White House Seeks $15 Billion from Federal Property Sales

Earlier in the week the Obama administration announced a plan to create an independent board to overlook the sale of billions of dollars worth of federal property. Both at home and abroad, President Obama wants to get rid of unnecessary federally owned buildings.

From Reuters.com:

President Barack Obama previewed the plan in his 2012 budget and State of the Union Address as part of his efforts to trim government waste and curb a budget deficit projected to reach $1.645 trillion this fiscal year.

The board, made up of experts drawn from the private and public sector, would make recommendations to Congress on 14,000 properties already identified as excess to requirements.

The White House says it expects the board, whose creation requires the approval of Congress, would save $15 billion in the first 3 years of its operation.

"The proposed civilian property realignment board will finally bring 21st century management practices to federal real estate," White House deputy budget director Jeffrey Zients told reporters.

More here

President Barack Obama Says He Didn't Raise Taxes Once, But He Did

In an interview with Bill O'Reilly, President Barack Obama said, "I didn't raise taxes once. I lowered taxes over the last two years." However, fact checkers were quick to point out that the President has in fact raised a few taxes including those levied on cigarettes as well as the tax implications of health care reform. Income taxes? Sure, those have not gone up, but as for other taxes… President Obama seems to have a selective memory.

From PolitiFact.com:

Looking at the whole statement, he's both right and wrong. For clarity's sake, we're going to take Obama's statement in two parts. Here, we'll look at his statement, "I didn't raise taxes once." In a separate report, we'll look at his statement, "I lowered taxes over the last two years."

The idea that Obama did not raise taxes is just plain wrong. He signed legislation raising taxes on cigarettes and other tobacco products soon after taking office; that money goes to pay for children's health insurance programs. The law went into effect in 2009. He also signed the health care law, which includes taxes on indoor tanning that went into effect last year. (Regular PolitiFact readers will remember our fact-check of reality TV star Snooki and her complaint about the new tax last year.)

The new health care law also includes a tax on people who decide not to have health insurance, as an incentive for them to get coverage. The tax phases in gradually, starting in 2014. By 2016, the tax would be $695 per uninsured person up to a maximum of three times that amount, or $2,085. The law includes exemptions for people who can't find affordable insurance, and a few other special circumstances.

More significantly, the health care law includes new taxes on the wealthy, starting in 2013. Individuals who make more than $200,000 and couples that make more than $250,000 will see additional Medicare taxes of 0.9 percent. They will also, for the first time, have to pay Medicare taxes on their investment income at a 3.8 percent rate. (Current law is that all workers and employers split a 2.9 percent Medicare tax; the self-employed pay all of it.)

Read more here

Obama Calls for Overhaul of Corporate Taxes

As expected, President Obama called for an overhaul of corporate taxes during his State Of The Union Address. He proposed eliminating many loopholes and deductions, in exchange for reduced corporate rates. Will this be the incentive corporations need to keep their profits in the US?

From the Associated Press:

Obama says he wants the changes to result in the same level of revenue as current corporate taxes. Obama says he would oppose changes that increase the deficit.

The president has in the past called for "revenue neutral" changes in corporate taxes. A deficit commission he appointed recommended a wholesale change in individual and corporate taxes that would lower rates but also raise additional revenue by eliminating loopholes and, thus, help reduce the deficit.

White House officials say the president doesn't want an overhaul of the corporate tax system to raise additional revenue.

Read more here

Tax Reform Won’t Happen in 2011 (or 2012)

Expecting major revisions to the tax code in 2011, or 2012? Well don't hold your breath. According to Howard Gleckman from TaxPolicyCenter.com, tax reform isn't likely to happen any time soon.

Here are his main reasons:

Obama isn’t on board. The President could have used the tax reform plans offered by his own fiscal commission or the Bipartisan Policy Center as an opportunity to jumpstart the debate. But he was decidedly cool, calling only for a national conversation on taxes. As Ronald Reagan showed with the 1986 Tax Reform Act, a major rewrite of the revenue code requires a full-court press by the White House. To get a bill moving, Obama would have to send a complete reform plan to Congress and keep up the pressure for passage. There is no sign he’s ready to do that.

