There’s been a fair amount of talk about reforming the tax system for big corporations. It’s a good idea, considering how out of line our corporation tax system is with the rest of the world, with its high rates and worldwide reach. But Andrew Lundeen is absolutely correct in saying Small Businesses Need Tax Reform, Too:
Many small businesses file taxes as pass-throughs, which mean the business owners pay the business tax on their personal income tax form.
About 95 percent of businesses are pass-throughs accounting for 54 percent of business income.
Much of this income is earned by high-earners. In fact, almost all job creators (small businesses with more employees than just the owner) earn over $100,000. Even more so, 67 percent of employer business income is earned by business owners with income of over $500,000.
Currently, many of these small businesses with employees face a “top marginal rates on average between 44.5 percent and 47.5 percent and as high as 51.8 percent in California.”
This means that for over 67 percent of the business income created in the United States, for every dollar these businesses earn, they pay a dollar in taxes. That is a dollar that those businesses are unable to reinvest in new equipment, higher wages, and new jobs.
When you tax “the rich,” you tax “the guy who hires people.” And you reduce his ability to do that.
Paul Neiffer, When Zero Equals $380 Now Equals $5,760. How the “Affordable” Care Act can clobber somebody with no net income other than social security if they like to play the slots.
Howard Gleckman, Could the GOP Boost Tax Reform By Adding the Idea to the Debt Limit?
Christopher Bergin, We Need a Tax Professional to Run the IRS
The IRS culture is in bad shape. There’s an arrogance in the culture that the national taxpayer advocate has been warning us about. The tax law is not black and white. Genuine disagreements between the tax administrator and honest taxpayers should not be handled in a guilty-until-proven-innocent ecosystem.
That’s a novel thought — have somebody who knows something about taxes run the tax agency. The hard part will be finding a docile political hack who knows something about taxes.
TaxGrrrl, Achtung Baby: Bono Defends U2 Tax Moves If you slam somebody for legally paying less taxes than they might otherwise, you should forego claiming any deductions on your own return to set a good example.
TaxProf, The IRS Scandal, Day 141
Kay Bell, IRS can’t account for $67 million to implement Obamacare Remember, we need to increase IRS funding.
Jack Townsend, Taxpayer Judicially Estopped from Refund For Taxes Admitted in Plea Agreement If you specify an amount of taxes you’ve evaded in a guilty plea, don’t be surprised if that’s the amount the IRS wants to collect.
Tax Justice Blog: New Research: Blame Congress, Not Hybrids, for Road-Funding Shortfall
Rita Crundwell is a name that will live on in introductory audit textbooks for years to come. Over two decades she looted the municipal treasury of Dixon, Illinois, to live lavishly and finance a big horse-breeding operation.
Her looting binge is over, but accounting firms that did business with Dixon are stuck with the hangover, reports Going Concern in CliftonLarsonAllen Settles with Dixon for $36 Million Over Crundwell Fraud:
In addition to CLA coughing up their share, Fifth Third Bank will pay $3 million, and the city’s auditor Sam Card will pay $1 million for a nice round sum of $40 million total, according to Saukvalley.com.
If the person who keeps the books and cashes the checks never seems to take a vacation, maybe you need her to take one.
Note to readers: Technical problems with the update today, so it’s short and late.