All Blog Posts from Econwatch

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

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While ambling around the Bureau of Labor Statistics site (a fantastic trove of information), I stumbled upon a Consumer Expenditure Survey that details how Americans spent their 2008 Economic Stimulus Payments, which were actually IRS tax rebates.

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It’s no wonder that Americans are struggling to understand health care reform: the stuff is complicated and dense. I learned my lesson on The Early Show this morning, when trying to succinctly describe who will pay for the plan.

I got off the air and was scolded for not providing viewers with a better means for understanding the issue at hand. As penance, I’m going to try to lay it out here.

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This weekend, the President announced a handful of new initiatives designed to make it easier for American workers to save more for retirement. The initiatives supposedly make use of research from behavioral economics, the arm of the dismal science that incorporates the way people really act into the design of retirement plans. That’s has proven effective in the past..except this time the Administration loses its nerve.

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According to the CBO, the US budget deficit is expected to rise by something close to a gazillion dollars. OK, the White House expects the ten-year budget deficit to reach $9 trillion, up from the original estimate of $7.1 trillion. Given that there are few plans to cut anything out of the budget, the alternative is to raise taxes.

What the President won’t say about health care reform is the following: there are not enough rich people to float the country’s needs right now. This is not a political statement, it’s a fact. This chart from last week’s Wall Street Journal demonstrates the point that to close the budget gap over the next ten years, tax rates on the rich would need to rise to nearly 69%. Even if you think that would be a good idea, it just isn’t going to happen.

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If you have any money stashed in an overseas account, the IRS wants to know about it.

The U.S. is launching a stiff crackdown on Americans who shield income from the tax man in foreign accounts. The new campaign could net tens of thousands of tax evaders, according to a report in the Wall Street Journal ($) Monday.

Taxpayers with $10,000 or more in offshore accounts at any point during the year will be required to file a tax form called the Foreign Bank Account Report, or FBAR. People who owe back taxes can expect some tough penalties. And for those who fail to file the form altogether, the penalties will be much greater.

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The Internal Revenue Services intensified hunt for tax evaders overseas has caused Switzerland's two biggest banks to say goodbye to its American customers.

UBS AG and Credit Suisse Group AG have given Americans a choice: move your money to special accounts they have created in the U.S. or lose the account, Bloomberg reports.

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The big debate around the tax day tea party protests has been over what they really represent: An organic movement built on genuine anger, or a more cynical and partisan effort by the Republican Party to score points against the Obama administration.

Based on Wednesday evening’s protest in New York City, a strong case can be made for the former. Though mainstream Republicans, GOP lobbying firms and Fox News have embraced the protests – Newt Gingrich was the featured speaker here – many of those who attended were not offering anything akin to Republican talking points.

“I think Newt Gingrich is – I think he’s a slime ball,” said Roy Delduco, a self-described Constitutionalist with tattoos up his arm and a shaved head. “I don’t like Republicans. I don’t like liberals either. I don’t like the whole bipartisan system. I think it’s part of the problem.”

Delduco said he wants the Federal Reserve disbanded, the IRS “put in jail” and his taxes lowered. He complained about government spending under both Presidents Obama and Bush.

“We’ve basically bankrupted the dollar, and I’m scared,” he said.

That’s not to say there weren’t plenty of complaints about Mr. Obama and his administration at the demonstration: protesters interviewed by CBSNews.com mentioned the president’s alleged bow to the Saudi leader, the recent Homeland Security report on right-wing extremists and unsubstantiated rumors about Mr. Obama’s birthplace, among other complaints.

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If a little-known but influential alliance of state politicians, large retailers, and tax collectors has its way, the days of tax-free Internet shopping may be nearly over.

A bill expected to be introduced in Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a "loophole" that, in many cases, allows Americans to shop over the Internet without paying sales taxes.

Currently, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay sales taxes at checkout time that they would if shopping at a local mall.

"We will have the bill ready for introduction by next Monday," said Neal Osten of the National Conference of State Legislatures. "We finalized the language and now we're working out the remaining issues and adding some new provisions at the request of various stakeholders."

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SAN FRANCISCO -- Agnes Bernstein, above, knows how well socialism works, or more precisely, doesn't work.

The eight-year resident of the San Francisco bay area grew up in Poland under socialist rule, and told a crowd of hundreds at a tax day rally here on Wednesday that she fears the United States is now heading in that direction.

"The government is growing too big," Bernstein said in an interview with CBS News after her speech. "And I grew up in socialism and I've seen it. And this is reminding me more and more of what Poland used to be. I was fortunate to see the transfer from socialism to a free market economy in Poland and i'm very sad to see that the opposite is happening here."

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Almost three-quarters of Americans think it is a good idea to raise taxes on people making more than $250,000 per year, according to the latest CBS News/New York Times poll.

In fact, two-thirds of Americans think the tax code should be changed so that middle-class Americans pay less than they do now, while "upper income" people pay more.

As for President Obama's overall budget plan, a majority - 56 percent - say it sets the right priorities for the country. Thirty-two percent say it doesn't, and twelve percent don't know.

The poll also finds that Americans are more likely to say the spending proposals in the budget will help the economy (37 percent) rather than hurt the economy (23 percent). Twenty-nine percent aren’t yet sure.

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Read The Complete Poll (PDF)

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Similarly, 32 percent of Americans say they think Mr. Obama's proposed tax plan will help the economy, while 21 percent think it will hurt. Again, a significant portion – 37 percent – are unsure.

Fifty-six percent of Americans say they approve of Mr. Obama's overall handling of the economy. (Read more on Obama's approval ratings here.) His marks on specific economic policies, however, are not so high.

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