O. Kay Henderson reports that maybe the Branstad focus on property taxes is misplaced in Economist: Iowa income taxes not competitive:
A Midwestern economist says Iowa policymakers should focus on cutting income taxes rather than property taxes. Ernie Goss, an economist at Creighton University in Omaha, says Iowa’s income tax rates are fifth highest in the country.
“In terms of what Iowa needs to look at, in my judgement, given what’s going on in Kansas, what’s about to go on in Nebraska — Iowa’s neighbors — you need to look at income taxes, in terms of being more competitive,” Goss says.
Iowa property taxes are too high, but income taxes matter more for many taxpayers. While property taxes are a big deal to companies that own real estate, like a manufacturer or a big insurance company, income taxes can mean a lot more to a start-up or a tech company. Fortunately the Tax Update’s Quick and Dirty Iowa Tax Reform Plan is ready to go!
Making a dent in the deficit! A chart shows how much the tax increases on “The Rich” will reduce the $1.2 trillion federal deficit (new taxes in green, deficit in red)
Either the government spends a lot less, or taxes go up a lot for everyone. The rich guy isn’t buying
The IRS isn’t buying, either. Tax Analysts reports Better IRS Enforcement Could Net $1 Billion More a Year, Says GAO ($link). $1 billion is less than 1/1000 of the deficit. They won’t audit their way to solvency.
Breaking tax news from the Eisenhower administration:
Andrew Biggs, Were taxes really higher in the 1950s?
It’s Monday. Do you know if your payroll taxes have been remitted? Another sad story of a payroll service provider who decided he needed taxes withheld from his clients more than the IRS did. Digtriad.com reports that Arthur Weiss of Winston-Salem, North Carolina is going away for 15 years:
Case documents show Weiss operated professional employer organizations (PEOs), which provided payroll-related services to client companies. For his client companies, Weiss agreed to pay the employees, withhold and remit federal and state taxes, prepare and file the federal and state employment tax returns and provide workers compensation insurance (WCI).
Weiss did pay the employees and withhold the employment taxes, but he failed to remit the employment taxes, keeping them for his personal use.
PEOs that file taxes under their own names and ID numbers have a hidden danger: their clients can’t verify that the IRS has received their payments via the Electronic Federal Tax Payment System (EFTPS). Employers can use EFTPS to monitor payments when they use a payroll service that reports employee taxes under the employer’s own name and Tax ID number. This makes it necessary for taxpayers to investigate PEO-type providers very carefully before trusting them with payroll services. If your payroll taxes are stolen by your payroll provider, the IRS will come after you to collect. Not many employers can afford to pay payroll taxes twice.
Russ Fox has more.
Few thieves report their income honestly. From WHOTV.com:
Disgraced former Peregrine Financial CEO Russell Wasendorf Sr. is in jail awaiting sentencing for embezzling over $200-million in customer funds, fraud, and lying to federal regulators.
Now the state says he may have also cheated on his taxes.
Records show the [Iowa Department of Revenue] filed an assessment in November against Russ and Connie seeking $14.1-million in unpaid taxes and penalties to Iowa.
Good luck collecting anything.
Fiscal Cliff Notes:
Elected representatives at work. Tim Carney: Baucus rewards ex-staffers with tax breaks for their clients:
Tax breaks for Hollywood, NASCAR, windmills, algae and multinational corporations ended up in the “fiscal cliff” bill thanks to President Obama, according to Senate Republican sources. But they were spawned by a web of lobbyists, donors and staffers surrounding Democratic Sen. Max Baucus of Montana.
Baucus’ Finance Committee passed a bill in August extending 50 expiring deductions and credits for favored industries. At Obama’s insistence, the Baucus bill was cut and pasted word for word into the cliff legislation.
But it’s all for our own good, I’m sure.
William Perez, President Signs the American Taxpayer Relief Act into Law
The ‘fiscal cliff’ bill and Iowa entrepreneurs. My new post at IowaBiz.com, the Des Moines Business Record blog for entrepreneurs.
Paul Neiffer, Up to Ten Capital Gains Tax Rates for 2013!
Janet Novack, The Forbes Guide To The Fiscal Cliff Tax Deal
Kay Bell, Ravens, Redskins and tax revenue
Brian Strahle, Minimize Restructuring Costs with State Tax Due Diligence
Peter Reilly, War Tax Resisters – Don’t Call Them Frivolous.
Patrick Temple-West, Inquiry into tech giants’ tax strategies nears end, and more (Tax Break)
Kaye A. Thomas, American Taxpayer Relief Act
Tax Trials, Senate Confirms Two New Tax Court Judges
Robert D. Flach ponders whether he should rename his Buzz roundup of tax news. Don’t do it, Robert!
Make up your minds!