Income taxes

Foreclosure Prevention Act of 2008 [Revised Bill]

atraub — Thu, 10 Apr 2008 14:37:17 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Amount of mortgage-related assets that the Federal Reserve assumed as collateral for a loan it made to facilitate the sale of Bear Sterns to J.P. Morgan Chase: $30 billion

Amount this bill provides in tax refunds for businesses that claim a loss: $6.1 billion

Amount this bill provides to state and local governments across the country to shore up neighborhoods devastated by mortgage foreclosures: $4 billion

Estimated number of foreclosures prevented if Congress lifted the ban on loan modifications by bankruptcy courts, a provision this bill does not include: 600,000

Amount of home equity saved if Congress lifted the ban on court-supervised loan modifications that would otherwise be lost because of foreclosures of neighboring properties: $72.5 billion

Amount that lifting the ban on court-supervised loan modifications would cost middle-class taxpayers: $0

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. With two million families facing the loss of their homes over the next two years and large sectors of the U.S. economy destabilized by mortgage defaults, the foreclosure crisis and the wider turmoil it has caused are among the greatest threats to middle-class Americans today. This bill responds to that threat, although not in the most effective way. The bill is stuffed with costly and irrelevant provisions, while the positive steps it does include fail to go far enough to help struggling families. The single most effective measure proposed to address the crisis – a change in bankruptcy law that would prevent hundreds of thousands of foreclosures – was killed as an amendment. Meanwhile some provisions that did make it into the final bill could even make the foreclosure problem worse.

Positive measures in the bill include FHA modernization, which will enable more homeowners to refinance problematic mortgages. The block grants for communities hard hit by the crisis to reclaim foreclosed properties and turn them into affordable homes is another very positive step, but here too the amount of funding may be too little to revitalize neighborhoods in need. Funding for mortgage counseling is also beneficial, but inadequate. And while enhanced mortgage disclosures are helpful, they are no substitute for a genuine ban on deceptive lending practices along the lines enacted by some state governments. The tax exempt bonds for state agencies to refinance subprime loans is a modest effort which will inevitably bail out lenders, whose lax standards helped cause the crisis, along with struggling homeowners.

While provisions to help homeowners and devastated communities are stingy, home builders and other businesses facing economic losses due to the downturn reap $6.1 billion in tax breaks. This provision has little to do with helping prevent foreclosure and is not even a cost-effective means of economic stimulus. The property tax deduction for non-itemizers is similarly problematic. While many middle-class families might see a small tax break under this provision, the credit is not substantial enough to help families who face foreclosure or are having serious difficulties making mortgage payments and is not targeted at these homeowners. To make matters worse, the deduction is limited to people who live in areas that have not raised property taxes. This creates an incentive for states and municipalities to cut services that middle-class families rely on rather than raising the revenue needed to preserve them. Finally, the tax credit for buying a foreclosed home might, as the Washington Post point out, actually encourage more home foreclosures.

The alternative energy tax breaks, added at the last minute, are similar to those included in the House’s Renewable Energy and Energy Conservation Tax Act. Providing the public investment necessary to jump start the development and promotion of renewable energy sources and ultimately mitigate global warming sweetens what is otherwise a unsatisfactory effort to deal with the home mortgage crisis. Middle-class Americans will ultimately see some benefit from this bill – but they deserve better.

Quotes from Experts

Beyond this Bill

Additional Resources

“Senate Housing Legislation Highly Disappointing” from the Center for Budget and Policy Priorities

Mortgage Lending page from the Center for Responsible Lending

United States National Health Insurance Act of 2007

atraub — Tue, 08 Jan 2008 11:11:41 -0500

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Tax Reduction and Reform Act of 2007

atraub — Tue, 08 Jan 2008 10:57:09 -0500

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Temporary Tax Relief Act of 2007

hmoroz — Tue, 11 Dec 2007 11:47:23 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Number of taxpayers affected by the AMT in 2006, with the exemption that is extended in this legislation: 3.5 million

Number of taxpayers who will be affected by the AMT in 2007 if this legislation is not enacted into law: 23.4 million

Average compensation paid to the 25 individual hedge-fund managers with the highest earnings in 2006: $570,000,000

Approximate loss of revenue to the U.S. Treasury in 2006 alone from taxing the carried interest of these 25 fund managers as capital gains: $1,995,000,000

Amount that the IRS estimates it will spend in startup and ongoing maintenance costs through FY2007 for the private collection agency program: $71 million

Revenue the IRS estimates it would generate if it applied this $71 million to its own IRS Automated Collection System: $1.4 billion

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. The Temporary Tax Relief Act of 2007 ensures that middle-class Americans are not overwhelmed by a tax that they were never intended to pay. An increase of approximately $3,000 in tax payments for more than 20 million American homes would be disastrous for families already reeling from home foreclosures, high gas prices, and nearly stagnant wages. The bill’s tax credit increases and extensions, including credits for college tuition and for improving public schools in economically distressed areas, benefit current and aspiring middle-class families. The legislation also spares families who have lost their homes to foreclosure from large income tax bills that would result from their mortgage debts being voided. This provision provides relief for households engulfed by the housing crisis that would otherwise be subject to large tax bills even after losing their homes. The bill’s revenue-raising tax hikes target the appropriate group: extraordinarily wealthy hedge fund and private equity managers who have exploited loopholes in the tax code to avoid paying their fair share of taxes.

