Photograph by Chip Somodevilla/Getty Images

Senate Budget Committee staff members hand out copies of the Obama Administration’s proposed FY 2014 federal budget in the Dirksen Senate Office Building on Capitol Hill April 10, 2013 in Washington, DC.

That’s the share of the higher taxes under President Barack Obama’s budget proposal that the top 1 percent of U.S. taxpayers would pay in 2023.

The figure comes from the nonpartisan Tax Policy Center, which yesterday released an analysis of the tax proposals in the budget blueprint that Obama administration officials released April 10.

Obama proposes tax hikes on wealthy income-earners to help reduce federal budget deficits. Republicans resist tax increases, saying Obama and Democrats need to do more to curb spending.

Bloomberg’s Richard Rubin has more here.

Original post is Bloomberg by the Numbers: 67% by Political Capital.

To economists, the tax deduction for charitable contributions is equivalent to a government grant matching private donations that increases with income.

So when the top tax rate increased to 39.6 percent from 35 percent, as it did last week, so did the power of the charitable deduction. For taxpayers in the new top bracket, the after-tax cost of contributions dropped by 7 percent, according to the nonpartisan Tax Policy Center in Washington.

That will encourage people to donate money to nonprofits rather than pay it in taxes.

Combined with other changes, the center estimates that the tax increases passed by Congress last week will increase charitable giving by 1.3 percent, or $3.3 billion.

Original post is Tax Boosts: Charities to Benefit by Political Capital.

Photograph by Scott Eells/Bloomberg

Commuters make their way home on a subway in New York.

That’s the percentage of the public that says changes to tax laws to avert the so-called fiscal cliff will help the economy, according to the Pew Research Center for People & the Press.

That compares with 46 percent who say the tax changes will hurt the economy, according to the survey taken Jan. 3-6.

The fiscal cliff agreement, which President Barack Obama signed into law on Jan. 2, makes permanent the George W. Bush-era income tax cuts for about 99 percent of Americans while letting them expire on family income above $450,000. A temporary payroll tax cut enacted in 2011 also expired, pushing the tax back to 6.2 percent from 4.2 percent.

About 77 percent of U.S. households will pay more in taxes under the agreement, mainly because of the expiration of the payroll tax cut, according to preliminary estimates from the Tax Policy Center.

Fifty-seven percent of respondents say that Obama got more of what he wanted, compared with 20 percent who say Republican leaders got more, as my colleague Jonathan D. Salant wrote  in Political Capital.

Original post is Bloomberg by the Numbers: 36 by Political Capital.

Photograph by Brendan Hoffman/Pool via Bloomberg

President Barack Obama arrives to deliver a statement in the Brady Press Briefing Room at the White House in Washington, D.C., on Jan. 1, 2013. The House of Representatives passed legislation averting income tax increases for most U.S. workers after Republicans abandoned their effort to attach spending cuts that would have been rejected by the Senate.

On the first day of this odd new year (2013):

Democrats in Washington have fought to the end of a protracted debate to preserve the tax cuts that former President George W. Bush won for most American taxpayers.

Republicans in Washington have embraced most of the tax increases that President Barack Obama sought for the nation’s top-earning taxpayers.

The president, triumphant in compromise, has returned to Hawaii for vacation.

The dual across-the board tax increases and far-reaching spending cuts that were supposed to force a commitment by New Year’s Eve to confront the underlying causes of a growing national debt instead have yielded one big group punt: A can of budgetary decisions kicked down the road for another couple of months.

It’s remarkable that, in a town so famously polarized, the Senate approved a tax deal averting a so-called fiscal cliff at the re-opening of the nation’s financial markets today by a vote of 89-8 in the predawn hours of New Year’s Day, and the House approved it by 257-167 near midnight of New Year’s Day. (85 Republicans joined 172 Democrats in passing the bill through the House; 16 Democrats joined 151 Republicans in opposing it.)

The Republican-run House, most of its members signatories to Grover Norquist’s pledge against new taxes, has signed on to this arrangement — calling it a historic tax cut. The Democratic-run Senate, with the help of Vice President Joe Biden in final negotiations with Republican Leader Mitch McConnell, defined the details of the final deal.

