Income Taxes

By complaining that state and federal tax hikes are forcing him to make "drastic changes," Phil Mickelson quickly became the poster boy for conservatives and liberals alike. The former said Mickelson epitomizes what happens when lawmakers try to fix their budget problems by soaking the rich. The latter said Mickelson should stop whining and hire a better accountant . I'm with Deadspin on this issue -- it's hard to imagine someone having trouble adjusting to $24 million in after-tax income.

Robert Briones weathered the downturn in the economy well, working more than he needed, going on a vacation to Norway with his family and eating out at lunch from time to time. But even the 48-year-old psychologist can't escape the latest blow to consumers' finances: a tax increase that will affect an estimated 160 million workers. As part of the deal on the so-called fiscal cliff, Congress extended tax breaks for middle-income families but did not extend a payroll tax cut that was set to expire this year.

WASHINGTON -- Even as he claimed victory and praised leaders for walking back from the edge of economic danger,  President Obama looked ahead to his next round of sparring with Republicans in Congress over deficits, taxes and government spending. Speaking to reporters in the White House moments after the House passed a deal averting the so-called fiscal cliff, Obama declared his intention to keep chipping away at deficit reduction efforts. "I think we all recognize that this law is just one step in the broader effort to strengthen our economy and broaden opportunity for everybody," Obama said late Tuesday night.

WASHINGTON - The Senate voted overwhelmingly early Tuesday to approve legislation to halt a tax increase for all but the wealthiest Americans while postponing for two months deep spending cuts. The vote came just hours after the accord was reached between the White House and congressional leaders. After a rare holiday session that lasted through the New Year's Eve celebration and two hours into New Year's Day, senators voted 89-8 to approve the proposal. Three Democrats and five Republicans dissented, most prominently Sen. Marco Rubio (R-Fla.)

WASHINGTON - If the nation goes over the "fiscal cliff," some Americans will wake up Tuesday with financial headaches to rival a New Year's Eve hangover. More than 2 million long-term jobless would receive their final unemployment benefit check within days. Millions of taxpayers would be unable to file their returns early, resulting in delayed refunds. Taxes would rise immediately on workers across the board. And although some of those increases may eventually be reversed, the first paychecks of the year would be smaller until any legislative fixes kick in. Even if the crisis is resolved quickly after the new year as pressure mounts on President Obama and lawmakers, it poses a short-term administrative nightmare for businesses.

WASHINGTON - Their deadline rushing closer, President Obama and the top four congressional leaders announced plans to meet Friday to try to pick up the pieces of the shattered budget talks, even as they spent Thursday positioning themselves to dodge the blame for failure. Expectations for a breakthrough at the White House huddle were low, but it was clear the president and the lawmakers felt obligated to at least appear to be pushing for a solution right up to the Dec. 31 deadline, when all taxpayers will see their income taxes rise if a deal is not reached.

WASHINGTON - President Obama called House Speaker John A. Boehner to the White House on Thursday night to try to break the deadlock in the year-end budget talks, but their third face-to-face session ended after nearly an hour with no sign of progress. Earlier in the day, a top Senate Democrat said increasing the Medicare eligibility age was off the table - an important stance to liberal Democrats. Publicly, the two sides appear to be drifting apart as Boehner, in a feisty moment during a morning news conference at the Capitol, insisted that spending cuts deeper than the president has proposed must be part of the deal.

For all the brave talk of a fiscal "grand bargain," President Obama and House Speaker John A. Boehner are playing small ball on a narrow field designed by the Simpson-Bowles commission. In framing the case for reform, the commission took the basic tax system as a given. In contrast, a final deal should recognize that the country is taxing the wrong things. We should be shifting from taxes on corporations to taxes on pollution and wealth, from taxes on income to taxes on consumption. These changes would increase revenue and promote a more just and efficient economy.

Even as both parties signaled they were making progress on a deal to avoid the so-called fiscal cliff, President Obama on Saturday renewed his call on the House of Representatives to act in the short term to extend lower tax rates for the bottom tier of wage earners, saying it would boost Americans' confidence ahead of the holidays. In his weekly video address, Obama called his first post-election sit-down with congressional leaders “constructive” and said there was agreement on the need to act as soon as possible to forestall automatic tax increases and budget cuts set to go into effect at year's end. But as they work out details on a broader compromise on spending and revenues, Obama said, the House “shouldn't hold the middle class hostage” and vote swiftly to send him legislation that would preserve lower rates on the first $250,000 of Americans' income.