Hill Republicans are not on board. Incoming Ways & Means Committee Chairman Dave Camp (R-MI) says tax reform will be one of his priorities, and that’s a good thing. But speaker-to-be John Boehner (R-OH) has little interest in supporting real reform. In the Senate, Democrat Ron Wyden (D-OR) still has his rewrite, but his GOP cosponsor, Judd Gregg, has retired and Republicans are not exactly lining up to take his place. Republicans would surely back further rate reductions, but they have no interest in cutting tax subsidies—the hard part of reform. It is easy enough for a pol to embrace the concept of repealing loopholes. It isn’t so easy to actually cut the mortgage interest deduction. And does anyone seriously think the GOP would give Obama an historic victory on tax reform on the eve of a presidential election campaign?

Hill Democrats are not on board either. After their battering in this year’s elections, Democrats want only one thing between now and November, 2012—a plummeting unemployment rate. And they don’t see how a nasty protracted debate over tax reform will create many jobs. Besides, these days Dems are just as enamored of targeted tax subsidies as Republicans.

There is no agreement on how much money the new tax code should raise. The ’86 Act passed, in part, because it produced the same amount of money as the tax code it replaced. But in the face of a $1 trillion-plus deficit and growing fiscal pressures down the road, the next reform would have to raise more revenues. Democrats, of course, will be fine with that. But the idea was red meat for Republicans even before the 2010 elections. The growing clout of the anti-tax activists who make up much of the tea party movement will make it even tougher for GOP lawmakers to budge on new revenues.

Continue reading at TaxPolicyCenter.com...

Dodging Repatriation Tax Lets Companies Bring Home Cash

Earlier in the month business executives reportedly asked President Obama for a new tax holiday. Apparently the executives have suggested the program would bring cash back to the U.S. economy.

From Bloomberg.com:

The money -- including hundreds of billions in profits that U.S. companies attribute to overseas subsidiaries to avoid taxes -- is supposed to be taxed at up to 35 percent when it’s brought home, or “repatriated.” Executives including John T. Chambers of Cisco Systems Inc. say a tax break would return a flood of cash and boost the economy.

What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers -- including “the Killer B” and “the Deadly D.”

Merck & Co Inc., the second-largest drugmaker in the U.S., last year brought more than $9 billion from abroad without paying any U.S. tax to help finance its acquisition of Schering-Plough Corp., securities filings show. Merck is also appealing a federal judge’s 2009 finding that Schering-Plough owed taxes on $690 million it had earlier brought home from overseas tax-free.

The largest drugmaker, Pfizer Inc., imported more than $30 billion from offshore in connection with its acquisition of Wyeth last year, while taking steps to minimize the tax hit on its publicly reported profit.

Disclosures in Switzerland and Delaware by Eli Lilly & Co. show the Indianapolis-based pharmaceutical company carried out many of the steps for a tax-free importation of foreign cash after its roughly $6 billion purchase of ImClone Systems Inc. in 2008.

Read more here

Questions for the Tax Lady: December 20th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question: I bought a home in 2008 and took advantage of a $7,500 incentive. I recently got a letter saying the money was a 0% interest loan from the government and that I must pay back $500 per year. I can barely pay my bills and have to get food from the good bank. Is there any way to get this lowered or removed?

Answer: You are in good company. Many people who received the First-time Homebuyer Credit in 2008 did not realize they were going to have to pay back the credit. Unfortunately, there really isn’t a work around. Since the IRS considered this an interest-free loan, they will come collecting.

Your best bet is to increase your income tax withholding by $42 a month. I know times are tough, but trust me, $42 a month is a lot less than the interest and penalties that would result from failure to pay back the credit.


Question: Since Obama signed the tax cut deal, does that mean my tax rate is going down next year?

Answer: Isn’t that the question of the week? Everyone is desperately trying to figure out what the tax deal means for them. Here’s the basic breakdown:

The short answer is no, your tax rate will not change. This means your official marginal tax rate will be the same that it was last year. That being said, there are other changes to the tax laws that might affect your overall tax liabilities. The most obvious example is the payroll tax deduction.

The Making Work Pay Tax Credit is gone, however, the tax deal reduced Social Security tax withholding by about 2%, so you might get a better tax break in the long run. If you earn $40,000, you’ll end up saving $800 in payroll taxes.

Obama: Get Corporate Cash 'Off the Sidelines'

Yesterday the President met with 20 prominent CEOs in a private session. The White House said the point of the meeting was to discuss getting the CEOs to use the money they have been holding to create more jobs.

