One shot on taxes: Don't blow it, Democrats (Ezra Klein)

[polichick]

The big question for many of us: Will Dems EVER learn how to negotiate?

Ezra's piece in today's WaPo is well worth the time it takes to read it:


There are now two sides in the American tax debate: the Republican Party, which refuses to have a serious conversation about taxes, and the Democratic Party, which . . . refuses to have a serious conversation about taxes.

Let’s start here: We cannot fund anything close to the government’s commitments if we don’t raise taxes, or if we let only the Bush tax cuts for income over $250,000 expire. And that’s true even if we make deep cuts across all categories of federal spending.

<snip>

The White House should announce that it won’t extend any of the Bush tax cuts and will instead insist on a Gang-of-Six-esque plan that cleans the code, lowers rates for everyone, and raises $2 trillion or more in revenue. If the GOP refuses, the tax cuts will expire, our revenue problems will be solved, and Republicans will suddenly find themselves much more interested in tax reform. Sometimes, to govern like a Democrat, you need to negotiate like a Republican.


http://www.washingtonpost.com/business/economy/one-shot-on-taxes-dont-blow-it-democrats/2011/08/02/gIQAEMOhqI_story_1.html


If you have time, read the whole article!

[FreakinDJ]

1. They should campaign against an outdated, inefficient, unfair tax code

because it makes too much sense

Great article btw

[polichick]

5. Yes, it's a great campaign issue - just as saving Medicare was...

until the WH muddied those waters. Hopefully, they won't toss away another obvious winning issue.

[OHdem10]

6. This is the Republican Line. They have been at it for months.

[FreakinDJ]

8. More of a "Diversion" to interject their agenda

Actually there is a long list of DEM sponsored legislation waiting for the House Republicans to kill it. I think DEMs (you and me) need to publicize this more

This is a summary of the Stop Tax Haven Abuse Act, 1346. Read a press release about the bill here. Access the bill as introduced here. Read Levin's floor statement on the introduction of the bill here.
Targeting $100 billion in lost revenue each year from offshore tax dodges, the bill would:

AUTHORIZE SPECIAL MEASURES TO STOP OFFSHORE TAX ABUSE (§101) by allowing Treasury to take specified steps against foreign jurisdictions or financial institutions that impede U.S. tax enforcement.

STRENGTHEN FATCA (§102) by clarifying under the Foreign Account Tax Compliance Act when foreign financial institutions and U.S. persons must report foreign financial accounts to the IRS.

ESTABLISH REBUTTABLE PRESUMPTIONS TO COMBAT OFFSHORE SECRECY (§102) in U.S. tax and securities law enforcement proceedings by treating non-publicly traded offshore entities as controlled by the U.S. taxpayer who formed them, sent them assets, received assets from them, or benefited from them when those entities have accounts or assets in non-FATCA institutions, unless the taxpayer proves otherwise.

STOP COMPANIES RUN FROM THE UNITED STATES CLAIMING FOREIGN STATUS (§103) by treating foreign corporations that are publicly traded or have gross assets of $50 million or more and whose management and control occur primarily in the United States as U.S. domestic corporations for income tax purposes.

STRENGTHEN DETECTION OF OFFSHORE ACTIVITIES (§104) by requiring U.S. financial institutions that open accounts for foreign entities controlled by U.S. clients or open foreign accounts in non-FATCA institutions for U.S. clients to report the accounts to the IRS.

CLOSE CREDIT DEFAULT SWAP (CDS) LOOPHOLE (§105) by treating CDS payments sent offshore from the United States as taxable U.S. source income.

CLOSE FOREIGN SUBSIDIARY DEPOSITS LOOPHOLE (§106) by treating deposits made by a controlled foreign corporation (CFC) to a financial account located in the United States, including a correspondent account of a foreign bank, as a taxable constructive distribution by the CFC to its U.S. parent.

REQUIRE ANNUAL COUNTRY-BY-COUNTRY REPORTING (§201) by SEC-registered corporations on employees, sales, financing, tax obligations, and tax payments.

ESTABLISH A PENALTY FOR CORPORATE INSIDERS WHO HIDE OFFSHORE HOLDINGS (§202) by authorizing a fine of up to $1 million per violation of securities laws.

REQUIRE ANTI-MONEY LAUNDERING PROGRAMS (§§203-204) for hedge funds, private equity funds, and formation agents to ensure they screen clients and offshore funds.

STRENGTHEN JOHN DOE SUMMONS (§205) by allowing the IRS to issue summons to a class of persons that relate to a long-term project approved and overseen by a court.

COMBAT HIDDEN FOREIGN FINANCIAL ACCOUNTS (§206) by allowing IRS use of tax return information to evaluate foreign financial account reports, simplifying penalty calculations for unreported foreign accounts, and facilitating use of suspicious activity reports in civil tax enforcement.

STRENGTHEN PENALTIES (§§301-302) on tax shelter promoters and those who aid and abet tax evasion by increasing the maximum fine to 150% of any ill-gotten gains.

PROHIBIT FEE ARRANGEMENTS (§303) in which a tax advisor is paid a fee based upon the amount of paper losses generated to shelter income or taxes not paid by a client.

REQUIRE BANK EXAMINATION TECHNIQUES (§304) to detect and prevent abusive tax shelter activities or the aiding and abetting of tax evasion by financial institutions.

ALLOW SHARING OF TAX INFORMATION (§305) upon request by a federal financial regulator engaged in a law enforcement effort.

REQUIRE DISCLOSURE OF INFORMATION TO CONGRESS (§306) related to an IRS determination of whether to exempt an organization from taxation.

DIRECT THE ESTABLISHMENT OF STANDARDS FOR TAX OPINIONS (§307) rendering advice on transactions with a potential for tax avoidance or evasion.

[NC_Nurse]

2. Does anyone actually believe they will EVER do this? I don't.

[woolldog]

3. One thing I'm concerned about

(and I haven't read the article yet, but I will soon) is I've heard Democrats talk about the Bush tax cuts expiring as "leverage." That concerns me because it suggests that they are willing to trade them to get something else. And I don't think they should trade them for anything. They should simply let them expire, for ALL tax brackets.

[polichick]

4. I agree that those tax cuts should simply expire - but if Dems won't allow that...

...they should use them as leverage for real tax reform.

If they fail to do at least that, the party becomes irrelevant. (If it's not already.)

[OHdem10]

7. Hold your breath and cross your fingers. Experts on Circular firing

squads.

[pansypoo53219]

9. THEY ARE NO LONGER NEGOTIATING WITH RATIONAL PEOPLE

the 'loyal' opposition is now oppose EVERYTHING and do not give an inch. they don't give a shit about america or americans. they care only about party + power.
they need to be shamed out of power.

[jefferson_dem]

10. Excellent read.

Thanks for posting! :thumbsup:

[LiberalFighter]

11. Should not lower taxes for EVERYONE

For those below no lower than $250k but at least $500k should be taxed at higher rates.

Now it might be possible by splitting the current tax brackets to lower taxes overall with any revenue loss made up with slight increases in the upper brackets.

Have a maximum mortgage interest, property taxes, and sales tax that can be deducted when itemized.

[Mass]

12. The problem is that the gang of six plan cuts taxes a lot more for rich than for poor.