Posts Tagged ‘Amity Shlaes’

Tax Roundup, 1/7/2013: Economist says Iowa’s problem is income tax, not property tax. And: thieves don’t report all of their income?

Monday, January 7th, 2013 by Joe Kristan

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)

Fiscal cliff taxes vs deficit

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:

Amity Shlaes,   Think Obama’s Tax Hikes Are Low Compared With Rates Of The 1950s? Think Again.  (Via Instapundit)

Andrew Biggs,  Were taxes really higher in the 1950s?

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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:

TaxProf,  WSJ: The Stealth Tax Hike — Why the New $450,000 Income Threshold Is a Political Fiction

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 entrepreneursMy 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

TaxGrrrl,  10 Things You Should Know About The Fiscal Cliff 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!

Tax Analysts, New Congress’s Partisanship, Inexperience May Hurt Chances for Tax Reform 

The Hill:  Tax reform more likely after ‘fiscal cliff’ agreement, say House Republicans. (Via Instapundit)

 

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But high-speed golf carts are essential to our green future!

Monday, November 30th, 2009 by Joe Kristan

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Tax incentives stink.
Don’t just take my word for it. Listen to Amity Shlaes, author of a ground-breaking study of how the government put the “Great” in the Depression, in a Tax Analysts piece ($link):

The greatest problem with tax incentives is that they distort the economy in ways that hurt us all in the long run. The tax deductibility employers enjoy when they buy health insurance for workers was first offered decades ago in the name of a righteous goal: encouraging those employers to provide coverage for uncovered citizens. But the third-party payment system that resulted provided a significant disincentive for doctors and patients to economize on healthcare. No one really knew who was paying, so no one took the costs seriously.

And they aren’t cheap:
Removing all tax expenditures, from the child credit to estate tax breaks, would allow lawmakers to cut the top tax rate from 35 percent to 20 percent, as scholars Leonard Burman, Eric Toder, and Christopher Geissler pointed out in a recent Urban Institute-Brookings Institution paper. Or, to put it another way, eradicating tax incentives would make us enough to extend Medicare and Medicaid without cutting benefits.

There’s a great example in the Sioux City Journal of how a tax credit for “green” vehicles works to take away what little exercise exists in a round of golf. The credit for “low-speed electric vehicles” has triggered a stampede to the cart dealers:
Some Siouxland golf cart dealers report a flood of interest from linksters wanting to tap a federal income tax credit that can slice the price of the machines in half or more. Out of stock, they’re waiting for new orders to arrive.
“Our sales usually slow down this time of year when the weather gets nasty,” said Jack Mills of Midwest Golf Car in Tea, S.D. “This year, our phones have been ringing off the hook. This has taken us by surprise and we’re trying to meet the demand.”
Why the big rush? To qualify for the credit, which amounts to several thousand dollars, depending on the car battery kilowatt capacity, purchases must be completed by Dec. 31.

The credit is available for carts that are street legal, and they have to be faster than standard carts:
To qualify for the tax credit, the plug-in electric vehicles must have maximum speeds between 20 and 25 miles per hour — nearly twice that of traditional golf carts.
“They’re probably overqualified for golf courses, but that’s probably where a lot of these are going to end up at,” Mills said.

So when you pay your tax bill next April – and a lot of people will find themselves paying — you can at least have the consolation that you are paying so some old guy at the country club could get a great deal on his own personal super-cart.
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