From CNN.com:

"We focused on jobs and investment, and they [the CEOs] feel optimistic that, by working together, we can get some of that cash off the sidelines," Obama said as he walked back to the White House from the meeting.

The private discussion between the president and the leaders lasted several hours, with the White House saying issues such as trade, regulation, education and investment were covered.

Obama concluded the session "by asking the attendees to continue the dialogue with him on a shared agenda focused on moving our economy forward," the White House said in a statement.

The so-called CEO summit came at a time when corporate America is sitting on $1 trillion in cash reserves while unemployment remains stubbornly high.

The heads of some of the biggest holders of corporate cash attended the meeting. Cisco Systems has the nation's largest corporate cash reserve with a balance of $39.9 billion, according to Moody's Investors Service.

Four other companies with CEOs attending are among the top 20 in cash on hand. Google is holding $30.1 billion, followed by Intel with $18.3 billion, General Electric with $12.9 billion and Boeing with $8.7 billion.

Read more at Money.CNN.com...

Tax Bill Heads to House for Hotly-Contested vote, President Obama Urges Passage with No Changes

The House of Representatives is expected to vote again today on the Obama-Republican tax compromise, which would extend tax cuts to all Americans for two years. The Senate has already approved the legislation, and the President has been pushing for Democrats in the House to get behind the compromise. Honestly, this entire process has become a nightmare. Here we are, 15 days from 2011, and we still don’t have the tax rates set in stone? Unbelievable.

From NYDailyNews.com:

"I know that not every member of Congress likes every piece of this bill, and it includes some provisions that I oppose," President Obama said on Wednesday. "As a whole, this package will grow our economy, create jobs, and help middle class families across the country."

The President wants the deal passed without any changes.

The bill is expected to cost $858 billion, reported The Associated Press.

The Senate backed the plan, passing it with an 81-19 vote on Wednesday.

The lame-duck House vote, however, is shaping up to be a battle as some Democrats believe the tax package gives too many breaks to the rich.

Before the plan goes to a vote, the House will first vote on whether to raise the estate tax, which, if passed, would force the bill to return to the Senate, a signal that the President is losing power over his own party.

Read more here

Obama Directs His Staff to Analyze Options for Overhaul of U.S. Tax System

Over the weekend President Obama directed his team to begin considering options for a massive overhaul of the U.S. tax code. Officials say that it is part of the president’s long term plan to fix the deficit. If there’s anything our country needs, it’s a simplified tax code. Let’s just see if he can get the job done.

From Bloomberg.com:

No decisions have been made about what options to pursue or a timeline for presenting a plan to lawmakers, said the official, speaking on condition of anonymity because no formal action has been taken. Any changes likely would take years to implement.

Obama said this week that revamping the nation’s tax system will have to be considered to deal with budget deficits and make the tax code more “fair” and “efficient.”

“The idea is simplifying the system, hopefully lowering rates, broadening the base,” Obama said in an interview yesterday with NPR News. “What I believe is, is that we’ve got to start that conversation next year.”

The administration is focusing on the issue as Congress debates measures to extend tax cuts set to expire at the end of the year and the president considers a report by his commission on reducing the federal deficit, which included recommendations to change tax laws.

Read more here

Five Ways New Estate Tax Deal Affects you

After long last, we finally see what will happen with the estate tax in 2011. Until Congress made this move, the estate tax was set to return in 2011, at a top rate of 55% for estates valued over $1 million. In the deal reached between Obama and Republican leaders, the top rate will be 35%, and the tax will only apply to estates valued at over $5 million.

MarketWatch.com put together a list of the ways this deal on the estate tax will affect everyday taxpayers. You can find a section of their article below, or click here for the full text.

For starters, consider the possibility that most Americans won’t even need a plan for federal estate taxes, especially if Congress also passes what estate planners refer to as “portability.” That’s the ability of a surviving spouse to use the unused exemption of the first spouse to die.

“There will be a significant drop-off in the business of estate tax planning, because even more people will have no significant estate tax problems,” said Howard Zaritsky, a Rapidan, Va.-based attorney specializing in estate planning. “And if Congress also passes ‘portability,’ this will very significantly remove over 99% of the public from the need for estate tax planning.”

Some years ago, a net worth of around $3 million to $3.5 million was considered the wealthiest 1% of the population, according to Martin Shenkman, an attorney and CPA who practices in New York City and Teaneck, N.J.

