 2012.

That's higher than under President Clinton because of a 0.9-percentage-point Medicare payroll tax hike for upper-income households, which passed with Obama-Care and takes effect in January.

Tax rates on long-term capital gains also will be higher than when Clinton left office if Bush tax cuts expire as ObamaCare's new 3.8% Medicare tax on investment gains takes effect. Up to now, only wage and salary income has been subject to Medicare taxes.

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * Theology • Ethics / Moral Theology

At first blush, it seems to make policy sense, too. The rich fabric of America’s civic life, from Boy Scouts to community orchestras to soup kitchens, is the envy of the world. Its diversity reflects in part how much it depends on private givers with diverse interests and motives, and not just on the government. Their giving is encouraged by the charitable deduction, enacted in 1917, just four years after the income tax itself. The deduction lets people feel they are beating the system even as they practice virtue.

But there’s a question of fairness that complicates the issue. Overwhelmingly, the deduction benefits the wealthy — and the rest of the country has to make up the gap.

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Filed under: * Culture-Watch • Charities/Non-Profit Organizations • * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

The Primate of All Nigeria Anglican Communion, Most Rev. Nicholas Okoh, on Saturday dismissed calls in some quarters for Churches in the country to be mandated to pay tax to government.

Okoh said this in Abuja at the 2012 Carnival for Christ, organised by the Abuja Diocese of the Anglican Communion.

The Carnival for Christ is an annual gathering of the various archdeaconries in the diocese to praise and worship God.

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Filed under: * Anglican - Episcopal • Anglican Provinces • Church of Nigeria • * Economics, Politics • Economy • Taxes

I listened to NPR yesterday for over an hour back and forth from a doctors appointment.

The entire time they talked about President Obama's proposal to implement the middle class tax cut now.
Everywhere I turn its middle class tax cut, middle class tax cut...

Except it isn't but no one thinks about these things.

What is being proposed is not letting the current tax code STAY THE SAME.
So 98% of Americans WON"T HAVE A TAX INCREASE.

Since when is not having an increase a cut?

Anyone you know say I am getting the same number of days vacation this year as last year I am angry I get a benefits cut!

Filed under: * By Kendall • * Economics, Politics • Economy • Personal Finance • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate

For the first time in decades, a bipartisan consensus has emerged in Washington to raise taxes. But negotiators working to avert the year-end “fiscal cliff” remain far apart on crucial details, including how taxes should go up and who should pay more.

Neither side gave ground in an opening round of staff-level talks last week at the Capitol. As President Obama and congressional leaders prepare for a second face-to-face meeting as soon as this week, the divide over taxes presents the biggest obstacle to replacing the heap of abrupt tax hikes and spending cuts, set to hit in January, with a less-traumatic debt-reduction plan.

People in both parties are exploring ideas for bridging the gap. Without a deal on taxes, there is not much hope for agreement on a broader strategy for restraining the national debt that also tackles the skyrocketing cost of federal retirement programs such as Social Security and Medicare.

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Most of the increases would result from the expiration of Bush-era tax cuts, which would cause marginal rates to rise. Simultaneously, several temporary tax breaks pushed by President Barack Obamaafter the financial crisis also would end.

And most households—121 million in all—would be hit by an increase in the payroll tax that employees pay to 6.2% from 4.2%.

Also expiring at year-end is a provision to reduce the so-called marriage penalty, a set of tax provisions that require many couples to pay higher taxes when they file jointly. And millions more families' earnings this year would be subject to the alternative minimum tax. The AMT was originally intended to prevent the very wealthy from avoiding taxes but would apply to middle-class households if policy makers don't renew a provision that expired last year.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Personal Finance • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • US Presidential Election 2012

...the biggest loopholes in the U.S. Tax Code — generally referred to as tax expenditures — aren’t just the tricks of the trade for millionaires with offshore bank accounts. For the vast majority of Americans, they’re just how things work: You don’t pay taxes on your health insurance or Medicare benefits; you contribute tax-free to your 401(k); and your mortgage interest pushes down your tax bill each year.

And even if you dump the biggest of the set, these tax perks don’t even come close to closing the deficit. At best, the top 10 would pull in an extra $834 billion a year, according to Joint Committee on Taxation figures. Considering the hole lawmakers are trying to fill is several trillion dollars large, it’s clear they wouldn’t even come close.

Here are the 10 biggest tax loopholes — and the reasons why most of them will survive the fiscal cliff....

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Filed under: * Culture-Watch • Health & Medicine • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Personal Finance • Taxes • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • US Presidential Election 2012

U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.

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Filed under: * Culture-Watch • Globalization • * Economics, Politics • Economy • Corporations/Corporate Life • Taxes • The U.S. Government • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • US Presidential Election 2012

As the high-stakes wrangling over the fiscal cliff gets underway, we though it might be the proper moment to remind everybody just how the United States managed to become the world's biggest debtor.

So, here's how....

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Filed under: * Culture-Watch • History • * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Census/Census Data • Medicare • Social Security • The National Deficit • Politics in General

Talks to agree the EU's 2013 budget have collapsed, after negotiators from the EU and member states were unable to agree on extra funding for 2012.

The EU Commission and European Parliament had asked for a budget rise of 6.8% in 2013.

But most governments wanted to limit the rise to just 2.8%.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Euro • European Central Bank • Taxes • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010

Should lawmakers not reach agreement prior to the end of the year, the US budget deficit for 2013 would be cut almost in half, to $560 billion.

Which doesn't sound like a bad thing. After all, the US is staggering under a monumental pile of debt and could potentially begin to face the kinds of difficulties that have plunged several euro-zone countries into crisis. It is a viewpoint shared by the ratings agencies -- a year ago, Standard & Poor's withdrew America's top rating, justifying the measure by pointing to the unending battle over the debt ceiling. The agency noted that "the political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed."

