A round-up of coverage and commentary on the Obama Administration’s budget proposal for Fiscal Year 2012…

Aric Newhouse, senior vice president, National Association of Manufacturers, NAM statement:

Unfortunately, President Obama’s budget plan … contains higher taxes for virtually all manufacturers – a direct threat to growth and manufacturing jobs. Increased income taxes on companies with worldwide operations, increased energy taxes and income taxes for small and medium-sized companies will make manufacturers less competitive.

Jack Gerard, president, American Petroleum Institute, “Administration tax hike will hurt jobs, cut government revenue“:

It’s no surprise the administration is proposing yet again to raise taxes on the U.S. oil and natural gas industry.  But it’s still a bad idea and comes at one of the worst times in our economic history.  The administration continues to ignore the fact this industry is among the nation’s largest job creators and delivers enormous revenues to government at all levels.  The industry pays income taxes, royalties and other fees totaling nearly $100 million every day and pays income tax at an effective rate far higher than most other industries.

 Besides eliminating thousands of new potential jobs, the increases, over the long term, would actually lower revenue to the government by many billions of dollars as a result of foregone revenues from projects the tax hikes would prevent going forward.

Dean Zerbe, Forbes, Capital Tax blog, “Obama’s Budget Proposal and Taxes: Lots of Regifting“:

The tax proposals in the administration’s FY 2012 budget released today is a combination of regifting (lots of old and cold proposals that didn’t go anywhere even when the Democrats ran the whole show) and some new proposals that will take a good deal of energy to get moving in this Congress. (continue reading…)

Ryan Ellis, tax policy director at Americans for Tax Reform, has put together an excellent summary sheet that clarifies what business extenders are, why they belong in the tax extension compromise before Congress, and why they are NOT earmarks.

From “Why Business Extenders in the Tax Deal Aren’t Earmarks, TARP, Pork, Etc.“:

Business extenders are various deductions and credits which have been in the tax code for many years. There is nothing special or different about them.  They are deductions and credits in the same way the student loan interest deduction is.  The only difference is that Congress puts an expiration date on these deductions and credits so that a “must-pass” legislative tax vehicle is manufactured every year or two.

Business extenders are far from ideal tax policy, as are permanent deductions and credits such as the student loan interest deduction, the state and local tax deduction, and many others.  On the merits, they should not exist in a broad-base, low-rate tax code.

However, American employers face the highest corporate income tax rate in the developed world (40 percent with states). These business deductions and credits are what make this confiscatory tax rate tolerable.  Getting rid of them is a good idea, but only in the context of fundamental tax reform that is revenue-neutral and lowers marginal tax rates.

Tax extenders are not earmarks, etc. The invectives applied to them are more properly applied to spending programs.  Only spending programs can be pork, earmarks, or bailouts.  Letting people (or, in this case, employers) merely keep their own money is not “spending money on them.”  In order to think that it is, you have to assume the government has a right to all their money in the first place, and by letting companies keep some of it, they are getting money spent on them.  That’s absurd, and hardly correct tax policy from a conservative perspective.

The extenders in question total $55 billion in tax relief out of a total of
$801 billion in tax relief.  As a percentage of the entire package (7 percent) the amount of attention they have received has been disproportionate. Congress has approved preventing these tax hikes from happening dozens of times over the past decade.  They simply are not new or controversial.

The whole point of this tax deal is to prevent taxes from going up on anybody.  It would be wrong to leave American employers with a tax increase at a time of nearly 10 percent unemployment. Congress should avert this tax hike on employers.

We urge Congress to pass legislation in the lame duck session to extend critical tax provisions that, while temporary in nature, are critical to our economy. It is of the utmost importance to all of us, and to the health of the U.S. economy, that this extension be enacted before the end of the year and apply seamlessly, at least through 2011.

Expiration of many of these provisions has already caused job losses, and the uncertainty around their extension will lead to further dislocations just as the fragile economic recovery is beginning.

The House is set to begin debate on H.R. 4849, Small Business and Infrastructure Jobs Tax Act, yet another “jobs bills.”

The National Association of Manufacturers has sent a letter to the House opposing the bill’s international tax provisions, arguing that they represent new and discriminatory taxes on foreign-owned companies and U.S. multinationals.

For one thing, it’s almost never a good idea to violate treaties, especially when the action makes your country a less attractive place to invest. From the NAM letter:

The limitation on treaty benefits would violate many of the bilateral tax treaties currently in effect between the United States and foreign countries because it would require companies to pay higher than negotiated withholding tax rates on payments to their foreign affiliates. If enacted, the proposal could lead to retaliatory actions by other countries or withdrawal by our treaty partners from existing treaties, harshly affecting U.S.-based businesses.