The Jan. 1, 2013, vote means that most Americans will be spared increases in federal income taxes this year — for households earning up to $450,000 a year, 99 percent of all taxpayers, income tax increases ready to take effect this year have been averted. Yet a lot of people still will be paying more taxes: 77.1 percent of U.S. households will pay higher taxes in 2003, largely because of the expiration of a two-year break in payroll taxes for Social Security, according to the Tax Policy Center. While this is a matter of simply returning to the payroll taxes that existed before a two-year break approved as an economic stimulus, the center says this will pull more than $100 billion out of the economy in 2013.

Still, the greatest burden of new taxes will fall on households earning more than $450,000 a year: With the expiration of the Bush-era tax cuts, the top personal income tax bracket will return to 39.6 percent, up from 35 percent, and the top 1 percent of U.S. taxpayers, those with incomes above $506,000 a year, will pay an average of $73,633 more in taxes.

The president, who campaigned for re-election with a pledge to protect the middle class from higher income taxes while demanding that the top-earners pay more, hailed the agreement as a “step” toward fiscal balance and boarded Air Force One at midnight for a return to Hawaii and the second half of his own Christmas holiday and New Year’s break.

“I think we all recognize this law is just one step in the broader effort to strengthen our economy and broaden opportunity for everybody,” Obama said in the press briefing room of the White House after 11:20 pm. “The fact is the deficit is still too high, and we’re still investing too little in the things that we need for the economy to grow as fast as it should. ”

“But we are continuing to chip away at this problem, step by step,” Obama said. “Tonight’s agreement further reduces the deficit by raising $620 billion in revenue from the wealthiest households in America” over the coming decade.

“And there will be more deficit reduction as Congress decides what to do about the automatic spending cuts that we have now delayed for two months,” he said. `But we can’t simply cut our way to prosperity.  Cutting spending has to go hand-in-hand with further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans… So we’re going to have to continue to move forward in deficit reduction, but we have to do it in a balanced way, making sure that we are growing even as we get a handle on our spending.”

They’ll be back at this debate in a couple of months, when the deferred sequestration of spending cuts approved in this New Year’s deal arises again, and when Congress confronts the federal debt ceiling that has been reached once again — $16.4 trillion at the start of this odd new year.

“We not only need to grow the economy, but we also need to address the fundamental causes of our debt and deficits, and that’s out-of-control spending,” said Rep. Dave Camp of Michigan, chairman of the tax-writing House Ways and Means Committee, who was given the party’s honor of blessing the tax bill passed last night as “the largest tax cut in American history” — for all those households under $450,000 spared the return of pre-Bush tax rates.

The new Congress still must act as early as mid-February to prevent a default, evoking memories of the 2011 standoff that led to a downgrade of the U.S. credit rating.

“People will remember, back in 2011, the last time this course of action was threatened, our entire recovery was put at risk,” Obama said at the White House.  “Consumer confidence plunged. Business investment plunged. Growth dropped. We can’t go down that path again.”

“And today’s agreement enshrines, I think, a principle into law that will remain in place as long as I am President: The deficit needs to be reduced in a way that’s balanced,” he said. “Everyone pays their fair share. Everyone does their part. That’s how our economy works best. That’s how we grow.”

Original post is Happy New Taxes Year: Deal Done by Political Capital.

Photograph by Andrew Harrer/Bloomberg

A deckhand washes a yacht that is docked in the Sag Harbor Bay in Sag Harbor, New York.

That’s how much more the top 0.1 percent of taxpayers, on average, will pay in taxes under the budget deal, according to the nonpartisan Tax Policy Center.

Folks with incomes over about $2.7 million would see their after-tax incomes reduced by 8.4 percent. They would pay 26 percent of the additional taxes imposed by the legislation.

Mostly because of the expiration of the payroll tax cut, which was enacted during the economic slowdown and is being allowed to expire, taxes will go up on 77 percent of American households under the plan.

Richard Rubin contributed.

