It is, in fact, true that the Republicans are moving ahead with plans to tack on the Keystone XL pipeline as part of a package to extend the payroll tax cuts for next year. It is equally true that President Obama is not happy about this turn of events and has threatened to block any such effort.

Obama said, about the plan, ”If the payroll tax cut is attached to a whole bunch of extraneous issues … then it’s not something that I’m going to accept. I don’t expect to have to veto it because I expect they’re going to have enough sense over on Capitol Hill to do the people’s business and not try to load it up with a bunch of politics.”

In return, House Speaker John Boehner (R-OH) called the move “the most political thing” that he’s ever seen the President do.

There’s no word yet on whether the final package will actually include the Keystone XL provision or if there’s enough support to override a threatened veto.

Stay tuned.Similar Posts:

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Today, more than 500 elementary school students in our local public school hauled recyclable bags filled with more recyclable plastic bags to school to mark America Recycles Day. Our green clubs are counting the bags – we already know that one kindergarten class brought in nearly 2000 – and putting them aside to reuse (for our school book sale), repurpose (we’re making tote bags and other crafts) and recycle.

It’s important to me that our kids understand the importance of reusing, repurposing and recycling plastics, glass, paper and other goods where possible. It’s something that I learned as a young girl from my dad, who was a big advocate of conserving and preserving our resources. I know what you’re thinking. He was some long-haired, tie-dye wearing, hippy liberal, right? Wrong. Try a clean shaven, gun owning, khaki wearing, church going conservative.

I grew up in rural North Carolina, not far from the intracoastal waterway. I spent much of my childhood roaming the woods with my brothers, crabbing off of the neighbors’ bulkhead, wading through the sound for clams and crabs and combing the shoreline for shark’s teeth with my dad. It was, in many ways, an odd paradise.

My dad was (and is) fiercely proud of the land that he owned. He taught us to have a healthy respect for our land. We took care of it. We gardened and composted: a pile across the creek served as a great spot for building compost for our plants – and more often than not, food for the local foxes and possums.

We also recycled. We brought our bottles back to the store and we bundled our newspapers and magazines in a pile to drive out to the recycling center when we took the trash (we didn’t have private or municipal pick up in our little town). We did our part not because the government told us to or because it was trendy. We did it because it was consistent with our priorities that you take care of what’s important.

Over the years, I remained committed to the values that my dad taught me. I recycled. I bought locally when possible. I conserved energy – even now, I can still hear his voice in my head yelling at me to turn off the lights. I even turned vegetarian for a bit for totally ecological reasons, though while it was easy enough to give up a steak or a hamburger, I couldn’t stay away from a good pulled pork sandwich for long.

But over that same period of time, something else happened. Somehow, caring about the environment became a political statement. And necessarily, the same could be said for not caring about the environment. Breathable air and drinkable water have become political symbols.

Interestingly, while conservatives have increasingly turned away from environmental protections as a government mandate, it was President Nixon who signed the Environmental Protection Agency into law. He went on to ask for federal dollars to improve air and water quality; to establish guidelines for lower motor vehicle emissions; and launch federally-funded research to reduce automobile pollution.

But in this new era of faux fiscal conservatism, it’s not okay to spend money on the environment. As politicians talk more and more about ditching the Tax Code, they seem to suggest that less government interference – and less tax dollars – is the solution to all of our problems.

Funding for the EPA continues its downward spiral (reduced 13% from 2010 for 2012). And federal income tax credits for energy efficiency which were promoted in 2006 have been eliminated or scaled back for 2011 – some are set to disappear completely in 2012. In an era where tax cuts are generally promoted by conservatives, tax breaks for energy efficiency and environmental measures have been discounted.

How did this happen? It’s clearly political, not economic. Somehow, the message of environmental responsibility has been co-opted as a liberal agenda; increasingly, conservatives try to put forth the idea that the environment isn’t a priority item. I’m not sure how or why that happened.

