David Kirkpatrick

March 17, 2009

Need tax help?

The IRS is opening its doors this coming Saturday to offer advice and answer questions.

The release:

IRS, Partners Mark Super Saturday March 21 to Help Taxpayers

 
IR-2009-25, March 16, 2009

Audio Files for Podcasts: English Spanish

WASHINGTON — The Internal Revenue Service and scores of its community partners will open their doors on Saturday, March 21, to help people who need free tax preparation, a question answered or a payment schedule arranged.

The IRS will open more than 250 local offices from 9 a.m. to 2 p.m. Community partners will open approximately 1,000 sites on March 21. Tax return preparation is limited to people who earn $42,000 or less. There is no income limitation for people needing IRS assistance for other services at Taxpayer Assistance Centers.

“Because of the economic downturn, many financially distressed taxpayers may be in need of free services. Our Super Saturday service will make it a little easier for people to get that help. Although our Taxpayer Assistance Centers are not normally open on Saturdays, we’re trying to go the extra mile in these difficult times,” said Doug Shulman, IRS Commissioner. “Our Super Saturday service will help people get their refunds quickly. Also, if you think you owe taxes and can’t pay, please come in and talk to us about it. There are steps we can take to help.”

Locations and hours of operation of Super Saturday sites are available at IRS.gov, keyword Super Saturday.  People without computer access can call 1-800-906-9887 to find a nearby IRS or partner office. IRS customer service telephone lines, 1-800-829-1040, also will be available on Super Saturday from 9 a.m. to 2 p.m. to answer tax questions.

People who earn $42,000 or less can have their tax return prepared by the IRS or a community volunteer at participating locations. Filing a tax return may also be the fastest way to get some extra money. More than 80 percent of all taxpayers receive a refund. IRS employees and the community volunteers can help people get all the tax credits and deductions for which they are eligible. Taxpayers who electronically file their tax returns and who use direct deposit can receive their refunds in as few as 10 days.

Because of lost jobs or reduced income, many people may be eligible for certain tax credits for the first time. For example, the Earned Income Tax Credit is for people who work but who do not earn a lot of money. The EITC adds an extra $2,000 benefit on average. It is the government’s largest anti-poverty program. The additional child tax credit and the first-time homebuyers’ credit are important benefits also affected by a taxpayer’s income.

People who owe taxes but who cannot pay should contact the IRS as soon as possible. Regardless of income, people who need payment options can get help at an IRS office. The IRS can help set up an installment payment plan or a deferred payment plan. It is important that people contact the agency so they can avoid penalties and interest that will make their tax bill even higher.

People who want their tax returns prepared should bring the following information:

  • Valid driver’s license or photo identification (self & spouse, if applicable)
  • Social Security cards for all persons listed on the return
  • Dates of birth for all persons listed on the return
  • All income statements: Forms W-2, 1099, Social Security, Unemployment, or other benefits statements, self-employment records and any documents showing taxes withheld
  • Dependent child care information: payee’s name, address and Social Security Number or Taxpayer Identification Number
  • Proof of account at financial institution for direct debit or deposit (i.e. cancelled/voided check or bank statement)
  • Prior year tax return (if available)
  • Any other pertinent documents or papers

For those who don’t want to make a trip, the IRS also offers other free services for tax preparation including the Free File program on IRS.gov.

For people with computer access, the IRS web site remains the best place to go for answers, access to forms and publications and other free services. For example, taxpayers will find the latest details on the American Recovery and Reinvestment Act of 2009 on the IRS.gov homepage.

People also can track their refunds through “Where’s My Refund?” – another free service offered by the agency. People without computer access can still use “Where’s My Refund?” by calling 1-800-829-1954. Taxpayers should have their tax return handy to use the “Where’s My Refund?” application.

February 17, 2009

Taxpayers and the stimulus package

A press release from H&R Block:

Stimulus 2009: Something for Nearly Everyone
Marketwire via NewsEdge :

KANSAS CITY, MO, February 16 / MARKET WIRE/ —

Millions of taxpayers will take home more money from the almost $790 billion American Recovery and Reinvestment Act expected to be signed into law early this week, but most provisions won’t happen automatically.