From afar, it is difficult to argue; the ongoing battle between Democrats and Republicans in the face of a horrendously imbalanced budget looks catastrophically absurd. As their country heads toward the edge of the abyss, lawmakers preferred to debate whether or not French fries and pizza should be considered vegetables.

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • US Presidential Election 2012

France’s main sales-tax rate will increase in January 2014 to 20 percent from 19.6 percent, while the second band on home renovations and restaurants will rise to 10 percent from 7 percent currently. A third rate that applies to food and energy will be cut to 5 percent from 5.5 percent in an effort to support the spending power of France’s poorest households, French Prime Minister Jean-Marc Ayrault said today.

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Filed under: * Economics, Politics • Economy • Taxes • * International News & Commentary • Europe • France

Heavenly Father we ask that you will have mercy on America today and bless us in spite of ourselves. We ask that you will give wisdom to all who go to the polls to cast their votes. Help us as we make difficult decisions on a variety of issues and as we seek to elect men and women who will hunger for righteousness and seek the common good to positions of authority in our towns and cities, in our states and in our nation. We pray against any voter fraud or any corruption of proper voter access and ask that justice be done in each and every election, whatever the locale. We also pray for peace and grace with one another as the results are received and digested, through Jesus Christ our Lord, who with you and the Holy Spirit lives and reigns in glory everlasting, Amen--KSH.

Filed under: * By Kendall • * Christian Life / Church Life • Spirituality/Prayer • * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Politics in General • City Government • House of Representatives • Office of the President • Senate • State Government • US Presidential Election 2012 • * Theology • Ethics / Moral Theology

Finance chiefs of the world's 20 leading economies are ringing alarm bells over the U.S. fiscal cliff and Europe's debt woes at a meeting in Mexico this weekend as they look to push back deficit reduction targets to help boost growth.

Unless a fractious U.S. Congress can reach a deal, about $600 billion in government spending cuts and higher taxes are set to kick in on January 1, threatening to push the American economy back into recession and hit world growth.

"The Americans themselves acknowledge that this is a problem," a G20 official said on condition of anonymity. "The U.S. administration says it doesn't want to fall off the fiscal cliff, but right now it can't tell us how exactly it will address it because that issue is on ice ahead of the election."

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • G20 • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Personal Finance • Stock Market • Taxes • The Banking System/Sector • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate • US Presidential Election 2012

French leader François Hollande is uncomfortably close to a collapse in credibility. His poll rating has sunk to 36pc. The speed of decline has been shocking.
The latest broadside comes from ex-German chancellor Gerhard Schröder, supposedly his ally on the Left.
"The election promises of the French president are going to shatter on the walls of economic reality," he said in Paris.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Euro • European Central Bank • Taxes • Foreign Relations • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • France

State officials say someone hacked into the Department of Revenue, exposing about 3.6 million South Carolina tax returns.

Gov. Nikki Haley said Friday about 387,000 credit and debit card numbers were also exposed, and 16,000 of those were unencrypted. State officials are urging anyone who has filed a state tax return since 1998 to call a toll-free number to determine whether their information is affected.

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Filed under: * Culture-Watch • Blogging & the Internet • Law & Legal Issues • Police/Fire • Science & Technology • * Economics, Politics • Defense, National Security, Military • Economy • Personal Finance • Taxes • Politics in General • State Government • * South Carolina • * Theology • Ethics / Moral Theology

The Ontario Medical Association’s call to slap hot fudge and French fries with a so-called fat tax is a regressive measure that will hurt consumers without any provable benefit. The association is also off-base with its proposal to put graphic photos of diseased organs and limbs on junk food packaging. While the association’s aim of raising awareness is laudable, food is not tobacco and shouldn’t be treated as an inherently harmful substance....

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Filed under: * Culture-Watch • Dieting/Food/Nutrition • Health & Medicine • * Economics, Politics • Economy • Taxes • * International News & Commentary • Canada

Indeed, the impact of this latest round of unconventional monetary policy is already fading. Analysts at Morgan Stanley this week decided that returns in the high-yield market were no longer attractive in the face of deteriorating fundamentals. The stock market is struggling to make further headway, while yields on mortgage-backed securities have started to turn up after an initial drop. A drop in third-quarter capital expenditure suggests the Fed policy hasn’t been a catalyst for corporate investment at all.

One major reason for the lack of effectiveness of this latest round of quantitative easing may well be a growing concern with the “fiscal cliff”, automatic US tax rises and spending cuts due to kick in on January 1. Uncertainty over “cliff risk” – and the prospects of a deal in Congress on deficit reduction – seems to be offsetting any positive impact of Fed policies.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Taxes • The Banking System/Sector • The U.S. Government • Budget • Federal Reserve • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate

An Episcopal priest who, with her husband, brings in about $65,000 a year tells Marketplace that they are lower middle class. A woman posting at dcurbanmom.com identifies her family as middle class, and their income is $100,000 a year. CNN talks to a man struggling to save for his son’s education who defines “middle class” as families with too much to qualify for federal Pell Grants—which is at most about $48,000 for a family of three. I was eligible for Pell Grants, and before that for subsidized school lunches, but I’ve always understood my family of origin to be middle class.

A majority of Americans consider themselves middle class, a recent Pew survey found, despite a wide variance in their earnings. So what does “middle class” mean if it applies to most of the country? And if we are all middle class now, what are the political and cultural implications?

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Filed under: * Culture-Watch • Globalization • Psychology • * Economics, Politics • Economy • Personal Finance • Taxes • The U.S. Government • Budget • The National Deficit • Politics in General • * International News & Commentary • America/U.S.A.

From an interview with the authors of the Simpson-Bowles reform plan and Goldman Sachs CEO Lloyd Blankfein:

"...We just met with -- a dozen of the largest high-tech company CEOs in the country. Not only are they hoarding cash. All their customers, all their suppliers are. They're scared to death we're going to go over this cliff and it could be a catastrophe...."