The fervor that would divide conservatives and liberals on environmental issues was most apparent during the Bush-Gore Presidential race in 2000. Gore painted himself as a champion of the environment, a move that many used to characterize him as out of touch and anti-business. Ironically, after his win, Bush quietly introduced a number of tax incentives meant to promote conservation and energy efficiency (seemingly at odds with Cheney’s position).

There has been very little energy policy talk in the latest run up to the presidency, save for the occasional stab at oil prices. Americans are smart enough to understand that energy policies and environmental concerns don’t start and stop with drilling, oil production and the cost of gasoline. That said, there’s not been any significant dialogue about what might happen moving forward with respect to energy credits and tax incentives. Is it because taxpayers and voters don’t care? Or because politicians are scared to take a position? I would suggest that it’s the latter.

I’m not about big government. And I don’t think that throwing money at a problem is ever a complete solution. But I am skeptical about a budget or a tax plan that would suggest that taking money away from a problem is a complete solution. Is it possible that there’s an answer somewhere in the middle? And if so, does either party want to talk about it?

–

Want more taxgirl goodness? Sign up to receive posts by email, follow me on twitter (@taxgirl) or hang out with me on Facebook.Similar Posts:

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Man, it’s hot. It’s like Africa hot. Tarzan couldn’t take this kind of hot. – Matthew Broderick as Eugene Morris Jerome in Biloxi Blues

And I’m in Philadelphia.

There’s an enormous heat wave stretching across the country right now. Some form of heat advisory, heat warning, or heat watch has been issued for the nearly 2000 mile stretch from Massachusetts to Oklahoma. CNN reported that there were 55 record highs reached on Wednesday and 60 records were tied.

I get it. It’s summer. It’s supposed to be hot. But not this hot. Many of us – my household included – aren’t used to this kind of heat. And it’s not simply a matter of cooling down with the flip of a switch: we don’t have central air. I’m not kidding.

We talk about putting in central air every year. We live in an old Victorian house and it’s not easy to install central air in the house because of the layout and there’s no existing duct work. It’s complicated and expensive so we keep putting it off. But every summer, there’s a week like this one that reminds me that we should think about it some more.

Unfortunately for us, waiting comes with a price. If we had gotten around to doing something last year, we could have scored a pretty nice tax credit. For 2010, the tax credit for the installation of an energy efficient air conditioner was 30% of the cost up to a maximum of $1,500. Nice, right?
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Today marked the 27th running of the TD Bank Philadelphia Men’s International Cycling Championship, the longest running single-day cycling road race in the United States. I happen to live pretty close to the most (in)famous part of the race, the Manayunk Wall. It’s a half-mile climb at a steep 17% grade and the cyclists have to make that climb ten times before finishing up with three laps around Lemon Hill and Logan Circle. When all is said and done, some of the world’s greatest cyclists will have logged 156 miles through the City of Brotherly Love.

It’s a pretty big deal for a city that loves its bikes. In addition to the numerous bike paths for fun, Philadelphia is a big bicycle commuter city, joining the likes of Boulder (CO), Cambridge (MA), Portland (OR), San Francisco (CA) and Minneapolis (MN) as top commuting cities. Those cities don’t stand alone: bicycle commuting is picking up steam all over the country. Congress finally acknowledged the trend in 2008 by including bicycle commuting expenses as excludable fringe benefits for employees under Section 211 of the Emergency Economic Stabilization Act of 2008 (you and I are probably most familiar with the law as “the bailout bill”).

Fringe benefits are sometimes thought of as perks. Perks or benefits are generally taxable unless they’re otherwise excluded. As of January 1, 2009, the exclusion from taxable income applies to qualified bicycle commuting reimbursement. However, it’s not as simple as it sounds. The rule is that you can usually exclude qualified transportation fringe benefits from wages even if you provide them in place of pay (Code of Federal Regulations section 1.132-9(b)(Q&A 11-15)) but that doesn’t apply to qualified bicycle commuting reimbursements: those may not be excluded from taxable income if provided in place of pay.

But assuming you get over that hump, the exclusion includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred during the calendar year. Reasonable expenses may include the purchase of a bicycle and bicycle improvements, repair, and storage. The key is that the bicycle must be used for regular commuting (meaning between where you live and where you work). It’s a lot less than other transportation benefits ($115 for monthly transit or $210 for monthly parking) but it’s a nod in the right direction.

