Read My Lips: No New Bailouts

Coffee Brown, University of New Mexico, Talk Radio News


Reps. Mike Pence (R-Ind.) and Peter Roskam (R-Ill.) said President Obama’s budget “taxes too much” and presented an outline of their alternative.

The President's budget would add up to $3,100 per year per family in increased energy costs via the cap and trade policy, which their statement referred to as “cap-and-tax.” Both representatives also said that many small businesses would pay more in direct taxes. Pence acknowledged that that was so only if the business owner files as an individual and is making over $250,000, but that is commonly done in order to avoid the higher corporate rate. In effect, those small business owners whose personal profits exceed a quarter million dollars per year would be forced to choose between the already higher corporate or the now higher personal tax bracket.

Roskam said that many of the small businesses in his area were “in survival mode.” It was unclear whether he was including those whose personal profits would create such a tax dilemma.

Pence was emphatic that the “first principle is no new bailouts.” He repeated three times that the majority of Republicans had opposed bailouts even when their leadership supported the strategy.

The other principles outlined were: no tax hikes, limiting the federal budget from growing faster than family budgets, reforming the financial system, controlling energy costs with increased exploration, as well as developing new energy sources and supporting long-term price stability.

The nuts and bolts of how to do those things will be the topic of several subsequent presentations, Pence finished.

Small business was big business in Geithner hearing

by Christina Lovato, University of New Mexico-Talk Radio News Service


“This is a very good budget, because it’s an honest budget...Now just because this is an honest budget does not mean that this is an easy budget. The budget presents some difficult realities, and it presents some hard choices.” said Senate Finance Committee Chairman, Max Baucus (D-Mont).

Today in the Senate Finance Committee meeting, U.S. Treasury Secretary Timothy Geithner testified and expressed why President Obama’s budget plan will work. "We are absolutely committed to working with you on how to produce a package of reforms that meets the President's broad principles in a way that is fiscally responsible for the country...We wanted to put on the table, to improve the credibility of our commitment to do this, concrete proposals that would achieve that.” Geithner stated. 

Senator Chuck Grassley (R-IA) said that in 2007 small business created 74% of new jobs. “I don’t understand why you would charge small business operators more than you would charge corporations...I want to emphasize for the Secretary over half are between 20 and 500 employees. Those larger small businesses are also businesses most likely to expand or contract depending on business conditions.” he stated.

In addition to discussions about small business, taxes, and health care reform, Geithner expressed two critical functions that the government must accomplish to get the economy back on track. “We need to make sure that banks have the resources needed to provide credit to the economy...The basic machinery necessary for credit to work in our country is broken in some respects, the pipes are clogged...So a critical second part of our program is to act directly to get credit flowing again to get those markets to start opening up. The entire small business lending market, the auto finance market, the student loan market, the consumer credit markets depend on that machinery.” Geithner concluded. 

McCain campaign fires back at Obama

Sen. Barack Obama (D-Ill.) has shifted his position on taxes to win the hearts of American people, when in reality he has voted 94 times to raise taxes, according to Carly Fiorina, the former CEO of Hewlett Packard. The McCain campaign held a teleconference with Fiorina and others in response to statements from the Obama campaign which said the Illinois senator would reduce taxes on the American people.

Fiorina said that Obama would institute $863 billion dollars in new spending programs if elected president. In addition, she said Obama has asked for nearly $1 billion in earmarks. Fiorina concluded by saying that the top five percent of wealthiest Americans will see the bulk of tax increases.

John Taylor, a Professor of Economics at Stanford University, said that with an economic recession looming, now is not the time to raise taxes on the Americans. He also said that McCain's primary economic focus is about creating jobs for the American people. Taylor agreed with Fiorina that Obama has shifted his position a number of times in order to earn more votes.

Obama promises tax cuts for middle class, increase for the wealthy

Sen. Barack Obama's tax plan would cut taxes to rates that are lower than those seen under Ronald Reagan, according to Jason Furman, the Obama for America Economic Policy Director. He and others held a conference call to discuss Obama's tax plan, and to dispel any myths that they feel were spread by Sen. John McCain's campaign.

Furman went on to say that taxes on middle class families would be significantly cut, with the overall tax rate brought down to less than 18 percent of our nations Gross Domestic Product (GDP). In addition, he said Obama would supplement these cuts by ending the war in Iraq responsibly and cut subsidies to Medicare HMOs. Furman also said that any family earning below $250,000 annually can expect no tax increases under an Obama administration, while McCain cannot say the same thing. He said that McCain's plan, for the first time in history, would force Americans to pay taxes on health insurance they receive from employers. Furman said this would result in a $3.6 trillion tax increase on middle class Americans.

Austan Goolsbee, Chief Economic Advisor for Obama for America said that the top one percent of households would see their taxes go from 21 percent to less than 25 percent. In addition, Goolsbee said that Obama would lower taxes on dividends and capital gains.

Former Treasury Secretary Larry Summers points out that while the McCain campaign and Conservatives in Washington have said that a Democratic tax plan would cause a recession, he points to the tax plan of the early 1990's under President Clinton. This plan was followed by the largest economic boom our nation has ever seen.

Debts and deadbeats

Over 1.6 million businesses owe more than $58 billion to Uncle Sam, according to Senator Carl Levin (D-Mich.) at a hearing before the Committee on Homeland Security and Governmental Affairs on unpaid payroll tax abuse. A study by the Government Accountability Office (GAO) concluded that more than half this debt is now uncollectible.

According to Levin, delinquent businesses not only stash away taxes they owe the government but also steal funds withheld from employee paychecks. Levin pointed out that this widespread failure to remit payroll taxes is a felony and a disgrace. Levin said that in 1998, the GAO found unpaid payroll taxes totalled $49 billion but now it has increased to $58 billion. Levin attributed the cause for this increased tax debt partyly to ineffective Internal Revenue Service (IRS) payroll collection efforts.

Levin focused on three of the hosts of problems identified by the GAO. Levin said that GAO’s report disclosed that 70% of all unpaid payroll taxes owed by businesses are due to repeat offenders. Levin also cited the IRS’ failure to make effective use of available enforcement tools and “deadtime in the queue” where cases are left unproductive until a revenue officer is assigned to them and enforcement action is taken.

Senator Norm Coleman (R-Minn.), ranking member of the Permanent Subcommittee on Investigations, referred to those who fail to pay payroll taxes as “deadbeats” and said they are not only breaching their employees’ trust but shortchanging honest American taxpayers. Coleman said that the IRS estimated $44 billion has been transferred from general tax revenues to Social Security and Medicare. Coleman pointed out that the billions of dollars could have been invested in crucial areas such as healthcare, homeland security and education. Coleman also said that tax-cheats are shifting the tax burden onto honest Americans and are gaining an unfair advantage over honest businesses.