You can find a summary article to read there, it has briefer video links, but the best use of your time is to watch the full interview over here or read the transcript (about 42 1/2 minutes). Also, David Brook's piece on the debt indulgence is worth a careful revisit.

Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • Federal Reserve • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate

A potentially serious complication has arisen in California's latest effort to avoid billions in spending cuts, which threaten the state’s education and welfare systems.

Gov. Jerry Brown's Proposition 30 intends to forestall "draconian" budget cuts by temporarily raising taxes, including sales taxes and income taxes on the wealthy. The initiative could largely determine his legacy, as well as the state’s fiscal health for at least a decade. Moreover, if successful, Prop. 30 could begin to shift the national conversation on taxes after decades of extreme antitax sentiment across the country.

Polls show that a thin majority of state voters support Prop. 30. But that support could be undercut by another proposition that aims to raise taxes for public education. Molly Munger, the millionaire behind the rival initiative, has even suggested she might start airing comparison ads arguing why voters should vote for her proposition, not Governor Brown's Prop. 30.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

And to draw, dear reader, what I think are critical relative comparisons, look at who’s in that ring of fire alongside the U.S. There’s Japan, Greece, the U.K., Spain and France, sort of a rogues’ gallery of debtors. Look as well at which countries have their budgets and fiscal gaps under relative control – Canada, Italy, Brazil, Mexico, China and a host of other developing (many not shown) as opposed to developed countries. As a rule of thumb, developing countries have less debt and more underdeveloped financial systems. The U.S. and its fellow serial abusers have been inhaling debt’s methamphetamine crystals for some time now, and kicking the habit looks incredibly difficult.

As one of the “Ring” leaders, America’s abusive tendencies can be described in more ways than an 11% fiscal gap and a $1.6 trillion current dollar hole which needs to be filled. It’s well publicized that the U.S. has $16 trillion of outstanding debt, but its future liabilities in terms of Social Security, Medicare, and Medicaid are less tangible and therefore more difficult to comprehend. Suppose, though, that when paying payroll or income taxes for any of the above benefits, American citizens were issued a bond that they could cash in when required to pay those future bills. The bond would be worth more than the taxes paid because the benefits are increasing faster than inflation. The fact is that those bonds today would total nearly $60 trillion, a disparity that is four times our publicized number of outstanding debt. We owe, in other words, not only $16 trillion in outstanding, Treasury bonds and bills, but $60 trillion more. In my example, it just so happens that the $60 trillion comes not in the form of promises to pay bonds or bills at maturity, but the present value of future Social Security benefits, Medicaid expenses and expected costs for Medicare. Altogether, that’s a whopping total of 500% of GDP, dear reader, and I’m not making it up. Kindly consult the IMF and the CBO for verification. Kindly wonder, as well, how we’re going to get out of this mess.

Please take the time to read it all and examine the chart closely. The only difference on this between Mr. Gross and myself is that I believe he understates the problem with the 60 trillion dollar figure. As has been discussed on the blog in the past, the correct figure may be as much as three plus times that amount--KSH.

Filed under: * Culture-Watch • Globalization • History • Psychology • * Economics, Politics • Economy • Credit Markets • Currency Markets • Taxes • The U.S. Government • Budget • Medicare • Social Security • Politics in General • House of Representatives • Office of the President • Senate

According to the non-partisan Tax Policy Center, the U.S. is on the threshold of one of the largest tax increases in history, a tax hike that could average $3,500 for every American household.

Without actions from Congress, the report says taxes will go up next year by 20 percent, or $536 billion overall. It will hit Americans at every income level including those living below the poverty line. For a middle income family making $40,000 per year, the tax increase is $2,000.

Read it all.

Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Personal Finance • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate • * International News & Commentary • America/U.S.A.

Support for Gov. Jerry Brown's plan for billions of dollars in tax hikes on the November ballot is slipping amid public anxiety about how politicians spend money, but voters still favor the proposal, according to a new USC Dornsife/Los Angeles Times poll.

The findings suggest that voters are leery of sending more cash to Sacramento in the wake of a financial scandal at the parks department, spiraling costs for a multibillion-dollar high-speed rail project to connect Northern and Southern California and ill-timed legislative pay raises.

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Filed under: * Economics, Politics • Economy • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

An overwhelming majority of Greeks believe new austerity measures the government has promised its international lenders in exchange for more financial aid are unfair and hurt the poorest sections of society, a poll showed on Saturday.

Near-bankrupt Greece needs the European Union and International Monetary Fund's blessing on measures worth nearly 12 billion euros ($16 billion) to unlock its next tranche of aid, without which it faces default and a potential exit from the euro zone.

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Filed under: * Culture-Watch • History • Psychology • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Foreign Relations • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • Greece

Gov. Jerry Brown of California announced when he came into office last year that he had found an alarming $28 billion “wall of debt” looming over the state, which had to be dismantled.

Since then, he has slowed the issuance of municipal bonds, called for spending cuts and tried to persuade the state’s famously antitax voters to approve a tax increase this fall.

On Thursday, an independent group of fiscal experts said Mr. Brown’s efforts were all well and good, but in fact, the “wall of debt” was several times as big as the governor thought.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

So people who spend most of their money on groceries and gasoline and electricity — usually the poorest among us — effectively pay a lower sales tax, because those items aren’t taxed. So do wealthier people who spend most of their money on services — from lawn care to attorney fees — which also are untaxed. People who spend more of their money on clothing or electronics or restaurant meals or most consumer goods pay a higher effective tax rate because those items are taxed.

