On a national media program on July 25, 2010, Treasury Secretary Timothy Geithner emphasized that the Obama administration plans to increase the tax rates for the top two brackets. When asked whether the 2001/2003 tax reductions should be extended for all brackets, Secretary Geithner stated, "I don't believe they should and I don't believe they will."

In the view of Secretary Geithner, the increase of the top two rates to 36% and 39.6% affects only "2% to 3% of Americans, the highest-earning Americans in the country." He suggested that the increased rates on top earners will not have a "negative effect on growth."

House Majority Leader Steny Hoyer (D-MD) agreed with Secretary Geithner. He advocated extending the tax cuts for middle-income taxpayers and remarked that their taxes are "lower than they were in any single year" when compared to prior administrations. However, in his view, the increase in the top two brackets is necessary to keep America from going "deeper into debt."

Sen. Orrin Hatch (R-UT) is a member of the Senate Finance Committee. He spoke on the floor of the Senate and expressed frustration over the decision by Majority Leader Harry Reid (D-NV), to refuse to allow a vote on the Hatch proposal to extend all of the tax cuts. Sen. Hatch offered a motion to commit the pending small business bill back to the Finance Committee in order to amend it and extend all of the tax cuts.

Sen. Hatch indicated that this "largest tax increase in history" will dramatically impact small businesses. These businesses, with between 20 to 500 workers, are owned by individuals who face substantial tax increases.

In the view of Sen. Hatch, the top bracket tax increases will reduce the ability of small business to perform its normal function, during an economic recovery, of generating 70% of new jobs. Sen. Hatch noted that new jobs typically have three components.

First, there must be entrepreneurs who are willing to take risks. Second, there must be adequate access to capital. He indicated that the banks and large companies currently hold record amounts of cash reserves, so there certainly is cash available. Third, there must be "reasonable economic certainly" so that the businesses are willing to expand. With the prospect of higher taxes and greater regulations, Sen. Hatch indicates that there is a high level of uncertainly that is directly reducing job growth in America.


BP Strikes $10 Billion Tax Credit "Gusher"

Major oil company British Petroleum (PLC) operated the Deepwater Horizon well that was responsible for a major Gulf of Mexico oil spill. The gushing oil well has now been capped, but the environmental disaster in the Gulf is the largest on record.

The massive quantity of oil in the Gulf is now breaking down as a result of water and wave action. However, there is a major cleanup underway of the beach and wetland areas. BP has promised to pay the expenses of the cleanup.

This week, BP spokesman Robert Wine indicated that the estimated cleanup cost to the company is $32.2 billion. Because U.S. tax law permits a credit for up to 35% of losses, BP plans to take a tax credit of $10 billion. This will reduce the taxes paid by BP to the U.S. Government by that amount.

Rep. Elliott Engel (D-NY) was quite distressed with the BP's announcement. He stated, "After being responsible for the worst environmental catastrophe in American history, they have used and abused the system, which has for too long permitted oil companies to treat the environment as their own private playground. Now they are looking to cut their losses at the expense of the American people."

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