Tag Archives: tax breaks

Obama Takes Tax Rate Increases Off the Table

28 Tuesday Jun 2011

Posted by in budget, Congress, economy, Obama, Politics, special interests, Taxes, Wall Street

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From The Hill yesterday:

“The White House, seeking an agreement to raise the nation’s $14.3 trillion debt ceiling by Aug. 2, on Monday said it would not insist that any deal include an end to former President George W. Bush’s controversial tax rates on the wealthy…The White House said the president is pushing the GOP to agree to eliminate some tax breaks for businesses and loopholes for wealthier taxpayers, but is not seeking to eliminate the across-the-board rates introduced by President Bush. That means taxpayers who earn more than $250,000 annually have gotten a reprieve.

Obama still wants to scrap the Bush-era rates, but with time running out on the debt-ceiling talks, he made clear Monday that he has a new range of targets.“

Translation: He’s being “forced” into it—again. Do you get it yet, Democrats? Is it starting to sink in? President Obama doesn’t want to end the Bush Obama tax rates. This makes two–count ‘em two–opportunities he’s had to make good on the smoke he blew during the 2008 campaign about ending the tax cuts. Both times he’s passed. In short, he’s just not that into you. On the other hand, he’s very much into these guys. Wake up and smell the coffee.

Oh sure, there will be some “revenue increases” included in what Dylan Ratigan appropriately calls the “pro wrestling” debt limit negotiations. Appropriate because the outcome is pre-determined, what we see now is just the preliminary theatrics. But like with so many other things the president says—like his creative interpretation of what constitutes “hostilities” for example— you have to carefully parse his words.

There will be “revenue increases” in the form of a few tax breaks ended, a few loopholes closed, and a few fees raised, but nothing that amounts to much in the big picture. Piddling amounts like this:

“Obama’s budget wants $85 billion in new user fees over 10 years, including raising the airline passenger security fee from a maximum of $5 per one-way trip to $11. Other proposals range from Food and Drug Administration food inspection fees to duck hunting fees. The $85 billion also includes federal auction of parts of the broadcast spectrum and the sale of surplus federal property.”

This is also being floated:

“The administration also would tax private equity or hedge fund managers at higher income tax rates instead of lower capital gains rates..”

Yeah, right. President Obama is going to raise taxes on the same guys he sucks up to at $35,000 a plate fundraisers. The same guys he plays kissy-face with to get contributions for his re-election campaign. That’ll be the day.

If you need further evidence of how seriously this whole song and dance is being taken by the powers that be, despite the screams about the alleged financial catastrophe that will happen if an agreement isn’t reached by August 2:

“Complicating matters is the congressional schedule. While the Senate is in session, the House is off this week ahead of the July 4 holiday. The House is scheduled to return next week when the Senate will be away.”

Pro wrestling indeed. The Hulkster would be proud.

Billions for Big Oil, Nothing for the Unemployed

04 Sunday Jul 2010

Posted by in budget, Congress, Deepwater Horizon, economy, Gulf Oil Spill, lobbyists, Obama administration, oil exploration, Politics, special interests, Unemployment

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We can’t afford to extend unemployment benefits, but:

“…an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.”

Take, for instance, two of the major players in the Gulf oil spill—Transocean and BP:

“When the Deepwater Horizon drilling platform set off the worst oil spill at sea in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to significantly reduce its American taxes.

The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes.

At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began.”

Congress and the Obama administration are working (allegedly) on legislation that would cut $20 billion in oil industry tax breaks. The response from the oil companies? One wrong move and the economy gets it:

“Jack N. Gerard, president of the American Petroleum Institute, warns that any cut in subsidies will cost jobs. “These companies evaluate costs, risks and opportunities across the globe,” he said. “So if the U.S. makes changes in the tax code that discourage drilling in gulf waters, they will go elsewhere and take their jobs with them.”

What are the chances of Congress eliminating these subsidies? Slim and none:

“Efforts to curtail the tax breaks are likely to face fierce opposition in Congress; the oil and natural gas industry has spent $340 million on lobbyists since 2008, according to the nonpartisan Center for Responsive Politics, which monitors political spending.”

An example is Sen. Robert Menendez (D-NJ) who is co-sponsoring the legislation that would end the tax breaks, but:

“While the legislation would cut many incentives over the next decade, it would not touch the tax breaks for oil refineries, many of which have operations and employees in his home state, New Jersey.”