“The Recovery Act gives taxpayers money to spend, incentives to spend it and choices to spend it on,” said Amy McAnarney, executive director of The Tax Institute at H&R Block (NYSE: HRB). “There are provisions that pay you now and some that pay you later. But for most individuals, this isn’t a check-is-in-the-mail stimulus. Taxpayers will need to have guidance to maximize the benefit.”

H&R Block notes five key areas that impact individual taxpayers today and in the future:

 

--  Putting money in taxpayers' pockets now
--  Helping more of those who have less
--  Making homeownership more affordable
--  Increasing access to higher education
--  Getting green from the garage

 

Review chart with the breakdown of taxpayer benefits.

“Taxpayers want to know how this Recovery Act affects them so they can get all the credits and deductions they’re due,” McAnarney said. “The Tax Institute recommends consulting with a trusted tax professional to help decipher the complex changes and what they mean to each individual.”

Review complete Recovery Act FAQ.

Putting money in taxpayers’ pockets now

The bill includes several provisions that immediately boost the wallets of workers, non-workers, the unemployed and retirees. For both 2009 and 2010, the Making Work Pay tax cut means up to $400 for individuals and $800 for couples through a reduction in income tax withholding; in other words, bigger paychecks. Eligible workers may need to work with their employers to ensure any adjusted income tax withholding is appropriate for their situation. For example, if all working taxpayers are automatically transferred to the new reduced withholding amounts, certain taxpayers may actually owe more taxes when they file their 2009 and 2010 returns.

“Knowing your tax situation is extremely important in instances like this,” said McAnarney. “How and when this credit is actually going to be administered is still unclear.”

Eligible self-employed taxpayers can adjust their quarterly estimated payments. For those taxpayers who do not receive the full amount this year, they will receive the remaining as a credit on next year’s tax return.

Social Security and SSI recipients, retired and disabled veterans, and railroad retirees will get a one-time payment of $250. The Social Security Administration and Veterans Administration will provide the information about who qualifies for this payment, so eligible individuals won’t have to do anything. Individuals on a federal or state retirement program who don’t receive Social Security benefits can claim a $250 credit when they file their 2009 tax returns.

“However, there’s no double-dipping,” said McAnarney. “Taxpayers who qualify for both the Making Work Pay Credit and the $250 payment can’t get the full amount of both benefits.” In these cases, the Making Work Pay Credit will be reduced by $250.

The Act has several benefits for the unemployed. Many will receive a $25 weekly boost to their unemployment check. In addition, the first $2,400 in benefits will be exempt from federal tax in 2009. Eligible unemployed workers paying for COBRA will benefit from a 65 percent federal subsidy for their monthly insurance premiums.

Helping more of those who have less

The Recovery Act expands the Child Tax Credit, allowing families to begin qualifying for the credit with every dollar earned over $3,000. For taxpayers, this change translates into a refundable credit of up to $1,000 for each qualifying child under 17. Refundable credits give taxpayers a real boost because if the person has no tax liability, the credit is issued in the form of a refund.

This is the second year in a row the income threshold has been lowered. For 2008, it was lowered to $8,500 from $11,750.

The Act also increases the Earned Income Credit for families with three or more children, where previously EIC benefits were capped at two children. The Act would also increase the beginning point of the phaseout range for all married couples filing a joint return. That’s good news for married couples regardless of the number of children they have.

Making homeownership more affordable

Taxpayers on the fence about buying their first home may want to consider the Act’s $8,000 tax credit.

Unlike the incentive passed last year, first-time homebuyers will not have to repay the credit as long as they live in the house for three years. To qualify, eligible homebuyers must make their purchase between Jan. 1, 2009, through Nov. 30, 2009. Taxpayers who have purchased a home this year can take advantage of this credit on their 2008 return. For those who have already filed, filing an amendment is the best way to capture this full credit on their 2008 tax return.

The plan also includes tax credits for energy-efficient improvements such as qualified new furnaces, windows and doors to existing homes. The credit applies to 2009 and 2010 tax returns, with a lifetime cap of $1,500.

