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Tuesday, February 03, 2009
FDIC to Raise Loss Estimates to Its Insurance Fund
Rich Edson, Washington Correspondent
The Federal Deposit Insurance Corp. believes that losses to its insurance fund will be higher than previously estimated, an FDIC official is set to tell Congress.
In testimony set to be given by FDIC Deputy Chairman and Chief Operating Officer John Bovenzi to the House Financial Services Committee and reviewed by FOX Business, he says that last fall the FDIC estimated $40 billion in losses over 2008 to 2013.
“The Bush plan certainly benefits the top of the income spectrum more than those with low and moderate incomes. The one percent of the population with the highest income would receive about 40% of the tax cut (even though they only pay about 20% of all federal taxes), while the bottom 80% of the population would receive only 29%.
Even many families with kids would not benefit from the Bush tax package. Our estimates show that about 12 million (or nearly one in three) families would not receive a tax cut. These families include 24 million children.”
Laurel, Md.: The rich receive a certain high fraction of the windfalls from Bush’s tax relief plan. How does that fraction compare to Clinton’s 1997 tax cut, which primarily lowered capital gains?
Figuring the rich have disproportionately high income from capital gains, I’d argue that no recent president has favored the rich more than Clinton.
Bush’s Tax Proposal
With Stephen Moore
Economic Expert, Club for Growth
Thursday, Feb. 8, 2001; 3 p.m. EST
G.O.P. to Seek Cut in Capital Gains Tax
By RICHARD W. STEVENSON
Published: July 8, 1999
House Republicans said today that they would seek to cut the top tax rate on long-term capital gains to 15 percent from 20 percent as part of the big tax-cutting bill they will take up next week in the face of opposition from President Clinton.
If enacted, the cut in the capital gains tax rate, which applies to profits on the sale of stock and other assets held for more than a year, would give a break to the growing legions of individual investors. And it could further fuel the long bull market on Wall Street, where stock prices hit another new high today. Representative Bill Archer, the Texas Republican who is the chairman of the House Ways and Means Committee, said the capital gains tax cut would help keep the economy growing by stimulating additional savings and investment.
Mr. Archer’s capital gains proposal will be one element of an $864 billion, 10-year tax-cutting plan that his committee is scheduled to vote on next week as the Republican-controlled Congress begins a politically charged showdown with Mr. Clinton over how to allocate trillions of dollars in projected Federal budget surpluses. The capital gains tax reduction would account for about $50 billion of the tax cut over a decade, Congressional aides said.
The top capital gains rate was last cut, to 20 percent from 28 percent, as part of the 1997 bipartisan tax and budget deal. Last year, Mr. Clinton signed legislation that reduced to one year from 18 months the period that stocks or other assets had to be held to qualify for the long-term rate.
Please Note that the U.S. Small Business Administration does not offer grants to start or expand small businesses, though it does offer a wide variety of loan programs. While the SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments.
January 31, 2005
Bush’s Dividend, Capital-Gains Tax Cuts Imperiled By Deficit
Republican leaders may make it difficult for Nelson, Collins, Voinovich and other senators to oppose a dividend and capital-gains tax cut extension by packaging it with other proposals that have broader backing, such as the repeal of the estate tax and gift tax, set to expire in 2011.
In a Jan. 25 statement issued in response to a CBO forecast of a $368 billion deficit this year, Gregg said, “We must get serious about putting our financial house in order, beginning with short-term deficit reduction and then long-term control of entitlement spending. Difficult debates and choices are at our doorstep.”
Republican Senator Judd Gregg of New Hampshire, the chairman of the Senate Budget Committee, has yet to publicly support extending the tax cuts, and wouldn’t comment for this article. He supported Bush’s tax agenda in the past and would continue to do so, spokeswoman Cara Duckworth said.
In addition, the president advocates letting younger workers divert some of their Social Security payroll taxes into private accounts, a change that the CBO estimates would cost the government $1 trillion to $2 trillion over 10 years.
Keeping the lower tax rates in place on dividends and capital gains would cost the U.S. Treasury $161.6 billion from 2009 to 2015, according to the Congressional Budget Office. That would come on top of extending other tax cuts, such as a repeal of the tax on multimillion-dollar estates passed on to heirs, that Bush has promised.
Some lawmakers, though, have their eyes on budget effects. After three rounds of income-tax cuts since 2001 totaling $1.85 trillion over 10 years, U.S. tax revenue will fall to 17 percent of gross domestic product this year, down from 21 percent in 2000 and the lowest in four decades, according to a report by the Center on Budget and Policy Priorities, which focuses on the effects of policies on low- and moderate-income families.
The 2003 tax legislation capped rates on income from dividends and capital gains at 15 percent, down from as high as 38.6 percent. The Securities Industries Association, the trade group that represents companies such as Goldman Sachs Group Inc. and Morgan Stanley, wants to keep it that way to make investment decisions easier, especially for retirement planning.
At a Jan. 24 press conference, Frist put Social Security restructuring at the top of the Senate’s priority list; making the tax cuts permanent was seventh. The other legislative priorities, which include restricting class-action lawsuits and increasing the child tax credit, mean Wall Street’s top interests may not get addressed, says Scott Talbott, a lobbyist for the Financial Services Roundtable, a Washington group representing 143 companies including Bank of America Corp. and Citigroup Inc.
The 2003 tax cuts helped create a surge in the number of companies increasing their dividends or introducing them for the first time. The proportion of U.S. companies paying dividends rose to 20 percent last year from 15 percent in 2001, according to a University of Illinois study.
The tax cuts have also been a boon to fund managers who specialize in buying stocks that pay high dividends. Greg Phelps, who helps manage $5 billion at Boston-based John Hancock Financial Services Inc., including the Patriot Premium Dividend Fund, is counting on Bush’s pledge during last year’s presidential election to make the cuts permanent.
At the start of his second term, the president already is facing a fight on spending and taxes as his administration forecasts this year’s deficit will reach a record $427 billion. Bush on Jan. 26 repeated his promise to halve the deficit by the end of his second term in January 2009. The capital-gains and dividend cuts, a priority of the securities industry, are set to expire at the end of 2008.
Bush’s Dividend, Capital-Gains Tax Cuts Imperiled By Deficit
By Michael Forsythe and Ryan J. Donmoyer
Jan. 31 (Bloomberg) — President George W. Bush’s first-term vow to permanently cut dividend and capital-gains taxes may be imperiled by persistent budget deficits in his second term.
To contact the reporters on this story: Michael Forsythe in Washington firstname.lastname@example.org; Ryan Donmoyer in Washington at email@example.com
Last Updated: January 31, 2005 02:37 EST
** My note – same old Republican song, same old dance – it created what? And, to what good is it offering real solutions to the current situation that their hands and minds facilitated and perpetuated?
– cricketdiane, 02-03-09