Tax Policy

Before adjourning for a two-week recess last week, the U.S. House of Representatives passed a budget proposal along party lines. The bill, sponsored by Rep. Paul Ryan of Wisconsin, outlines the House majority’s funding priorities for the 2013 fiscal year. The legislation paints a much different picture than many expected, and took a sharp turn from last summer’s debt ceiling wrangling. The proposal also could forecast dark days for states.

Late last week, the U.S. House of Representatives passed a bipartisan bill ending the stalemate over the payroll tax cut and assorted entitlement programs, and the Senate quickly followed suit. But the details of the bills paint an interesting picture of the political landscape as we approach the 2012 election cycle, and what may be even more important to states, the Lame Duck session of Congress that will follow it.

The bill passed by Congress would keep the payroll tax rate at 4.2 percent through 2012, instead of springing...

In the last few days, Congress has moved forward on two sizable agenda items, the payroll tax cut extension and a long term surface transportation bill. As always, however, the devil is in the details and the details are open for interpretation. 

First, the payroll tax cut extension. House and Senate negotiators are slowly making progress toward a deal on extending the payroll tax cut, which has been extended repeatedly over the past few years. The package also would stave off a massive cut to Medicare and extend long-term...

President Barack Obama on Sept. 8 addressed a joint session of Congress to roll out the American Jobs Act. In the wake of a still stagnant recovery, the bill includes a combination of tax breaks and new spending designed to give the economy a booster shot and hopefully put more people back to work.  If passed by Congress, the bill would provide more than $35 billion to state and local governments to retain or rehire teachers and public safety officials. The tax measures used to pay for the bill, however, may ultimately come back to bite the very state and local governments it is designed to support.