Tag Archives: Barack Obama

The Discretion of the President to Plan Cuts Under Debate

The Discretion of the President to Plan Cuts Under Debate

President Barack Obama has been pretty vocal about the effect that automatic budget cuts are going to have. These warnings are getting increasingly ominous from the President and the Congressional Republicans are preparing to counter these warnings as far as possible. Basically the Congressional Republicans are looking to aid the administration with more flexibility and that too in instituting the 85 billion dollars worth of cuts. They believe and have said that this one proposal could actually serve the vital purpose of shielding the most important programs. This should be done while the political fallout is shifted to the White House.

English: In January 2009, President of the Uni...

English: In January 2009, President of the United States of America, George W. Bush invited then President-Elect Barack Obama and former Presidents George H.W. Bush, Bill Clinton, and Jimmy Carter for a Meeting and Lunch at The White House. Photo taken in the Oval Office at The White House. (Photo credit: Wikipedia)

This plan is undoubtedly facing extreme opposition from the administration. The administration has declared that it isn’t really planning to do much to soften the blows that have come upon the domestic and military programs. However, what’s worth the consideration is the fact that this is leading to apparent racks in the Democrats’ camp. This is essentially because it’s the lawmakers from the states who’re literally standing face to face with the deepest cuts. Now, this obviously goes on to say much as there are high chances that the Democrats might also be prepared to go along with the Republicans, simply so that they can manage to avoid arbitrary cuts to military programs as well as social services.

With the nation reeling under debt and that’s easily reflected with the increasing number of sign ups for programs like online debt consolidation, this political turmoil over the cuts seems literally unwanted. There’s hardly much time left until “sequestration” makes its way. Basically, the across the board cuts also known as sequestration have been scheduled to commence. It’s not surprising that the administration officials are not taking to this favorably and they’re still talking about the consequences to come in alarming terms. This is in spite of the fact that there was hardly any evidence of hardcore negotiations with the lawmakers such that a deal could be reached to avoid them altogether.

In spite of all this, a South Carolina Republican, Senator Lindsay Graham gave the impression of advancing the debate on Monday. He being a leading defense hawk expressed that this is actually the ideal opportunity to carry out the big deal. He said that he was willing to raise revenue of around 600 billion dollars provided the Democrats would be willing to reform entitlements. He believes that they can then fix sequestration together.

The secretary of homeland security, Janet Napolitano expressed that the automatic cuts would leave the country not so very well guarded. In fact, she also believes that this can actually leave the nation ill-equipped to meet terrorist threats. This is obviously going to turn into an inconvenience for millions of travelers too. There came further warnings from the interior secretary, Ken Salazar. He warned about campgrounds closing down and firefighting efforts being scaled back. He also spoke about lesser seasonal workers who’ll be hired.

Ms. Napolitano opines that there’s always a threat looming large. Though they plan to do everything they can to minimize the risk involved, yet it’s a fact that the sequester makes things really very tough.

It’s a known fact that efforts are being made to shift the responsibility completely to President Barack Obama and to cushion the attacks by the White House. Now, what’s important is the fact that Republicans were supposed to unveil legislation on Tuesday and they said that this would literally alleviate their biggest concerns. This measure is supposed to be effective because it’ll allow for agencies and departments to amass programs that had long since been proved to be ineffective. This is almost like a measure to prove that there were functions like say critic federal functions as well as air traffic control and meat inspection that had been spared.

Now, if the Congress happens to grant the White House the authority to protect the air traffic controllers and other such patrol agents, then the administration’s carefully devised plan is bound to lose impetus.

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Understanding The Fiscal Cliff Deal

The Fiscal Cliff Deal

The taxes paid by most Americans will definitely increase despite the fiscal cliff deal just signed by Congress.

President Obama has declared that the fiscal cliff deal as a victory for middle class households. This may not be true because taxes are bound to go up and this will lead to an increase in middle class taxes.

The percentage of households and individuals i...

The percentage of households and individuals in each income bracket. “US Census 2005 Economic Survey, income data” . . Retrieved 2006-12-09 . “US Census Bureau, personal income distribution” . . Retrieved 2006-12-09 . (Photo credit: Wikipedia)

America also has a huge national debt of $16 trillion. The tax relief and pork included in the new deal will add about $4 trillion to the national debt over 10 years. The fiscal cliff deal has been hailed as a victory for the middle class but this deal means that about 77% of the American population will pay more federal taxes in 2013. There are bound to be tax increases in 2013 and this affect the people in the middle classes too.

This may seem pretty high but people in high income brackets will pay much more than this in 2013.
The new deal will definitely affect people in the $400,000-$450,000 income bracket.

For those in the top income bracket, investment taxes will increase from 15% to 20%. Another category of top income earners will experience an increase of 4.6% in the taxes they already pay. This means that the tax will move up from 35% to 39.6%.