The amount that can be excluded in a calendar year is limited to $20 times the number of qualified bicycle commuting months during that year. A qualified bicycle commuting month is any month in which you regularly used your bike to commute and you did not receive other reimbursement benefits for transportation in a commuter highway vehicle, a transit pass, or qualified parking benefits.

Of course, you may receive benefits that exceed the exclusion. The consequence is that you would then include in your wages the amount over the benefit.

Self-employed persons are not considered employees for purposes of the exclusion. The exemption also does not apply to S corporation employees who are 2% (or more) shareholders or to partners. There are additional exclusions and restrictions under the law so check with your tax professional if you have questions.

The total benefit per year can’t exceed $240. Those kinds of dollars aren’t going to offset the kind of bikes ridden by this year’s ICC men’s champ Alex Rasmussen and other cyclists on the circuit but it should help you get to and from work on a nice road bike.Similar Posts:

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I said it would be a tough vote and it was: the Senate voted this week to block a proposal to curb tax breaks for big oil.

The Democratic effort to launch S.B. 940, known as the Close Big Oil Tax Loopholes Act, would have ended tax breaks for the top five most profitable oil companies. Under the proposal, those companies (BP, Exxon Mobil, Shell, Chevron and Conoco Phillips) would have had existing tax breaks scaled back, resulting in increased federal tax revenues of $21 billion over ten years.

Sixty votes were needed to move forward procedurally with the bill. The final vote was 52-48, eight votes short, bringing consideration of the bill to an end.

As expected, the votes were mostly along party lines. Republicans opposed the bill with the exception of the two Senators from Maine: Susan Collins (R-ME) and Olympia Snowe (R-ME). Democrats supported the bill with the exception of three Senators: Mary Landrieu (D-LA), Ben Nelson (D-NE) and Mark Begich (D-AL). The two Independent Senators, Bernie Sanders (I-VT) and Joe Lieberman (I-CT), voted in support of the proposal. The measure also had the support of the Obama administration.

Even before the dust settled on the final vote, the finger pointing had already begun. Democrats accused Republicans of favoring the interests of Big Oil over taxpayers while Republicans derided the effort as simply smoke and mirrors, as opposed to real change. The Republican leader in the Senate, Mitch McConnell (R-KY), said about the proposal, “Clearly, this is not a serious effort to address the price of gas at the pump.”

The vote was a tricky one for many Republicans since the revenue raised from the bill would have been earmarked for debt reduction, a priority for many in the GOP. Additionally, with a key election year looming and gas prices continuing to rise, many conservative voters are making noise about tax breaks for big oil. That seems to have played out more in the House than the Senate: earlier in the month, House Speaker John A. Boehner (R-OH) indicated that he was not opposed to eliminating some tax breaks for big oil companies.

Of course, in the midst of all of the dramatic speeches and charts (if you’ve followed the debates, you’ll note that there were lots and lots of charts), a more cynical view of Congressional interests has surfaced: campaign contributions. U.S. Senators who opposed the plan to rescind the tax breaks reportedly received five times more in campaign contributions from oil and gas interests than those who supported the measure. On a per Senator basis, those who voted no on the proposal allegedly received $370,664 on average from gas and oil interests compared to $72,145 received by those who voted in favor of the measure. And yes, two of the Democrats who voted not to consider the measure were at the top of the list for those receipts (Sens. Landrieu and Begich).

Coincidence? You and I both know that it’s not. That’s what is most disturbing about campaign financing these days. It taints the conversation about the underlying issues. Even if you agree with the final vote not to push back those tax breaks for Big Oil, it can’t feel right to see those numbers.  It’s kind of like when the Little League coach always plays his own kid in games; even if that kid is the best one on the team, you’re always kind of wondering why nobody else gets to play.