Now, there are perfectly legitimate reasons to write exemptions into the tax code. It can make the code more equitable: A sales tax is regressive, because poor people must spend a larger portion of their income than wealthier people, who are able to save or invest more; exempting groceries is one way to make the tax less regressive. Exemptions also can discourage those activities that we as a society want to discourage and encourage activities that we want to encourage; hence, a higher tax on cigarettes, and tax breaks for creating jobs in low-income counties.

The problem comes when the loopholes swallow the whole — as they clearly have when twice as many sales are exempted as taxed. The problem comes when the tax exemptions do not reflect generally agreed-upon values, but instead reflect the lobbying power of the favored interests. Or inertia.

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Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Personal Finance • Taxes • Politics in General • State Government • * South Carolina

Cash-strapped officials in Europe are looking for a way to ease their financial burden by upending centuries of tradition and seeking to tap one of the last untouched sources of wealth: the Catholic Church.

Thousands of public officials who have seen the financial crisis hit their budgets are chipping away at the various tax breaks and privileges the church has enjoyed for centuries.

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Filed under: * Christian Life / Church Life • Parish Ministry • * Culture-Watch • Law & Legal Issues • Religion & Culture • * Economics, Politics • Economy • Housing/Real Estate Market • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • * Religion News & Commentary • Other Churches • Roman Catholic

Watch it all.

Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit

More big U.S. companies are reincorporating abroad despite a 2004 federal law that sought to curb the practice. One big reason: Taxes.

Companies cite various reasons for moving, including expanding their operations and their geographic reach. But tax bills remain a primary concern. A few cite worries that U.S. taxes will rise in the future, especially if Washington revamps the tax code next year to shrink the federal budget deficit.

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Filed under: * Culture-Watch • Globalization • Law & Legal Issues • * Economics, Politics • Economy • Corporations/Corporate Life • Taxes • The U.S. Government • Budget • Politics in General • * Theology • Ethics / Moral Theology

What's the fiercest rivalry in American politics today? There's Obama-Romney, of course, but try O'Malley-McDonnell—neighboring governors battling across the Potomac River over how best to resuscitate a moribund economy.

Martin O'Malley, Maryland's liberal Democratic governor, is competing for jobs, businesses and tax dollars with Bob McDonnell, Virginia's conservative Republican chief executive. Both are rising stars considered potential presidential hopefuls in 2016. Both are Irish Catholics—Mr. McDonnell playfully calls Mr. O'Malley "the big Irishman to our north"—and each leads his party's association of governors. The two regularly spar on the Sunday talk shows, on the pages of Washington-area newspapers, and over the radio.

Each man seems obsessed with proving that his economic model has outperformed the other's....

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government • * Theology • Ethics / Moral Theology

Shortly after confiding to his countrymen that he had been unable to sleep at night because of all the young unemployed people in his country, Spanish King Juan Carlos secretly hopped aboard a plane and went on a lavish safari to Botswana, where he shot elephants.

When word leaked out this spring, Spaniards were outraged. Newspapers calculated that such hunting trips cost twice the country’s average annual salary. Tomas Gomez, a Socialist party leader, called on the king to choose between his “public responsibilities or an abdication.” Now, critics are calling on him to slash his budget and reveal how he is spending the money.

The backlash against the 74-year-old king is part of a broader soul-searching in Europe about the role and relevance of monarchies as the economic crisis deepens.

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Filed under: * Culture-Watch • History • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Currency Markets • Euro • European Central Bank • Taxes • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Foreign Relations • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • Spain • * Theology • Ethics / Moral Theology

It's game on. But to understand the contest — and the associated scare tactics — it's best to first understand a few unpleasant facts that are not in dispute:

•The popular old-age health insurance plan is on a financially unsustainable course. Medicare's payroll tax and premiums that beneficiaries pay cover barely half the program's costs, and as Baby Boomers retire, things will get worse. The tab is projected to rise rapidly: 7.6% a year for the doctor-care part of Medicare and 8.8% for the program's prescription drug benefit, for example. The economy, a rough proxy for the nation's ability to afford this, is growing less than 2% a year, leaving a huge gap.
•There is no painless fix. Both presidential candidates have committed to detailed plans for curbing costs, and no matter who wins, beneficiaries will pay more or get less, likely both. People who say otherwise are deluding themselves. As economist Herb Stein famously said: Anything that can't go on forever won't.

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Filed under: * Culture-Watch • Aging / the Elderly • Health & Medicine • Middle Age • Young Adults • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Personal Finance • Taxes • The U.S. Government • Budget • Medicare • The National Deficit • Politics in General • Office of the President • * Theology • Ethics / Moral Theology

Most economists surveyed by USA TODAY have little faith a divided Congress will adequately address looming tax increases and spending cuts, significantly hampering economic growth well into 2013.

The standoff in Washington, along with the global economic slowdown, threatens a U.S. economy that otherwise would be gaining steam on a strengthening U.S. housing market and improving private-sector balance sheets, economists say. The survey of 50 leading economists was conducted Aug. 3-8.

Fifty-three percent of those surveyed don't think Congress will be able to lessen the impact of $560 billion in tax increases and spending cuts, slated to take effect at year's end, in a way that avoids significant damage to the economy. The Congressional Budget Office says the so-called fiscal cliff would slice up to 4 percentage points off growth next year -- causing the economy to contract in the first half -- if all the deficit-slicing measures occur at once.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

Fiscal woes that have caused high-profile bankruptcies in California are surfacing across the country as municipalities struggle with uneven growth and escalating health and pension costs following the worst recession since the 1930s.

Budget crunches already have prompted Michigan lawmakers to authorize emergency fiscal managers, and led the mayor of Scranton, Pa., to temporarily cut the pay of all city workers to the minimum wage.

In a majority of the nation's 19,000 municipalities—urban and rural, big and small—stagnant property tax revenues, less aid from states and rising costs are forcing less dramatic but still difficult steps.