Finally, the Tax Relief Act’s prohibition of debt-collection contracts between the IRS and private companies, a ban suggested by the IRS’s taxpayer advocate, will put a stop to the harassment of lower- and middle-income taxpayers that resulted from the unaccountable, inefficient, and expensive outsourcing of a public function to the private sector.

Quotes from Experts

Beyond this Bill

Additional Resources

House AMT “Patch” Bill Is Fiscally Responsible from the Center on Budget and Policy Priorities

Tax Topics: Individual Alternative Minimum Tax from the Urban-Brookings Tax Policy Center

The Taxation of Carried Interest, Testimony before the Finance Committee of the U.S. Senate

Nina Olson, National Taxpayer Advocate, Statement on the IRS’s private debt collection inititative

Tax Increase Prevention Act of 2007

atraub — Mon, 08 Oct 2007 13:43:14 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Tax on Carried Interest of 2007

atraub — Mon, 08 Oct 2007 13:30:38 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Jobs and Growth Tax Relief Reconciliation Act of 2003

atraub — Tue, 25 Sep 2007 15:13:12 -0400

Legislation

The middle class

Opposes

Video Summary

Injustice Facts

Percentage of the President’s 2003 tax cuts that went to the top 1% income earners: 40 percent
Average tax cut received by Americans with incomes of $1.4 million and up: $81,000
Average tax cut received by middle-class Americans with incomes of $35,000: $800

Overview/Summary

Middle Class Position Analysis

The Middle Class Opposes: The Jobs and Growth Tax Act of 2003, enacted in May 2003, was initially portrayed as a tax cut for struggling working-class Americans, but has translated into a law favoring the rich at the expense of everyone else. While middle-class Americans with incomes of $35,000 enjoyed a tax savings of roughly $800 as a result of this law, according to the Economic Policy Institute, those with incomes above $1.4 million received a tax cut of $81,000–more than 100 times as much. In fact, over the next four years, the top one percent of income earners will receive almost 40 percent of the total tax relief from this legislation, while the bottom 60 percent of taxpayers will receive just nine percent. This law provides neither the economic support required by middle-class American families struggling with soaring fixed costs, debt, and unemployment, nor the surge in consumer spending required to stimulate the sagging economy because less than 10 percent of its benefits go to those most likely to spend it.

Quotes from Experts

Beyond this Bill

Additional Resources

Alternative Minimum Tax Reform Amendment of 2004

atraub — Mon, 24 Sep 2007 16:22:56 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Approximate number of Americans who paid the AMT: 3 million
Percentage of households in 2004 that make between $50,000 and $75,000 that will have to pay the AMT if the system is not reformed by 2010: 37
Income level at which a married couple begins paying the AMT under this amendment: $250,000
Income level at which a married couple begins paying the AMT under the bill that passed: $58,000
Estimated amount the amendment would increase the federal budget deficit, if extended for ten years: $0
Estimated amount the bill that passed would increase the deficit if extended for ten years: $17.8 billion

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. The Alternative Minimum Tax was originally an innovative way to make sure corporations and rich individuals couldn’t exploit tax loopholes to avoid paying taxes completely. To some extent, it still fulfills this role. But as inflation takes its toll, more middle-class families end up paying taxes at the AMT rate rather than their regular income taxes. The tax is most likely to fall on middle-class families with children and those who live in areas where state taxes are high. The AMT makes the tax code significantly more burdensome and complicated for middle-class families. This amendment offers a simple and commonsense, if temporary, solution. It’s also significant that the amendment, unlike the bill it would have substituted for, would not increase the deficit. The tax cuts for the middle class are offset by increased revenue from corporations that had previously used accounting tricks to avoid paying their fair share of taxes.

Income taxes

Foreclosure Prevention Act of 2008 [Revised Bill]

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

United States National Health Insurance Act of 2007

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Tax Reduction and Reform Act of 2007

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Temporary Tax Relief Act of 2007

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Tax Increase Prevention Act of 2007

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Tax on Carried Interest of 2007

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Jobs and Growth Tax Relief Reconciliation Act of 2003