Politics In Action: S. 2230

STATEMENT OF ADMINISTRATION POLICY

S. 2230 – Paying a Fair Share Act

(Sen. Whitehouse, D-RI, and 13 cosponsors)

The Administration strongly supports Senate passage of S. 2230, which would set a minimum tax rate for taxpayers with annual income greater than $1 million.  S. 2230 will ensure that the Nation's wealthiest people are not able to use tax preferences and shelters to reduce their tax rate below what middle class families pay.

Over the past fifty years, the average tax rate paid by the very highest-income Americans has fallen to a near low – even as their share of the Nation's income has risen to one of the highest levels in close to a century.  As a result, one in four taxpayers with annual income greater than $1 million today pays a lower tax rate than millions of hardworking middle-class households.  S. 2230 would address that most basic source of unfairness by limiting the degree to which the most financially fortunate can take advantage of tax expenditures and preferential rates on certain income.

The Administration believes that S. 2230 would not only make the Nation's tax system more fair, but will also help the economy by closing inefficient tax shelters and loopholes and by allowing the Nation to continue making the vital investments that strengthen the economy and provide economic security for middle class families.  All Americans are being asked to come together to make the sort of shared sacrifices that will allow the Nation to continue making crucial investments in areas that will help the economy grow and create jobs, such as education, research, and infrastructure.  In such a time, the Administration believes that continuing to allow some of the wealthiest Americans to use special tax breaks to avoid paying their fair share simply cannot be justified. 

Meeks Responds to Bank Stress Tests

"I Have Supported the Stress Testing of Banks..."

WASHINGTON, DC -- Congressman Gregory W. Meeks (D-NY), a senior member of the House Financial Services Committee, released the following statement on the Federal Reserve’s recent stress tests:

“Yesterday, the Federal Reserve conducted stress tests to measure the financial health of 19 major financial institutions. I have supported the stress testing of banks, and for their results to be made public, since I introduced an amendment mandating semiannual tests with Congressman Dennis Moore (D-KS) in 2009. 

Periodic stress tests, combined with the requirement that firms develop detailed 'living wills' on how to wind down their firms in the event of a crisis, empower investors in the equity and debt markets by providing vital transparency and information to the public, and are a fundamental part of the Dodd-Frank financial reform bill.

“As Congressman Moore and I argued in 2010, had ‘our stress test language [been] in law a decade ago, both regulators and the marketplace would have seen how overleveraged and fundamentally risky a firm like Lehman Brothers had become and would have taken preemptive actions that could have prevented its dramatic collapse, which, in turn, ignited a financial panic.’

“The Fed’s recent stress tests, the third round that has been conducted since 2009, scrutinized capital levels under certain stringent scenarios to ensure the institutions would not curb lending in the event of an economic downturn. The results, which included failing a major institution, show clearly that the Federal Reserve will not rubber stamp the exams.   These results also prove the value of the Dodd- Frank law in assuring the safety and solvency of America’s banking system and financial industry.  

The financial industry and banks are vital for America’s prosperity, and I am proud to have been an ardent supporter of the efforts to keep them secure and strong.”

Administration Releases Framework for Business Tax Reform

Says Plan Would Simplify Tax Code, Eliminate Tax Loop Holes and Subsidies, Among Other Things

WASHINGTON – The U.S. Department of the Treasury today released the President’s framework for reforming the U.S. business tax system, which would enhance American competitiveness by simplifying the tax code and eliminating dozens of tax loopholes and subsidies, incentivizing job creation and investment here at home and lowering the business rate while broadening the tax base.

“In order to make us more competitive and create jobs here at home, we must reform our corporate tax code,” said Treasury Secretary Tim Geithner.

“The President’s framework would boost growth and provide American companies with incentives to invest in the U.S. while simplifying and cutting taxes for our small businesses.”

According to the Administration, under the current tax system, the United States will soon have the highest statutory corporate tax rate among developed countries, within a system that features a large number of tax expenditures for special interests.

This puts American businesses—especially those in areas like manufacturing that are subject to more intense international competition—at a disadvantage. And this system is also unnecessarily complicated for America’s small businesses.

For these reasons, the current business tax system is uncompetitive, unfair, and inefficient—distorting choices about where to produce, what to invest in, how to finance a business, and how to incorporate.

