Archive for the ‘Taxes and spending’ Category

Today, the Congressional Budget Office projected this year’s deficit to be $845 billion. It would be the first time during Barack Obama’s presidency that the deficit could be measured with only a 12-digit number. Hooray?

CBO expects higher tax revenues, including the tax increases included in the Jan. 1 deal to avert the so-called fiscal cliff, to contribute $259 billion toward deficit reduction. (Here, I repeat my standard disclaimer that CBO almost always over-estimates the increase in revenues that comes with higher tax rates because it does not even attempt to consider how people will change their behavior to avoid paying higher taxes.)

Yet, also today, Obama said he does not want to see spending cuts of just $85 billion due to the sequester take effect.

For those keeping score at home, the cuts he opposes equal (take your pick):

• just 2.3 percent of all federal spending this year;
• just 10.1 percent of even this year’s deficit;
• a mere $1 for every $3 in deficit reduction …

Continue reading Obama: Why, we can’t cut spending by 2.3 percent! »

The Dow Jones Industrial Average today briefly touched the 14000 mark, before falling slightly. As I write, it’s hovering right around that level, the first time it’s done so since late 2007. The broader S&P 500 is at a five-year high, about 3 percent off its all-time peak in October 2007. The Nasdaq is at a 10-year high, though it’s significantly lower than its tech-bubble peak. In all, though, these major indices finally are back to roughly where they were before the housing crash and Great Recession (as long as we don’t adjust them for inflation, that is).

Yet, earlier today, the Bureau of Labor Statistics announced the unemployment rate had ticked upward to 7.9 percent even though more people had stopped looking for work than found a job. At January’s rate of job growth (157,000 net jobs created), it would take until at least 2025 to regain pre-recession employment levels. At the rate for all of 2012 (an upwardly revised 181,000), it would take “only” until 2022, a decade …

Continue reading Stock gains don’t make up for continued sluggishness in economy, job market »

Few people expected Georgia’s legislators to pursue any big new transportation initiatives this year. So far, legislators are meeting that expectation.

The rejection of the T-SPLOST in nine of Georgia’s 12 regions is still fresh, and most state agencies face budget cuts amid stagnant tax revenues. Yet, this is a critical moment for our state to figure out how to pay for transportation infrastructure.

But not only our state. All signs indicate the so-called budget sequester will force Congress to cut spending by tens of billions of dollars a year. And that will be just “the first of many large cutbacks” affecting transportation, predicts Robert Poole.

Robert Poole

“There will be no more ‘nice to have’ things,” says Poole, co-founder and head of transportation policy at the libertarian Reason Foundation. “If we’re going to continue … to invest in transportation, the states are going to have to pick up the ball.”

But, Poole added during a Thursday speech at …

Continue reading Tough choices loom as Georgia maps its road(s) ahead »

As I suggested last week, congressional Republicans don’t have to play around with the debt ceiling in order to make sure spending is cut during the next two months. And it appears that approach is more or less what they’re doing. From the Washington Post:

As House Republicans prepared to vote Wednesday on a plan to suspend the debt limit, Budget Committee Chairman Paul Ryan made clear that the party is in no way abandoning its uncompromising approach to the budget battle with President Obama.

Republicans will insist that automatic spending cuts take effect March 1 unless other cuts are adopted, Ryan said. They may force a shutdown of the government on March 27 unless Democrats agree to additional cuts. And they will demand that any future increase in the debt limit – likely to be necessary this summer if the measure to suspend the current debt limit is adopted — be paired dollar-for-dollar with spending cuts or other reforms.

“We have a sequester kicking in on March 1, a …

Continue reading House GOP skirts debt-ceiling drama, can now focus on spending cuts »

Professional golfer Phil Mickelson has been in the news lately for complaining — and then apologizing about complaining — about the marginal tax rate he faces under new tax laws at both the federal level and in his home state of California. He claimed he now pays more than 60 percent of his income in taxes.

Presumably, he apologized because now is not the most popular point in U.S. history for questioning the wisdom of the government for taxing sharply the income of Americans who earn tens of millions of dollars a year. And as someone who earns a goodly chunk of his millions precisely because of his popularity (think endorsements), Mickelson has to consider such things.

So perhaps readers will be more interested to know that Mickelson has nothing on low-income Americans when it comes to watching his take-home earnings dissipate with each additional dollar. But not only because of tax rates.