Original post is Bloomberg by the Numbers: $443,910 by Political Capital.

Photograph by Everett Collection

Big Bird, who lists taxable wages of about $280,000, may not get much of a tax break from Romney.

If Mitt Romney gets elected president, Big Bird and his Sesame Street colleagues may have to go out and hustle donations to keep stations airing their show operating.

Big Bird, who lists taxable wages of about $280,000 on the IRS filing of his non-profit employer, Sesame Workshop Inc., also may not get much of a tax break for all Romney’s promises to lower rates.

Big Bird, aka Caroll Spinney, would lose much of the savings in a lower income tax rate proposed by Romney if the former Massachusetts governor follows through with an idea to cap deductions at $17,000, according to Clay Batchelor, a Washington DC tax attorney. (And the Romney campaign may like to know that Defense spending is jeopardized by the candidate’s pledge to eliminate federal aid for Sesame Street in a PBS cut-off.)

Under Obama’s tax proposal, which would allow Bush-era tax cuts for higher earners to expire, the worker who plays the yellow-feathered icon would pay about $48,500 in personal income tax, assuming he has $50,000 in deductions, a reasonable amount for someone in his income bracket, Batchelor said.

That compares with about $47,000 under the under Romney’s tax proposal, if the Republican candidate is elected and can deliver his idea to cap deductions at $17,000.

“If he can’t claim as many deductions, his tax number may wind up being about the same,” said Batchelor. The deduction cap would hit middle and upper income taxpayers hardest, he said.

Romney proposes lowering top rates to 22.4, 26.4 and 28 percent, compared with 33, 36 and 39.6 percent in the Obama plan, which allows Bush-era tax cuts to expire for high earners.

Big Bird’s tax bill drops to about $39,000 if he can use Romney’s tax rate and $50,000 in deductions.

Batchelor’s back of the envelope calculations assume no other investments and a married joint filing.

Spinney, 78, who also created Oscar the Grouch, declined to comment through Sesame Workshop.

“Unfortunately, Big Bird is not doing interviews,” said Sherrie Westin, vice president and chief market officer of Sesame Workshop, which has called upon the Obama campaign to pull its cable TV ad featuring Big Bird in its Romney attack.

Big Bird became an unlikely player in presidential politics during the Oct. 3 Romney-Obama debate, when Romney declared that he could make tough decisions, like cutting federal support for the Public Broadcasting Service.

“I’m going to stop the subsidy to PBS,” Romney told moderator Jim Lehrer, of the PBS NewsHour. “I’m going to stop other things. I like PBS. I love Big Bird. I actually like you too. But I’m not going to — I’m not going to keep on spending money on things to borrow money from China to pay for it.”

The story line got legs when Obama seized on Romney’s comment to illustrate what he portrayed as is his opponent’s willingness to overlook big problems in favor of less pressing issues.

“He’ll get rid of regulations on Wall Street, but he’s going to crack down on Sesame Street,” Obama said Oct. 4 at a campaign event in Madison, Wisconsin.

Over the weekend, Big Bird appeared on NBC’s Saturday Night Live and on Tuesday, the Obama campaign rolled out its satirical ad featuring an image of the gangly bird amid pictures of Bernard Madoff, Kenneth Lay, of Enron Corp. and Dennis Kozlowski of Tyco International Ltd., who all were convicted of large-scale financial crimes.

“Big. Yellow. A menace to our economy,” the narrator says. “Mitt Romney knows it’s not Wall Street you have to

worry about, it’s Sesame Street.”

The ad didn’t amuse either Sesame Workshop, which asked the Obama campaign to stop airing the ad, or the Romney campaign.

PBS doesn’t actually produce Sesame Street. Sesame Workshop is a separate entity that produces and licenses the show.

Out of Sesame Workshop’s $140 million operating budget, about $1.5 million annually comes from PBS via a licensing fee, which is the net of PBS’s share of Sesame Street merchandising and sponsorship revenue.

Sesame Workshop has gotten federal government money in the form of about $12.3 million in contracts over the past 10 years, including a high of $3.68 million in fiscal 2008, when President George W. Bush was in office.