As a result, the U.S. business tax system does too little to encourage job creation and investment in the United States and creates too many opportunities that encourage shifting production and profits overseas.

The President’s framework for reform seeks to address those deficiencies in a way that is fiscally responsible.

The details put forward today also make clear that the Administration is committed to working with experts, stakeholders and lawmakers on a bipartisan basis to enact tax reform, including business tax reform that improves the tax treatment of a range of businesses from large corporations to small businesses and does so with fewer tax expenditures, less complexity and lower rates without adding to the deficit.

This report describes the current state of the U.S. business tax system and lays out a framework for reform that includes five major elements:

Eliminate dozens of tax loopholes and subsidies, broaden the base and cut the corporate tax rate to spur growth in America: The framework eliminates dozens of different tax expenditures and fundamentally reforms the business tax base to reduce distortions that hurt productivity and growth. It reinvests these savings to lower the corporate tax rate to 28 percent, putting the United States in line with major competitor countries and encouraging greater investment.

Strengthen American manufacturing and innovation: The framework would refocus the manufacturing deduction and use the savings to reduce the effective rate on manufacturing to no more than 25 percent, while encouraging greater research and development and the production of clean energy.

Strengthen the international tax system, including establishing a new minimum tax on foreign earnings, to encourage domestic investment: Our tax system should not give companies an incentive to locate production overseas or engage in accounting games to shift profits abroad, eroding the U.S. tax base. Introducing the principle of a minimum tax on foreign earnings would help address these problems and discourage a global race to the bottom in tax rates. 

Simplify and cut taxes for America’s small businesses: Tax reform should make tax filing simpler for small businesses and entrepreneurs so that they can focus on growing their businesses rather than filling out tax returns.

Restore fiscal responsibility and not add a dime to the deficit: Business tax reform should be fully paid for and lead to greater fiscal responsibility than our current business tax system by either eliminating or making permanent and fully paying for temporary tax provisions now in the tax code.

To view the President’s framework for reforming business taxation, please visit this link.

Image courtesy of http://www.easyvectors.com

Krueger: 'We Need to Extend the Payroll Tax Cut...'

Statement on the Employment Situation in January

WASHINGTON, DC – Alan B. Krueger, Chairman of the Council of Economic Advisers, issued the following statement today on the employment situation in January.   

Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression. It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007. Most importantly, we need to extend the payroll tax cut and continue to provide emergency unemployment benefits through the end of this year, and take the additional steps that President Obama proposed in his State of the Union address to create an economy built to last.

The unemployment rate fell 0.2 percentage point to 8.3%, from a high of 10% in October 2009. The drop in unemployment over the month was entirely due to employment growth, as the labor force participation rate remained constant, once new population weights are taken into account. The unemployment rate has fallen by 0.8 percentage point in the last 12 months. Private sector payrolls increased by 257,000 jobs and overall payroll employment rose by 243,000 jobs in January. Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 23 straight months, for a total of 3.7 million payroll jobs over that period. In the last 12 months, 2.2 million private sector jobs were added on net. Nonetheless, we need faster growth to put more Americans back to work.

Sectors with net job increases in December included professional and business services (+70,000), manufacturing (+50,000), leisure and hospitality (+44,000), health care and social assistance (+29,700), and construction (+21,000). Government lost 14,000 jobs.

The monthly employment and unemployment numbers can be volatile, and employment estimates can be subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.

White House Briefs

OrthoNet Holdings, Inc. Expands into Hudson Valley

$4.5 Million in Private Investment Will Retain 350 Jobs and Create 155 New Jobs

Governor Andrew Cuomo announced that OrthoNet Holdings, Inc. will invest up to $4.5 million to expand its national headquarters in White Plains, retaining 350 jobs and creating a projected 155 new jobs to boost the Hudson Valley economy. OrthoNet Holdings is a national leader in orthopedic specialty benefit management.

“The expansion of OrthoNet demonstrates our commitment to attracting private sector investment and stimulating job growth in New York,” said Cuomo.

“I am proud to have worked with OrthoNet and our local partners to ensure New York jobs remain in the hands of New Yorkers.”