Based on data released earlier last fall by the Congressional Budget Office, the

Continue reading What Phil Mickelson has in common with low-income Americans »

As I write, President Obama is about to announce the gun-control proposals his administration has been drafting since the Sandy Hook school massacre (although some of them almost certainly were on his wish list before he ever entered the White House). We’ll discuss that here after they’ve been made official and we’ve had time to digest them.

In the meantime, and of a more time-sensitive nature, we march on toward next month’s trio of fiscal deadlines: the expiration of temporary funding measures for the federal government, the end of a two-month delay in the automatic budget cuts known as sequestration, and the end of the administration’s authority to borrow more money.

That last issue, popularly known as the debt ceiling, has drawn the most attention, with Democrats accusing the GOP of holding the economy hostage by insisting on spending cuts if they are to raise the ceiling. We’ve seen this movie before, in the summer of 2011. It didn’t end all that well.

It did, however, …

Continue reading GOP can cut spending without delaying debt ceiling »

Say what you will about Grover Norquist — and I know many of you have had plenty to say about him in the past, none of it good. But I don’t think there’s any question his organization, Americans for Tax Reform, is right about one particular element of its statement regarding Gov. Nathan Deal’s plan to have the Department of Community Health, rather than the Legislature, decide whether to continue imposing the hospital bed tax (or “hospital provider fee,” in the current Georgia political vernacular).

Here’s the statement, obtained by my AJC news-side colleagues. I’ve put the seemingly unobjectionable part in bold-face:

Gov. Deal’s decision to shift taxing authority from the legislature to the Department of Community Health does nothing to improve the hospital bed tax. Instead, it is a step in the wrong direction, attempting to absolve the governor and legislature of any potential blame for the looming tax increase.

The hospital bed tax remains a job-killing tax hike that will …

Continue reading Grover’s right: Bed-tax bill is all about passing the buck »

Another day, another Republican governor making a bold proposal on an issue Georgia lawmakers have been wrestling with. From the Times-Picayune in New Orleans:

Gov. Bobby Jindal is proposing to eliminate Louisiana’s income and corporate taxes and pay for those cuts with increased sales taxes, the governor’s office confirmed Thursday. The governor’s office has not yet provided the details of the plan.

“The bottom line is that for too long, Louisiana’s workers and small businesses have suffered from having a state tax structure that is too complex and that holds back economic prosperity,” Jindal said in a statement released by his office. “It’s time to change that so people can keep more of their own money and foster an environment where businesses want to invest and create good-paying jobs.”

Jindal said the plan would be revenue-neutral and that the goal would be to keep sales taxes “as low and flat as possible.”

Another Louisiana newspaper, the Monroe News-Star, reports the …

Continue reading Another Southern state not named Georgia looks to ditch the income tax »

If you think the 112th Congress was a weak, unproductive bunch, you’re not alone. Saxby Chambliss agrees with you.

“Unfortunately that’s the way it feels inside, not just outside,” Georgia’s senior senator told me over coffee at his Cobb County office Tuesday. “Harry Reid’s leadership [in the Senate] leaves a lot to be desired, and the in-your-face stuff that the president’s thrown at us has gotten a lot of backs up on our side, in both the House and the Senate. You throw the presidential election in there and it just kind of all came together, and nothing got done.”

Readers who are not GOP partisans would probably add House Republicans to Chambliss’ list of Washington’s bad actors. But after spending the past few years working with a handful of his fellow senators to fashion a big, bipartisan deal to reform the federal tax code and reduce spending, to no avail, Chambliss conveyed disdain for the way the Jan. 1 agreement to avoid the so-called fiscal …

Continue reading Chambliss: Government shutdown is up to Obama »

After last year’s resounding T-SPLOST flop, Georgia legislators are not expected to make any big moves regarding new transportation funding. But forget new transportation funding: Given the long-term decline in the purchasing power of the motor fuel tax, which will only accelerate as vehicles become more fuel-efficient, Georgia will have to consider alternate means of funding for building and maintaining roads and bridges. Increasing the motor fuel tax rate even just to maintain parity might work in the short term, but it’s probably not a solution in the long run.

Few of the most-discussed alternatives have obvious appeal. Tolls almost certainly will become a more important source of revenue, particularly on the interstates, but that’s a limited option. You’re extremely unlikely to face a toll booth between your house and the grocery store, and there are vast swaths of the state where tolls probably aren’t viable. Another option, tracking the number of miles traveled by a …

Continue reading Transportation funding: Should Georgia follow another GOP governor’s lead? »