Today’s the last day of this season’s only extended road trip, so here are a few items to travel with.
Another top-ten finish for Iowa. In “How High are Capital Gains Tax Rates in Your State?” Kyle Pomerleau and Richard Borean at Tax Policy Blog rank state burdens on capital gains. Iowa’s 29.6% combined federal and state capital gain rate is ninth (California’s 33% is the worst).
Like so many things about Iowa taxes, it’s complicated. Some taxpayers — those who meet both a ten-year holding period and ten-year material participation test — can sell some assets (but not stock or partnership interests) and have a zero Iowa capital gain rate. Those who aren’t so blessed by the legislature get socked.
TaxGrrrl is back after the Forbes hack attack with IRS Reveals Dirty Dozen Scams For 2014. Identity theft tops the list. Take common-sense steps to protect yourself. Never send your Social Security Number or similar tax information in an unencrypted email, for example. If you need to get documents with confidential information to your preparer electronically, use a secure file transfer site.
Cara Griffith ponders What Triggers a Sales and Use Tax Audit? at Tax Analysts Blog.
Christopher Bergin says Progressivity Does Not Equal Equality (Tax Analysts Blog). “I still support a progressive tax system, just not as a method of addressing income inequality.”
There’s no evidence that an income tax system with rates short of ridiculous can affect “equality,” however you want to measure it. In fact, the fretted-over rise in inequality has coincided with a shift in taxes to “the rich.”
If you seriously tried to use the tax system to level income differences, the best you would get would be achievement of inequality by means of mass poverty.
Howard Gleckman, How 19 Million Uninsured Tax Filers Could Get ACA Coverage. (TaxVox). He pushes the awful idea of dumping responsibility for enrolling people in the misbegotten Obamacare system on tax preparers. It’s as bad an idea as giving responsibility for administering the healthcare system to the IRS. Preparers have more than enough complexity and difficulty to deal with as it is.
TaxProf, The IRS Scandal, Day 288.
Tony Nitti, Kevin Durant Calls Foul On Tax Preparer Over Improper Deductions. Funny, he didn’t seem to mind them when he signed the returns. It never pays for preparers to curry favor with clients by using bogus deductions. The same client who happily cashes the big refund check will throw you to the wolves in a heartbeat.
Tax Justice Blog, Bipartisan Rush to Win Gold Medal in Tax Gimmickry: “A lot of gimmicky bills are proposed each Congressional session, but few are quite as ridiculous as the proposal by a bipartisan group of lawmakers in the House and Senate to create a new federal income tax break for the cash bonuses received by U.S. Olympic medalists.”
I have to disagree. Many proposals are every bit as ridiculous, unfortunately, including a lot that have been enacted.