Blog: The Fine Print / Revenue & Spending

Pryor to Offer Estate Tax Bill

Aug 18, 2006 by Matt Lewis

Sen. Mark Pryor (D-AR) is working on a bill to cut back the estate tax. Pryor said his plan would increase the exemption to $5 million and set the tax rate at 35 percent. "It really takes care of the small business family farm problem we have in the state," Pryor said about his plan. "It doesn't completely fix up everybody, but it makes it so much better for virtually everybody." He said less than 3 percent of taxpayers actually pay the estate tax. "We're not talking about the 97, 98 percent who don't pay it," he said. "We're trying to fix it for people in small towns who own a car dealership, own a convenience store (or) have a farm." I hope the Waltons are happy.

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CBO Releases Economic Outlook

Aug 17, 2006 by Matthew Madia

CBO has released its full report on the state of the deficit. It's worth taking a look at.

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Pension Bill=Tax Cut

Aug 17, 2006 by Matthew Madia

Today, President Bush will sign another regressive tax cut into law. Yes, ladies and gentleman, I'm talking about the pension reform bill, which happens to not only fix some problems with the Pension Benefit Guaranty Corporation, but also makes permanent a handful of the temporary tax cuts passed in 2001. The Tax Policy Center, a joint project of the nonpartisan Brookings Institute and Urban Insitute, estimates that the tax cuts will save people in the top income quintile about $368 a year, while people in the bottom quintile get $8.

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Quote of the Day

Aug 16, 2006 by Matthew Madia

ThinkProgress brings us this quote from House Appropriations Chair Jerry Lewis (R-CA): There is a misunderstanding, particularly in the media, that earmarks are "out of control," said Lewis, who is chairman of the House Appropriations Committee. Here's the punchline (from a May 11 article in the Los Angeles Times): Federal prosecutors have begun an investigation into Rep. Jerry Lewis, the Californian who chairs the powerful House Appropriations Committee, government officials and others said, signaling the spread of a San Diego corruption probe.

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Grassley To Move Forward With Estate Tax

Aug 16, 2006 by Matt Lewis

Sen. Chuck Grassley (R-IA) may try to make an estate-tax compromise the first order of business when the Senate returns from recess, according to WebCPA: Spokespeople for Senate Finance Committee Chairman Chuck Grassley, R-Iowa, are already saying that his take on an estate tax reform bill could be next on Congress's docket. A Republican-led effort resulted in the bill's second defeat on the Senate floor last week, but any legislation brought by Grassley would likely be a compromise crafted within the Finance Committee and aimed at winning the support of Democrats.

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The Mystery of Estate-Tax Fever

Aug 16, 2006 by Matt Lewis

From the San Francisco Bay Guardian, a great article that connects the dots between the IRS's plans to downsize its estate tax division and the mania in Congress. It's definitely worth checking out, especially if you're new to the estate tax debate. Here's one interesting (but purely speculative) point from the article: Estate planner Schiller likened opponents of the estate tax to medieval villagers who complained of gout to prove how well nourished they were. "People want to believe they have an estate-tax problem," he said, "so they can feel successful."

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FY2005 Budget Reconciliation Ruled Constitutional

Aug 15, 2006 by Craig Jennings

Earlier this year we told you that the budget reconciliation bill may violate the Constitution because, due to a clerical snafu, the two chambers did not sign identical versions of bill. On Friday, a U.S. District Court judge ruled that the bill is, in fact, constitutional. BNA (sub. req'd):

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Are Earmarks Really That Bad?

Aug 15, 2006 by Matt Lewis

The Christian Science Monitor is running a series of articles on pork-barrel politics, the latest of which focuses on defense earmarks in West Viriginia. Here's what a defense contractor had to say about a military production facility (ABL) that earmarks have helped develop:

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Estate Tax Reduction Could Prompt More Regressive State Tax Policies

Aug 15, 2006 by Craig Jennings

Not only has the reduction in the estate tax made the federal tax regime less progressive, it could make state tax policies less progressive as well. Andrea Coombs writes in the Wall Street Journal: Because of a federal law that has been phasing in over the past few years, the states' share of federal estate-tax revenue has fallen to zero, from 16% in 2001...Budget-challenged states are feeling the pinch. And a number of states have responded with some form of estate or inheritance levies of their own.

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More on the Crock That Is Supply Side Economics

Aug 15, 2006 by Matthew Madia

This post is just to hammer the point further about much of a sham supply side economics really is. The CRS memo, discussed earlier by Matt, was requested as "a discussion of the dynamic model used by the Treasury Department," and includes a comparison of various models used in two Treasury reports. ("Dynamic scoring" is a method by which future tax revenues are calculated based on different economic conditions due to changes in tax policies.)

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