The Week Just Past: A Balanced Approach?

The AMT Threatens New Jersey Taxpayers

What is the AMT? (Alternative Minimum Tax)

Medicare Is Faulted on Shift to Electronic Records

Hurricane Sandy Deadlines

Iran Accelerates Nuclear Weapons Fuel Enrichment

 

The Week Just Past: A Balanced Approach?

As talks resumed in Washington to avoid the so-called, ‘fiscal cliff,’ the New York Times carried an interesting story this week.  Entitled, ‘Efforts to Curb Social Spending Face Resistance,’ the piece reported that, “In talks with Congressional leaders, Mr. Obama is seeking $1.6 trillion in additional revenue over 10 years and $340 billion in health care savings.”  

That means the President is now seeking nearly $5 in tax increases for every $1 of spending cuts.

“This is far from a ‘balanced approach,’ let alone anywhere close to the ratio the President called for last April of $1 in revenue for every $3 in spending cuts.  As the President has previously declared, spending, not a lack of tax revenue, is the primary cause of our debt and deficits.

“In doing so, he tacitly admitted that this nation has a spending problem, not a taxing problem. 

“And he would be right.  During his first term, the debt grew by $5 trillion. This was not because tax revenues fell: The Office of Management and Budget estimates that this year’s revenues are about $278 billion greater than in 2009, and total revenues since 2009 have exceeded $9 trillion.  The problem is that President Obama has spent $5 trillion more than these revenues.

“He is urging tax increases on ‘the rich’ and many small businesses.  These tax hikes may reduce the debt by 1 percent or 2 percent, as CBO projects, or they may backfire, forcing our economy to slide back from extremely slow growth back into recession.

“So, the only sure way to reduce the debt is to cut spending. And everything needs to ‘be on the table.’

“We have the responsibility to come to an effective solution.  And as an optimist, I do believe we can reach an acceptable, bipartisan compromise that will prevent the largest tax increase in the nation’s history.  December is here and the ‘fiscal cliff’ negotiations continue, I think it is appropriate to ask the President: where is your plan?”

Rodney Frelinghuysen

Recommended Reading: Reed Abelson, writing in the Thursday New York Times, “Medicare Is Faulted on Shift to Electronic Records”

Recommended Reading: Tuesday’s editorial in Investor’s Business Daily, “ObamaCare Must Be Part of Fiscal Cliff Talks”

The AMT Threatens New Jersey Taxpayers

The Alternative Minimum Tax (AMT) is one of the many taxes that could jump dramatically if the President and Congress cannot come to an agreement that will avoid the “fiscal cliff.” 

This is particularly important in our state because an additional 2 million New Jersey taxpayers could be adversely affected.

This week, Rodney and 9 of his colleagues joined in asking Speaker John Boehner to ensure that an AMT “fix” is included in any final tax and spending agreement.

The text of the letter to Speaker Boehner:

As you are aware, in the absence of an alternative minimum tax (AMT) fix, roughly 34 million taxpayers will find their tax bill skyrocket for the 2012 tax year.  The AMT was originally created to ensure that only a small number of high-income taxpayers paid income tax.  Because the income thresholds under the AMT were never adjusted for inflation, the AMT now threatens tens of millions of middle-income Americans.  

Because of the particular tax preferences and exemptions disallowed under the AMT, people in certain demographics, such as large families and married couples will be particularly hard hit by this tax.  Furthermore, because the AMT does not allow for a deduction of state and local taxes, residents of certain areas of the country will be disproportionately affected by the tax.  For example, the states most impacted by the AMT, are California, New York and New Jersey.   

Given our nation’s economic health—and the millions of small businesses, individuals, and families struggling to make ends meet—Congress must address the AMT extension to prevent a catastrophic tax hike.  We respectfully request that you include an AMT extension as one of your top priorities in negotiations with President Obama and Senate Majority Leader Harry Reid to address the fiscal cliff.   

What is the AMT?

Ed O’Keefe explains in the Monday Washington Post.

Recommended Reading: James C. Capretta and Yuval Levin writing in the Wall Street Journal, “Why ObamaCare Is Still No Sure Thing.” An excellent read!

Hurricane Sandy Deadlines

Some important deadlines related to Hurricane Sandy are on the horizon:

• Deadline for registering with FEMA for Individual Assistance: December 31, 2012
• Last day to check out of hotel/motel for those approved for Transitional Shelter Program: December 13, 2012
• Last day to apply to the Small Business Administration for low-interest loans for structural damages and inventory loss: December 31, 2012
• Last day to apply to the Small Business Adminstration for economic injury loss: July 31, 2013

Some of these deadlines may be extended at the request of the state. 

To register for assistance or obtain information on FEMA’s programs, visit:

www.fema.gov.

Recommended Reading: Yaganeh Torbati writes for Reuters this week that Iran is intensifying efforts to develop weapons-grade plutonium, in defiance of international sanctions. 

At the rate Iran is proceeding, the apparently movable “red line” will have the U.S. and its allies eventually “containing” Iran’s nuclear capabilities.