Most of the money came from the Defense Department, which has used the Sesame Street characters in videos to help children through transitions and separations.

The Corporation for Public Broadcasting, which supports PBS and National Public Radio, got about $445 million in fiscal 2012 from the federal government.

Spinney has performed as Big Bird and Oscar the Grouchm in over 4,000 episodes of Sesame Street, beginning with the first show in 1969, according to the show’s Web site. Spinney co-authored a 2003 book called The Wisdom of Big Bird (and the Dark Genius of Oscar the Grouch): Lessons from a Life in Feathers.

Danielle Ivory contributed to this post

Original post is Big Bird’s Taxes: Little Relief Promised in Romney’s Tax Cuts by Political Capital.

“When the cameras rolled, a performance began,” President Barack Obama’s new minute-long video says. “But the problem is, that’s all it was.”

It shows Romney on stage in Denver denying he proposes a $5 trillion cut — with Ezra Klein of the Washington Post on MSNBC refuting the claim in “Mitt’s Math.”

The 20 percent tax cuts that Romney proposes across the board, while continuing the Bush-era tax cuts, total nearly $5 trillion, and Obama was talking about that in debate last week. Romney maintains he will offset that cost with the closing of loopholes, particularly for high-earners, but he hasn’t specified any plans.

The Obama campaign has turned to the independent Tax Policy Center to support its claims that Romney cannot accomplish his tax cuts and offsetting loophole closings without reaching into exemptions that middle-income taxpayers enjoy. The Romney campaign, since the debate, has aired an ad citing the American Enterprise Institute in support of his contention — with the Obama campaign responding that the AEI is no independent monitor; its board members include former Vice President Dick Cheney.

The  campaign’s Web video, cut for minute-long TV ad length, shows Romney on-stage touting his health-care plans for including coverage for pre-existing conditions, which a fact-checker labels false. The ad highlights more of the post-debate fact-checking that the Obama campaign has citied in accusing Romney of telling lies in the first of their three debates.

“His massive new tax cut for millionaires means higher taxes on the middle class,” the narrator says, “and AARP says Romney’s plan undermines Medicare by turning it into a voucher.”

“America needs a president with character,” it concludes, with visuals that mock Romney’s body language on stage, “not a politician who just plays one.”

Original post is Obama Unwinds Romney Debate — `President with Character’ Needed by Political Capital.

Photograph by Joe Raedle/Getty Images

DNC chairwoman Rep. Debbie Wasserman Schultz introducing Vice President Joe Biden during a campaign event in Boca Raton, Florida.

Debbie Wasserman Schultz, chairwoman of the Democratic National Committee, is willing to give Republican presidential nominee Mitt Romney some style points for his performance against President Barack Obama in their first debate.

But she wants to deduct even more points for the falsehoods which she heard during the entire 90-minute confrontation.

“I think you can give Mitt Romney points for style, but, really, I think you have to take a lot of points off for how untruthful he was during the entire debate,” Wasserman Schultz said in an interview on “ Political Capital with Al Hunt” airing this weekend on Bloomberg Television. “I mean, from beginning to end, he lied about his own proposals.”

Reince Priebus, the Republican National Committee chairman, speaking in a separate interview for “Political Capital,” said that Romney won in Denver, though “it’s not good enough to just have one great night, and it was a great night.”

In their next debate on in Hempstead, New York, on Oct. 16, “you’re going to see the same Mitt Romney,” Priebus said. “He’s passionate. He’s got a command of issues.”

Obama, his party chair told Hunt, will “come out strong, and we’ll see a spirited discussion” in the next debate Oct. 16.

Wasserman Schultz singled out Romney’s insistence that he did not propose a $5 trillion tax cut. “I don’t have a $5 trillion tax cut,” Romney said during the debate. “I don’t have a tax cut of a scale that you’re talking about.”

“We’re not going to let Mitt Romney get away with lying about his tax plan,” Wasserman Schultz said. She said fact-checkers “specifically said he has a $5 trillion tax plan skewed towards the wealthy.”

