Taxes

In the face of opposition from Congress, President Obama on Tuesday vigorously defended his proposal to scale back two popular tax breaks by limiting the ability of upper-income taxpayers to deduct home mortgage interest and gifts to charities.

Faced with mounting budget deficits and the enormous cost of overhauling the nation's healthcare system, Democrats and Republicans on Capitol Hill are expressing increasing openness to an idea that once seemed unthinkable: putting taxes on some healthcare benefits. The idea of taxing medical insurance benefits has long worried many lawmakers, who are concerned that new taxes could jeopardize the employer-based health system most Americans rely on.

Congressional Democrats sealed an agreement Monday night on a budget plan that would help President Obama overhaul the healthcare system but allow his tax cut for most workers to expire after next year. Senate Budget Committee Chairman Kent Conrad (D-N.D.) announced the agreement and key details. The pact would prevent Senate Republicans from delaying or blocking Obama's plan to vastly expand government-subsidized healthcare when it advances this fall. The $3.

President Obama's plan to crack down on what he called abuse of overseas tax loopholes was met Monday with quick and unusually sharp opposition from big business, threatening to produce the administration's first major confrontation with a broad segment of corporate America.

Behind the open brawling over how to rebuild the nation's healthcare system, another struggle is beginning that may be the toughest test for the drive to cover millions of people without insurance and improve medical care for all: who should pay the eye-popping bill.

Facing multibillion-dollar state funding cuts, school districts across California are asking residents to tax themselves to fund local schools. Parcel taxes -- some topping $2,000 annually per family -- have been proposed this year from Sebastopol to San Marino.

The Internal Revenue Service had a moment of clarity Tuesday and backed off from its plan to crack down on personal use of office cellphones -- sort of. Just last week, the agency stirred up a hornets' nest of bad publicity by announcing it would ramp up enforcement of a long-standing -- and largely ignored -- federal law requiring that personal calls made on company cellphones be taxed as income.

Twelve years after Los Angeles adopted a lower tax rate to attract Internet and multimedia companies, the cash-strapped city is telling many tech businesses that they don't qualify for the discount and billing them millions of dollars in additional taxes. Shopzilla.com, a comparison-shopping website based in West Los Angeles, was slapped with $2.74 million in additional taxes. Now it's considering moving to Santa Monica, a couple of blocks away.

Many wealthy communities across Southern California have recently passed parcel taxes to help their beleaguered schools. But the defeat this week of a similar levy in a less affluent, larger school district in the San Gabriel Valley offers a look at the challenges that could face parcel tax proposals in big-city school systems in Los Angeles and Long Beach.

When Congress decides how to pay for President Obama's signature healthcare initiative, some of his strongest political bastions may be footing a heavy bill. And in a political irony, states that went for Obama's Republican rival, Sen. John McCain of Arizona, in 2008 are among those likely to benefit most from Democratic healthcare policies.