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Filed under: * Culture-Watch • Urban/City Life and Issues • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Personal Finance • Pensions • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • City Government

The most eye-opening and persuasive parts of the book explore the revenue and benefits to be had from cannabis without a single joint’s being lighted. Throughout human history, cultures from Mongolia to Peru have used the non-psychoactive cannabis plant for food, shelter, clothing and medicine. Early drafts of the Declaration of Independence were written on hemp paper, and the covered pioneer wagons that took America westward were made of cannabis fiber. In 1942, cannabis prohibition was suspended because of a shortage in industrial supply during the war, and the government actually encouraged farmers to grow it, using a propaganda film, “Hemp for Victory.”

The place industrial cannabis is not found yet, Fine points out, is in the above­ground American economy, thanks to its listing as a Schedule I narcotic. The Drug Enforcement Administration’s official stance is that it has no medical value at all: “Smoked marijuana has not withstood the rigors of science — it is not medicine, and it is not safe.” O.K., Fine seems to say, but tell that to the doctors with evidence of its ability to shrink tumors and ease the effects of chemotherapy; or to the seniors of Orange County who depend on medical marijuana to treat their arthritis, and the doctor who uses it to treat his glaucoma; or to the 30-year-old Iraq war veteran with the shrapnel injuries who thanks God every day for this drug. It is prescription drugs that are now the leading cause of fatal drug overdoses — more than 26,000 each year. Also each year, over 23,000 Americans die of alcohol-related causes. None have died from cannabis alone.

As I said, the issue is loaded. And yet the side that has all the load never seems to win in America....

Read it all.

Filed under: * Culture-Watch • Books • Drugs/Drug Addiction • Health & Medicine • Law & Legal Issues • Psychology • * Economics, Politics • Economy • Consumer/consumer spending • Taxes

Quick Stats[:]

As of 2012-06 the civilian labor force was 155,163,000
As of 2012-06 there were 111,145,000 in the private workforce
As of 2012-06 there were 56,174,538 collecting some form of SS or disability benefit
Ratio of SS beneficiaries to private employment just passed the 50% mark (50.54%)

....As of May 2012, the outlays are $756.9 billion annualized. Fewer worker relatively speaking, support more and more recipients with exponentially growing payments. This is supposed to work?

Read it all from Mish's economics blog (another from the long queue of should-have-already-been-posted material).

Filed under: * Culture-Watch • Aging / the Elderly • Middle Age • Psychology • Young Adults • * Economics, Politics • Economy • Credit Markets • Labor/Labor Unions/Labor Market • Taxes • The U.S. Government • Budget • Census/Census Data • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate • * International News & Commentary • America/U.S.A.

Facing the same financial stressors that pushed San Bernardino toward bankruptcy, cities across California are slashing day-to-day services and taking other drastic actions to skirt a similar fiscal collapse.

For some, it may not be enough.

San Bernardino on Tuesday became the third California city to seek bankruptcy protection in the last month and, while no one expects the state to be consumed by municipal insolvencies, other cities teeter on the abyss.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Taxes • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • City Government

Stockton, California--This Gold Rush-era port city, an epicenter of California's agricultural exports, will become the nation's largest city to seek protection under the U.S. bankruptcy code after its City Council on Tuesday stopped bond payments, slashed employee health and retirement benefits and adopted a day-to-day survival budget.

City Manager Bob Deis likened the process to cutting off an arm to save the body. He is expected to file bankruptcy papers immediately.....

Stockton..[had] been in negotiations with its creditors since late March under AB 506, a new California law requiring mediation before a municipality can file for reorganization of debt. It was the first use of the law, and policy analysts who watched its torturous and tedious progress have titled their report on it "Death by a Thousand Meetings." Mediations ended Monday at midnight.

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Credit Markets • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Taxes • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • City Government

The new rules could hit pension plans in states like Illinois and New Jersey particularly hard, and even raise borrowing costs for certain municipalities, analysts say. "This could be the event that incites a bigger policy response than what we've seen so far," says Matt Fabian, managing director at Municipal Market Advisors, a research firm.

The exact impact of the new rules by the Governmental Accounting Standards Board isn't clear. According to researchers at Boston College, pension liabilities at 126 state and municipal pension plans would jump by roughly $600 billion, or about 18%. The estimate is based on 2010 financial data and doesn't reflect the stock market's recent rebound or moves by many U.S. states to rein in pension costs.

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Personal Finance • Pensions • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • City Government • State Government

State and local governments are keeping the tightest lid on spending in three decades, even though tax revenue is rising again and powerful interest groups are asking for more money.

he tight budget controls represent a sharp reversal from several years ago when states struggled to control spending, despite a drop in tax collections, and got a $250 billion bailout from the federal government. Today, both Republicans and Democrats are rejecting spending requests even from traditional allies -- police, businesses, teachers, doctors and others -- and keeping budgets balanced as federal aid recedes.

"We're seeing some incredibly significant examples of groups not getting what they want," says Scott Pattison, head of the National Association of State Budget Officers. "There doesn't appear to be that much pushback. Maybe there's an acceptance that cuts have to occur."

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Filed under: * Economics, Politics • Economy • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • City Government • State Government

How much money does the U.S. government forgo by not taxing religious institutions? According to a University of Tampa professor, perhaps as much as $71 billion a year.

Ryan Cragun, an assistant professor of sociology, and two students examined U.S. tax laws to estimate the total cost of tax exemptions for religious institutions — on property, donations, business enterprises, capital gains and “parsonage allowances,” which permit clergy to deduct housing costs....

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Filed under: * Culture-Watch • Law & Legal Issues • Church/State Matters • Religion & Culture • * Economics, Politics • Economy • Taxes • * International News & Commentary • America/U.S.A. • * Religion News & Commentary • Other Faiths • Atheism

After clinching Spain’s €100 billion bank bailout, Prime Minister Mariano Rajoy flew to Poland on Sunday for the Spanish team’s soccer match, declaring “this matter is now resolved.”

