Raising taxes on rich best way for states to fix deficits?
As states try to deal with their own massive deficits, many are turning to higher taxes on the rich as the answer. A proposal here in New York would follow in the steps of California and Maryland in pushing the wealthiest into higher tax brackets - several percentage points above most workers.
New Jersey is considering raising its highest bracket to more that 10 percent from the current five-plus percent. And Wisconsin and Delaware are also considering higher tax brackets.
The head of one political group that supports the higher taxes tells the Wall Street Journal, "Most people are treading water. Others are drowning. That gave politicians the courage to say the rich have to pay their fair share."
But critics say the higher taxes wouldn't only affect those in the financial industry. They say small-business owners are concerned, since a lot of them report their business earnings on their personal income-tax returns.
And the libertarian Cato Institute found that higher taxes hurt economic growth, and the places that imposed an income tax to generate revenue ended up with poorer growth rates than places that used other kinds of taxes.
Meanwhile - where is the talk in these states of cutting spending, firing government workers, consolidating services, etc.? It's practically nowhere to be seen. The plans seem to be mostly tax wealthy people more and more and leave the government bureaucracy as it is. Morons.
Here’s my question to you: Is raising taxes on the highest earners the best way for states to deal with their deficits?
Interested to know which ones made it on air?
How would you change income tax laws?
Americans are currently preparing for next month’s income tax filing deadline whether using tax software, filing on paper forms or using a tax preparer. (PHOTO CREDIT: GETTY IMAGES)
FROM CNN's Jack Cafferty:
With this year's tax deadline quickly approaching, President Obama is tackling tax reform. He's creating a task force to propose ways to simplify the tax code, reduce evasion, close loopholes and make changes in corporate tax breaks. But, their main goal is to raise revenue.
The task force, headed by former Federal Reserve Chairman Paul Volcker, has only a couple of constraints: President Obama says they can't propose tax increases for 2009 and 2010; and after 2010, they can't propose tax increases on families making less than $250,000.
It's estimated there's a $300 billion a year tax gap - which is the difference between what taxpayers owe and what they actually pay. The biggest reason for this gap is under reporting of income. This isn't always intentional; sometimes it comes from honest mistakes by filers who are confused by a very complex tax code. The group is also expected to suggest ways to simplify different kinds of tax credits.
The tax task force will present its proposals to the president in early December. Then it will be a question of getting Congress to sign off on any changes.
Here’s my question to you: What changes would you make to the income tax laws?
Interested to know which ones made it on air?
Taxing bonuses a good idea?
People protest against corporate bailouts in front of AIG's Los Angeles office.(PHOTO CREDIT: GABRIEL BOUYS/AFP/GETTY IMAGES)
FROM CNN's Jack Cafferty:
There seems to be plenty of opposition to the House of Representatives' bonus tax plan - including perhaps President Obama himself.
In a move that many saw as "grandstanding," the House rushed through that 90 percent tax on bonuses of big earners at bailed-out financial institutions last week. The measure came in response to news that AIG paid out at least $165 million in bonuses - after getting $170 billion in taxpayer bailout money.
But in an interview with "60 Minutes," the president questioned the legality and constitutionality of the tax; and said that he wouldn't "govern out of anger." Nonetheless, Mr. Obama vowed to make Wall Street understand it must do away with "the old way of doing business."
He said the Senate would produce a very different and more acceptable version of the the bonus tax bill; maybe one he could sign.
Also coming out against the tax were other top administration officials - the vice president's top economic adviser, Jared Bernstein, said it "may be a dangerous way to go." And the chair of the White House Council of Economic Advisers, Christina Romer, said the president favors creating a federal "resolution authority" over bailed-out financial institutions which would allow a judge to void the kind of contracts that let AIG pay out the bonuses.
Meanwhile the American public clearly wants that money back. A new Gallup poll shows 76 percent of those surveyed want the government to intervene to block or recover the AIG bonuses.
Here's my question to you: Is it a good idea to tax bonuses?
Interested to know which ones made it on air?
Should Gov. Palin say how much she owes in back taxes?
From CNN's Jack Cafferty:
Alaska Governor Sarah Palin owes back taxes on almost $17,000 she received from the state in per diem funds while living at her Wasilla home.
Palin's office won't say how much she owes, saying it is a personal matter.
The state decided this week that the payments were not legitimate business expenses and that employees must treat them as income subject to taxes.
