Paying taxes is painful… but reading about them shouldn’t be.
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Remember last month when Secretary of the Treasury Timothy Geithner would not rule out a tax increase for the middle class to resolve our budget woes?
Well, apparently he’s changed his mind. Speaking this week, Geithner was asked the same question. This time, his answer was: “I don’t think so, no.”
So there you have it. Yes and no. (I still expect no.)
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It was just a matter of time before Obama made a statement rebutting the suggestion from Geithner that a tax increase on the middle class was imminent. Apparently, a matter of time means less than a day.
Today, President Obama’s press secretary Robert Gibbs was quick to clarify that statements made over the weekend by Geithner did not reflect the president’s plans. Gibbs said this afternoon:
The president was clear during the campaign about his commitment on not raising taxes on middle-class families. I don’t think any economist would believe that, in the environment that we’re in, that raising taxes on middle-class families would make any sense.
Agreed (even though I’m not middle class).
When asked about comments made by Geither, Gibbs said, “They allowed themselves to get into a little hypothetical back-and-forth.” By using “they”, Gibbs was also referring to comments made by Larry Summers, director of the National Economic Council, who said on Sunday that he couldn’t guarantee that the middle class would escape a tax hike.
Gibbs was suggesting what many of us thought: that Geithner and Summers (who are not elected officials and do not make law) were essentially admitting that there’s no plan.
Am I allowed to say I told you so? According to my brothers, I’m pretty good at it…
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When President Obama was running for office, he pledged not to raise taxes on the middle class. Is he about to go back on his word?
Pundits are screaming that tax cuts for the middle class are “imminent.” I don’t know that I’d go that far.
What all of the hullaballoo is focusing on is this interview between George Stephanopoulos and Treasury Secretary Tim Geithner which aired on “This Week.”
In the interview, Stephanopoulos asks Geithner about the current state of the economy and what’s on tap for the future. At one point, Stephanopoulos asks Geithner very pointedly:
The President has said that taxes won’t go up for any Americans earning under $250,000, but it doesn’t appear that he’s going to be able to keep that promise if you’re going to bring the deficits down.
And Geithner didn’t say no. He started his reply by stating, “George, we can’t make these judgments yet about what exactly it’s going to take and we’re going to get there.”
Okay, yes, yes, yes. I get that’s not a no. But it’s hardly a yes either. It doesn’t warrant the headlines that I’m seeing in the press.
If you follow the interview, when Stephanopoulos asks Geithner about reducing the deficit again, Stephanopoulos uses the phrase “revenues” without specifically limiting it to the middle class. And to this is the exchange that followed:
GEITHNER: Again, we’re not at the point yet where we’re going to make a judgment about what it’s going to take. But the important thing…
STEPHANOPOULOS: But you’re not ruling it out, you can’t rule it out.
GEITHNER: I think what the country needs to do is understand we’re going to have to do what it takes, we’re going to do what’s necessary.
And that’s the few words that have pundits jumping up and down.
Come on. I don’t think there is a single American out there that thinks that taxes aren’t going to go up. It’s just a question of who bears the burden of the increases. And if you’ve been paying attention so far, it looks like it will be the rich and perhaps, corporations.
To run screaming from this interview shouting, “Middle class taxes are going up” is, in my opinion, irresponsible. We don’t know what’s going to happen yet. And keep this in mind: 2010 is a major election year for Congress. Who in Congress will vote in a package that will raise taxes on 95% of the population in an election year?
So, let’s try and look at this for what it is: Geithner admitting that he doesn’t have a plan. Nothing more.
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Just a few days ago, IRS Commissioner Doug Shulman asked for public feedback on proposals to clarify a 1989 law regarding the taxation of cell phones. Apparently, he got some. Earlier today, Shulman announced that he, together with Treasury Secretary Geithner, has asked Congress to repeal the tax altogether.
(Remember, Congress makes the tax laws, not the IRS.)
Shulman is in luck since there are bipartisan bills in both the House and Senate to “repeal” the tax by way of eliminating cell phones as listed property under Section 280F. The bill in the Senate (S.144) has been introduced by Sen. John Kerry (D-MA) and has 45 co-sponsors. The bill in the House (H.R. 690) has been introduced by Sen. Sam Johnson (R-TX) and has 33 co-sponsors. Both bills have been relegate to committee. Senators Kerry and Ensign introduced a similar bill in 2008 that did not pass.
So, the ball is really in your court now, taxpayers. The IRS has heard you loud and clear. Make sure that your representatives do, too. To voice your thoughts on these bills, contact your Congressional officials. You can find information about your Senators here and your Representative here.
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