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Sen. Ben Nelson Co-Sponsors Bill To Repeal Dodd-Frank Provision He Voted For

As part of the Dodd-Frank financial reform law, the Federal Reserve has been directed to implement a cap on what are known as interchange fees — the fees that banks charge retailers to process debit card transactions. This cap was added to Dodd-Frank via an amendment proposed by Sen. Dick Durbin (D-IL) that passed by a 64-33 vote.

The Fed has proposed capping the fees at 12 cents, far below the current 44 cents per transaction that the banks charge. This has led the banks to launch an all-out lobbying campaign to delay (and ultimately repeal) the Durbin amendment. Yesterday, nine senators introduced legislation to delay the new rules for two years, presumably giving the banks ample time to cajole lawmakers into repealing the cap altogether:

Five of the nine senators who co-sponsored Tuesday’s legislation opposed the debit fee limits when Senator Richard J. Durbin of Illinois pushed the original legislation through the Senate last year…Only one co-sponsor voted in favor of the amendment, and the other three co-sponsors were not Senate members at the time.

That one co-sponsor who affirmatively voted for the Durbin amendment last year, but is now trying to delay its implementation, is Sen. Ben Nelson (D-NE). Sen. Jon Tester (D-MT), who is leading the charge to delay the Durbin amendment, said, “I think there is a little bit of buyers’ remorse as I talk to senators in the hallway.”

As the Roosevelt Institute’s Mike Konczal pointed out, “interchange rates in the United States are among the highest, if not the highest, in the developed world.” The fees have grown by more than 300 percent in the last decade. It’s worth noting that the American Banker’s Association applauded the effort to block the new regulation.

The cap would cost the nation’s biggest banks — and therefore save retailers, large and small — about $14 billion in fees per year. “The proposed regulations will benefit consumers by lowering the billions of dollars annually in non-negotiable swipe fees paid by merchants to large banks and the dominant credit card networks,” said Ed Mierzwinski of U.S. Public Interest Research Groups. Nelson last year agreed that this step to rein in the big banks needed to be taken. What changed between then and now?

REPORT: In 12 States, GOP Plans To Slash Corporate Taxes While Increasing Burden on Working Families

ThinkProgress has been documenting conservative efforts to shift the burden of record budget shortfalls onto middle-class Americans, while simultaneously doling out tax cuts to corporations. While progressive governors have proposed raising revenue from those who can afford it, alongside painful cuts to programs, Republican governors have unveiled budgets that cut taxes for corporations and raise them on the middle-class and working poor. In this report, ThinkProgress evaluates the priorities conservatives have set in twelve states:

NEW JERSEY: Last year, Gov. Chris Christie’s (R) budget raised taxes on the working poor and middle-class by cutting the state’s Earned Income Tax Credit and homestead rebates — yet still found money for lucrative corporate tax cuts. This year, Christie’s budget calls for $200 million in business tax cuts, while cutting mental health services, $540 million from Medicaid, and witholding property tax rebates for seniors until public workers give up many of their health and pension benefits. Many New Jerseyans have said they prefer a tax on millionaires to Christie’s draconian cuts.

MICHIGAN: Gov. Rick Snyder’s (R) budget would make Michigan’s already regressive tax system even more unfair for the state’s poorest residents. The plan cuts taxes on business by more than 86 percent while slashing $1.2 billion in funding for “schools, universities, local governments and other areas.” Snyder also wants to raise personal taxes by 30 percent — an increase that will fall disproportionately on Michigan’s lowest income residents.

GEORGIA: Last week, the Georgia House passed an austerity budget that will increase health insurance costs by more than 20 percent for state workers, teachers and retirees and cut funding for state universities by $75 million. The House has already gutted the state’s HOPE scholarship program, and is now considering implementing a regressive new tax system that would lower income taxes for the rich while raising the sales tax on basic necessities. House Majority Leader Larry O’Neal (R), meanwhile, has introduced a bill that would implement a flat income tax rate and cut corporate taxes by 33 percent.

FLORIDA: At a Tea Party rally last month, Gov. Rick Scott (R) unveiled his budget, telling supporters he would make the state the most “fiscally conservative” in the nation. The budget would slash corporate income and property taxes, lay off 6,700 state employees, cut education funding by $4.8 billion, and cut Medicaid by almost $4 billion.

