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EconNews Online is South-Western's service to provide summaries of the latest economics news stories. Review the brief summaries and, for stories of interest, select the full summary. |
| TAXES, SPENDING, AND DEFICITS | |
| Title | Brief Summary |
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Democrats are seeing to lead the way in an overhaul of the alternative minimum tax. If it is left unchanged it will increase taxes on tens of millions of families as early as 2008. The democratic plan wants to shield all but the very rich from this alternative calculation of income taxes. (Updated May, 2007) |
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Despite signs of a weakening economy, Federal Reserve chairman Bernanke still talks tough on inflation. In a recent conference on monetary issues, Bernanke indicated that he was far less worried about signs of weaker economic growth than he was about the danger of higher prices. (Updated July, 2006) |
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Congress is debating the full repeal of the estate tax. Republicans promote the repeal, while Democrats generally oppose elimination of the so called "death tax". The debate over the tax will likely result in a political compromise between the two parties. (Updated July, 2006) |
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American expatriates have a nasty surprise in store when they compute their 2006 income taxes. Many Americans living and working overseas enjoy employer allowances for housing, schools, and trips back home. Previously exempt from U.S. taxes, the cost of these items will now be subject to U.S. income taxes. (Updated June, 2006) |
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Unexpected tax revenue increases from the American economy are expected to shrink the federal budget deficit by almost $100 billion in 2005. The Bush administration cites the increase in tax revenues as an indication that their tax cuts have stimulated the economy and are now paying for themselves. (Updated September, 2005) |
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The U.S. tax code includes provisions that many analysts describe as a hidden tax. The alternative minimum tax may require tens of millions of American taxpayers to pay additional taxes in the next several years. (Updated June, 2005) |
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President George W. Bush continues to push for private accounts in the Social Security System. Mr. Bush puts the issue at the top of his domestic agenda, but has yet to convince a majority in either house of Congress on the worthiness of his plan. (Updated April, 2005) |
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President Bush has named two former senators to lead a bipartisan advisory panel. Their task: to come up with a simpler and fairer income tax structure for U.S. citizens. (Updated March, 2005) |
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In this election year, proposed personal income tax code reforms bring up questions related to politics and fairness. The divide appears to be along political lines, with Republicans pushing for some kind of a consumption tax to replace the current income tax. Democrats respond by suggesting such a tax would favor the wealthy at the expense of middle-income citizens. (Updated December, 2004) |
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Federal Reserve chairman
Alan Greenspan has extended the discussion about the looming federal deficit
by suggesting that Social Security and Medicare programs be cut as an alternative
to raising taxes to cover future obligations. The comments reflect the view
that the only solution to the huge and growing deficit is to raise taxes
or cut benefits and Greenspan believes the spending cuts are the best alternative
for long-term growth in the economy. (Updated April, 2004) |
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While reporting a generally
upbeat outlook for the economy, Federal Reserve chairman Greenspan also
hinted at the possibility of long term problems for the economy if the federal
budget deficit continues to grow. He worries that it could lead to higher
interest rates and increase U.S. indebtedness to the rest of the world. (Updated April, 2004) |
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The best year for new
housing in twenty-five years is leading some analysts to raise their forecasts
for the housing industry in 2004. This is very good news for an economy
that has been relying on the building, buying and refinancing of homes for
a steady driving force in the economy. (Updated March, 2004) |
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A record federal budget
deficit of $477 billion is expected in 2004, according to the Congressional
Budget Office. They also predict accumulated deficits over the next 10 years
will total $1.9 trillion. Economist worries that the huge deficits could
have a negative effect on long-term economic growth. (Updated March, 2004) |
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The news on the federal
budget deficit for 2003 appears to be very favorable. After the Office of
Management and Budget projected a record deficit of $455 billion, the deficit
came in at only $375 billion. Appearances, however, are not always what
they seem. (Updated January 4, 2004) |
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An expected budget
deficit of $374 billion in 2003 is a record high in absolute (constant)
dollar terms. The budget deficit is a result of a generally weak economy,
spending for war and homeland security, and the Bush administration's tax
cuts. (Updated November, 2003) |
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The recently legislated
tax cuts will put a trillion dollars in the hands of American consumers
over the next six years, but because present government expenditures are
far outstripping revenues the tax cuts may represent a mixed blessing. With
the discrepancy between spending and revenue, the government will have to
engage in massive spending cuts or Americans will face a much larger tax
bill in the future (Updated October 17, 2003) |
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Bush's tax-cut package
has fattened paychecks and provided tax-credit checks to millions of Americans.