Not so fast, prime minister.

On Tuesday, Spain’s long-term borrowing costs soared to their highest level since the country joined the euro zone. Investors have apparently concluded that the rescue is potentially a much better deal for the banks and their shareholders than for the government, its taxpayers and bondholders.

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Filed under: * Economics, Politics • Economy • Taxes • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • Spain • * Theology • Ethics / Moral Theology

Every generation has an incentive to borrow money from the future to spend on itself. But, until ours, no generation of Americans has done it to the same extent. Why?

A huge reason is that earlier generations were insecure. They lived without modern medicine, without modern technology and without modern welfare states. They lived one illness, one drought and one recession away from catastrophe. They developed a moral abhorrence about things like excessive debt, which would further magnify their vulnerability.

Recently, life has become better and more secure. But the aversion to debt has diminished amid the progress. Credit card companies seduced people into borrowing more. Politicians found that they could buy votes with borrowed money. People became more comfortable with red ink....

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Filed under: * Culture-Watch • History • Psychology • * Economics, Politics • Economy • Consumer/consumer spending • Personal Finance • Pensions • Taxes • The U.S. Government • The National Deficit • Politics in General • City Government • State Government • * Theology • Ethics / Moral Theology • Theology: Scripture

Although they have rented it out to a restaurant for the past five years, the owners of one building in Aspe have never paid property tax. Nor have they ever paid tax on the apartments that house two of their employees. But that may be about to change. Last week, the city's government voted to partially rescind the exemption that the Catholic Church, landlord of those three properties and another eight more in town, has long enjoyed. And thanks to the crisis that threatens to upend Spain's economy, it's not the only place demanding change.

Three different laws, including a 1979 agreement with the Vatican, exempt the Catholic Church from paying property tax in Spain. The same provision holds for other recognized religions and non-profit organizations like the Red Cross, yet because Catholicism is the dominant religion in Spain, and because the Church's holdings there are so vast (España Laica, a pro-secularism group, estimates that were it not for the exemption, the church would annually owe 2.5 to 3 billion euros in property taxes), critics have long argued that the arrangement is part of the preferential treatment granted the Catholic Church. It's only now, however, with austerity measures bearing down and a European bailout looming, that anyone has thought to put that criticism into action. Economic pressure, in other words, may well accomplish what 33 years of democracy have not.

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Filed under: * Culture-Watch • Law & Legal Issues • Church/State Matters • Religion & Culture • * Economics, Politics • Economy • Taxes • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • Spain • * Religion News & Commentary • Other Churches • Roman Catholic

An essential element of Greece’s recovery plan has been to collect more taxes from a population that has long engaged in tax avoidance. The government is owed 45 billion euros in back taxes, tax officials in Athens said, only a fraction of which will ever be recovered.

To understand the difficulty, just talk to Nikos Maitos, a longtime official in Greece’s financial crimes investigation unit.

When he and a team of inspectors recently prowled the recession-hit island of Naxos for tax evaders, a local radio station broadcast his license plate number to warn residents.

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Taxes • The Banking System/Sector • Foreign Relations • Politics in General • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • Greece

“I voted for [Walker] in 2010 because I realized we have to do something about the deficit. I voted for him in the recall because I don’t believe recall elections are meant for what they’re doing with it,” said Katy Tomlanovich, who teaches at Northeast Wisconsin Technical College. She said recall elections should be reserved for politicians who commit gross malfeasance, not for those who make unpopular decisions.

Tomlanovich said she plans to vote for Obama in November but cast a ballot for the Republican on Tuesday. “Scott Walker is actually doing something about [spending], and I think he should be allowed to serve the rest of his term.”

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Filed under: * Economics, Politics • Economy • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate • State Government

Everyone seems to have an opinion on what the vote in Wisconsin means for national politics.

But beyond the issue of whether Scott Walker's survival puts Wisconsin in play in November, his victory represents an example of the way politicians in our most pressed states are sorting themselves as they confront this long fiscal downturn. Increasingly they fall into two camps: those willing to undertake tough reforms in the face of severe fiscal restraints that don't appear likely to improve anytime soon, and those who continue to put off the difficult decisions even as their states' balance sheets deteriorate and investors grow wary of their budget instability.

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The nonpartisan Congressional Budget Office (CBO) said Tuesday that unless lawmakers act to prevent scheduled tax increases and spending cuts at the end of the year, a recession will likely result in early 2013.

Early next year income taxes are set to go up when the Bush-era tax rates expire. Automatic spending cuts totaling roughly $109 billion triggered by last August’s debt-ceiling deal are set to hit. Meanwhile, payments to physicians under Medicare will be slashed.

CBO projects that these and other elements of the so-called “fiscal cliff” will cause the economy to contract as demand dries up.

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Filed under: * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate

Defense contractors have slowed hiring. Tax advisers are warning firms not to count on favorite breaks. And hospitals are scouring their books for ways to cut costs.

Across the U.S. economy, anxiety is rising about the potential for widespread disruptions after the November election, when a lame-duck Congress will have barely two months to resolve a grinding standoff over taxes and spending.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Housing/Real Estate Market • Labor/Labor Unions/Labor Market • Personal Finance • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate

California is facing a much deeper budget deficit than expected due to weak tax revenues and slow progress in cutting budgets, Governor Jerry Brown said on Saturday.

Brown said the shortfall for the fiscal year ending on June 30 now stood at $16 billion, up from a previous estimate of $9.2 billion made in January.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

...it is tempting for progressives to dismiss complaints about redistribution of wealth as ignorant or hypocritical, as in many cases they probably are. Yet all naïveté about public budgets aside, a strong presumption in favor of being able to keep the money you earn is a valuable and powerful thing. Progressives who embrace the concept of wealth redistribution on egalitarian grounds, or who join the refrain of “tax the rich” as the main solution to our fiscal and economic problems, tend to miss the many ways in which economic unfairness can remain untouched or even affirmed by redistributive policies....

