Bucking Obama, Congress will introduce Iran sanctions bill within days

19 Jan 2015 | Author: | No comments yet »

5 things about Barack Obama’s Robin Hood tax plan.

If you’re among the tens of thousands of Central Florida workers planning to claim the Earned Income Tax Credit this year, there’s good news: It will be both easier to qualify and more generous in how much money you get back. President Barack Obama would take from the rich and give to everyone else as part of a sweeping tax plan he intends to push Tuesday in his State of the Union address.Administration says president’s signature means US violation of JPOA; nuclear talks in Geneva end with “limited” progress, to be continued early February. The EITC, a federal initiative to encourage Americans to work, is also expected to top last year’s collective return of well over a half-billion dollars to residents in Orange, Osceola and Seminole counties alone — a sum likely to have a positive ripple effect on the local economy. “There’s a substantial population out there that will qualify for this credit,” said Mark Batchelor, manager of financial-stability initiatives for the Heart of Florida United Way, which is promoting EITC awareness and free-tax-preparation sites. “The average for our area is $1,500 to $2,000 per family. The Robin Hood-style proposal would raise taxes on capital gains and various breaks for the wealthy in order to finance more generous education, family and retirement benefits for those further down the income ladder. “By ensuring those at the top pay their fair share in taxes, the president’s plan responsibly pays for investments we need to help middle-class families,” the administration says in a summary.

The proposal would increase the capital gains tax rate both by raising the rate and by making it harder for families to avoid the tax entirely by passing on assets in an inheritance. 2. It faces long odds in the Republican-controlled Congress, where lawmakers have bitterly complained about a string of recent tax increases on the wealthy. The bill will be “marked up” in committee on Thursday and introduced in the days before with “balanced co-sponsorship” from Democrats and Republicans, sources tell The Jerusalem Post. People use it to buy a washing machine or a car or something significant.” Credited as the nation’s No. 1 program for lifting families out of poverty, EITC is available to those with a valid Social Security number, no more than $3,350 in investment income and at least some earned income last year, whether it was from tips, hourly wages or a salary.

CAPITAL GAINS: The administration wants to increase the top rate to 28 percent, from the current rate of about 25 percent with various surcharges, while expanding the number of things that would be subject to it. It would do that by cracking down on what’s known as a “stepped-up basis.” Here’s how it works: If you sell stock for $1 million that you bought for $100,000, you pay capital gains taxes on the $900,000 profit.

Authors of the bill, formally titled the Nuclear Weapon Free Iran Act of 2015, seek full enactment and will settle for nothing short, Capitol Hill aides say. That suggests Republicans will attempt to whip a strong, bipartisan initial vote tally and, should passed legislation receive the president’s veto, a second vote to override him. One widespread complaint about the Democratic candidates for Senate in the 2014 midterms was that they offered no compelling governing vision, but rather scare stories about how extreme and frightening a Republican majority would be. For a family living in a rent-by-the-week motel room, Batchelor noted, that’s enough to put down first- and last-month’s rent and a security deposit on an apartment.

According to the Congressional Budget Office, the provision cost the Treasury about $50 billion in 2013, and 21 percent of the tax benefits went to the top 1 percent. Over the weekend, members of the Senate Foreign Relations Committee argued that their bill – first drafted over a year ago and never brought to the Senate floor – would not violate an interim agreement between world powers and Iran but would instead force concessions from Tehran in the nuclear talks. “All I’m saying is let us put in prospective sanctions that don’t get imposed until July,” Senator Bob Menendez (D-New Jersey), the top Democrat on the Senate Foreign Relations Committee, said at a news conference on Friday. The administration’s plan would end the stepped-up basis “loophole,” though it would add various provisions aimed at shielding the non-wealthy and small businesses from having to pay the tax.

Both of their staffs say the bill carefully recognizes the language of the Joint Plan of Action, an interim accord reached by negotiating powers last year that set the parameters for comprehensive talks. That interim deal called on the US, consistent with the executive and legislative branches, to “refrain” from “imposing” new nuclear-related sanctions throughout the negotiations. The Affordable Care Act, meanwhile, was financed in part by a new 3.8 percent investment tax, which together raise the current cumulative top capital gains rate to 25 percent. The battles over deficit reduction that began when a Republican-controlled House took office in 2011 were really proxy fights for both parties, with those on the left pushing for continued stimulus and those on the right using the high deficits as a reason to reshape the scale of America’s social welfare state. The administration notes that a 28 percent rate would match the levy under President Ronald Reagan, though the top income tax back then was 28 percent, while income taxes currently top out at 39.6 percent, not including various surcharges.

The new plan may stand little chance of passage, but it signals that we are moving into a different phase of the nation’s debates over how the government taxes and spends. Her husband was working in automotive sales, but they were still struggling. “If we hadn’t itemized and claimed that credit, we would have owed the IRS $7,200,” said Bowman, 48. “We wouldn’t have been able to keep the lights on. As Ezra Klein of Vox posted on Twitter on Saturday, this is the first big proposal of the “post-recession, post-deficit panic era.” The unemployment rate is at 5.6 percent and still falling, and the deficit is on track to be around 3 percent of gross domestic product in the 2015 fiscal year, hardly a scary number. By October, the US would change its current sanctions law from banning the sale of Iranian crude oil to the prohibition of all petroleum products of Iranian origin.

A combination of spending cuts, tax increases and some success reducing growth in health care costs is paying dividends that are shifting the fiscal policy debate elsewhere. The bill would also demand that current international purchasers of Iranian oil reduce their intake to a “de minimis” level within a year, or face US sanctions themselves. It is constructed to sidestep those old debates over the size of government; it creates no new programs, instead working entirely through the tax code. It would lower taxes on working parents, including a $500 tax credit for families in which both parents work, and change existing child care tax incentives to reduce taxes for families with young children up to $3,000 per child.

And nationwide, Florida ranked third for the total credited to its earned-income recipients, returning $5.2 billion to the state. “That went out to about 2.1 million people here, meaning there are a lot of Floridians who benefit,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “And they’re not just taking the money and putting it in a Mason jar and burying it in the backyard. Obama also wants to fix an issue where those who join a government program that forgives student loan debt after borrowers make payments for 20 years can be socked with unexpected — and big — tax bills. This money by and large tends to go right back out into the region’s economy, creating jobs.” Residents can locate free tax-preparation sites by searching at hfuw.org or calling 2-1-1, the United Way help line.

Cameron also said the UK opposed any new sanctions legislation at this time. “There is sometimes the view that this regime cannot be trusted; that, effectively, negotiations with Iran are pointless,” the president said. “And since these claims are being made by individuals who see Iran as a mortal threat and want as badly as we do to prevent them from getting a nuclear weapon, the question then becomes: Well, what other alternatives exactly are available?” “Congress should be aware,” he continued, “that if this diplomatic solution fails, then the risks and likelihood that this ends up being at some point a military confrontation is heightened. Hours, days and languages spoken vary by site, but collectively the volunteer tax program will be open days, evenings and weekends, and aides can help people in English, Spanish, Creole, Portuguese, Chinese, American Sign Language and Hindi. Text “mymoney” to 898-211, and you’ll get a welcome notice along with information on when tax-preparation sites open, tax tips and articles offering advice. In other words, we are heading toward an election in which the two parties more or less agree on the problem facing Americans: A growing economy has done little to accrue to the incomes and living standards of ordinary workers over the past generation.

At the same time, the administration would expand tax breaks for small businesses that automatically enroll their employees in retirement savings accounts. But with his speech Tuesday, he will take his best stab at shaping the terms of the debate over American economic policy even once he is spending long hours on a Hawaii beach.

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