Of course, this vote isn’t the end of the story. It’s a vote on procedure only which means that both sides will likely be scrambling to introduce an alternative measure. We’ll get a glimpse of the strategy today as Republicans are expected to introduce their own plan to expand areas for oil drilling and accelerate permitting. Expect lots more charts.

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A friend of mine recently bought a popup camper and my husband is beyond envious. He has dreams of cramming all of us into an Airstream camper and driving cross country, checking out a host of national parks along the way. I am not totally averse to all parts of this plan since I happen to love camping and I love our national parks. But there’s something about “wide open spaces” and a camper that don’t mesh for me. I prefer a tent – a big tent – for camping. It just feels more authentic (though some might say crazy).

I’ve been thinking about the park system a lot lately (summer is coming). We’ve visited a number of our national parks but nowhere near the 394 that are located here. That’s a pretty astounding number if you think about it. It works out to nearly eight per state even though that’s a bit misleading since one state doesn’t have a national park at all (Delaware, in case you’re curious). Other odd trivia: the largest park is in Alaska (Wrangell-St. Elias National Park and Preserve) and the smallest park is in my home state of Pennsylvania (Thaddeus Kosciuszko National Memorial).

Of course, if I had gotten my act together a little earlier, I might have planned to check some of the parks out this week. It’s National Park Week and to celebrate, all entrance fees will be waived through April 24, 2011. You can find a park near you here.

The National Park Service is, of course, part of the Department of the Interior. It was founded nearly 100 years ago by President Wilson in 1916. If that seems late to you, it’s because you’re probably familiar with our first national park, Yellowstone, which was established much earlier, in 1872.

The National Park Service (NPS) is funded by a combination of entrance fees, concessions and federal tax dollars. In 2010, the NPS budget was $3.16 billion. That same year, 281,303,769 visitors utilized the park system – that’s nearly the entire population of the United States (the US Census puts the estimated 2009 population at 307,006,550). If you do the math, as math geeks like me are wont to do, the budget works out to about $11 per visitor. That’s pretty amazing when you consider the amount of work it takes to preserve our green spaces, promote our history and celebrate our heritage…

I know there are a lot of taxpayers who don’t visit the parks and I would encourage you to make an effort to seek one out (you folks in Delaware can scoot up 95 to Philadelphia). It’s free for a couple more days… What could be better than that?Similar Posts:

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Tonight, our temperature is slated to drop into the 30s. In fact, it’s supposed to start doing that on a pretty regular basis, something I imagine my mom is thrilled about as she packs to come visit me for Thanksgiving. She just loves the cold (insert hysterical laughter here).

We live in a 19th century Victorian house in Philadelphia. It is not what one would call “energy efficient.” We have a number of old, single pane windows, an old heater and a pretty horrifying lack of insulation in the back room. It is, I tell myself, part of the “charm” of living in an old house.

Over the years, we’ve been fixing it up. New window panes here, new fangled electric thermostat there, new roof here, electric wires that don’t use the words “knob” and “tube” there… By the end of the year, we’ll probably make another improvement or two: one, so that we don’t freeze to death this winter and two, because of the availability of two energy tax credits through the end of this year.

1. The Nonbusiness Energy Property Credit is available for taxpayers who invest in “energy-saving improvements.” It can be up to 30% of the cost of those improvements, to a maximum tax credit of $1,500 for 2009 and 2010 combined. In real dollars, that means that the credit offsets the first $5,000 of improvements like high-efficiency heating and air conditioning systems, water heaters and stoves that burn biomass. Labor is also included on those items. Labor is not included on certain other improvements like the cost of energy-efficient windows and skylights, energy-efficient doors, qualifying insulation and certain roofs, although the actual cost of the improvements is included.
2. The Residential Energy Efficient Property Credit is available for taxpayers who are going green this year. Up to 30% of the costs of solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property is available as a credit with no cap on the amount of credit available. The cost of installation qualifies for the credit in most cases.

Remember these are credits, not deductions. You don’t have to itemize to claim them on your tax return – just use federal form 5695, Residential Energy Credits (the 2009 form downloads here as a pdf), to figure the credit. And credits, unlike deductions, actually reduce your tax due on a dollar for dollar basis. Trust me, you *like* tax credits.