Supported by an incentive package including up to $3 million in Excelsior Tax Credits from Empire State Development and $31,000 in sales tax exemptions from the County of Westchester IDA, OrthoNet will be able to significantly expand its presence as a key economic and employment resource for the local community, while meeting its mission of providing services that promote high-quality, cost effective health care.

“We are excited about keeping and expanding our business in Westchester,” stated OrthoNet’s President and CEO Dr. Roger Shedlin.

“This means our excellent local workforce will not face relocation or disruption. The support from ESD and WIDA will help enable our continued growth, and job creation, here in New York.”

OrthoNet is the nation’s largest provider of musculoskeletal benefit management services. For over sixteen years the Company has called Westchester home, successfully growing a business that works with most major health plans, providing a wide array of programs related to orthopedics, rehabilitation and related clinical services throughout the United States and its Territories. These initiatives create efficiencies that keep treatments affordable, while promoting improved clinical outcomes and greater patient access to the most appropriate care.

Empire State Development President, CEO & Commissioner Kenneth Adams said, “As OrthoNet grows so will employment opportunities for Hudson Valley residents. Over the next five years, their aggressive agenda for corporate expansion has the potential for significant job creation and economic activity to support the local community. I want to thank our local partners, including Westchester County Executive Rob Astorino and his strong team for their outstanding efforts in helping keep these jobs in the Hudson Valley.”

“From day one I have made economic growth a cornerstone of my administration. Attracting and retaining business in Westchester is how to put people to work and strengthen the economy. Partnering with OrthoNet not only maintained jobs but created new ones. I would also like to thank Empire State Development (ESD) for collaborating with my IDA team to make this possible,” said Westchester County Executive Rob Astorino.

Image courtesy of http://www.ortho-net.com.

White House Briefs: Debt Ceiling Negotiation Update

Statement by Press Secretary Jay Carney

The President has been advocating a balanced plan that would reduce our deficit by $4 trillion by making large cuts in domestic and Pentagon spending, reforming entitlement programs, and closing tax loopholes for corporations, millionaires and billionaires. This sort of approach won support from Democrats and Republicans in the Senate, but the House Republicans walked away after insisting that the budget be balanced on the backs of seniors and the middle class.

Now, faced with the “my way or the highway,” short-term approach of the House Republicans, Senator Reid has put forward a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery. All the cuts put forward in this approach were previously agreed to by both parties through the process led by the Vice President. Senator Reid’s plan also reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans, and, most importantly, it removes the cloud of a possible default from our economy through 2012.

The plan would make a meaningful down payment in addressing our fiscal challenge, and we could continue to work together to build on it with a balanced approach to deficit reduction that includes additional spending reforms and closing tax loopholes for corporations, millionaires and billionaires.

Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court.

Photo source: Cropped from http://www.flickr.com/photos/whitehouse/5640484305/

Author: Peter Souza

Permission: Public Domain

News Corp. Dumps MySpace for Huge Loss

The social networking site once valued near one billion dollars has been sold once again-- and this time for only $35 million.

Sources:All Things DigitalFox BusinessThe Christian Science MonitorWired

Multisource political news, world news, and entertainment news analysis by Newsy.com

By Megan Noe

Video provided by Newsy.com

'Economy Has Improved Dramatically Over the Past Two Years, But There Will Surely Be Bumps in the Road Ahead'

Statement by CEA Chairman Austan Goolsbee on the Employment Situation in April

Today’s employment report shows that private sector payrolls increased by 268,000 in April, the strongest monthly growth in five years. The economy has added 2.1 million private sector jobs over 14 consecutive months, including more than 800,000 jobs since the beginning of the year. The unemployment rate rose to 9.0 percent, but remains 0.8 percentage point below its November level.

Despite headwinds from high energy prices and disruptions from the disaster in Japan, the last three months of private job gains have been the strongest in five years. While the solid pace of employment growth in recent months is encouraging, faster growth is needed to replace the jobs lost in the downturn. We are seeing signs that the initiatives put in place by this Administration – such as the payroll tax cut and business incentives for investment – are creating the conditions for companies to add new jobs and foster the industries of the future. We will continue to work with Congress to find ways to reduce spending, so that we can live within our means without neglecting the investments in education, infrastructure, and clean energy that will strengthen our economy.