Increasing access to higher education

More taxpayers will be able to qualify for the American Opportunity Tax Credit, which will provide a new, partly refundable $2,500 tax credit for college tuition in 2009 and 2010. By making the credit partially refundable, nearly 4 million low-income students now will be able to qualify for the credit. This can be a better alternative for taxpayers than the two existing higher education credits.

Also, computer and computer technology costs will now qualify in 2009 and 2010 under the Section 529 Education Plans, which are tax-exempt college saving plans. Previously, eligible expenses included only tuition, room and board, and books, supplies and equipment that were required for attendance at the school.

Getting green from the garage

The package allows taxpayers to deduct the state and local sales and excise taxes paid on the purchase of new cars, light trucks, recreational vehicles and motorcycles. The vehicles must be purchased from the enactment date of the Act through the end of the year.

The Act also provides a tax credit of up to $7,500 for families who purchase plug-in hybrid vehicles purchased after 2009 or plug-in conversion after date of enactment and before 2012. Even those taxpayers who don’t itemize can benefit from this.

H&R Block will provide ongoing information about the Recovery Act on www.digits.hrblock.com.

The Tax Institute, a division of H&R Block, is a national leader in providing unbiased research, analysis and interpretation of federal and state tax laws. Staffed by Enrolled Agents, CPAs, and Attorneys, The Tax Institute provides industry expertise for matters related to taxes and the professional tax preparation industry.

About H&R Block

H&R Block Inc. (NYSE: HRB) is the world’s preeminent tax services provider, having served more than 400 million clients since 1955 and generating annual revenues of $4.1 billion in fiscal year 2008. H&R Block provides income tax return preparation and related services and products via a nationwide network of approximately 13,000 company-owned and franchised offices and through TaxCut® online and software solutions. The company also provides business services through RSM McGladrey. For more information visit our Online Press Center at www.hrblock.com.

February 3, 2009

GM keeps hand out, sheds a tear

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 3:01 pm

It never stops with these guys.

Unbelievable.

From the link:

General Motors, which is borrowing $13.4 billion from the federal government to remain solvent, is pressing Congress to waive a tax liability of as much as $7 billion related to the overhaul plan that it is completing this month, people with knowledge of the discussions said on Sunday.

The tax bill, which could be enough to force the company into bankruptcy, would be a consequence of the terms that the Treasury Department required as part of the rescue package approved last month by the Bush administration. In accepting the loans, G.M. pledged to persuade its creditors to swap a large chunk of the automaker’s debt for equity in the company.

 

The equity-for-debt exchange is aimed at ensuring G.M.’s viability in the future, but under corporate tax law, the swap would amount to debt forgiveness and count as income for G.M. The resulting tax bill could take G.M.’s cash level below the minimum needed for daily operations.

G.M. is lobbying Congress to reduce or eliminate the tax liability, said people with knowledge of the effort, who spoke on the condition of anonymity because the discussions were private. The Detroit News first revealed the lobbying effort on Friday.

January 7, 2009

IRS announces help for troubled taxpayers in 2009

Filed under: Politics — Tags: , , , , — David Kirkpatrick @ 4:46 pm

A release from the Internal Revenue Service:

IRS Begins Tax Season 2009 with Steps to Help Financially Distressed Taxpayers; Promotes Credits, e-File Options

 
IR-2009-2, Jan. 6, 2009

WASHINGTON — The Internal Revenue Service today kicked off the 2009 tax filing season by announcing a number of new steps to help financially distressed taxpayers maximize their refunds and speed payments while providing additional help to people struggling to meet their tax obligations.

IRS Commissioner Doug Shulman encouraged taxpayers to take advantage of several new tax credits and deductions this filing season and announced a major enhancement to the Free File program that will allow nearly all taxpayers to e-file for free and accelerate their refunds.

“With so many people facing financial difficulties, we want taxpayers to get all the tax credits they’re entitled to as quickly as they can,” Shulman said. “In addition, we are creating new protections to help people trying to meet their tax obligations. The IRS will do everything it can to help during these tough times.”

Help for People Who Owe Taxes

With many people facing additional financial difficulties, the IRS is taking several additional steps to help people who owe back taxes.