Americans for Tax Reform also objects to the legislation because it amounts to a $7 billion tax increase. ATR’s analysis:

If enacted, corporations who engage in business with the United States would face a whopping $7.7 billion in tax hikes. It is vital to remember that these “foreign” companies are engaged in doing business in the United States, providing jobs to U.S. workers, and goods to U.S. consumers. If
enacted, these tax hikes will ultimately be passed onto American families. Consumer goods will become more expensive, some businesses will cut jobs, or even close their doors. Economic activity throughout the United States would plummet. Workers in other industries who rely on these foreign companies for goods and services will feel the effects, and will also be forced to raise costs and lay off workers, leading to a chain reaction that will be extremely damaging to the U.S. economy.

In reading up on labor, jobs and White House forums this morning, came across the transcript of Vice President Joe Biden’s remarks in Philadelphia, Feb. 27, at the very first meetings of the White House’s Middle Class Task Force:

THE VICE PRESIDENT: I’d like the record to show it’s the first time in my life my Senate colleagues ever stood for me. I really do appreciate that — (laughter) — this was worth the job, worth the trip. (Laughter.)

Ladies and gentleman, thank you for all being here today, and Senators Specter and Casey, and Congressman Fattah and Congressman Brady; Mayor Nutter and the governor will be here, as well; and many luminaries that are here in the audience: I see that Andy Stern of SEIU is out there, and Anna Burger of Change to Win, — (applause) — and as I understand it, that Jerry Sullivan is out there, representing the laborers that are going to get, God-willing and the creek not rising, a significant boost from what we’re about to do.

Stern has been in the political news a lot lately, especially since being cited as the most frequent White House visitor. Two conservative activist groups, Americans for Tax Reform and the Alliance for Worker Freedom, this week called for a federal investigation into lobbying by Stern, who has not registered as a lobbyist. The SEIU connection with ACORN has drawn scrutiny. Then there are the continuing “California Labor Wars,” as the Wall Street Journal describes them.

House Republican Leader John Boehner (R-OH) spoke today at an American Spectator/Americans for Tax Reform newsmaker luncheon today, with Heritage Foundation blogging guests also on hand.

Boehner and 10 Republican freshmen returned this week from an energy-oriented trip to Colorado and Alaska, and today’s session concentrated on energy issues.

The leader’s arguments:

• The majority of the public favors additional domestic energy supply, i.e. drilling.
• Clear majorities exist in both the House and Senate for pro-supply measures. In the House, Democratic leadership therefore prevents votes on legislation. 
• House Republicans intend to try to force votes, but it’s unclear whether the strategy will succeed.
• Republicans also intend to make energy a campaign issue this fall.

We’ll let the partisan politics speak for itself, although yes, it does seem like pro-energy supply bills would pass if allowed to come to a straight up-and-down vote.

A good question came from Phil Kerpen of Americans for Prosperity. Kerpen cited the EPA’s recent Advance Notice of Proposed Rulemaking on the regulation of greenhouse gases, alluding to the Supreme Court’s ruling in Massachusetts v. EPA. Kerpen asked whether Congressional policymaking on energy isn’t ultimately moot if the EPA regulates carbon dioxide under the 1970 Clean Air Act, and whether Congress might respond in some fashion, perhaps a rider on the continuing resolution. 

Boehner:

First you have to remember that the Democrats control the Congress, and you’ve seen their willingness to give us an opportunity to amend their appropriations bills, or for that matter, almost any bill.

If I had my way I would make it clear that CO2 is not the enemy, because under that court ruling, we’d have Fish & Wildlife Service and EPA in charge of every CO2 permit in America. I think it’s going to become very evident by this time next year in Congress that if they haven’t acted, they’re going to have to act. But I see no evidence on the part of the Democrat majority in the House and Senate to address the issue.

Kerpen wrote a column highlighting the regulatory implications (dangers) of the EPA’s Advance Notice of Proposed Rulemaking, “The EPA’s Blueprint for Disaster.”

UPDATE: (4:20 p.m.) A good, brief account of today’s session from David Weigel at Reason.

Americans for Tax Reform today marks the annual Cost of Government Day, when the average taxpayer has earned enough for the year to pay his government obligations and start working for himself.

Cost of Government Day falls four days later in 2008 than last year’s revised date of July 12.  In 2008, the average American will have to work an additional 17 days out of the year to pay off his or her cost of government compared to 2000, when the COGD was June 29. 

In fact, since 1977, COGD has fallen later than July 16 in only four of those 32 years – in 1982 and 1983, and in 1992 and 1993.  The driving factor for this development is the fact that all components of the cost of government – federal spending, state and local spending, and regulation – are now increasing faster than national income.

Index here.