In a report on the tax compromise, written for Steve Leimberg’s Estate Planning Newsletter, Shenkman said: “A $5 million threshold would thus mean far less than 1% of the families would be effected. If in 2009, with a $3.5 million exclusion, only about 16,000 decedents filed a federal estate tax return, a $5 million exclusion should reduce the number to a miniscule figure.”

Of course, the specific federal estate tax exemption and rates could still change, but if the proposed agreement does in fact become law, estate planners say these five moves will be important to manage your financial affairs properly:

1. Create a bypass trust

Don’t overlook the potential need for a bypass trust.

According to Shenkman’s report, “Failing to establish the bypass trust that had been the cornerstone of most tax oriented estate plans of the past might lead the surviving spouse to a taxable estate problem, especially if the survivor’s exclusion is not indexed for inflation.”

Continue reading at MarketWatch.com...

Obama Agrees to Two-Year Tax Cut Extension, Lower Payroll Taxes

After months of debating, the President has announced that he plans to break one of his largest campaign promises and extend all of the Bush tax cuts, even those to the wealthiest taxpayers. Obama has agreed to a deal with Republicans to allow for the two-year extension in exchange for an unemployment insurance extension and a reduction in the payroll tax. More spending and less revenue, how will this affect the deficit? Well, it can’t help.

From Business Week.com:

Obama said he would accept lower rates on high earners’ income, dividends, capital gains and multi million-dollar estates for the next two years to break a stalemate over extending the Bush administration’s tax cuts for middle-class taxpayers before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to increase Dec. 31.

Without the compromise, middle-income families would become “collateral damage for political warfare here in Washington,” Obama said in televised remarks yesterday. He said he still believes that the nation can’t afford to permanently extend the reduced top tax rates.

“This compromise is an essential step on the road to recovery,” said Obama, who criticized Republicans for insisting on permanent tax cuts for the wealthiest Americans “regardless of the cost of impact on the deficit.”

Obama spoke in Washington after a White House meeting with Democratic congressional leaders. They and the Republican leadership still have to sell the plan to their caucuses. Obama called it a “framework” for a deal.

In addition to preserving the status quo on Bush policies, the proposal creates more than $300 billion in new tax cuts for wage-earners, wealthy families, and corporations.

President Obama Expresses Disappointment with Tax Vote

Over the weekend the Senate blocked legislation that would have extended the Bush tax cuts to middle income taxpayers. President Obama reportedly called the vote very disappointing.

"It makes no sense to hold tax cuts for the middle class hostage to permanent tax cuts for the wealthiest two percent of Americans," he added.

Check out this video from the Associated Press, or the article below explaining the Senate's decision.

In a rare weekend session that followed days of stormy debate, the 100-member Senate on Saturday fell short of the 60 votes necessary to approve the Democratic proposal of renewing low tax rates only for individuals earning up to 200,000 dollars and for families with 250,000 dollars or less of income.

The measure, backed by the White House, would have let rates on higher earners rise at the beginning of next year to where they were before cuts enacted by former president George W. Bush's administration in 2001 and 2003.

Republicans blocked the legislation on a procedural vote, complaining the measure failed to extend low tax rates for wealthier Americans. They want all of the tax cuts -- including those that directly benefit the top earners -- to be extended instead.

They also rejected another Democratic proposal to extend the tax cuts for annual incomes of up to one million dollars. A handful of Democrats voted against the two measures.

"With so much at stake, today's votes cannot be the end of the discussion," Obama said in a statement.

Read more here

Obama Calls for Federal Wage Freeze

According to CNN Money, President Obama will call for a two-year federal employee wage freeze. It is expected to save the country an estimated $60 billion over 10 years, which would only make a small dent in the forecast deficit totaling nearly $9 trillion over the next decade.

CNN Money reports

"It's a real money issue and a psychological first step," said Maya MacGuineas, fiscal policy director at the New America Foundation.

Obama was scheduled to announce the proposal later Monday.

According to the administration, the two-year pay freeze would save $2 billion for the remainder of fiscal year 2011 and $28 billion over the next five years.

The freeze would not apply to military personnel, but would apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense.

Federal workers shouldn't feel singled out: The White House says more tough choices are on the way.

Read more here

Republicans Oppose Compromise with President Obama on Tax Cuts

From Chicago Tribune.com:

In another ominous sign of new political gridlock developing in Washington, House Republican leaders Sunday took a hard line on compromising with President Obama on extending tax cuts that are due to expire at the end of this year.

