Obama threatens to veto $440 billion tax deal

[Clarko95 📚💰📈]

http://www.nytimes.com/2014/11/26/business/congress-nears-deal-on-major-business-tax-breaks.html

There were 55 tax breaks and credits that expired last year (when exactly? Can't find a date) that, if not renewed by December 31st, cannot be claimed this year, and the IRS is warning that this could cause some major headaches come tax filing time in early 2015. It's worth a cool $440 billion bucks over 10 years, and there were secret negotiations between Harry Reid and GOP leadership.

Obama has threatened to veto it, saying it was too friendly to corporations, while Congressional Dems flipped when they learned about the details of the negotiations, saying Reid was being too generous to the GOP.

Some provisions:
- would make permanent 10 provisions, including an expanded research and development tax credit, which businesses and the Obama administration have wanted to make permanent for years (worth $15.6 billion per year)
- a measure allowing small businesses to deduct virtually any investment (worth $7.3 billion per year)
- the deduction for state and local sales taxes
- the American Opportunity Tax Credit for college costs (worth $9.7 billion per year)
- deductions for employer-provided mass transit
- four different breaks for corporate and charitable giving (worth $1.6 billion per year)
- Smaller measures already passed by the Senate Finance Committee, from tax breaks for car-racing tracks to benefits for racehorse owners, would be extended for one year and retroactively renewed for the current tax year
- The tax credit for wind power, a Democratic priority, would phase out and end after 2017
- tax credits for biodiesel
- tax credits for coal produced in Native American communities
- breaks for energy efficient homes and commercial buildings

The real deal-breaker for Congressional Dems is that the deal would exclude making the Earned Income Tax Credit's recent expansion permanent and the Child Tax Credit (they actually expire in 2017). Republicans cite Obama's recent immigration order for opposition, saying that more undocumented immigrants would take advantage of it (tax aides for both parties agree that this will happen). Republicans also say Obama pushed for many expanded business and research credits initially, but now he has reversed his position.

Interestingly, the deficit hawk politicians are nowhere to be found, as this would require $44 billion in offsets per year in either spending cuts and/or tax increases elsewhere. "The price tag is a result of irresponsible horse trading whereby each side got to claim its favorite tax break without paying for it," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for lower deficits.

A possible solution is that the new Republican Congress will pass this bill in January when the new Congress convenes, which means the Democrats will be in a weaker position to negotiate.

[they don't love you like i love you]

Some provisions:
- would make permanent 10 provisions, including an expanded research and development tax credit, which businesses and the Obama administration have wanted to make permanent for years (worth $15.6 billion per year)
- a measure allowing small businesses to deduct virtually any investment (worth $7.3 billion per year)
- the deduction for state and local sales taxes
- the American Opportunity Tax Credit for college costs (worth $9.7 billion per year)
- deductions for employer-provided mass transit
- four different breaks for corporate and charitable giving (worth $1.6 billion per year)
- Smaller measures already passed by the Senate Finance Committee, from tax breaks for car-racing tracks to benefits for racehorse owners, would be extended for one year and retroactively renewed for the current tax year
- The tax credit for wind power, a Democratic priority, would phase out and end after 2017
- tax credits for biodiesel
- tax credits for coal produced in Native American communities
- breaks for energy efficient homes and commercial buildings

I bolded the only good ones. The first one is probably a combination of good ones and bad ones. So overall yes, good move by Obama.

[KCDem]

Wonderful news! Raise the taxes!

[○∙◄☻¥tπ[╪AV┼cVê└]

Tax breaks for energy efficiency are too often a racket that subsidizes newer and larger buildings most of all - in other words, exactly the opposite of what is actually most energy efficient. It's nearly as ridiculous as how the typical hybrid vehicle owner benefits from thousands of dollars in direct subsidies and tax credits, yet cyclists receives little or nothing. The underlying logic is anything but "green."

Anyway, this deal is horrifically bad. I don't know how Reid "negotiated" an extendor that includes nearly every tax credit except for those that most benefit the poor, but thank God that this abomination has begun to receive attention and even more that Obama is refusing to play along.

It's the typical Democratic strategy. Start out with your position being the compromise position, and then after the Republicans refuse to budge, meet them halfway a couple more times.

[🐒Gods of Prosperity🔱🐲💸]

would be nice if a stalemate on this leads to some actual tax reform. probably not, but would be nice.

[All Along The Watchtower]

Republicans "reward" their (white) working-class supporters by announcing that they would allow the Earned Income Tax Credit and the Child Tax Credit to expire. Why? Because of Obama's executive action over immigration, of course.

http://www.huffingtonpost.com/ian-reifowitz/gop-payback-to-white-work_b_6239006.html

Petty, spiteful, etc.

