As the congressional supercommittee begins its budget-cutting efforts, state and local governments are worried about looming cuts to their federal grants. From Bloomberg:
In statehouses across the U.S., a budget-cutting congressional supercommittee and the sputtering economy threaten a fledgling recovery from the worst fiscal crisis in more than 70 years.
To create a more balanced approach that includes revenue increases as well as spending cuts, President Obama has proposed to raise taxes on the highest earners by reducing their tax exclusions and deductions (of which the municipal bond tax exclusion is a relatively small part).
Much of the criticism about his proposal to raise taxes on the wealthiest Americans describes the proposal as a drag on those who own small businesses and create most of the nation’s employment. Republicans often describe these small businesses as “jobs creators” when they argue against tax increases. As House Budget Committee Chairman Paul Ryan (R-WI) said on Fox News Channel:
And don’t forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you’re raising taxes on these job creators where more than half of Americans get their jobs from in this country.