National Debt: $14,683,910,471,706 - Increased by $4,057,033,422,793 since Obama’s Inauguration because of unbridled spending, bad decisions, and agenda to transform the U.S. into a second rate country and incompetence. So now he wants more money to up the debt even further through another failed stimulus. Call Congress and tell then NO!!
There are fourteen new or higher taxes in President Obama's "Stimulus 2.0" plan he wants Congress to pass. Permanent tax hikes for new spending.
President Obama has asked Congress to pass his “American Jobs Act,” a bill which is a series of permanent tax increases funding temporary tax relief and new spending programs. The overall act is a net tax increase (score pending). All tax hikes are scheduled to take effect in 2013. Below is a comprehensive list of the 14 tax hikes in the bill (in order of appearance in Stimulus 2.0):
Spectrum Tax (Sec. 278): A new $4.8 billion hidden tax on wireless consumers. Levied on users of licensed spectrum, the tax will hit consumers who use mobile phones, tablets, and other wireless devices. Worst of all, the Federal Communications Commission could raise or punitively-target this Spectrum Tax at whim from this $4.8 billion floor.
28% Limit on Itemized Deductions and Employer-Provided Health Insurance (Sec. 401). Under the Stimulus 2.0 tax hike, no matter what tax bracket you fall in, you can only benefit from deductions as if you are in the 28 percent bracket or less. This denies taxpayers in the top two brackets the full deduction for mortgage interest, charitable contributions, and state taxes that other taxpayers can claim. In addition, this tax increase limits most non-itemized deductions and exclusions for these taxpayers, in particular those for employer-provided health insurance, health savings accounts (HSAs) and self-employed health insurance premiums. Moving expenses and the foreign earned income exclusion would also be limited. For taxpayers in 2013’s top bracket of 39.6 percent, this would chop 30 percent of the value of all these exclusions and deductions.
“Carried Interest” (Sec. 411). Under current law, capital gains earned by managers of investing partnerships are taxed (properly) as capital gains. This bill would tax them instead as ordinary income, raising their tax rate from 15 percent today to 39.6 percent in 2013.
Airplane Tax Hike (Sec. 421). Businesses should be able to expense all equipment in the year of purchase (President Obama would seem to agree, since he called for an extension of 100% “bonus depreciation” which does precisely that). However, Stimulus 2.0 inconsistently also calls for a longer “depreciation” (slow deduction over time) of one business expense—airplane purchases. The bill calls for the depreciable life of aircraft (not just “corporate jets”) to be extended from 7 to 12 years. This is a tax hike that will kill jobs, just like the 1990 yacht tax killed that industry a generation ago.
Intangible Drilling Costs (Sec. 431). Current law allows energy companies to deduct most (only 70% of these costs for the larger companies) of the costs associated with drilling. All expenses should be deductible in the year they are incurred. Stimulus 2.0 would repeal this and make companies deduct the costs very slowly over fifteen years.
Tertiary Injectants (Sec. 432). Current law allows energy companies to deduct the cost of injecting materials into older energy reservoirs in order to keep them productive. This is the proper tax treatment of this cost. Stimulus 2.0 would replace this very ordinary deduction with precisely nothing. Energy companies would simply have to eat the cost with after-tax dollars.
Percentage Depletion (Sec. 433). This refers to a provision of law that allows taxpayers to recover their lease investment in a mineral interest through a percentage of gross income from a well. Stimulus 2.0 would repeal this provision ONLY for investments in oil and gas wells. Interestingly, the largest oil companies don’t benefit from this today, so this tax increase is targeted only at smaller energy companies and their investors.
Manufacturer Tax Deduction (aka “Section 199”) (Sec. 434). All employers are today allowed to deduct up to 9% of the cost of domestic manufacturing—all employers, that is, except energy companies, who can only deduct 6% of such costs. Stimulus 2.0 would deny this deduction entirely to energy companies, singling them out by picking winners and losers in the tax code.
Oil and Gas Passive Losses (Sec. 435). In general, “passive” (trade or business activities without active participation) losses are not allowed to be claimed by taxpayers. There is an exception for investment in oil and gas extraction. Stimulus 2.0 repeals this exception, which will tend to hit small energy companies and their investors the hardest.
Geological and Geophysical Costs (Sec. 436). Currently, small energy companies can deduct the costs of exploring for new sources of energy over two years (again, the proper treatment should be to expense in the first year). Stimulus 2.0 would stretch this period to seven years. This only affects small, independent energy employers as larger companies are ineligible for the two-year treatment under current law.
Enhanced Oil Recovery Credit (Sec. 437). This credit, intended to spur oil production even when prices are low, can only be claimed when oil is less than $42 per barrel. Oil is currently about $87 per barrel, so this credit is nowhere near claim-able. Nonetheless, Stimulus 2.0 repeals the credit just to raise taxes while scoring cheap points against energy employers.
Marginal Well Production Credit (Sec. 438). This credit is the same as the Enhanced Oil Recovery Credit in Sec. 437, but it is only use-able when oil prices drop to $27 per barrel. Stimulus 2.0 repeals this credit for similar reasons.
Dual Capacity Rules (Sec. 441). The U.S. is one of the only nations which attempts to tax on a “worldwide” basis—even on income which has already faced income taxation in other countries. When combined with the highest corporate tax rate in the developed world, “worldwide” taxation is an uncompetitive jobs killer. In order to avoid international double taxation, employers can claim a tax credit for income taxes paid overseas. Stimulus 2.0 makes it more difficult for energy companies to claim this tax credit, exposing their worldwide income to international double taxation—potentially shipping jobs overseas to avoid paying taxes twice.
Dual Capacity Discrimination Against Oil and Gas Employers (Sec. 442). In addition to the dual capacity rule repeal of Sec. 441, this provision of Stimulus 2.0 makes it even more difficult for oil and gas employers to avoid double taxation than it does for all other taxpayers to avoid double taxation. It adds insult to the injury of dual capacity rule repeal.
What do you think?
Will any of these 14 tax hikes help create jobs?
Source: Americans for Tax Reform
Related:
Obama Trapped in Keynesian Twilight Zone
See the: House Republican Plan for America’s Job Creators
Source: Americans for Tax Reform
Related:
Obama Trapped in Keynesian Twilight Zone
American Infrastructure Is Being Built by Chinese Workers; NOT Americans
See the: House Republican Plan for America’s Job Creators
Memo on the President’s Job’s Proposal… - From Eric Cantor
SEC. 376. FEDERAL AND STATE IMMUNITY. (a) Abrogation of State Immunity- A State shall not be immune under the 11th Amendment to the Constitution from a suit brought in a Federal court of competent jurisdiction for a violation of this Act. (b) Waiver of State Immunity- (1) IN GENERAL- (A) WAIVER- A State's receipt or use of Federal financial assistance for any program or activity of a State shall constitute a waiver of sovereign immunity, under the 11th Amendment to the Constitution or otherwise, to a suit brought by an employee or applicant for employment of that program or activity...
Go to the White House web link for the “American Jobs Act,” http://www.whitehouse.gov/sites/default/files/omb/legislative/reports/american-jobs-act.pdf
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