Not all energy efficient improvements qualify for the credit. You’ll also need to provide documentation to substantiate your claims so read labels carefully. You can find out more about what qualifies – and what doesn’t – on the Energy Star web site.Similar Posts:

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I’m writing this particular post from my hotel room in Durham, NC, just across the way from Duke Hospital where my dad had surgery on yesterday. Thanks for all of your thoughts and prayers. He came through surgery just fine – although the family and I are quite worn out from dealing with Duke (yes, if you follow me on twitter, you’ll note that I’m still bitter about the complete lack of compassion and consideration demonstrated by the folks at Duke – it was very shocking).

As I was in the hospital room yesterday, I thought about a lot of things. At one point, I was holding my dad’s hand while he told me how much he hurt and watching my mom’s eyes turn even more red from exhaustion and worry, and it hit home how much it can suck to get older. So many things change. And so much of it is beyond your control.

In the midst of all of this, as I stood there pondering life, my dad cracked an inappropriate joke. It was, however, pretty funny and it made us all smile – heck, my brother and I laughed out loud as my mom kind of smacked him and put his oxygen machine back on his face. And in that moment, I realized that there is at least one perk to getting older: you are increasingly emboldened to say exactly what it is that you think without worrying about the consequences.

Just ask Alan Greenspan. And now, Sen. George Voinovich (R-OH). The 74 year old Senator (and former mayor of Cleveland) has announced that he will retire in 2011. Before he goes, he has a few things he’d like to get off his chest. After already rankling the GOP in January with his comments on health care reform, Voinovich is stepping off the GOP platform on another issue: he firmly believes that the federal gas tax needs to be raised. He believes that a boost in the tax will help bring down the deficit and pay for a sizable transportation bill which has the capacity to create additional jobs.

Voinovich noted on his web site that the federal gas tax hasn’t been touched since 1993. It currently sits at 18.4 cents a gallon. He says, about an increase, that boosting the tax “just a few cents could help create jobs, improve our infrastructure and better the climate.” He goes on to suggest that there are benefits to reducing car travel noting that “traffic congestion, for example, contributes almost 30 percent to our greenhouse gas emissions.”

Whoa. Increasing spending? Focusing on the environment? Raising taxes? What? Isn’t this terribly anti-Republican of him? Not especially. It’s anti-new-Republican of him. Voinovich tapped into his inner Reagan on this one, citing the former’s President’s comments that “Good tax policy decrees that, wherever possible, a fee for a service should be assessed against those who directly benefit from that service.”

A boost in the federal gas tax is also not a new idea. It’s been kicked around before a number of times (clearly unsuccessfully) and Voinovich himself has been vocal about an increase since last year. So what gives?

Interestingly, Voinovich goes on to place the blame for not getting this done squarely on President Obama. He’s only half right. It’s true that Obama has not been supportive of the transportation bill but to suggest that the rest of Congress, including a sizable percentage of the GOP, would get behind a bill that would raise taxes on everyone is a bit disingenuous. Voinovich may be forgetting that he’s already announced his retirement: he doesn’t have to fight re-election ads which would surely spin a hike in the gas tax as raising taxes on the middle class when they could least afford it.

Still, you have to give Voinovich a lot of credit for saying what he thinks. That’s increasingly rare in Congress these days.

Technorati Tags:
gas tax, tax, George Voinovich

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In the middle of all the “tax loopholes closing” that’s been going on in Congress, a big, fat one may have remained open. Sen. Max Baucus (D-MT), who chairs the powerful Senate Finance Committee, has opened an investigation into whether Transocean, Ltd., has been exploiting tax law loopholes by moving their headquarters overseas (spoiler alert, Sen. Baucus, they have, just as Apple, Microsoft, Dell, Pfizer and just about every other giant and profitable company in the US has done).

So why do we care now – and not, say, three months ago? Easy. Transocean Ltd. is the owner of the Deepwater Horizon rig that exploded in the Gulf in May. You know, the one that’s pouring millions of gallons of oil into our ocean?