[Landslide Lyndon]

Republicans "reward" their (white) working-class supporters by announcing that they would allow the Earned Income Tax Credit and the Child Tax Credit to expire. Why? Because of Obama's executive action over immigration, of course.

http://www.huffingtonpost.com/ian-reifowitz/gop-payback-to-white-work_b_6239006.html

Petty, spiteful, etc.

I'm sure they don't mind as long as these people continue to spread the word of Jesus Christ and bash gays, immigrants and single women.

[AggregateDemand]

Republicans "reward" their (white) working-class supporters by announcing that they would allow the Earned Income Tax Credit and the Child Tax Credit to expire. Why? Because of Obama's executive action over immigration, of course.

http://www.huffingtonpost.com/ian-reifowitz/gop-payback-to-white-work_b_6239006.html

Petty, spiteful, etc.

I'm not sure what you're trying to say. The Child Tax Credit is middle class avarice, and the EITC is its current form is basically the same irrelevant love for people who make children they can't afford to raise.

We'd all be better off if those policies were eliminated or reformed, even if Obama gets blamed.

[TDAS04]

He should. 

[Indy Texas]

Republicans "reward" their (white) working-class supporters by announcing that they would allow the Earned Income Tax Credit and the Child Tax Credit to expire. Why? Because of Obama's executive action over immigration, of course.

http://www.huffingtonpost.com/ian-reifowitz/gop-payback-to-white-work_b_6239006.html

Petty, spiteful, etc.

I'm not sure what you're trying to say. The Child Tax Credit is middle class avarice, and the EITC is its current form is basically the same irrelevant love for people who make children they can't afford to raise.

We'd all be better off if those policies were eliminated or reformed, even if Obama gets blamed.

You can get EITC without having children. I know this for a fact because a couple of years ago I was eligible for it when I was in grad school and working part time.

Anyway, you can't run on "Ooooh, Obummer and the Dim-o-crats are gunna raise yer taxes! Oogah-boogah!" and then turn around and demand that poor white people pay more tax than they otherwise would.

[King]

Yeah those moochers taking a thousand dollars of EITC in exchange for the 100k burden of raising a child!!!! Those LOSERS are living high off the hog

[Joe Republic]

Republicans "reward" their (white) working-class supporters by announcing that they would allow the Earned Income Tax Credit and the Child Tax Credit to expire. Why? Because of Obama's executive action over immigration, of course.

http://www.huffingtonpost.com/ian-reifowitz/gop-payback-to-white-work_b_6239006.html

Petty, spiteful, etc.

I'm not sure what you're trying to say. The Child Tax Credit is middle class avarice, and the EITC is its current form is basically the same irrelevant love for people who make children they can't afford to raise.

We'd all be better off if those policies were eliminated or reformed, even if Obama gets blamed.

Good thing your party makes it so easy to abort all those unaffordable babies you're complaining about!

[AggregateDemand]

You can get EITC without having children. I know this for a fact because a couple of years ago I was eligible for it when I was in grad school and working part time.

Anyway, you can't run on "Ooooh, Obummer and the Dim-o-crats are gunna raise yer taxes! Oogah-boogah!" and then turn around and demand that poor white people pay more tax than they otherwise would.

Why not? Democrats ran on healthcare reform, but they passed a terrible "Republican" law that the executive branch couldn't even execute without crippling our fragile economy.

Yes, you can get EITC if you're single, but look up the benefits schedule and you'll see the amount is basically nothing compared to the scheduled benefits. The sad part is that we have bipartisan support for raising the EITC for single people by 200% or 300% depending upon the specific proposal. Unfortunately, EITC reform isn't good for a political punch-up so no one does anything about it. Kind of like corporate tax reform or income tax reform.

[Indy Texas]

Why not? Democrats ran on healthcare reform, but they passed a terrible "Republican" law that the executive branch couldn't even execute without crippling our fragile economy.

Ah yes, tell us more about how unemployment and inflation have risen and job growth has plummeted since the ACA's provisions went into effect.

[H. Ross Peron]

Good. The President should continue to stand strong on this position.

[hopper]

http://www.nytimes.com/2014/11/26/business/congress-nears-deal-on-major-business-tax-breaks.html

There were 55 tax breaks and credits that expired last year (when exactly? Can't find a date) that, if not renewed by December 31st, cannot be claimed this year, and the IRS is warning that this could cause some major headaches come tax filing time in early 2015. It's worth a cool $440 billion bucks over 10 years, and there were secret negotiations between Harry Reid and GOP leadership.