“We need to ensure that we balance our responsibility to enforce the law with the economic realities facing many American citizens today,” Shulman said. “We want to go the extra mile to help taxpayers, especially those who’ve done the right thing in the past and are facing unusual hardships.”

On a wide range of situations, IRS employees have flexibility to work with struggling taxpayers to assist them with their situation. Depending on the circumstances, taxpayers in hardship situations may be able to adjust payments for back taxes, avoid defaulting on payment agreements or possibly defer collection action.

The IRS reminds taxpayers who are behind on tax payments and need assistance to contact the phone numbers listed on their IRS correspondence. There could be additional help available for these taxpayers facing unusual hardship situations.

Among the areas where the IRS can provide assistance:

  • Postponement of Collection Actions: IRS employees will have greater authority to suspend collection actions in certain hardship cases where taxpayers are unable to pay. This includes instances when the taxpayer has recently lost a job, is relying solely on Social Security or welfare income or is facing devastating illness or significant medical bills. If an individual has recently encountered this type of financial problem, IRS assistors may be able to suspend collection without documentation to minimize burden on the taxpayer.
  • Added Flexibility for Missed Payments: The IRS is allowing more flexibility for previously compliant individuals in existing Installment Agreements who have difficulty making payments because of a job loss or other financial hardship. The IRS may allow a skipped payment or a reduced monthly payment amount without automatically suspending the Installment Agreement. Taxpayers in a difficult financial situation should contact the IRS.
  • Additional Review for Offers in Compromise on Home Values: An Offer in Compromise (OIC), an agreement between a taxpayer and the IRS that settles the taxpayer’s tax debt for less than the full amount owed, may be a viable option for taxpayers experiencing economic difficulties. However, the equity taxpayers have in real property can be a barrier to an OIC being accepted. With the uncertainty in the housing market, the IRS recognizes that the real-estate valuations used to assess ability to pay may not be accurate. So in instances where the accuracy of local real-estate valuations is in question or other unusual hardships exist, the IRS is creating a new second review of the information to determine if accepting an offer is appropriate.
  • Prevention of Offer in Compromise Defaults: Taxpayers who are unable to meet the periodic payment terms of an accepted OIC will be able to contact the IRS office handling the offer for available options to help them avoid default.
  • Expedited Levy Releases: The IRS will speed the delivery of levy releases by easing requirements on taxpayers who request expedited levy releases for hardship reasons. Taxpayers seeking expedited releases for levies to an employer or bank should contact the IRS number shown on the notice of levy to discuss available options. When calling, taxpayers requesting a levy release due to hardship should be prepared to provide the IRS with the fax number of the bank or employer processing the levy.

Taxpayers with financial problems who discover they can’t pay when they file their 2008 tax returns also have options available. IRS.gov has a list of What If? scenarios that deal with payment and other financial problems. These scenarios, in question-and-answer format, provide information on specific actions taxpayers can take. Taxpayers unable to pay in full can likewise contact the IRS to discuss additional options to pay.

Maximizing Refunds and Speeding Refund Delivery

This filing season, there are several steps taxpayers can take to maximize their refunds and speed the delivery of money from the IRS.

Taxpayers should look into the numerous tax breaks available and take every credit, deduction and exclusion for which they qualify. People who had less income in 2008 could find they qualify for credits for which they previously did not qualify. And there are several new benefits this year:

  • First-Time Homebuyer Credit: Those who bought a principal residence recently or are considering buying one should take note. This unique credit of up to $7,500 works much like a 15-year interest-free loan. A special page on IRS.gov has more details and answers to common questions.
  • The Recovery Rebate Credit: This credit is figured like last year’s Economic Stimulus Payment except that Recovery Rebate Credit amounts are based on tax year 2008 instead of 2007. Most people already received their full benefit in the form of the Economic Stimulus Payment. However, a taxpayer may qualify for the Recovery Rebate Credit, if, for example, he or she did not get an Economic Stimulus Payment, had a child in 2008 or had a change in income level. If you receive this credit, it will be included in your refund and will not be issued as a separate payment. See the Form 1040 Instructions, Fact Sheet 2009-3 or the information center on IRS.gov for details.
  • Standard Deduction for Real Estate Taxes: Taxpayers can claim an additional standard deduction, based on the state or local real estate taxes paid in 2008. The maximum deduction is $500, or $1,000 for joint filers.
  • Mortgage Workouts and Foreclosures: For most homeowners, these are now tax-free. Eligible homeowners can exclude debt forgiven on their principal residence if the balance of the loan was less than $2 million. The limit is $1 million for a married person filing a separate return. See Form 982 and its instructions for details.

