Federal Budget & Tax

Federal Budget & Tax: News Blog Background

Wednesday, May 28, 2008

I just wanted to alert readers of a new blog we've been reading: EconomistMom - "where analytical rigor meets a mother's intuition."

Authored by economist and mom Diane Lim Rogers of the Concord Coalition, the blog's "particular focus [is] on the economics of fiscal responsibility," but Rogers also writes about broader issues.

She's been on a roll lately, explaining the trap of the "largest tax increase in history" rhetoric, expressing frustration about the 'extenders' tax cuts, and righteously high-fiving Steven Pearlstein for his column that connects the dots of the various economic woes of the day.

Good stuff.

Posted by Craig Jennings, 11:06:43 AM

Thursday, May 22, 2008

Time Running Out for Wesley Snipes

Our friend Wesley Snipes looks like he is running out of options to avoid going to jail on June 3 for believing he was exempt from paying taxes (oh, and actually not paying taxes too). The Associated Press reports:

Wesley Snipes must surrender to prison authorities June 3 if he isn't granted bail to appeal three federal tax convictions, defense lawyers said in a court filing. Snipes' attorneys plan to argue before the 11th U.S. Circuit Court of Appeals that the trial judge erred in several ways before and after his February conviction. U.S. District Judge William Terrell Hodges last month sentenced Snipes to three years in prison.

To be granted freedom during the appeal, the 45-year-old actor must prove that he has a substantial issue to raise and isn't a flight risk. His attorneys argue that Hodges gave the jury bad instructions and should have granted them an expanded pretrial hearing on their request to move the proceedings.

Prosecutors said Snipes had no major issues to raise and has demonstrated he could flee. In a Monday filing, U.S. Attorney Robert O'Neill said Snipes told the probation office he had less than $10,000 in liquid assets, but the actor surprised the government by producing $5 million in payment for back taxes at his sentencing.

(h/t TaxProf Blog)

Posted by Adam Hughes, 01:55:33 PM

Condition of State Budgets Continue to Decline

The state of state budgets continues to deteriorate around the country. The Center on Budget and Policy Priorities released another update yesterday to their increasingly disturbing analysis, which now shows that 31 states are anticipating budget problems in 2009, with 27 projecting a budget shortfall. We continue to reiterate that this is pretty bad news as state budgets are far less flexible than the federal budget and usually are legally prohibited from running a deficit. From the CBPP update:

31 states anticipate budget problems. Of those:

27 states and the District of Columbia faced or are facing $47 billion in combined '09 budget shortfalls. Arkansas and Michigan join this list.

2 states face '09 deficits, but have released no further information. (Connecticut joins this list. Louisiana and Michigan leave.)

2 other states project budget gaps for 2010 and beyond. (Connecticut leaves this list.)

CBPP: 27 STATES FACE TOTAL BUDGET SHORTFALL OF AT LEAST $47 BILLION IN 2009

Posted by Adam Hughes, 11:27:53 AM

House, Senate Set to Approve Budget Resolution

The House and Senate are set to vote on the FY 2009 Congressional Budget Resolution today. OMB Watch sent letters of support for the resolution to both the House and Senate Budget Committees yesterday (House letter, Senate letter). The letters highlight the positive (and negative) aspects of the resolution, as well as the recent historical difficulty of enacting a budget resolution during an election year (hasn't happened since 2000).

The resolution is good, but not great. Hopefully its enactment will help develop momentum for Congress to continue to draft and pass more fiscally-responsible, responsive fiscal policies in 2008 and beyond.

Posted by Adam Hughes, 09:02:59 AM

Wednesday, May 21, 2008

Vene, Vidi, Veti -- and Voodoo
Doing the Veto-Voodoo Dance

It's vetoes ("veti" in Latin?) gone wild this week at 1600 Pennsylvania Avenue, with President Bush vetoing the Farm bill this afternoon, and issuing formal veto threats against the war funding bill cleared last week by the Senate Appropriations Committee and, now, against the House extenders package, H.R. 6049 -- the Energy and Job Creation Act of 2008.

H.R. 6049 extends a welter of tax breaks -- the vast majority benefiting corporations, per the Tax Policy Center -- at a one-year cost of about $55 billion (see JCT Score). The problem is that the House Ways and Means Committee had the temerity to pay for this package, so that it wouldn't blow a $55 billion hole in the federal budget.

And that's a big no-no for the White House. See, the president loves all those tax cuts. $55 billion is just too big a price to pay. So why pay for any of them at all?

Here's the White House "reasoning," or ratiocination:

The Administration does not believe that efforts to avoid tax increases on Americans need to be coupled with provisions to increase revenue... these provisions would increase tax burdens, undermine the competitiveness of U.S. workers and businesses, and could have adverse effects on the U.S. economy.

As opposed to the interest payments on the new $55 billion he'd prefer to add to the national debt than to pay for. Interest payments that would go in large measure to the Chinese, Japanese, E.U., and our other international economic competitors.

Is this what the president's father would call the Vene-Vidi-Veti-Voodoo economics dance?

POSTSCRIPT: The House has just passed H.R. 6049 by a vote of 263-160, 19 votes short of the number necessary for a veto override.

Posted by Dana Chasin, 03:36:23 PM

Thursday, May 08, 2008

Monthly Budget Review: April, 2008

Receipts from tax returns filed by the April 15 deadline were about 6 percent higher than such receipts last year, about what CBO anticipated when it prepared its most recent budget projections in March. Nevertheless, the federal government recorded a deficit of $151 billion for the first seven months of fiscal year 2008, CBO estimates—$70 billion more than the shortfall incurred in the same period last year.

...

Because of the large inflow of tax payments due by April 15, the government runs a budget surplus in April. This year, that surplus was $160 billion, CBO estimates, or $17 billion less than the surplus recorded in the same month last year. That reduction was due to the effect of the calendar on the timing of certain outlays.

...

Through April, withholding of income and payroll taxes rose by about $49 billion (or nearly 5 percent), reflecting continued increases in wages and salaries. Those receipts grew at a slower rate than the nearly 7 percent increase recorded in both 2006 and 2007.