Tags: Lesniewski | Obama | tax | Senate

Roll Call's Lesniewski Discusses Obama Tax Proposal

By    |   Wednesday, 21 Jan 2015 07:52 AM

Roll Call Senate Correspondent Niels Lesniewski appeared on C-SPAN's Washington Journal Jan. 20 to preview the administration's tax reform proposal, which was slated to be featured in the State of the Union Address that evening.

Lesniewski was interviewed by host Pedro Echeverria who asked how the new Republican Congress would respond. Lesniewski pointed out that the White House has been aggressive in putting out details of the proposal ahead of the speech, and Republicans have already reacted, dismissing key parts of it as not serious.

Echevarria asked whether the president wants his proposal, based on a package of higher estate taxes on the wealthy, more breaks for the middle class and free community college, or whether he just wants to open a discussion with Republicans, and the writer said it is the latter. He noted that Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, would be speaking the same morning to the U.S. Chamber of Commerce to outline his agenda for this Congress.

This writer would add that legend has it that tax legislation must originate in the House, because it is the body closer to the voters, but evidently that's just a formality, and a cynic would say that tax legislation actually originates at the staff of the Joint Committee on Internal Revenue Taxation with the help of the Chamber and the Business Roundtable.

Part of the package involves a technical-sounding concept that is so old that this writer first heard of it while taking the tax course in law school from the tax advisor for Sen. Eugene McCarthy's presidential campaign in 1968. It rankles liberals that when people inherit stock, they receive what is called a "stepped up" basis, which means that thenceforth the amount of capital gains tax is determined based on the market value at the time of death not the basis at which the deceased carried the stock.

The professor thought it outrageous that heirs already receiving a windfall should get a tax benefit cherry on top. The issue elicits emotion on all sides, and a cynic would ask, if this hasn't gone anywhere in all these decades, why would it suddenly gain traction now? One could even ask why President Obama didn't propose it when the Democrats controlled both houses of Congress. The answer is presumably that his first priority was Obamacare. Lesniewski recalled that Hatch has a history of working with liberals like Sen. Ted Kennedy, D-Mass., and Rep. Henry Waxman, D-Calif., so it would not be out of character for Hatch to deal.

Echevarria reported that callers had expressed considerable interest in Obama's proposal to provide two years of free community college at an estimated cost of $60 billion over a decade. The cynical view might be that with the Federal Reserve pumping up the economy so generously, anything that can be done for such a cheap price is must legislation. However, some unappreciative critics are already questioning whether this is the best way to boost the economy by investing in human capital. Lesniewski reminded the viewers that it might come at the expense of state 529 plans that confer a tax break on funds built primarily to finance attendance at state-related colleges.

When a caller from Louisville, Ky., home of Senate Majority Leader Mitch McConnell, asked how the president could pursue policies that would fairly be called redistributionist in light of his admission that his policies were on the ballot in 2014, Lesniewski was quick to say that now the focus has already shifted to positioning the Democrats for 2016. It might be added that Democrats expect the nature of the electorate in a presidential year to be more favorable to a liberal agenda.

(Archived video can be found here.)

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Robert-Feinberg
Roll Call Senate Correspondent Niels Lesniewski appeared on C-SPAN's Washington Journal Jan. 20 to preview the administration's tax reform proposal, which was slated to be featured in the State of the Union Address that evening.
Lesniewski, Obama, tax, Senate
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2015-52-21
Wednesday, 21 Jan 2015 07:52 AM
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