In addition to the increases last month, payroll survey estimates of private sector job growth for February (now +261,000) and March (now +231,000) were revised up. Overall payroll employment rose by 244,000 in April, well above market expectations. Payroll employment grew in almost every sector. Solid employment increases occurred in retail trade (+57,100), professional and business services (+51,000), education and health services (+49,000), leisure and hospitality (+46,000), and manufacturing (+29,000). Manufacturing has added 244,000 jobs in the last 14 months, the best period of manufacturing job growth in 13 years. State and local government experienced a decline of 22,000; this sector has shed 289,000 jobs in the past 14 months, mostly in local government.

The unemployment reading in April showed a partial reversal of the 1.0 percentage point decline over the previous four months. Employment measured in the household survey dipped in April and the labor force participation rate was unchanged. The unemployment rate data derive from a separate household survey. The payroll and household surveys can differ on a monthly basis; the household survey is more volatile, but the two surveys typically show similar long-run trends in employment.

The overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.

Austan Goolsbee is Chairman of the Council of Economic Advisers.

Statement courtesy of www.whitehouse.gov

Photo source:
http://www.whitehouse.gov/sites/default/files/microsites/support-images/Austan_02.jpg

Author: Chuck Kennedy

Permission: Public Domain

LIPA to Undergo Major Audit, Rate Hike Review

Investigation Centers on Over $230 Million in Questionable Charges and Over-Billing

Governor Andrew Cuomo has directed New York State Inspector General Ellen Biben to conduct a thorough audit of the Long Island Power Authority (LIPA). Cuomo pointed to recent concerns that LIPA may be raising rates in a manner to avoid triggering a required review by the Public Service Commission (PSC), making questionable charges and overbilling more than $230 million over the last decade.

The governor directed Biben to do a comprehensive review and also to focus its audit on LIPA's billing and delivery charge practices to ensure Long Island ratepayers are treated fairly and are not subjected to unnecessary and avoidable rate hikes.

"The Inspector General's audit of how LIPA sets its rates will make sure Long Islanders know where their money is going, especially since they pay among the highest energy rates in the nation," Governor Cuomo said.

"We must make sure that LIPA is following the letter of the law when it comes to how much it charges ratepayers."

At the governor's request, the Inspector General Biben will conduct a full audit of LIPA's delivery charges and other billing actions to ensure that its rate structure is efficient and accurate. Concerns relating to the utility that have been raised by local elected officials include the following:

A recent discovery of more than $230 million in overcollections by the utility, which coincided with its 1.9 percent delivery charge increase.

Rate increases that fall just below the level that would require a review by the PSC. Annual delivery charge increases of less than 2.5 percent are not subjected to scrutiny by the PSC and the last two increases of 2.1 percent and 1.9 percent have fallen just below that level, raising the possibility that LIPA is increasing its rates just below the threshold to avoid a PSC review.

Questionable charges, including passing on approximately $33 million in charges to ratepayers for recovery from a storm that never happened.

The American Consumer Satisfaction Index gave LIPA the lowest customer satisfaction rating among municipal-owned utilities in the nation, underscoring an overall dissatisfaction with the power utility

"Our office has the tools and resources necessary to conduct a swift and thorough audit of the Long Island Power Authority's rate tactics, and I thank Governor Cuomo for the opportunity to verify and assess rate increases that impact Long Island ratepayers," said Biben.

Senator Charles J. Fuschillo, Jr. and Assemblyman Robert K. Sweeney have been vocal advocates on behalf of ratepayers on Long Island. Senator Fuschillo recently led a hearing on LIPA oversight and Assemblyman Sweeney has put forth legislation seeking oversight of the utility.

"I applaud Governor Cuomo for ordering a thorough audit of LIPA by the Inspector General. This is a critically important step in the right direction towards making LIPA more transparent and accountable to its 1.1 million ratepayers, who are sick and tired of paying some of the highest utility costs in the nation," stated Senator Fuschillo.

Assemblyman Sweeney said, "I am delighted that Governor Cuomo has begun the process of providing desperately needed public oversight of the Long Island Power Authority. A number of unfortunate and questionable decisions have caused the authority to lose public confidence. It is only through greater transparency and professional oversight that this trust can be restored. Long Islanders pay among the highest electric rates in the United States. They deserve no less than to receive the best possible management of their utility."