This Web site, IRS.gov, has more information on these and other popular credits, such as the child tax credit, the Earned Income Tax Credit and alternative fuel vehicle credit.

E-File, E-Pay and Direct Deposit

This year, electronic filing options will speed the payment of refunds to millions of taxpayers. Taxpayers who e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. That compares to approximately six weeks for people who file a paper return and get a traditional paper check.
This year, taxpayers can begin filing electronically on Jan. 16.

The IRS in 2009 is again offering free tax preparation and filing through the Free File program. Anyone with an adjusted gross income up to $56,000 can use the standard Free File options this year –– that is approximately 98 million Americans. The program also has usability improvements, including a standardized set of electronic forms that are most frequently used by Free File-eligible taxpayers.

This year the IRS and its partners are offering a new option, Free File Fillable Tax Forms, that opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

Free File Fillable Tax Forms allows taxpayers to fill out and file their tax forms electronically, just as they would on paper. This option does not include an “interview” process like the other Free File offerings, but it does allow taxpayers to enter their tax data, perform basic math calculations, sign electronically, print their returns for recordkeeping and e-file their returns. It may be just right for those who are comfortable with the tax law or those who use electronic software to prepare their returns but file using paper forms.

Both the fillable-forms option and the previously available Free File offerings are available only through the IRS.gov Web site. More information will be available in mid-January.

1040 Central and Taxpayer-Friendly Features

When they visit the IRS.gov Web site this filing season, taxpayers may notice the new “rotating spotlight” feature on the homepage. The spotlights, which change every few seconds, give the taxpaying public direct access to more of the IRS Web site’s vast amount of content.

Also on the homepage, taxpayers can click on 1040 Central to find help preparing and filing their tax returns. Like last year, this popular section of IRS.gov has a wide range of offerings that address taxpayer needs.

Finally, the IRS is producing a number of podcasts this filing season that will be available on IRS.gov. In addition to Tax Tips, Fact Sheets and News Releases, these short audio interviews cover a wide range of topics and are a way for the IRS to reach out to a new generation of taxpayers.

Tax Filing Fact Sheets

For more tax season topics, see the following fact sheets:

December 10, 2008

Planning on year-end donations for tax purposes?

Filed under: Business, Politics — Tags: , , , , — David Kirkpatrick @ 10:28 am

Then go read this tip sheet from your friendly Internal Revenue Service.

Here’s the whole thing:

IRS Offers Tips for Year-End Donations

 
IR-2008-138, Dec. 9, 2008

WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years.

One provision offers older owners of individual retirement arrangements (IRAs) a different way to give to charity. There are also rules designed to provide both taxpayers and the government greater certainty in determining what may be deducted as a charitable contribution. Some of these changes include the following.

Special Charitable Contributions for Certain IRA Owners

An IRA owner, age 70 ½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charitable organization. This option, created in 2006 and recently extended through 2009, is available to eligible IRA owners, regardless of whether they itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.

To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the amount given to the charity.

Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.

Transferred amounts are counted in determining whether the owner has met the IRA’s required minimum distribution rules. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.

Rules for Clothing and Household Items

To be deductible, clothing and household items donated to charity must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to be in good used condition or better if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances, and linens.

Guidelines for Monetary Donations

To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Donations of money include those made in cash or by check, electronic funds transfer, credit card, and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

These requirements for monetary donations do not change or alter the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet the requirements of both provisions.

