House to vote on tax break extension. Will it affect you?
The House may vote this week on a one-year retroactive tax break extension.听Maybe you鈥檝e heard this song before, but听Bloomberg听the bipartisan tax extender package proposed last week is in fact dead. As many as one in six taxpayers could be affected without an extension of the 60 or more tax breaks, according to tax-preparation company H&R Block. The House鈥檚 Plan B would extend nearly all of them to finish the congressional session as soon as possible, and allow for a smoother start to tax filing season.
Yes, you鈥檝e definitely, unfortunately, heard this song before.听罢笔颁鈥檚 Len Burman knows听听by heart, and assumes that Congress will ultimately pass a one-year retroactive extension. But this 鈥渋llustrates how bad extender tax policy is. Many of the provisions slotted for revival are regressive, fiscally irresponsible, and inefficient鈥� and 鈥渃reate a vehicle for all sorts of budget-busting mischief.鈥� If you鈥檇 like to sing along for a few bars, 罢笔颁鈥檚 Bob Williams has some new听听for you.
A lame duck鈥檚 swan song: The House may vote on an omnibus bill to keep the government open.Or,The Hill听reports, the GOP, under pressure to respond to President Obama鈥檚 executive order on immigration,听. It would fund much of the government, but would require continuing resolutions on agencies responsible for immigration, such as the Department of Homeland Security. But do Republicans wants to risk the consequences with the threat of terrorism lurking? No final decision has been made: The House GOP Conference meets today, the first time since the Thanksgiving recess.
Taxing Social Security benefits doesn鈥檛 seem to change an older worker鈥檚 tune.听A听by Len Burman, Norma Coe, Kevin Pierce, and Liu Tian explains. Social Security benefits are taxed under complex rules that raise marginal effective tax rates as high as 85 percent. That鈥檚 pretty steep, and an older worker might work and earn less to avoid the high tax rate. But the researchers found no such effect. In fact, they conclude: 鈥淥verall, the findings suggest that older taxpayers have little understanding of the rules governing Social Security benefit taxation.鈥� Is tax advice another possible member service for AARP?
Germany, France and Italy would like the EU to hurry up and harmonize.听The EU lacks corporate 鈥渢ax harmonization,鈥� and the听听to the EU鈥檚 Economic and Tax Commissioner Pierre Moscovici and urged him to develop a 鈥済eneral principal of effective taxation.鈥� Such a move, they argue, would do more to prevent sweetheart tax deals in countries with lower corporate tax rates than promises of 鈥済reater transparency and company registries.鈥� They鈥檇 like Moscovici to draft a directive by the end of the year, and would like member nations to adopt EU rules by the end of 2015.
If not harmony, then maybe in unison鈥攁t least to tax banks?听A听would require that they pay a levy on every executed trade in stocks, bonds, or other financial instruments. Most EU nations, including Britain, oppose the plan, saying banks would pass the cost to investors, or execute trades in low- or no-tax regions. Still, eleven EU nations, among them France, Germany, Italy, and Spain, would like to levy the tax but have until the end of this year to agree to a plan. They want banks to repay the EU for aid received during the financial crisis of 2007-09. Trouble is, they can鈥檛 agree on what should be taxed, or when, how, or where it would be collected.
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