It’s important to focus rhetoric and activism on making the rich “pay their fair share”—especially during this austerity season, in which the practical alternative is watching services for the poor dramatically cut....

This can’t, however, be the final analysis of redistributive policies. Throughout the Old Testament, inequality itself is hardly the only issue. There is also the question of fair access to the means of making a living—which, in the Old Testament world, means fair access to land ownership.

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Filed under: * Culture-Watch • Poverty • * Economics, Politics • Economy • Taxes • The U.S. Government • Politics in General • City Government • State Government • * Theology • Ethics / Moral Theology

The last major overhaul of the tax code took place when a Democratic Congress, working with Reagan, passed the Tax Reform Act of 1986. It simplified the code, decreased individual tax rates, increased corporate taxes and significantly reduced the number of exemptions, deductions, credits and loopholes. The reform also set the tax rate for capital gains at about 23 percent, which was reduced dramatically to around 15 percent as part of the Bush tax cuts.

Ever since the 1986 reform was passed, Congress has been systematically chipping away at the tax code, adding literally thousands of changes and additional tax benefits, exemptions and loopholes, junking up the tax code and making it more complicated and less fair.

"It's out of control, says Eugene Steuerle, an Urban Institute economist. "They keep throwing junk in the tax code which adds to the deficit."

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Filed under: * Culture-Watch • History • * Economics, Politics • Economy • Taxes • Politics in General • * International News & Commentary • America/U.S.A.

Almost nine out of 10 charity bosses fear big donations from wealthy backers will be hit by Chancellor George Osborne's cap on tax relief for charitable donations, according to a survey.

The findings of the survey of 120 charity chief executives and senior executives conducted by the Charities Aid Foundation (CAF) will intensify the pressure on the Government to rethink its plans unveiled in last month's Budget.

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Filed under: * Christian Life / Church Life • Parish Ministry • Stewardship • * Culture-Watch • Charities/Non-Profit Organizations • Religion & Culture • * Economics, Politics • Economy • Personal Finance • Taxes • Politics in General • * International News & Commentary • England / UK

(The full title is: "White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You")--KSH

What was the main difference between Great Britain and France? It -wasn’t the size of their national debts: at the time of the French Revolution, Great Britain’s debt per person was much larger than France’s. The difference was politics. In Great Britain, the political system was dominated by elected representatives who supported an activist government and were willing to endorse the taxes necessary to pay for its resulting debts. In France, the government did not have the legitimacy necessary to raise the money to service its smaller debts. And although its tax rates were lower than Britain’s, the problem of taxation without representation was an important cause of the Revolution.

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Filed under: * Culture-Watch • History • * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • The National Deficit • * International News & Commentary • America/U.S.A. • England / UK • Europe • France

When the European Union's finance ministers met in Copenhagen on 30 March they gave the clearest indication yet of what has been clear to most observers for months: that the 27 member states cannot agree a tax on financial transactions. A tax on share deals modelled on the UK's stamp duty might be possible, but a wider tax on financial trades is off the agenda for the foreseeable future. The German finance ministry, one of the strongest supporters of the tax, admitted as much at the meeting, calling for work to focus on a tax on share transactions.

Since June 2011, when the European Commission announced it would propose an FTT, it had been obvious that the plan would not fly...

Apparently heedless that the object was immoveable, José Manuel Barroso, the Commission president, last week made yet another attempt to exert irresistible force in support of the tax. He told members of national parliaments and the European Parliament that the revenue raised by the tax would allow member states a cut of up to 50% in their contributions to funding the EU.

Perhaps Barroso's intransigence is inspired by the unfortunate fact that the FTT proposal was central to the Commission's plans for financing the EU's multiannual financial framework (MFF) for 2014 to 2020. Removing the idea of an EU-wide tax from the agenda leaves a big hole in Barroso's plans for financing the MFF.

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Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Euro • European Central Bank • Stock Market • Taxes • The Banking System/Sector • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Foreign Relations • Politics in General • * International News & Commentary • Europe

Prime Minister Mariano Rajoy will unveil the most austere budget since before Spain’s return to democracy in 1978, risking a deeper recession in a bid to avoid succumbing to Europe’s debt crisis.

“There’s interest in seeing how they are going to manage this particular trick of cutting the budget so aggressively,” said Harvinder Sian, an interest-rate strategist at Royal Bank of Scotland Group Plc in London, during a telephone interview. “The recession will be dramatic.”

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Euro • European Central Bank • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • * International News & Commentary • Europe • --European Sovereign Debt Crisis of 2010 • Spain

At some point, the spectacle America is now calling a presidential campaign will turn away from comedy and start focusing on things that really matter—such as the "fiscal cliff" our federal government is rapidly approaching.

The what? A cliff is something from which you don't want to fall. But as I'll explain shortly, a number of decisions to kick the budgetary can down the road have conspired to place a remarkably large fiscal contraction on the calendar for January 2013—unless Congress takes action to avoid it.

Well, that gives Congress plenty of time, right? Yes. But if you're like me, the phrase "unless Congress takes action" sends a chill down your spine—especially since the cliff came about because of Congress's past inability to agree.

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Filed under: * Culture-Watch • Aging / the Elderly • History • * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

The agency says it has strengthened the electronic system used to screen returns for potentially fraudulent refund claims by thieves who often use other people's Social Security numbers or other identifying information. When the computer detects reason to suspect fraud, it refers a tax return for investigation, holding up the refund for weeks.

This and other computer glitches have slowed refunds and led to widespread unhappiness, particularly among low- and moderate-income people, who often receive significant cash refunds thanks to a range of tax credits and often rely on that money to pay bills.