Romney’s tax plan would reduce income tax rates across the board, costing the U.S., Treasury $480 billion a year starting in 2015, according to a March study by the Tax Policy Center. That amounts to $4.8 trillion over 10 years, or close to $5 trillion.

The Republican candidate has said he will cover the cost of lowering the tax rates by closing unspecified tax loopholes, particularly for high-earners. He has refused to identify which tax breaks he would give up.

Original post is Wasserman Schultz: Romney Scored With Style Points, Not Facts by Political Capital.

Yet Romney’s ad, in highlighting $1 trillion in new taxes that Obama proposes, maintains these will hit the middle class.

Who will raise taxes on the middle class?

This is the question posed by Republican Mitt Romney’s new ad.

His answer: President “Barack Obama and the liberals.” In particular, Nancy Pelosi, the former House speaker from California who helped Obama pass his health-care legislation when Democrats still controlled Congress. The ad pairs Obama and Pelosi as a liberal threat, despite the fact that Republicans are likely to maintain control of the House after November’s elections.

Obama has raised and answered the question in his own ads, which accuse Romney of threatening higher taxes on the middle class. The 20 percent across-the-board tax cuts that Romney proposes cannot be paid for without deeply reaching into tax exemptions that benefit many taxpayers, including the middle class, according to the Washington-based Tax Policy Center.

Yet Romney’s ad, in highlighting $1 trillion in new taxes that Obama proposes, maintains these will hit the middle class. Obama is proposing to eliminate the Bush-era tax cuts for households earning more than $250,000 a year, and maintaining the tax cuts for everyone earning less.

The one tax likely to hit the middle class in January, regardless of who is elected in November, is the expiration of the temporary relief in payroll taxes that has been in effect during the past two years as an economic stimulus. That has benefited people making less than $100,000 a year, as the payroll tax isn’t applied much beyond that level of income.

Romney’s ad also touts his plan to restrict tax exemptions for millionaires, the ones which the Tax Policy Center says cannot be obtained in a revenue-neutral plan without affecting the middle class. A lack of specifics in Romney’s proposal — which exemptions, such as the one for mortgage interest, charities or employer-paid health insurance, he would trim — make a definitive analysis elusive at best.

Original post is Taxing the Middle Class: Ad War Impossible to Settle Without Detail by Political Capital.

Photograph by Bruce Bennett/Getty Images

Homes in Pittsburgh, Pennsylvania.

American households are facing an average tax increase of $3,446 in 2013, if Congress doesn’t avert the so-called fiscal cliff, the nonpartisan Tax Policy Center said in a study released today in Washington.

The top 1 percent of households face some of the largest tax increases and would see their average federal tax rates hit 40.5 percent, up 7.2 percentage points from this year. That would translate to an average tax increase of $120,537.

About 88 percent of U.S. households would see their taxes increase in 2013, with a typical middle-income household facing a tax increase of about $2,000.

After the Nov. 6 election, Congress is scheduled to return to Washington to debate the automatic spending cuts and tax increases starting in January unless lawmakers act. For calendar year 2013, taxes would increase by $536 billion, or about 20 percent.

“This is a very large tax increase,” Donald Marron, the center’s director, told reporters in Washington today.

If Congress does nothing, tax rates on income, capital gains, dividends and estates would increase, and the alternative minimum tax would spread to 21.7 million households, up from 4 million this year.

The top statutory tax rate on ordinary income would reach 39.6 percent, up from 35 percent, and the top rate on capital gains would be 23.8 percent, up from 15 percent. A 2 percentage point payroll tax cut is set to expire at the end of 2012.

Lawmakers agree they should extend the income tax cuts for most households. Republicans want to keep all the income and estate tax cuts for 2013 and begin overhauling the tax code.

Democrats, including President Barack Obama, want to let most of the tax cuts lapse for the top 2 percent of households, or individuals making more than $200,000 a year and married couples making more than $250,000.

See Richard Rubin’s full report at Bloomberg.com.

Original post is Fiscal Cliff: $3,446 per Household by Political Capital.