Federal Budget Talks Focus On – What Else? – Taxes
by Terri Eyden on
By Ken Berry
At the very least, key members of the House and Senate are talking to each other about the federal budget. But talk – unlike the mounting debt of the country – is cheap.
More than a week ago, the Democrat-controlled Senate barely passed a budget featuring a $975 billion tax hike over a ten-year span, in addition to imposing state sales tax collections on online sales. Although other revenue-generating provisions weren't specified, presumably the nation's wealthiest taxpayers will shoulder most of the burden. The Senate-approved budget is a far cry from the House plan authored by Budget Committee Chair Paul Ryan (R-WI), where the Republicans rule the roost. Neither plan is expected to gain much traction.
Although the Senate budget isn't legally binding, it serves a litmus test for the future of the Marketplace Fairness Act requiring merchants selling products or services online to collect sales tax from their customers. Any business with less than $1 million in Internet sales would be exempt. This previously proposed legislation was added as an amendment to the budget resolution.
The House budget seeks to balance the budget in ten years by retaining $1 trillion in domestic spending cuts mandated by the sequester, cutting back most domestic programs, converting Medicare to a voucher-like program, and completely overhauling the tax code. It doesn't provide for any tax increases.
Not surprisingly, at this point the Senate and House are miles apart. Nevertheless, Senate Budget Committee Chair Patty Murray (D-WA), the main architect of the Senate version, expressed some optimism.
"I am proud of the work we did in the Budget Committee and on the Senate floor to write, debate, and pass a responsible budget plan that puts economic growth and the middle class first," Murray said in a prepared statement. "I want to especially thank the many people across the country who shared their stories, ideas, and priorities with us as we put this budget together. While it is clear that the policies, values, and priorities of the Senate Budget are very different than those articulated in the House Budget, I know the American people are expecting us to work together to end the gridlock and find common ground, and I plan to continue doing exactly that. I spoke with Chairman Ryan after his budget passed the House to congratulate him and continue our conversation about moving this process forward. I am confident that if Republicans join Democrats at the table and are truly ready to compromise, we can get to the balanced and bipartisan deal that the American people expect and deserve."
Senate Minority Leader Mitch McConnell (R-KY) was more pessimistic than Murray: "Although Senate Democrats finally generated a budget after four years, the plan they produced raises taxes, increases spending and debt and never, ever balances," he said. "Top Washington Democrats said they simply don't care about balancing the budget anymore, and it certainly shows in this tax and spend proposal. This budget is a rehash of the extreme policies that continue to hobble the economy and crush the middle class. The only good news is that the fiscal path the Democrats laid out in their budget resolution won't become law."
The next concrete move is up to President Obama. He's expected to unveil his own budget plan later this month. Depending on the administration's proposals, it could pave the way for a consensus or only lead to further stalemate.
- Is This the Year for Tax Reform?
- Nation's Top Tax Advocate Calls for Tax Reform
- How to Prepare Clients for the Marketplace Fairness Act
You may like these other stories...
Lois Lerner isn’t a Superwoman, but she’s showing at least as much resilience as Lois Lane.A new report released on March 11 by the House Committee on Oversight and Government Reform, one of several government...
Each tax-filing season poses different challenges for small business owners – from understanding the new tax laws and regulations to preparing new forms and disclosures.But according to Kevin Anderson and Doug Bekker,...
In Denver, state legislators are probably thinking, "Why didn't we think of this earlier?" The state of Colorado's retail marijuana sales (separate from medical marijuana sales) in January alone generated...
Upcoming CPE Webinars
BAR is an acronym for: Boundaries, Authority and Role. This simple tool will provide participants with a solid understanding of leadership essentials to improve their performance.
This material is designed to provide a start-to-finish overview of how to plan and complete high-quality small audits efficiently.
In this session Excel expert David H. Ringstrom, CPA shares numerous techniques that you can use to work with charts more efficiently.
Key Accounting and Reporting Issues for Nonprofits No. 1: Overview and Statement of Financial Position
This material focuses on non-profit organizations organization, accounting and reporting.