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Filed under: * Culture-Watch • Law & Legal Issues • Science & Technology • * Economics, Politics • Economy • Taxes • The U.S. Government • * Theology • Ethics / Moral Theology

Pinched by the global recession and tough-love budget demands of the European Union, the Italian government is looking for extra revenue, and has its eyes set on commercial properties owned by the Roman Catholic Church.

On Feb. 15, the government of Prime Minister Mario Monti announced it wants to revise rules on the tax-exempt status of church-owned commercial property. Although the exemption also applies to other not-for-profit entities, such as trade unions, political parties and religious groups, the Catholic church is its largest beneficiary.

"Such a move would have been unimaginable six months ago," said Francesco Perfetti, a history professor at LUISS University in Rome. "After all, no matter whether you are a believer or not, the church is an integral part of Italy's culture."

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Filed under: * Culture-Watch • Law & Legal Issues • Church/State Matters • Religion & Culture • * Economics, Politics • Economy • Housing/Real Estate Market • Taxes • * International News & Commentary • Europe • Italy

Corporate America’s love affair with debt is driven by a heavy subsidy, courtesy of the federal tax code. It’s an unhealthy preference that the Obama administration is now reviewing.

The problem arises because the interest that corporations pay on their debt is deductible on their federal taxes.

To understand the effect of this deduction, imagine if you could deduct the interest you pay on your debt. I am not just talking about the deduction on your home mortgage. This would be a deduction for all of the interest paid on your credit card bills, auto loans and any other loans you had, including the one from Uncle Mikey....

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Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Taxes • The U.S. Government • * Theology • Ethics / Moral Theology

The Obama administration will propose lowering the top income-tax rate for corporations to 28% from 35% but would raise overall tax revenue by eliminating dozens of popular deductions in an effort to restructure the corporate tax code.

The proposal, which will be announced Wednesday, would lower the "effective" tax rate on manufacturers to "no more than 25%," according to a senior administration official, down from the current average rate of about 32%. It raises taxes on oil and gas companies that would lose many large deductions and subsidies.

The plan would require U.S. companies operating overseas to pay—for the first time—a minimum tax rate on their foreign earnings.

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Filed under: * Culture-Watch • Law & Legal Issues • * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Taxes • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The U.S. Government • Foreign Relations • Politics in General • Office of the President • President Barack Obama

For the fourth year in a row, President Obama is proposing lower tax deductions for the wealthy on donations to churches and other nonprofit organizations. And for the fourth year in a row, nonprofit groups say the change would lead to a dramatic drop in charitable giving.

The reduction, included in Obama's 2013 budget proposal, rankled the Union of Orthodox Jewish Congregations of America.

"We were hoping this would not come up again this year. We asked that they not renew it, but unfortunately the request was not taken," said Nathan Diament, the group's Washington director. "It's a real concern."

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Filed under: * Christian Life / Church Life • Parish Ministry • Stewardship • * Culture-Watch • Charities/Non-Profit Organizations • Religion & Culture • * Economics, Politics • Economy • Taxes • The U.S. Government • Budget • Politics in General • Office of the President • President Barack Obama

In place of those cuts, the president offered a mixture of real steps to reduce the deficit — including nearly $2 trillion in additional taxes over the coming decade, mainly at the expense of high-income Americans — and bogus ones, such as almost $850 billion in "savings" from the previously planned end of foreign combat operations, a chunk of which would be spent on infrastructure and jobs programs. The one bright spot: Obama didn't ignore the rapid and unsustainable growth in healthcare entitlements, as he did in last year's budget. Instead, he called for saving about $360 billion over 10 years on those programs, in part by paying drug companies less for medicines prescribed to low-income Medicare patients.

There's little chance this Congress will agree to many, or even any, of those suggestions. Tax increases seem particularly unlikely. But even if lawmakers were to adopt all of Obama's deficit-cutting measures, they wouldn't go far enough to set the budget on a path toward balance.

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Filed under: * Culture-Watch • History • * Economics, Politics • Economy • Credit Markets • Currency Markets • Taxes • The U.S. Government • Budget • Medicare • Social Security • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate

US economic growth will slow dramatically if tax rises and spending cuts come into effect as planned in 2013, according to new figures from the Congressional Budget Office.

The expiry of tax cuts originally passed by president George W. Bush, the end of a 2 per cent payroll tax holiday and automatic spending cuts agreed last August will reduce growth to just 1.1 per cent in 2013 unless changes are made.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Corporations/Corporate Life • Personal Finance • Taxes • The U.S. Government • Budget • The National Deficit • Politics in General • House of Representatives • Office of the President • Senate

South Carolina residents who bought things last year from Amazon.com are now receiving emails reminding them that they owe the state money, because the online retailer didn't collect the sales taxes.

While Amazon's customers might be surprised, South Carolina residents always have been required to pay tax on online purchases -- it's just a question of who collects the money. In practice, when it comes to declaring online purchases and paying the tax, consumers have been lax, costing the state an estimated $110 million annually....

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Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Taxes • Politics in General • State Government • * South Carolina

When people heard that Mitt Romney’s federal income tax rate was about 15 percent, the immediate reaction of many was to assume that their own rate was higher. The top marginal rate is 35 percent, after all, and the marginal rate on a couple with $70,000 in taxable income is 25 percent.

The truth is that most households probably pay a lower rate than Mr. Romney. It is impossible to know for sure, given that he has yet to release his tax return. What is clear, though, is that a large majority of American households — about two out of three — pays less than 15 percent of income to the federal government, through either income taxes or payroll taxes.

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Filed under: * Economics, Politics • Economy • Consumer/consumer spending • Personal Finance • Taxes • Politics in General • Office of the President • * International News & Commentary • America/U.S.A.