Tax Roundup, 12/12/12: Iowa income tax reform on hold? And Warren calls for more taxes on non-Warrens.

December 12th, 2012 by Joe Kristan

What’s missing here?  Governor Branstad had an interview with the Associated Press about his plans for the coming legislative year.  Topics covered include

– Property tax reform

– Education reform

– “Accepting” higher spending.

Anything missing?  Not a word here about income tax reform.  The governor had been talking about income tax reform in the runup to the elections, but hasn’t said much about it since.  I’m getting the feeling that Iowa’s chilly business tax climate isn’t warming up anytime soon.

What the current model of the Iowa tax law would look like if it were a car.

They could have thought about that before they voted for it.  From Byron York:

Sixteen Democratic senators who voted for the Affordable Care Act are asking that one of its fundraising mechanisms, a 2.3 percent tax on medical devices scheduled to take effect January 1, be delayed.  Echoing arguments made by Republicans against Obamacare, the Democratic senators say the levy will cost jobs — in a statement Monday, Sen. Al Franken called it a “job-killing tax” — and also impair American competitiveness in the medical device field.

You mean taxes matter?  Who knew?  (via Instapundit)


Warren Buffett calls for another tax increase on people who aren’t Warren Buffett.  From CNBC:

Warren Buffett isn’t limiting his call for higher taxes to a minimum rate for very rich Americans who get a large chunk of their income from investments.

He’s also one of several dozen wealthy people who have signed a statement calling for a “strong tax on the largest estates.”  It’s been released by a group called “United For a Fair Economy.”

Like the income tax hikes he supports, this increase wouldn’t affect him, because he plans to leave his pile to the Bill and Melinda Gates Foundation, where it will escape estate tax.  I’ll take him seriously if he calls for reducing or eliminating the estate tax charitable deduction.  Going Concern has more.

Peter Reilly, Warren Buffett And George Soros Want Higher Estate Tax Than Obama Proposes


In Iowa he’d have to collect sales tax too.  The Tax Court yesterday told a Houston patrolman learned that he was in independent contractor when performing security services off-duty.  From the decision (citations omitted):

An employment relationship is indicated when the service recipient has the right to control the details and means by which the worker performs the services.  In contrast, independent contractor status is indicated where the opposite is true.  This factor is generally critical in determining the nature of a working relationship.  Petitioners did not demonstrate that the third parties maintained the requisite right to control Mr. Specks in the performance of the security services.

Also, his employers clients didn’t withhold taxes from his payments.  If there’s no withholding, that’s a strong clue that you are not an employee.  Off-duty officers in Iowa are also expected to collect sales tax for their services.  (Specks, T.C. Memo 2012-343)


Jack Townsend links to a study of plea agreements in federal criminal cases.  While much of his post is of interest only to attorneys, this quote from the study should be read by anybody tempted to file a return (or not file) based on the idea that the income tax is unconstitutional (my emphasis):

These constitutional challenges do not work out well for defendants. Almost twenty years ago, the United States Supreme Court held that a considered, fundamental disagreement with the constitutionality of the tax laws does not represent a valid defense to a charge of tax evasion. Yet even with this guidance, many tax resisters remain unwilling to concede the point, and demand to take their cases to trial. One exasperated federal judge catalogued some of the “tired arguments” advanced by these defendants: 

That defendants continue to press these arguments in court despite their nonexistent odds of success underscores how many parties simply do not behave as extrapolation from likely trial outcomes might predict.

There’s no point trying to convince tax protesters that they are wrong in theory.  All you can point out is that their arguments never work when it matters.


Patrick Temple-West,  Boehner tries to keep GOP ranks behind him, and more (Tax Break)

TaxGrrrl,  Boehner, Obama Talks Heat Up But Still No Deal On Taxes, Spending


Jason Dinesen,  What Couples in Same-Gender Marriages Should Be Doing, Tax-Wise, Before Supreme Court Ruling.  I think it’s likely the court will require the IRS to recognize same-sex marriages, and Jason’s post is a must read for affected taxpayers. 

Paul Neiffer,  File Your Gift Tax Return.  It gets the statute of limitations started.

David Brunori,  Time To Get Rid of the Deduction for State And Local Taxes.  (  When the taxes arise from business income, like from S corporations and partnerships, I disagree.  It any case, it should only come with rate reductions.

Brian Strahle,  State Budgets and Taxes:  What Will Happen in 2013?

Jim Maule,  Ohio as Role Model for Tax Policy

Buzz time!  It’s Wednesday somewhere, so Robert D. Flach has a new roundup of good tax stuff.

The Critical Question:  Is your response to taxes genetic? (Kay Bell)


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