To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:

  • Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn’t paid until next year. Also, checks count for 2008 as long as they are mailed this year.
  • Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. The searchable online version can be found at IRS.gov under “ Search for Charities.” In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even though they often are not listed in Publication 78.
  • For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to people who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceeds the standard deduction. Use the 2008 Form 1040 Schedule A, available now on IRS.gov, to determine whether itemizing is better than claiming the standard deduction.
  • For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value.Additional rules apply for a contribution of $250 or more.
  • The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value of the vehicle is more than $500. Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.
  • If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.

For additional information on charitable giving:

October 14, 2008

RNC blasts Obama’s economic plan

Filed under: Politics — Tags: , , , , , — David Kirkpatrick @ 11:53 am

Here’s a release from the Republican National Committee:

Republican National Committee: Obama’s Insufficient Funds

As Obama Realizes His Tax Hikes Will Hurt The Economy, He Is Having A Tough Time Paying For His Proposals

WASHINGTON, Oct. 14 /PRNewswire-USNewswire/ — The following is being issued by the Republican National Committee:

  (Logo:  http://www.newscom.com/cgi-bin/prnh/20080519/RNCLOGO )

  OBAMA’S SHIFTING RHETORIC ON THE WINDFALL PROFITS TAX

On The Campaign Trail Obama Routinely Rails Against Oil Companies, But Now Is Shifting His Stance On His Windfall Profits Tax Because Of Economic Concerns:

The Obama Campaign Said He Will Likely Scrap His Windfall Profits Tax. “Mr. Obama had initially proposed to offset the rebates’ expense with a new windfall-profits tax on oil companies, but the campaign indicated Monday that he would scrap that plan assuming that oil prices do not rise above about $80 a barrel. The shift was just one sign of how the economic crisis has shoved concerns about budget deficits to the sidelines.”(Jackie Calmes and Jeff Zeleny, “Obama Details Plan To Aid Victims Of Fiscal Crisis,” The New York Times, 10/14/08)

FLASHBACK: Obama: “I Think It Is Appropriate For Us To Impose A Windfall Profits Tax On Our Oil Companies.” (Sen. Barack Obama, Remarks At A Campaign Event, Charlotte, NC, 5/2/08)

FLASHBACK: Obama: “I don’t take money from oil companies or Washington lobbyists, and I won’t let them block change anymore. They’ll pay a penalty on windfall profits.” (Rob Christensen, “Claims Department: Fact-Checking The Ads,” The [Raleigh] News & Observer, 4/15/08)

NOTE: Obama Originally Said The Windfall Profits Tax Could Fund A Number Of His Proposals, So Where Is That Money Coming From Now?

Obama Planned To Use His Windfall Profits Tax To Help Fund A $1,000 Tax Cut For Working Families, An Expansion Of The Earned- Income Tax Credit, And Assist Americans With Energy Costs. “Democratic presidential candidate Barack Obama’s proposal for a windfall profits tax on oil companies could cost $15 billion a year at last year’s profit levels, a campaign adviser said. … The plan would target profit from the biggest oil companies by taxing each barrel of oil costing more than $80, according to a fact sheet on the proposal. The tax would help pay for a $1,000 tax cut for working families, an expansion of the earned- income tax credit and assistance for people who can’t afford their energy bills.” (Daniel Whitten, “Obama May Levy $15 Billion Tax On Oil Company Profit,” Bloomberg News, 5/1/08)

On The Same Day He Scrapped The Windfall Profits Tax, Obama Proposed New Spending:

On Monday, Obama Proposed “Costly New Programs” Bringing The Price Of His Full Economic Stimulus Plan To $175 Billion. “Senator Barack Obama proposed new steps on Monday to address the economic crisis, calling for temporary but costly new programs to help employers, automakers, homeowners, the unemployed, and state and local governments. … Obama advisers put the cost of Mr. Obama’s full economic stimulus plan at $175 billion, including $60 billion for the steps announced Monday.”(Jackie Calmes and Jeff Zeleny, “Obama Details Plan To Aid Victims Of Fiscal Crisis,” The New York Times, 10/14/08)

If Obama Could Enact All Of His Campaign Proposals, Taxpayers Would Be Faced With Financing Nearly $1.3 Trillion In New Spending Over One White House Term. (Republican National Committee Website, www.gop.com, Accessed 10/14/08)