You may remember the revelation of these payments became an issue in last year's campaign. It didn't exactly jive with Palin's so-called image as a government reformer. At the time, her office insisted she was entitled to the per diem payments.
Palin collected most of these payments before being named to the GOP ticket as John McCain's running mate. The expenses were paid when she stayed at her Wasilla home and commuted to her Anchorage office instead of staying in the governor's mansion in Juneau. The AP found that Palin continued to charge the state for meals and other incidentals after losing the general election in November.
Palin's office says they don't know if she's still collecting a per diem or will continue to do so. They claim her taxes are a personal matter and won't say how much she owes.
The Alaska Governor had also previously charged the state more than $21,000 for having her kids travel with her, saying they were acting on state business.
Here’s my question to you: Should Governor Sarah Palin have to disclose how much money she owes in back taxes?
Interested to know which ones made it on air?
Pres. Obama’s credibility hurt by tax scandals?
Questions about tax issues have now clouded three nominations. (PHOTO CREDIT: JIM WATSON/AFP/GETTY IMAGES)
From CNN's Jack Cafferty:
President Obama says he "screwed up” when it came to the nomination of Tom Daschle as Health and Human Services Secretary. No kidding.
Daschle dropped out after days of questioning about more than $100,000 in unpaid taxes. President Obama says it's important for his administration to send a message that there aren't two sets of rules when it comes to paying taxes - for prominent people and for ordinary folks. That might prompt one to ask, "Then why do you keep nominating people who haven't paid their taxes for high ranking positions in your administration?"
Questions about tax issues have now clouded three nominations. Besides Daschle, another top appointee, Nancy Killefer, pulled her name from consideration as chief White House Performance officer – because of unpaid taxes for a household employee. And then, of course, there was Treasury Secretary Timothy Geithner. He was eventually confirmed by the Senate – but only after days of scrutiny and numerous public apologies. The man who will now oversee the IRS failed to pay tens of thousands of dollars in taxes himself.
None of this is good news for the Obama administration. It opens up the White House to a lot of criticism from Republicans and on newspaper editorial pages. They say President Obama preaches one thing – ethics, responsibility, etc. – but practices another. It also raises serious questions about the administration's vetting process. Who keeps submitting the names of tax cheats for high-powered jobs in Obama's administration?
Here’s my question to you: How does nominating three people who didn't pay their taxes affect President Obama's credibility?
Interested to know which ones made it on air?
Tax rebates for people who earn too little to pay income tax?
From CNN's Jack Cafferty:
In meetings to hammer out an economic stimulus package acceptable enough to pass an anticipated House vote, President Obama told Republicans he's not willing to compromise on tax rebates for nearly every working American.
Should Americans who don't pay income tax receive one of these stimulus checks?
According to an aide, the President said, "Feel free to whack me over the head because I probably will not compromise on that part."
Every working American includes people who don't make enough to pay income taxes. The President justifies his support because these people do pay payroll taxes, Social Security and Medicare and therefore, they are taxpayers.
No matter how you look at it, the economy is bad and that's true for everyone, whether you pay income taxes or not.
Jobs are disappearing by the millions and people are scared.
The Conference Board's Consumer Confidence Index fell to 37.7 this month, which is an all-time low dating back to 1967.
There's no light at the end of the tunnel, at least not yet. And President Obama might be giving a glimmer of hope to the least fortunate among us by standing his ground.
Here’s my question to you: Should people who earn too little to pay income tax be given tax rebates?
Interested to know which ones made it on air?
Tax cuts or government spending for stimulus package?
From CNN's Jack Cafferty:
There's no formula for success when it comes to stimulating the economy. As Time Magazine points out, the economists and experts speculating on what will work are simply guessing.
Should the President-elect's stimulus package emphasize tax cuts or government spending?
At the heart of it all is whether the boost should come from tax cuts or government spending. There are pros and cons for both but no one knows if either is the magic bullet.
Tax cuts are a quick solution, and have been effective in the past. But this time they may not be the answer because with consumer confidence as low as it is people are likely to hold on to any extra money they can get their hands instead of running out and spending it.
As for government spending, the projects take a long time to get under way. They leave debt for our children and grandchildren, but the idea is that there is something to show for them at the end of the day. There is a bridge or a building or a highway. There's also the option of, rather than starting new projects, pumping money to state and local governments where it can be spent on projects already under way that are likely going to be cut.
