House Republicans On The Offensive Following Extended Tax Fight

Congressional Republicans are looking to change the subject, following a long, drawn out battle over cuts in 2012 taxes. They are doing so by pushing for new legislation, that they propose will promote transportation and energy projects, not only creating jobs but also cutting taxes for cash-strapped businesses.

On the other side, Democrats are hoping to continue their winning record by pushing  Republicans to vote on jobs programs that would be financed by increasing taxes on the rich. During an election year, this might just be a winning strategy.

The parties’ differing uses of legislative power serve to emphasize the conclusions that each party took away following the brawl over new payroll taxes, which ended only when Congress finally passed on a $143 billion package to President Obama.¬† The bill also included a payroll tax cut of 2%, and provisions to preserve extended unemployment benefits for those who have been unable to find a job in the long-term. An additional provision will prevent Medicare from decreasing payments to participating doctors.

Until the Republicans dropped their, previously ardent demands for hefty spending cuts, the Democrats had succeeded in presenting the opposing party as opponents of a tax break that would benefit most middle-class Americans. Not a good spot for the Republicans to be in during an important election year.

This puts the GOP in a position where they feel that they need to get the voter’s attention focused on other issues. In this case, they point primarily to what they cite as the failure of President Obama’s jobs and economic stimulus plans.

To this end, House GOP members are working hard to push threw bills that put job growth at the top of the agenda. Examples of this strategy include a $460 billion dollar transportation bill that is linked to additional oil drilling legislation.

But the odds of them passing this legislation, particularly a bill that addresses oil billing, are almost zero. Nonetheless, House Republicans will continue to present themselves as the pro-job party.

Popularity Of Millionaire Tax

Polls show the millionaire tax and spending cuts are popular.

In general, people are in favor of President Obama’s proposal to increase millionaires’ taxes, but are still more in favor of spending cuts, as shown by an Associated Press-GfK poll. This gives Republicans an advantage over Democrats in the ongoing battle over the economy.

The poll shows that while the President’s proposed millionaire tax is generally popular, the plan does not effectively change the partisan views of public towards the $1 trillion yearly deficit.

Republican and retired New Jersey Mike Whittles said in support of the tax proposal, “Everybody should be called to sacrifice.” Still, Whittles said, he’d prefer spending and government waste reduced first.

Obama’s plan to impose at least a 30 percent income tax for millionaires was favored by 65 percent of the people polled by AP-GfK, while only 26 percent were opposed.

However, 56 percent as opposed to 31 percent approved of cuts in government spending rather than higher taxes — a small shift from the previous year’s poll.

Overall, people had a more optimistic view of Democrats than Republicans and positivity towards Obama as the presidential election approaches. Democrats received 54 percent favorable responses while Republicans had only 46 percent, corresponding with the results of a January 2011 poll.

Obama’s plan has little chance of passing in Congress despite Democratic support. Still, the proposal unifies Democrats in their opposition to GOP plans to lower top income earners’ taxes.

The 2012 taxes proposal was nicknamed the Buffet Rule since billionaire Warren Buffet is a supporter of higher taxes for the wealthy. The wealthy GOP candidate Mitt Romney released his tax returns to show he paid 15 percent.

Nearly two-thirds of independents and two-fifths of Republicans approve of Obama’s proposal. In addition, 60 percent of whites and 50 percent of conservatives back the plan, groups who generally support the GOP, and also 60 percent of those who earn more than $100,000 a year.

Unconditional Offer On Extension Of Payroll Tax Cuts Made

On Monday the leadership of the House GOP said it planned to support a payroll tax cut extension through the end of this year. It would support the payroll tax cut without adding unrelated policies or making offsetting cuts. It is a surprising turn of events. Congress could pass a bipartisan proposal related to 2012 taxes well before deadline and without a huge debate about who pays what when. A compromise related to cuts in 2012 taxes is surprising.

This doesn’t mean that Republicans and Democrats are thrilled with each other when it comes to payroll tax cuts. Speaker of the House John Boehner, majority leader Eric Cantor and Kevin McCarthy, whip, read a statement together. The statement said that because an agreement hadn’t been reached, they decided to put into place a backup plan that extends payroll tax cuts through 2012. This will affect 2012 taxes. With the backup plan in place, negotiations on offsets and unemployment insurance will continue. The statements said that a measure for House consideration could be scheduled.

Despite Republican leadership support, the payroll tax cuts is not set in stone. Republicans might not have the support of conservatives in their party, Blue Dog Democrats could pull their support, and Democrats might not want the payroll tax cuts separated from unemployment insurance. Even though this is still not a done deal and may not affect 2012 taxes, it is remarkable that an unconditional tax holiday was passed by the House GOP. It has been a while since anyone in the government has used the word unconditional and meant it.

Romney Has Investments Funds In Cayman Islands

Romney Has Big Stash in Cayman Islands

It might not be immediately obvious, but Mitt Romney has millions of his fortune in investments funds in the Cayman islands, an infamous tax refuge.

A representative for Romney says he obeys the law, and that he pays the normal taxes despite where his money is.

As Republican nominations get closer, Romney is finding it harder to keep the secrets about his wealth under wraps.

Jack Blum, a lawyer from Washington thinks Romeny’s financial situation is a disgrace to the United States tax system.

Romney recently let out that he has been paying only 15% in taxes, much less than most of us. He stated privacy as the reason for wanting to keep this information separate, but all potential presidential candidates have to expect people to look into their financial affairs.

Romney is not hurting for money. His fortune is estimated at 250 million, and he pays lower income taxes on his investments in the Cayman Islands.

Blum says channeling money through offshore accounts lets investors avoid many small fees and traps that they would pay if the same money was on US soil. The primary reason for having funds in that location is avoiding taxes.

It may not be illegal, but it looks bad to some people, and the tax havens like the Cayman Islands cause the US government to lose out on $100 billion in revenue every year. Considering his timing, Romney may be wishing his investment funds were somewhere else less suspicious right now.