The Obama 2010 health care law necessitated a higher amount of tax for families which earn high incomes. In 2013, households with incomes in the $500,000 and $1 million bracket will pay $14,812 more. Families making more than $1million per year will fork out $170,341 in federal taxes.

The new tax deal was passed into law on January 1, 2013. The aim is to get more money for social security which is financed by taxes paid by employees and employers of labor. The fiscal cliff deal was opposed initially by republicans but the law has now been passed into law.

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Legislation Delays Cause TurboTax To Prepare For Short Tax Season

TurboTax 2012

Intuit Inc., which is the maker of the tax software TurboTax 2012, is getting ready for the tax season to begin late in 2012.

With the changes that are occurring in tax laws it is possible that the filing deadlines may be pushed to later in the year. This could cost the company a delay in revenue  of $50 million to $75 million. This could translate into a 10 cent to 15 cent loss in their per share earnings in the companies second quarter of the fiscal year. This was the warning that the company had  announced over the last week.

The company expects to make up the loses in later quarters and is readying themselves by staying in contact with federal tax authorities. They want to stay on top of the changes and develop software that covers all of the possible scenarios. They hope to be ready for whatever congress decides.

English: President Barack Obama leans back in ...

English: President Barack Obama leans back in his chair as he listens to the discussion at a Long-Term Fiscal meeting in the Roosevelt Room of the White House, May 29, 2009. (Official White House Photo by Pete Souza) (Photo credit: Wikipedia)

With a mix of large tax increases, along with the across-the-board spending cuts, which will begin in January if there is no intervention from lawmakers,  it is creating a fiscal cliff. There is still no word on whether President Obama and the Republicans leaders are going to be able to bury the hatchet and come up with a resolution and get together on a new tax code, even if it is a temporary one just for this year.

Approximately 1/6 of all the tax returns last year were filed with the assistance of TurboTax 202. This year they are better equipped to face the challenges. With the use of social media, and on and offline commercials they have led people to the understanding of what TurboTax 2012 can do for them.

With the new tools that Intuit has installed, they will be able to help users keep up with the changes and file on time and accurately.

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Learn More About The Tax Breaks That Will Expire At The End Of This Year

End of Tax Breaks: All You Need To Know About the Expiring Tax Breaks

There seem to be changes in the IRS tax code every single year. The only advantage they have is that they keep accountants employed.

It is important that you stay informed about tax code changes regardless of whether you use computer software to do your taxes or you have your accountant do it for you. Knowing changes in the tax code will help you to file the right returns and get your refund quickly.

The first tax breaks to go are Bush Tax Cuts that gave high income earners huge tax deductions. They are expected to expire towards the end of 2012. The expected changes will affect:

Retirement

When Bush tax cuts are phased out, people will have to pay higher taxes when they retire. Taxpayers who benefited from Bush tax cuts should convert to a Roth IRA, as this will allow them to pay taxes upfront and enjoy their full retirement benefits when they retire. This will save them the hassle of filing income tax returns in their old age.

Converting to the new Roth will be costly for taxpayers who benefited from Bush Tax cuts in 2010. Generally, they will have to pay up to 35 percent tax rate on a rollover. This rate may increase after these tax cuts expire.

Home sale

Homeowners who lose their homes to foreclosures, a short sale, or had their debt reduced through mortgage restructuring will have to pay taxes on the difference between the actual debt and the new debt, or between the outstanding balance on the mortgage and the sum recovered from a short sale.

There are many other changes that will affect education and health care among other industries.

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Obama’s Purposed Tax Reform May Have Holes

Timothy Geithner, the Treasury Secretary, has presented Obama’s current plan for overhauling business taxes today. This plan includes eliminating loopholes and a reduction in tax rates by up to 28%. Critics, however, state this is not low enough.

Plans are also in the works to instate a minimum tax on foreign earnings, but no details have yet been given.

Geithner went on to say that the main goal of the Obama tax reform plan is to “restore a system” which allows American businesses to succeed or fail based on the services they provide or products they make, not on the acrobatics their tax professionals are capable of or the lobbyists they have in their corner.

He went on to explain that the proposed overhaul will be “politically contentious”, but analysts have stated that it will most likely not be instated for 2012 taxes.

Senior policy analysts Curtis Dubay has said that there is very little chance that the plan will be approved this year – partly because it is an election year, but also because he believes it will be seen as a policy that will “make things worse.”

William Gale has said that today’s plan simply shows how hard it can be to implement major tax reforms and legislation. He reminds us that taxes for business income in the U.S. are quite “confusing and uneven.”

Some of the difficulties are income which is taxed twice, moving beyond subsidies, deductions for interest, business partnerships, and more.

Geithner claims to have spoken with Senator Max Baucus, Senator Orrin Hatch, and Republican Sander Levin, and says they will meet sometime next week to iron out the proposal and build consensus.

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