"I really want to see that we can come together and agree upon the notion that Washington doesn't need more revenues right now," Rep. Eric Cantor of Virginia, the No. 2 House Republican, said on "Fox News Sunday."

"And to sit here and say we're just going to go about halfway, or we're going to send a signal that it's going to be uncertain for job creators and investors to put capital to work, that's exactly what we don't need right now."

Obama has proposed permanently extending tax cuts for American households making less than $250,000 a year, but he has argued that the country cannot afford to extend those cuts for the wealthiest Americans.

The president repeated that proposal in his weekly address this weekend.

"At a time when we are going to ask folks across the board to make such difficult sacrifices, I don't see how we can afford to borrow an additional $700 billion from other countries to make all the Bush tax cuts permanent, even for the wealthiest 2% of Americans," he said.

Is this the Tax Reform Obama and the New Congress can Agree on?

The mid term elections are over and both President Obama and Congress are going to have to decide on a few tax laws in the next few weeks. Earlier today Reuters published an article bringing attention to a non-partisan tax proposal from Senator Ron Wyden, a Democrat from Oregon, and Senator Judd Gregg, a Republican from New Hampshire, that many expect the President and Congress to consider.

The proposal would simplify income tax rates for individuals and businesses, and change laws so that businesses could immediately write off capital investments. It would also raise capital gains tax rates, but would reduce the federal budget deficit, while reducing the average family's tax liability by around $4,000.

Reuters reports:

President Barack Obama’s bipartisan deficit commission has a mandate to cut the U.S. budget gap. But the White House panel may surprise in another area: tax reform. Democrats and Republicans are taking a hard look at a plan that would simplify the code and cut corporate taxes. Although not perfect, it would be a big improvement.

Much of the public focus on the commission, which is expected to vote on any recommendations it makes next month, has been on its efforts to slash spending. Two areas that could suffer the knife are tax breaks and Social Security, analysts say. But panelists are also assessing ways to reform America’s labyrinthine tax code to promote economic growth, and thereby more tax revenue to help pay down the debt.

Smartly, members won’t recommend a total scrapping of the current system in favor of some ideal tax code concocted by academics. No politically unfeasible value-added or flat taxes here (though a flat consumption tax would be ideal). Instead, they’re examining a plan devised by politicians — Senator Ron Wyden, a Democrat from Oregon, and Senator Judd Gregg, a Republican from New Hampshire and panel member — that uses the current system as a baseline and then tweaks it a whole lot.

The Wyden-Gregg idea mostly succeeds. For individuals, it would reduce the number of tax rates from six to three and dump the alternative minimum tax. It would also combine several existing government savings plans into one. For business, Wyden-Gregg would combine multiple rates, including a 35 percent top rate, into a flat, 24 percent corporate rate. Small businesses could immediately write off capital investments. And companies could only deduct part of their interest payments, making equity financing more competitive. All great, great stuff.

There are some downsides, which is to be expected of a plan meant to win votes on both sides of the aisle. It would raise the top capital gains tax rate to 23 percent from 15 percent (not counting what happens with the Bush tax cuts or the new Obama Medicare tax). It would also subject the foreign income of U.S. multinationals to immediate taxation. Most advanced economies tax only income earned domestically.

Read more here

Surprise! You got a Tax Cut! (You Just Didn't Notice.)

From the Christian Science Monitor:

Michael Cooper over at The New York Times stopped off at the Pig Pickin and Politickin rally in North Carolina the other day to ask folks about the Obama tax cuts. Their response, not surprisingly, was “What Obama tax cuts?”

This despite the fact that about one-third of the much-reviled 2009 stimulus—or almost $300 billion--came in the form of tax reductions. According to Tax Policy Center estimates, 96.9 percent of households enjoyed a tax cut that averaged almost $1,200. Just one measure—Obama’s Making Work Pay tax credit—put more than $116 billion into people’s pockets in 2009 and 2010.

Yet, a Times poll found that fewer than 10 percent of those surveyed had any clue. Remarkably, fully one-third thought their taxes went up—even though the actual number was about zero.

