Tax News

CCH (cch.taxgroup.com) reports:

President Bush on September 20 stood firmly against any congressional move to increase tobacco taxes to pay for expansion of the federally and state-funded Children's Health Insurance Program (S-CHIP). Health and Human Services (HHS) Secretary Mike Leavitt, at a White House news conference, said that the president will seek a temporary extension of the existing S-CHIP program if the administration does not reach agreement on a funding compromise with Congress by the end of the fiscal year (FY) on September 30.
The president indicated that tax-cut policies have sustained economic growth and will help to avert an economic recession amid the current financial market turmoil. Referring to himself as a "supply-sider," Bush said that he believes supply-side economics, "when properly instituted," result in additional tax revenue growth. Higher-than-estimated tax receipts have kept the federal deficit "lower than the 30-year average," he noted. Keeping taxes low, combined with federal spending restraint, will keep the budget on track toward balance by 2012, the president maintained.
On mandatory spending programs, Bush said that he will not give up on entitlement reform. "The biggest issues we've got with the deficit are those deficits inherent in these entitlement programs."
On discretionary spending, the Congress faces a veto showdown on 10 out of 12 regular appropriations bills. Only the appropriations bills for military construction and the Department of Veterans Affairs have been spared a promised veto, noted White House Deputy Press Secretary Tony Fratto.
IRS Appropriations Bill
Meanwhile, the House approved an IRS budget of $11.1 billion for FY 2008 as part of a $12.3 billion Treasury budget (HR 2829, TAXDAY, 2007/06/29, C.1). The appropriation includes $3.6 billion for taxpayer service, $7.2 billion for enforcement, $282 million for business systems modernization, and $116 million for tax compliance research.
The Senate Appropriations Committee approved an $11.1 billion IRS budget on July 12, as part of the Financial Services and General Government Appropriations Act for FY 2008 (TAXDAY, 2007/07/13, C.3) The bill has not yet been taken up by the Senate.
By Paula Cruickshank and Brant Goldwyn, CCH News Staff