Here’s my question to you: Should President-elect Obama's stimulus package emphasize tax cuts or government spending?
Tune in to the Situation Room to see if Jack reads your answer on air.
And, we love to know where you’re writing from, so please include your city and state with your comment.
Is Now The Right Time For Tax Cuts?
FROM CNN's Jack Cafferty:
President-elect Barack Obama and Congressional Democrats are working on a plan to offer businesses and individuals $300 billion in tax cuts. Forty percent of it would come from an emergency stimulus package that is expected to total in the neighborhood of $775 billion.
Mr. Obama wanted the stimulus package on his desk when he assumes the presidency in 2 weeks. But this is Congress he's dealing with, and now we're being told they can't possibly have anything ready for his signature before early February. Meanwhile the economy continues to suffer big time. And the predictions are that without help things will likely get a lot worse.
The tax cuts are supposed to be the incentive Republicans need to support the stimulus package which is supposed to create jobs, jump start the economy and eventually help to turn things around.
The largest piece of the plan comes from the campaign trail. Something Mr. Obama called "Making Work Pay" which promised tax cuts of $500 per person or $1,000 per family.
Economists remind us that the rebate checks that were sent out last year to get people spending didn't work, so who knows if this will.
Here’s my question to you: Is now the right time for additional tax cuts?
Interested to know which ones made it on air?
Should Obama hold off raising taxes on wealthy?
Click the play button to see what Jack and our viewers had to say.
FROM CNN's Jack Cafferty:
There are stimulus packages and there are stimulus packages. Remember the one President Bush, House Speaker Pelosi and Senate Majority Leader Reid collaborated on a while back? It was $168 billion and resulted in a few hundred dollars in most people's pockets. It did it's job, gave a short term jolt to the economy, but it's effects are long since gone. And the economy is a whole lot worse now than it was then.
Watch: Cafferty: Obama wait on taxes?
Stand by for "Stimulus Two!" Congressional Democrats say they will have a stimulus package ready for Barack Obama to sign the day he is inaugurated. New York Senator Chuck Schumer told ABC's "This Week," this time the stimulus package could total $700 billion. Gee, another $700 billion. And that's a pretty round number in Washington these days. After all, $700 billion you may remember is what Congress committed last month to bailout troubled financial institutions. It's also an amount slightly higher than what the nation has spent on the war in Iraq over the last 6 years. But it doesn't matter, does it? It's money we don't have anyway, just add it to the national debt.
David Axelrod, Obama's chief political adviser, said Sunday that the cost of Obama's economic rescue plan would be pricey. He also hinted that the president-elect may hold off on raising taxes for the wealthy and instead just allow the Bush tax cuts to expire in 2010. Despite Obama's campaign promise to immediately roll back the Bush tax cuts for people making more than $250,000, conventional wisdom says it's never a good idea to raise taxes during an economic slowdown.
Here’s my question to you: Should President-Elect Obama hold off raising taxes on the wealthy for two years?
Interested to know which ones made it on air?
State Budget Crunch: cut services or raise taxes?
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/11/18/art.garbage.ca.gi.jpg caption="Would you rather your state cut services or raise taxes?"]
FROM CNN's Jack Cafferty:
Americans are feeling pretty cash-strapped these days and as a result, state budgets are feeling squeezed too. Many states are watching tax revenues simply melt away from sales taxes to corporate and capital gains taxes. People aren't shopping like they used to, or traveling, and the stock market's killing everybody - all of which is hurting local governments. And those states with high foreclosure rates? They're getting hit hard too.
According to the liberal-leaning Center on Budget and Policy Priorities, at least 37 states have faced or are facing budget gaps in the 2009 fiscal year totaling $66 billion.
Take California for example. Two months ago, the state faced a $15 billion deficit. Suddenly that number has shot up to $26 billion, and California may not be able to pay its bills this spring.
New York state isn't much better. It faces a $12.5 billion deficit in 2009. Cuts here are expected to include health care and education.
The governors of both states have called special legislative sessions to deal with this financial crisis. As the economy continues to deteriorate, states are facing increasingly difficult choices.
Here’s my question to you: Would you rather your state cut services or raise taxes to cover its budget shortfall?
Interested to know which ones made it on air?
@jackcafferty on Twitter
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