Click Here To View The Obama Spend-O-Meter: http://www.gop.com/obamaspendometer.htm

With An Obama Administration And Democrat Congress, We Will See “A Big Increase In Spending And Deficits.” “Liberals will make a full-bore push for European-style economic policies. On the other hand, the remaining moderates will argue that it was excess and debt that created this economic crisis. … Obama will try to straddle the two camps — he seems to sympathize with both sides — but the liberals will win. Over the past decade, liberals have mounted a campaign against Robert Rubin-style economic policies, and they control the Congressional power centers. Even if he’s so inclined, it’s difficult for a president to overrule the committee chairmen of his own party. It is more difficult to do that when the president is a Washington novice and the chairmen are skilled political hands. It is most difficult when the president has no record of confronting his own party elders…. What we’re going to see, in short, is the Gingrich revolution in reverse and on steroids. There will be a big increase in spending and deficits.” (David Brooks, Op-Ed, “Big Government Ahead,” The New York Times, 10/14/08)

OBAMA’S SHIFTING RHETORICONDEFERRING INCOME TAX HIKES

Obama Can’t Decide Who Should Pay More Taxes – Now That He’s Scrapping His Windfall Profits Tax He Believes Upper-Income Americans Can Pay More – Contradicting What He Said Last Month:

Obama Now Has “No Plans To Change” His Tax Increase On Upper-Income Americans. “Despite criticism from the McCain camp that increasing taxes would further endanger the economy, Mr. Obama has ‘no plans to change’ his longstanding proposal to repeal the Bush tax cuts next year for households with an annual income of more than $250,000, said Jason Furman, Mr. Obama’s economic adviser.”(Jackie Calmes and Jeff Zeleny, “Obama Details Plan To Aid Victims Of Fiscal Crisis,” The New York Times, 10/14/08)

In September, Obama Implied He Would Defer His Tax Hikes Because Of The Weak Economy:

Obama Told ABC’s George Stephanopoulos That The Economic Situation In January Could Require Him To Defer His Tax Increases. ABC’s George Stephanopoulos: “So even if we’re in recession next January, you come into office, you will still go through with your tax increases?” Obama: “No, no, no, no. What I’ve said, George, is even if we’re still in a recession I’ll go through with my tax cuts, that’s my priority.” Stephanopoulos: “But not the increases?” Obama: “I think we have to take a look and see where the economy is. The economy is weak right now.”(ABC’s “This Week,” 9/7/08)

In June, Obama Also Changed Positions On Whether He Would “Defer” Tax Hikes Depending On The Economic Situation:

Obama Told CNBC’s John Harwood That He May “Possibly Defer” Some Of His Tax Increases Based On The Economic Situation. CNBC’s John Harwood: “Higher taxes for capital gains, for dividends, for carried interest, for high-income Americans. You embraced a lot of those policies when the economy was stronger than it is now.” Obama: “Yeah, yeah.” Harwood: “Even if you think those are a good idea substantively, is there reason, because of the situation we’re in, to delay the implementation of any of those to avoid having a negative effect on job creation?” Obama: “Well, there’s no doubt that any policies I implement are going to be based on the economic situation that I inherit from George Bush. You know, one of the things I believe in is a manager of the economy, is you should base your decisions on facts and not ideology. And so even if I’m predisposed to a certain set of policies, I’m going to want and se e what’s going on at the moment and ask a wide range of viewpoints from situations…” Harwood: “So you can see the possibility of deferring some of those?” Obama: “Some of those you could possibly defer.” (CNBC’s “Your Money, Your Vote: McCain Vs. Obama,” 6/10/08)

But Obama Later Told Reporters He Never Said He Might “Defer” Some Of His Tax Increases. Question: “Senator in your interview yesterday with John Harwood, you suggested you might consider deferring the tax increases you proposed. Do believe that raising taxes hurts jobs creation, even if it’s only on the most wealthy of Americans?” Obama: “No, first of all I didn’t say I would defer, what I said was that I always take facts into account.” (Sen. Barack Obama, Remarks At A Campaign Event, St. Louis, MO, 6/10/08)