Despite the fact that Deepwater really, really does care about all of the damage (I know this because they said so in their auto-response to me when they got my name wrong), they claim not to be a US company at all. Despite the fact that they have 1,300 workers in Houston – and just a handful abroad – they moved their corporate headquarters to Switzerland in 2008. They now have 2 corporate addresses in Switzerland, as well as one in the Caymans (another tax haven), listed on their web site. There’s one in the US, too, but the most prominent US address on the site is just a post office box in Houston.

Of course, moving your headquarters isn’t necessarily wrong. And this doesn’t mean that they did anything illegal. There’s nothing in the Tax Code to prohibit you from legally minimizing your tax burden. And Sen. Baucus has been careful to say that he’s not accusing Transocean, Ltd. of criminal wrongdoing.

It could just be that his curiosity has been piqued by all the publicity surrounding Transocean. But I’m guessing it’s something more.

You see, Sen. Baucus was instrumental in pushing through the American Jobs Creation Act of 2004. A big focus of that act was on preventing corporations from moving their operations abroad merely on paper just to save taxes. Some of the laws were tightened as a result of the law. But Congress didn’t approve some of the stronger language in the initial proposal. Afterwards, Sens. Grassley (R-IA) and Baucus made themselves sort of the unofficial watchdogs of the bill, vowing to keep pushing against what they saw as an unacceptable exploitation of our existing tax laws.

Baucus now wonders whether Transocean might have exploited those very laws. The unpopular move abroad kept the company rich – the company has reported billions of dollars in profits each year since the move. Transocean, for its part, makes no bones about why they picked up and left, first for the Caymans and then to Switzerland. They cited an improvement in “our ability to maintain a competitive worldwide effective corporate tax rate” as a primary reason for the move in the first place.

So, assuming that it’s legal and assuming that they’ve been upfront about everything, they’re basically doing the same thing as just about every other wildly profitable “US” company. Again, that begs the questions: Why Transocean? Why now?

Well, as much as people are bothered by Apple’s failure to deliver on the new iPhone and as many times as Microsoft’s Windows systems crash computers across the country, people don’t really hate those companies. They’re kind of ambivalent about them. But Transocean? Right now, a lot of people really, really hate them.

Of course, it’s not helping matters that reports have been swirling that Transocean stands to make money on the Gulf spill. The company reportedly took out a $560 million insurance policy on its Deepwater Horizon rig, a value much greater than the cost of the rig. Additionally, the gain in the policy is expected to surpass the share of claims that Transocean will pay out to victims of the spill (BP is contractually obligated to pay the rest). And unlike many of the Gulf spill victims, Transocean has already received most of its payout – Lloyds of London has reportedly paid out over $400 million to Transocean already. That means that they will walk away from this in the black. And folks whose lives have been upended are angry.

Now would be the perfect time to look into their finances. Who’s going to complain?

And, oh yeah… Remember that language that Baucus and Grassley couldn’t get through in 2004. It’s not 2004 anymore. Baucus is said to be questioning whether new legislation is warranted. I’ll bet you we’re going to find out that the answer is yes.

Technorati Tags:
Gulf spill, oil spill, Transocean, multinational corporations, Charles Grassley, Max Baucus, American Jobs Creation Act of 2004, Switzerland, corporate inversion, tax haven

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More than 3.3 million barrels of oil have now spilled into the Gulf as a result of the BP spill. To put that into perspective, the entire Exxon Valdez spill dumped a mere 257,000 barrels into the sea. There is no doubt that the fall-out from this spill, both environmentally and fiscally, will be significant.

Congressional leaders (while being slow to actually do anything about the spill) are taking their first steps towards economic relief for victims of the spill. Senators from states affected by the spill are seeking a number of tax provisions aimed at softening the impact of the spill for small businesses in particular. Specific provisions would include tax deferral from BP payments (many of which are taxable), loss carrybacks, a tax credit on new hires and a sales tax “holiday” for tourists. It’s just in the early stages right now and to my knowledge, nothing has been discussed in the House, just the Senate. I’ll keep you posted.Similar Posts:

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