The House of Representatives passed a bill today that would allow taxpayers to deduct Chile relief donations made by April 15th on their tax returns. The non-controversial bill, which should easily sail through the Senate, would also extend the deadline for Haiti donations to April 15th. Check out the following article on the new development courtesy of the Associated Press.
Under current law, donors would have to wait until next year, when they file their 2010 returns, to claim the deductions. The House bill would allow donations made by April 15 to be deducted on 2009 returns.
The House passed the bill Wednesday on a voice vote, with no opposition. It now goes to the Senate. Congress passed a similar bill for donations to Haiti quake victims made before the end of February. The bill would extend the deadline for Haiti donations until April 15 as well.
The House has passed a bill that would allow taxpayers to write off charitable donations to Chile earthquake relief efforts when they file their 2009 taxes this spring.
From ABC.com:
The House passed a bill Wednesday that would extend for one year more than $31 billion in tax breaks. Among the 45 deductions and credits for businesses and individuals, which are set to expire at year's end:
A sales tax deduction that mainly benefits people who live in the nine states without a state income tax. The states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington and Wyoming. Cost: $1.8 billion.
An additional standard deduction for state and local property taxes for taxpayers who don't itemize their deductions. Cost: $1.5 billion.
A deduction of up to $4,000 for college tuition and related expenses. Cost: $1.5 billion.
A deduction of up to $250 for teachers who spend their own money for books and other classroom supplies. Cost: $228 million.
A credit that helps businesses finance research and development. Cost: $7 billion.
Accelerated depreciation for improvements made to leased restaurant and retail property. Cost: $5.4 billion.
Last Friday, the Center on Budget and Policy Priorities released a study examining the House of Representative’s much-discussed proposal for funding health care reform. They call the plan “a reasonable approach” and assert that the “impact on small businesses would be modest.” However, as the recession continues, even a small tax increase could delay recovery. Check out a snippet from their study below, but be sure to check out the full explanation of the study (including graphs) at CBPP.org.
Reforming the health care system to provide universal health coverage is an urgent priority. But, facing huge projected budget deficits that have the nation on an unsustainable fiscal path, the White House and Congress must enact a health reform plan that is also fully financed and that reduces the growth rate of health care costs over the long term.
Policymakers have been considering two major proposals to help finance health care reform that represent sound tax policy: (1) limiting the tax exclusion for employer-provided health benefits, and (2) capping the value of itemized deductions at 28 percent or a somewhat higher level. Capping the exclusion has the added benefit of helping slow the growth of health care costs. House Democrats have now advanced a third major proposal that also represents sound tax policy: imposing a graduated surcharge on high-income taxpayers.
The House surcharge proposal is reasonable and well targeted. In recent decades, incomes have grown disproportionately for households at the top of the income scale, while their tax burden has fallen substantially. Moreover, despite charges to the contrary, the proposal would have only a small impact on small businesses. The congressional Joint Tax Committee estimates that it would have no impact at all on 96 percent of small business owners — broadly defined as any taxpayer with as little as $1 of business income — and that only half of the 4 percent of small business owners who would be affected derive more than a third of their income from a business. At the same time, the House plan would enhance the ability of small businesses to offer affordable, quality health insurance to their employees.
High-Income Households Have Far Outpaced Others in Recent Decades
The surcharge would affect only the highest-income 1.2 percent of taxpayers, according to the Joint Tax Committee. Very high-income households have benefited handsomely — both absolutely and compared to the rest of the population — from both recent trends in pre-tax incomes and recent changes in tax policy. Congressional Budget Office data show that between 1979 and 2006 (the most recent year for which these data are available): [3]
From The New York Times:
Representative John B. Larson embarked again this week on his lonely quest to enact a national tax on carbon dioxide emissions.
His idea is to set a modest price on a ton of emissions, gradually increasing it each year until the desired reduction in heat-trapping-gas pollution is achieved. Under the bill he introduced this week, virtually all the revenues from the tax would be returned to the public in lower payroll taxes.
“The American people want us to level with them,” Mr. Larson, a moderate Democrat from Connecticut and a member of the House leadership, said in an interview. “We create price certainty without any new bureaucracies or complicated auction schemes.”
Many economists and academics, as well as a handful of Mr. Larson’s colleagues on both sides of the aisle and perhaps a few White House officials, if secretly, agree that a carbon tax is a simpler and more effective means of tackling global warming than the complex cap-and-trade scheme embraced by the Obama administration and most Democratic leaders in Congress.
The supporters of a carbon tax have watched as the new European cap-and-trade system has failed to achieve its emissions goals while prices for carbon permits have gyrated. They see taxing as a more effective means of cutting emissions than cap-and-trade or other hybrid plans now under consideration.
But for a variety of political, environmental and economic reasons, a national carbon tax is probably going nowhere.
Mr. Obama and Democratic leaders argue that cap-and-trade, in which polluters must either reduce emissions on their own or buy credits from more efficient companies, is a better system for assuring reductions, letting the market set the right to pollute.
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