Obama has threatened to veto it, saying it was too friendly to corporations, while Congressional Dems flipped when they learned about the details of the negotiations, saying Reid was being too generous to the GOP.

Some provisions:
- would make permanent 10 provisions, including an expanded research and development tax credit, which businesses and the Obama administration have wanted to make permanent for years (worth $15.6 billion per year)
- a measure allowing small businesses to deduct virtually any investment (worth $7.3 billion per year)
- the deduction for state and local sales taxes
- the American Opportunity Tax Credit for college costs (worth $9.7 billion per year)
- deductions for employer-provided mass transit
- four different breaks for corporate and charitable giving (worth $1.6 billion per year)
- Smaller measures already passed by the Senate Finance Committee, from tax breaks for car-racing tracks to benefits for racehorse owners, would be extended for one year and retroactively renewed for the current tax year
- The tax credit for wind power, a Democratic priority, would phase out and end after 2017
- tax credits for biodiesel
- tax credits for coal produced in Native American communities
- breaks for energy efficient homes and commercial buildings

The real deal-breaker for Congressional Dems is that the deal would exclude making the Earned Income Tax Credit's recent expansion permanent and the Child Tax Credit (they actually expire in 2017). Republicans cite Obama's recent immigration order for opposition, saying that more undocumented immigrants would take advantage of it (tax aides for both parties agree that this will happen). Republicans also say Obama pushed for many expanded business and research credits initially, but now he has reversed his position.

Interestingly, the deficit hawk politicians are nowhere to be found, as this would require $44 billion in offsets per year in either spending cuts and/or tax increases elsewhere. "The price tag is a result of irresponsible horse trading whereby each side got to claim its favorite tax break without paying for it," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for lower deficits.

A possible solution is that the new Republican Congress will pass this bill in January when the new Congress convenes, which means the Democrats will be in a weaker position to negotiate.

Why not pay for what you just spent? Only in Congress......

[AggregateDemand]

Ah yes, tell us more about how unemployment and inflation have risen and job growth has plummeted since the ACA's provisions went into effect.

If you don't pay attention to the economy, what makes you think you can bluff your way through economic topics by provoking people to refute your baseless claims? It seems you are living in a world of make-believe.

[Chancellor Tanterterg]

Good. The President should continue to stand strong on this position.

[traininthedistance]

Some provisions:
- would make permanent 10 provisions, including an expanded research and development tax credit, which businesses and the Obama administration have wanted to make permanent for years (worth $15.6 billion per year)
- a measure allowing small businesses to deduct virtually any investment (worth $7.3 billion per year)
- the deduction for state and local sales taxes
- the American Opportunity Tax Credit for college costs (worth $9.7 billion per year)
- deductions for employer-provided mass transit
- four different breaks for corporate and charitable giving (worth $1.6 billion per year)
- Smaller measures already passed by the Senate Finance Committee, from tax breaks for car-racing tracks to benefits for racehorse owners, would be extended for one year and retroactively renewed for the current tax year
- The tax credit for wind power, a Democratic priority, would phase out and end after 2017
- tax credits for biodiesel
- tax credits for coal produced in Native American communities
- breaks for energy efficient homes and commercial buildings

I bolded the only good ones. The first one is probably a combination of good ones and bad ones. So overall yes, good move by Obama.

The deduction for employer-provided mass transit is good, as well.  More or less.

Eliminating it would be particularly scandalous seeing as there is also a similar deduction for parking expenses, which of course is both a) higher than the transit benefit ($245 as opposed to $130, which won't even be enough for an unlimited MetroCard soon), and b) seemingly not in any danger here or anywhere else.  This situation is obviously prima facie absurd and perverse.

But it gets worse!  I won't bore you right now with all the basic reasons why transit is in general a public good and parking in general a public bad.  But the specific shape of the parking deduction leads to especially perverse incentives.  In short, the parking benefit primarily subsidizes upper-income individuals driving their individual vehicles into downtown, where the costs for driving and parking are highest, and the necessity of doing so lowest (because that's where th best transit is).  Think about it: if you live a car-dependent life out in the burbs with a job in some office park or mall, parking is plentiful and free, so it's not like this deduction actually helps you.  It only helps where parking has a cost that isn't entirely hidden from the driver.

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Now... if we got rid of both the parking and the transit benefit, that would in fact be much better than the status quo.  But there's no indication that that parking benefit is on the chopping block, so I must defend the transit benefit (and push for it to be raised to parity).  And I wouldn't really object to a counterfactual reality where we had transit deductions but no parking deductions, either.