December 18, 2007
"Creditors would be prohibited from … extending credit without considering borrowers' ability to repay the loan." This is not a joke. It is part of proposed new Federal Reserve Board regulations aimed at stopping banks from repeating the shockingly bad lending practices that led to the still-worsening mortgage mess. Perhaps they could call the new rule "stop me before I lend again."
December 14, 2007
When the Senate passed a long-awaited energy bill yesterday, I flashed back to a fascinating off-the-record chat I had back in 2004 with a top executive of a major oil company. He was in Washington to help make sure that the energy bidness got its piece of an especially hideous tax break called the Sec. 199 production deduction.
December 12, 2007
A December 10 Wall Street Journal rant against PAYGO asserts that the AMT is careening out of control because "Democrats who designed it failed to index it for inflation and raised AMT rates under Bill Clinton in 1993." To be sure, indexing the AMT exemption would have kept millions of taxpayers out of its clutches but blame for that oversight lies with many Congresses and administrations. Never in the tax's 40-year existence has either Congress or the president seriously tried to permanently index the AMT. And the decision in 2001 to cut regular income taxes without also reducing the AMT has played a huge role in AMT's growth.
December 10, 2007
Mike Huckabee wants to replace the entire federal tax system with a national retail sales tax of 23 percent. Trouble is, he can't do it and maintain anything like the government that Americans have come to expect.
December 7, 2007
To the surprise of no-one, the Senate has blinked in the stand-off over whether Congress will pay for the cost of patching the Alternative Minimum Tax for another year. The question now: Will House Democrats stand firm, or will they too cave in to the big-bucks lobbying campaign of the hedge fund and private equity industry?
December 7, 2007
Late last night, the Senate passed, by a vote of 88–5, a one-year increase in the AMT exemption without the offsetting tax increases in the version that passed the House. The rejected House version would take ten years of small tax increases to pay for a one-year AMT patch, leaving open the question of how to pay for next year's patch, but at least that bill follows the letter of the PAYGO rules. The Senate bill is an outright $50 billion tax cut.
December 4, 2007
Treasury Secretary Hank Paulson, searching for a way to ease the burgeoning mortgage crisis, is traveling down a dangerous road. He wants to let state and local governments use tax-exempt bonds to refinance some troubled home loans.
November 29, 2007
Interesting to watch the Republican debate last night. Once they got past their arguments about who hired whom with a "funny accent" or who would build a bigger barrier across the Mexican border (Duncan Hunter trumped everyone by promising to build a double fence), the Presidential candidates tackled the "no tax" pledge invented a decade ago by Grover Norquist of Americans for Tax Reform. Their answers were revealing.
November 27, 2007
The Wall Street Journal editorializes ($) admiringly on Fred Thompson's "voluntary flat tax" (or alternative maximum tax to use the tax code's current lingo). Putting aside questions of the desired size of government, cost, feasibility, equity and so forth, I'd like to zero in on the claim that "there would only be five lines on the tax form."
November 27, 2007
adaniller posted some thoughtful comments in response to my November 20 article on Social Security. He argues that while the program's shortfall may be worrisome in the long-run, there is no compelling reason to fix it now. Rather, we should wait, carefully consider the problem, and weigh potential solutions.