Click Here To Watch: http://www.youtube.com/watch?v=WdbKv1C1-fI

NOTE: Obama’s Income Tax Increase Would Burden Small Businesses Struggling In A Weak Economy:

FactCheck.org: “McCain Is Right About One Thing. Many Small-Business Owners Would Indeed See Their Taxes Go Up If Obama Is Elected And Raises The Top Income-Tax Rates.”(“McCain’s Small-Business Bunk,” www.factcheck.org, 7/14/08)

Two-Thirds Of Small Business Income Would Be Subject To Obama’s Significantly Higher Tax Rates. “The conservative argument (and that of the John McCain campaign) is that Obama’s stated plan to raise taxes on households making $250,000 or more in income is a tax increase on small business. The simple answer to this dilemma can be found in the IRS Statistics of Income Bulletin (Table 1.4, for those who are interested). So what do the data say? In 2006 (the latest year available), $706 billion of such income was reported to the Internal Revenue Service. Of this, about half was reported by households in the top marginal income tax rate. Interestingly, two-thirds of this income was reported by households making $250,000 per year or more — the very same households that Obama wants to increase taxes on. The Obama campaign maintains that the number of small-business owners is what’s important. Economists know what matters is the tax rate that’s applied to the bulk of small-business income. Make no mistake about it: Obama’s plan to raise taxes on households making more than $250,000 will raise taxes on most small-business profits in America.” (Grover G. Norquist, Op-Ed, “An Argument Against Obama’s Tax Plan,” The Politico, 7/11/08)

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July 30, 2008

McCain and the tax question

Filed under: Politics — Tags: , , , , , , — David Kirkpatrick @ 2:47 pm

The title of this Jonathan Martin post at Politico is, “Why is McCain not slamming the door on taxes?” That is a great question. Here’s a blog post of mine with a great link to head to when comparing the two candidate’s tax plans.

I feel like I’ve been blogging a lot more about Obama than McCain, but frankly McCain is doing very little that is interesting or inspiring and I don’t really have any interest in piling on the negative posts like more partisan blogs are currently enjoying. I did post on an anonymous GOP strategist describing his campaign tactics as “insane.” And I considered dedicating a post to his well-documented problems with the personal computer, and now his campaign’s fumbling with the Web 2.0 crowd with ill-conceived projects like BarackBook.

See how easy it is. I spend a short graf explaining why my McCain blogging might seem light and I found it impossible to ignore two negatives. And that’s without mentioning Huckabee likening McCain’s efforts to Bob Dole in 1996.

Back to the original link, Martin asks a great question. Why isn’t McCain taking the tax issue by the horns and speaking to the fiscal conservative leg of the GOP stool? This past Sunday on “This Week” he was asked if he’d consider raising payroll taxes to address Social Security. McCain said, “There is nothing that’s off the table.”

I don’t expect a “read my lips” moment of disingenuity out of McCain, but taxes is one place he can really set himself apart from Obama. All this may just come down to his very inartful dancing around issues where he differs from the base, doesn’t want to/can’t lie (I pick the latter), and has to come up with a sentence construction that remains true to his beliefs while placating the hardline GOPers listening.

I really don’t see him riding Iraq into the White House.

Beyond the convoluted statements, my corollary guess is McCain just isn’t comfortable talking about economic issues. He’s admitted to not truly understanding that policy area and it’s an area he’s not going to be actively involved in if he were to win the presidency.

From the very first link back up in sentence number one:

By his positions, he meant that he opposes raising taxes.   He reitereated this stance yesterday at a town hall meeting in Nevada with a one-word answer: “no.”   He’s been similiar unequivocal when asked the same question in the past.

But McCain’s refusal to slam the door Sunday on Social Security has worried some Republicans who not only are concerned for philosophical reasons, but because it could have the effect of diluting McCain’s claim that Obama is the tax-increaser.

“If Mr. McCain can’t convince voters that he’s better on taxes than is a Democrat who says matter-of-factly that he wants to raise taxes, the Republican is going to lose in a rout,” said the Wall Street Journal editorial page today in a scathing editorial.