How could so many people have missed it? After all, $1,200 ain’t nothing. In large part, it was due to the design of Obama’s tax plan. Earlier stimulus tax cuts often came in the form of ostentatious checks from the Treasury. In 2008, for example, President Bush proposed a tax reduction only half the size of Obama’s (about $145 billion). But it was delivered to households in the form of rebate checks—generally $600 per adult and $300 per child.

However, conventional economic wisdom argues that increased withholding over time is more effective stimulus than a single big check. The theory is that people will bank a one-time rebate but spend the extra bucks they get in their weekly pay.

The Overseas Profits Elephant in the Room

From the Wall Street Journal:

During last year's "Jobs Summit," President Obama said he was open to any good idea to get the economy moving again. Today he should be especially so, since Washington's many monetary and fiscal policy decisions have not been able to spur the robust growth or job expansion that we all would like. And yet there is a simple idea—the trillion-dollar elephant in the room—that has apparently been dismissed for no good reason.

One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.

But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here.

The U.S. government's treatment of repatriated foreign earnings stands in marked contrast to the tax practices of almost every major developed economy, including Germany, Japan, the United Kingdom, France, Spain, Italy, Russia, Australia and Canada, to name a few. Companies headquartered in any of these countries can repatriate foreign earnings to their home countries at a tax rate of 0%-2%. That's because those countries realize that choking off foreign capital from their economies is decidedly against their national interests.

Obama: End Tax Breaks to Stop Overseas Hiring

From Google News:

President Barack Obama is renewing his call for Congress to close tax breaks that reward some U.S. companies with overseas subsidiaries, a proposal that has raised concerns among some lawmakers in the president's own party.

In his weekly radio and online address, Obama said the tax breaks encourage companies to create jobs and profits in other countries.

"There is no reason why our tax code should actively reward them for creating jobs overseas," Obama said. "Instead, we should be using our tax dollars to reward companies that create jobs and businesses within our borders."

At issue is a bill that stalled in the Senate last month that would end some tax credits and deferrals for U.S. companies for operations overseas.

Though Obama singled out Republican opposition, the bill also failed to get support from some Democrats, including Senate Finance Committee Chairman Max Baucus, D-Mont., who expressed concern that change would put the U.S. at a competitive disadvantage.

The ending of the tax loopholes has been opposed by business groups, including the National Association of Manufacturers.

Obama said that while companies that conduct business internationally do make an important contribution to the U.S. economy, it doesn't make sense to grant them tax breaks when companies at home are struggling to rebound from the economic crisis.

White House Pushes to Extend College Tuition Credit

The popular American Opportunity Tax Credit helped an estimated 12 million college students pay for their education. The popular credit is set to expire at the end of the year, however the President has suggested extending the credit to continue helping students who cannot afford to pay for college.

CNN Money.com reports:

The American Opportunity Tax Credit helped soften the blow of college tuition for more than 12 million students last year, but it's due to expire at the end of this year unless President Obama gets his way.

To remind Congress of the importance of extending the credit, top government advisers spoke to reporters Wednesday about why they believe the break is worth keeping around.

"[Obama] believes that it is important for this to be extended and for families to have the certainty and confidence that this [credit] will be there when they are making the choices about sending their children to college," said Gene Sperling, Counselor to the Treasury Secretary.

The tax break, introduced under the government's 2009 Recovery Act and applicable to 2009 or 2010 college tuition, expands the existing Hope Credit to include more lower- and higher-income Americans.

Unlike the Hope Credit, the AOTC is also partially refundable and covers more of the expenses associated with sending a child to college, like textbooks and computers. It is available for the first four years of post-secondary education, up from two years under the Hope Credit.

Read more here

Obama Seeks To Partner Businesses, 2-Year Colleges

In a new attempt to improve job growth in the country, President Obama is looking to partner companies and labor unions with two-year colleges. The proposal comes after Congress scaled back the President’s attempt to pump billions of dollars into community colleges.

According to USA Today, Obama is also asking public-private partnerships and philanthropies to help the schools produce a well-educated workforce.

On Monday, he announced an initiative through which companies, labor unions and two-year colleges in 50 states would collaborate to improve job training and workforce development.

Today, he is scheduled to address business leaders, educators, and others at a White House summit aimed at better aligning learning with workforce goals.

"We want to make it easier to join students looking for jobs with businesses looking to hire," Obama said Monday at the start of a meeting with his economic recovery advisory board. "We want to put community colleges and employers together to create programs that match curricula in the classroom with the needs of the boardroom."

Continue reading at USA Today.com…