Tax Freedom Day measures the total yearly tax burden imposed on Canadian families by the federal, provincial and local governments.
“Without our Tax Freedom Day calculations, it’s nearly impossible for Canadian families to know all the taxes they pay each year because federal, provincial and local governments levy such a wide range of taxes,” said Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of Canadians Celebrate Tax Freedom Day on June 10, 2015.
The list of taxes includes income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, vehicle taxes, profit taxes, import taxes, “sin” taxes and more.
In 2015, the average Canadian family (with two or more people) will pay $44,980 in total taxes or 43.7 per cent of its annual income.
The lateness of the date may surprise some U.S. tax practitioners who are familiar with Canada’s low 15% top corporation tax rate — less than half the U.S. 35% top rate. But Canada more than makes up for it with high provincial taxes and a national sales tax.
Business Activity Tax Simplification Act of 2015 Expands the federal prohibition against state taxation of interstate commerce to:
(1) include taxation of out-of-state transactions involving all forms of property, including intangible personal property and services (currently, only sales of tangible personal property are protected); and
(2) prohibit state taxation of an out-of-state entity unless such entity has a physical presence in the taxing state. Sets forth criteria for:
(1) determining that a person has a physical presence in a state, and
(2) the computation of the tax liability of affiliated businesses operating in a state.
Congress last addressed these rules in 1959. The world of multistate commerce today would hardly be recognizable to an Eisenhower-era tax planner. States constantly try to expand their reach to non-voters in other states. State taxes are becoming the largest portion of the tax compliance bill to more and more small businesses. Simplification is way overdue. Unfortunately, this bill will probably go nowhere.
Gretchen Tegeler, Public sector health plans are costly for taxpayers (IowaBiz.com):
Health exchange plans try to encourage members to be conscious of the cost of services. They require subscribers to pay 100 percent of the cost of nearly everything, up to the deductible. The deductibles are set deliberately high — $3,750 for a single plan and $7,500 for a family plan in our example. Public employee plans, on the other hand, which already cost employees very little in premiums, tend to have extremely low co-pays and deductibles. So employees have minimal exposure to the actual cost of services, and minimal incentive to stay healthy.
When you don’t have to compete to stay in business, this is what happens.
Another ACA Success Story. The Treasury Inspector General for Tax Administration reports that delays in getting information from insurance exchanges will make it impossible for the IRS to verify all health insurance subsidy claims.
Hank Stern, Yeah, about that promise… (InsureBlog).
Jason Dinesen, Are HRAs Always Appropriate for Sole Proprietors? Part 3
Timothy Todd, Ninth Circuit Vacates Tax Court Decision On Transferee Liability. The case involves a “Midco” transaction involving the use of a loss company to give a buyer an asset deal and a seller a stock deal in the sale of a C corporation.
TaxGrrrl, Footballer Lionel Messi To Face Trial On Tax Fraud Charges. That’s a soccer player, in case you are trying to remember what NFL team he’s on.
Caleb Newquist, Who Wants to Work at a Small Accounting Firm? (Going Concern). If it’s you, let me know.
Jim Maule, The Return of the Lap Dance Tax Challenge. “Despite having a fairly good grasp of tax law generally, and a passable understanding of sales taxation, I would have struggled with this case because, as others can attest, I don’t quite understand art.”
David Brunori, Brownback Can’t Catch a Break (Tax Analysts Blog).
I think Brownback had the right idea and the wrong approach. He wanted to reduce tax burdens on Kansas citizens. That is laudable for two reasons. First, in the long run, lower taxes will lead to greater economic growth. Second, the money belongs to Kansans. Politicians don’t have an inherent right to people’s property. And it doesn’t matter whether lawmakers’ motivations are noble or venal — it’s not their money.
But I think Brownback made a terrible error when he exempted from tax all income from passthrough entities.
That approach is exactly backwards. You should broaden the base when you lower the rates. And while you should make sure you don’t tax income twice, you want to catch it once.
Kay Bell, Louisiana lawmakers ask D.C. lobbyist for tax hike permission. “Spoiler alert: Americans for Tax Reform’s Grover Norquist says ‘no'”
Scott Greenberg, Progressive Policy Institute Calls for Cutting Corporate Tax Rates (Tax Policy Blog). “Right now, companies can take advantage of lower tax rates in Europe by relocating their legal location through an inversion. But, if new international tax rules force companies to actually move jobs overseas to take advantage of Europe’s lower tax rates, companies would likely shift jobs away from the U.S. as well.”
TaxProf, The IRS Scandal, Day 762. He links to a piece arguing “First, the IRS, while effective at collecting taxes, is a poor agency to task with regulating advocacy organizations, especially those, such as the advocacy groups covered under 501(c)(4), that cannot offer donors a tax deduction.” Actually, every non-revenue task assumed by the IRS weakens their effectiveness in collecting taxes.
Playing hard to get. Does Saying “No Chance” Increase the Chances of Reform? Renu Zaretsky’s TaxVox headline roundup covers tax reform, internet taxes, and patent boxes today.
News from the Profession. The Greatest Reality TV Accountants, Awarded and Ranked (Leona May, Going Concern). I’d love to see Robert D. Flach do this.