OHIO: Gov. John Kasich (R) has proposed cutting 25 percent of schools’ budgets, $1 million from food banks, $12 million from children’s hospitals, and $15.9 million from an adoption program for children with special needs. A Kasich staffer revealed yesterday that these cuts are more about politics then budget-balancing, telling the Cincinnati Dispatch that “even if there weren’t an $8 billion deficit, we’d probably be proposing many of the same things.” The plan includes tax cuts for oil companies, a repeal of the estate tax and an income tax cut for the rich that former Gov. Ted Strickland (D) halted last year because of the state’s fiscal crisis.

IOWA: Gov. Tom Branstad (R) began this year proposing a budget that included a $200 million tax cut on commercial property taxes and corporate income but would freeze spending on schools, cut $42 million to state universities and lay off “hundreds” of state workers. Since then, the Governor has already begun laying off state nursing home workers and frozen funding for mental health services. The budget is now moving through the politically divided legislature, where Republican-controlled House committees have gone even further, approving tax refunds for upper-income Iowans while cancelling infrastructure investments, eliminating preschool for 4-year-olds, closing Iowa workforce development offices, and making even deeper cuts to public universities.

PENNSYLVANIA: Gov. Tom Corbett (R) presented a budget last week that would cut taxes for corporations, while freezing teacher salaries, cutting dental care for Medicaid recipients, and eliminating more than half of the state’s universities. Yet the state has lots of revenue potential in northern Pennsylvania, where out-of-state energy companies’ “fracking” of natural gas has reaped them hundreds of millions of dollars in profits. Corbett has refused to tax these companies, many of which helped fund his gubernatorial campaign, and has instead opted to lay of more than 1,500 state workers.

MAINE: Despite calling for “shared sacrifice” Tea Party Gov. Paul LePage’s (R) budget would cut income taxes for Maine’s wealthiest one percent, while actually raising property taxes for the state’s middle class. This so-called “jobs budget” freezes healthcare funding for working parents, cuts money for schools and infrastructure and raises the retirement age for public workers. Yet LePage was still able to find more than $200 million in tax cuts for large estates, business and the rich.

WISCONSIN: The tax cuts Gov. Scott Walker (R) signed earlier this year worsened his state’s fiscal condition, so now Walker is planning to raise taxes on the poor, eliminate $26 million in tax credits for seniors and single mothers and cancel property tax rebates for low-income Wisconsinites making less than $24,000 a year.

SOUTH CAROLINA: Gov. Nikki Haley (R) has proposed ending the state’s corporate income tax, even while she calls for cutting physical education, K-12 schools, and Medicaid. Haley has received pushback from Republican colleagues: last week the legislature rejected her plan to force state employees to pay more for health insurance.

KANSAS: Facing a $493 million budget shortfall, Gov. Sam Brownback (R) has called for eliminating the corporate income tax while proposing a $50 million cut to education. With majorities in both Houses, Republicans have proposed a cut to the federal Earned Income Tax Credit that would push 6,500 families below the poverty line.

ARIZONA: Last October, as she ignored 26 other possible funding solutions, Gov. Jan Brewer (R) implemented painful cuts to the state’s Medicaid program, which resulted in 2 deaths and left 98 Arizonians waiting for transplant funding. After months of protests, Brewer finally agreed to set aside $151 million in an “uncompensated-care pool to pay health-care providers for ‘life-saving’ procedures, including transplants.” However, House Republicans refused to restore funding for organ transplants because, as House Appropriations Committee chair Jon Kavanagh (R) said, “not enough lives would be saved to warrant restoring millions in budget cuts.” Then, while peoples’ lives were in danger, Brewer eagerly signed tax cuts for businesses that will cost the state $538 million.

Despite calling for “shared sacrifice” in their plans, Republican governors have yet to ask corporations to share the burden of record budget shortfalls. Ultimately, choosing big business over Main Street could undermine the already slow economic recovery. However, a Main Street Movement in many of these states has emerged to protest placing the burden of deficit reduction solely onto the backs of the middle-class and public employees.

Paul Breer and Kevin Donohoe

In 2009, U.S. Gov’t Awarded $3.7 Billion In Contracts To Almost A Dozen Corporate Tax Delinquents

Right-wing state and federal lawmakers all over the country are asking Main Street Americans to sacrifice their education, health, and wellbeing by ramming through massive budget cuts and even tax increases on the working and middle class to finance tax cuts for the wealthiest among us.