Most experts agree that what American consumers do with these windfalls
are critical to the economic recovery. (Updated September 10, 2003) |
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An expected budged
deficit of $455 billion this year is sending waves of optimism through the
democratic ranks. The democratic contenders for the presidential bid are
pointing to the deficit as a huge failure of the Bush administration's economic
policy while the republicans point to terrorism and two wars to explain
shift from a surplus to a deficit.. (Updated August 27, 2003) |
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The Federal Reserve
Bank (Fed) is always at the ready to conduct policy that improves the overall
operation of the economy. In an historic shift, the Fed announced it is
more concerned with deflation than with inflation. (Updated June 2, 2003) |
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With a projected budget
deficit of $157 billion in fiscal year 2002, Greenspan cautioned Congress
to keep the federal budget deficit under control, arguing that even though
interest rates are at a 40-year low, higher interest rates would result
from a breakdown of budget discipline. (Updated October 10, 2002) |
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Ohio is considering
increasing its cigarette tax. The benefits would include more state revenue
and lower cigarette consumption. Disadvantages would be increased out-of-state
purchases and the tax burden being borne by the poor, minorities, and the
less educated. (Updated October 10, 2002) |
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The AMT was originally
enacted to prevent the very wealthy from escaping their income tax obligations.
This year, approximately 2.6 million taxpayers will be affected, and the
burden on the AMT will fall on families with incomes between $75,000 to
$500,000, canceling some of the benefits of the Bush tax cut. (Updated October 10, 2002) |
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President Bush submitted
a $2.13 trillion budget for the next fiscal year that calls for significant
increases in defense spending and homeland security. The President cited
the new realities of war and a need to prevent terrorist attacks as justification
for his reorientation of federal spending. (Updated March 20, 2002) |
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President Bush submitted
his $2.13 trillion budget, which will result in budget deficits replacing
what had been forecasts of a surplus in fiscal years 2003 through 2005.
There is a controversy as to whether budget deficits and rising debt harm
the economy by pushing up long-term interest rates. (Updated March 20, 2002) |
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Since last January,
the Federal Reserve has cut its target federal funds rate by 4.75 percentage
points to 1.75 percent. Long-term interest rates, which guide interest rates
on mortgages and many consumer and business loans, have increased in recent
months rather than following short-term rates. Some economists blame the
fiscal policies of the Bush Administration as the reason for the rise in
long-term rates. Others argue that rates have risen anticipating that the
economy would rebound strongly this year and that the Fed would start increasing
short-term rates. (Updated February 13, 2002) |
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For the coming fiscal
year, according to the most optimistic forecast, analysts predict a balanced
budget and a more likely outcome of a return to deficit spending. (Updated November 1, 2001) |
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Both George W. Bush
and Ronald Reagan made a tax cut an important part of their Administration's
initiatives, but the Bush tax cut is being justified on Keynesian grounds,
whereas Reagan preached supply-side economics to support his cuts. (Updated March 1, 2001) |
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Will government deficits
return? Even though lowered tax rates coupled with increases in government
spending do not necessarily result in government deficits, it may be that
the 'natural' inclination of Congress and the Administration to spend whatever
surplus it has on hand will push us to deficits once again. (Updated March 1, 2001) |
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It appears that political
rhetoric generated during budget deliberations has created an artificial
crisis - stories are reported that the recommendations of one party or the
other-if they became law-would bankrupt social security and millions of
social security recipients would not receive checks. This crisis has been
generated by political need and faulty reasoning. (Updated November 1, 1999) |
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Japan, at the urging
of the U.S., has been spending at a feverish pace in order to stimulate
its economy into recovery. As a consequence of the spending and recession,
annual budget deficits grew and total debt has almost doubled. Rising debt
levels tend to produce higher long-term interest rates which would affect
the development of many Asian economies. (Updated October 1, 1999) |
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President Clinton recently
announced his fiscal 2000 budget. While interest in the budget typically
focuses on national issues, the federal budget has a powerful influence
on regional growth and development. (Updated April 1, 1999) |
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Clinton unveiled a nearly
$1.8 trillion federal budget proposal that has increased federal spending
on a number of new or expanded programs that contains no across-the-board
tax cut, and the Republican Congress is not happy over the increased size
and role of government as outlined in the proposal. (Updated March 1, 1999) |
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After decades of deficits,
the U.S. budget went into the black last year and forecasts predicted that
the budget surpluses would continue for at least the next few years. (Updated February 1, 1999) |
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After 28 years during
which the federal government spent more than it received in tax revenues,
the federal budget is now in surplus. Fiscal restraint was an important
factor in propelling the economy forward and creating the economic strength
that has so far insulated the U.S. economy from the Asian economic turmoil.
The question now being debated is what to do with the surplus. (Updated November 11, 1998) |
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The goal of fiscal policy
during these past years has been to reduce the budget deficit to zero. When
forecasters first projected a federal budget surplus, the projections were
accompanied by statements that surpluses were only temporary.... (Updated May 22, 1998) |
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After all these years
of talking about budget deficits, is it time to start thinking about budget
surpluses? According to some economists, the recent budget agreement between
President Clinton and Congress, coupled with our current rate of economic
growth could generate budget surpluses listing into the next century. (Updated January 15, 1998) |
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