And at the same time, corporate tax dodgers are getting away with paying little to nothing. For example, megabank Bank of America paid literally nothing in 2009 in corporate income taxes.

Now, a new audit by the Treasury Inspector General For Tax Administration finds that almost a dozen federal contractors that were delinquent on their taxes in 2009 nevertheless received billions of taxpayer dollars that same year:

For Tax Year 2009, we identified that 10 of the 11 contractors owing delinquent taxes also received payments totaling approximately $3.7 billion from other Federal agencies. To identify the Federal agencies and the payments made, we researched the contractors’ tax accounts. These agencies included the Defense Finance and Accounting Service, Department of Homeland Security, Department of Agriculture, General Services Administration, Department of the Interior, and Department of Veterans Affairs.

While the report says that it lists the eleven contractors it investigated on Appendix V on page 20, a review of that page reveals blank boxes with numerical totals at the bottom, indicating that the report intends to shield the identity of the contractors for the time being:

Earlier this month, Rep. Jason Chaffetz (R-UT) introduced legislation that would prohibit “any person who has a seriously delinquent tax debt from obtaining a federal government contract or grant.” All across the country, a Main Street Movement has sprung up that is demanding fair sacrifice rather than economic policies that attempt to balance budgets on the backs of the great American middle class. This movement rightly points out that it is simply unfair for lawmakers to continue to demand more from those who have already sacrificed too much while allowing tax dodgers to get away with highway robbery.

Update

A Treasury official responds by noting that the IRS disputes parts of the report: “The amount of tax revenue that could potentially be collected was clearly overstated by TIGTA. In all, 99 percent of the $3.8 million in outcome revenue highlighted by TIGTA involves adjustment-pending cases, and it is misleading to highlight this figure because the dollar amounts were in dispute by the taxpayers. It is important to note that in these instances taxpayers have submitted evidence that raise legitimate concerns about the accuracy of an underlying tax payment, and the IRS has a responsibility to investigate the merit of the taxpayer’s claim before initiating an enforced collection action. If the IRS determines that the underlying tax assessment is inaccurate, the taxpayer’s account is adjusted to the correct amount owed. The IRS is committed to making additional improvements involving contractors and building on the continued success of the Federal Payment Levy Program.”

House Republican Opposition To Tax Increases Ends When Taxes Help Them Restrict Women

If there is one thing that House Republicans have taken a strident stand against, it is any measure that might bring additional revenue to the federal government, even with tax revenue at its lowest level in 60 years. The entire House Republican caucus recently voted against stripping tax subsidies from the nation’s biggest oil companies, and Republicans went all-out to prevent the Bush tax cuts for the wealthiest two percent of taxpayers from expiring on schedule. Republicans have continually voted to allow multinational corporations to claim domestic tax credits on overseas profits, deriding attempts to reverse this policy as simply “tax increases.”

But House Republicans are evidently getting over their allergy for tax increases, at least when it helps them restrict a woman’s right to choose:

A Republican bill that would cut taxpayer funding for abortion aims to prevent women from using itemized medical deductions, certain tax-advantaged health care accounts or tax credits included in last year’s health care law to pay for abortions or for health insurance plans that cover abortion. Under common Republican definitions, limiting a tax benefit is viewed as a tax increase — which is anathema to the House majority. [...]

The tax provisions raise a more complicated question because they would generate more money for the government. If a woman cannot use the itemized medical deduction — which is available for expenses exceeding 7.5 percent of adjusted gross income — for an abortion, she would pay more in taxes than she would have otherwise.

The bill in question, H.R. 3, will be the subject of a hearing before a House Ways and Means subcommittee today. The bill would deny tax credits — and thus, by the GOP’s own definition, raise taxes — to both individual women and small businesses that provide their employees with health care that covers abortion.

As CAP’s Jessica Arons wrote, H.R. 3 “would impose blanket prohibitions on all forms of direct and indirect funding streams that might potentially touch on the provision of abortion care. Rather than securing the ostensible goal of shielding citizens who object to the use of taxpayer money for abortion — a questionable objective given that taxpayers are not similarly protected in other areas of controversial funding such as the death penalty or war — [H.R. 3] would accomplish the unstated end of making abortion as difficult to obtain as possible without actually criminalizing it.” And if that end has to be achieved by raising taxes, House Republicans seem prepared to say so be it.

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