Most people aren’t working today, as they are too busy spending like there’s no tomorrow. But the Tax Update, between the first round of turkey and today’s round two, has much to be thankful for.
I am thankful I don’t have 50 employees. From Jillian Kay Melchior at The Corner we get this great graphic that shows how Obamacare penalties may make you regret that 5oth hire:
(1) Whereas, the U.S. government is in desperate need of revenue.
(2) Whereas, Warren Buffet is worth tens of billions of dollars, almost all of which is destined for private foundations and thus will completely escape federal tax.
(3) Whereas, Warren Buffet has publicly proclaimed that he is undertaxed.
(4) Resolved, the U.S. government should pass legislation that gifts to foundations in excess of a $20 billion lifetime exemption will hereinafter be taxed at 55%, the normal inheritance tax rate.
Fairness, Warren, fairness!
I am thankful that Megan McArdle, who (deservedly) has a much bigger audience than the Tax Update, has posted some excellent tax policy posts:
Kevin Drum and Dave Weigel take off after rich people who don’t understand that they only pay marginal tax rates on the extra dollars they earn above taxation thresholds. ”This isn’t true, of course. Obama is only proposing to raise tax rates on income over $250,000, so if your income goes up to $251,000, you only pay the higher rate on the extra $1,000. The tax bill on your first $250,000 stays exactly the same.”
Their analysis is basically sound, except for the fact that it is not quite true. They have forgotten to look at deduction phaseouts, surtaxes, and the AMT, which are not taxes on marginal income.*
Followed up by:
And then by Still More Tax Wrinkles on the way the tax law has surprising and painful definitions of “highly-compensated” employees.
I am thankful the IRS has decided to defer until 2014 the regulations for capitalizing expenditures for tangible property. (Notice 2012-73) Now I don’t feel so bad for not having read them yet.
I am thankful I never thought it was a good idea to evade taxes by having money due to me paid to my spouse instead. Criminal mastermind, that guy.
I am thankful for all of the other tax bloggers who give me much to link to and think about, link, and agree or disagree with:
Jana Luttenegger, Giving Back After Hurricane Sandy (Davis Brown Tax Law Blog)
Trish McIntire, Bye Bye NOLs – Kansas
Patrick Temple-West, Congress seeking ways to raise taxes but leave tax rate as is, and more
Joseph Henchman, South Carolina Tax Collector Leaves After Cyberattack Accesses Taxpayer Records. He should be leaving on a rail with a tar-and-feathers ensemble.
Robert D. Flach, 1099-K PROBLEMS HAVE NOT GONE AWAY
Most of all, I am thankful for great clients and readers that make the Tax Update possible and fun. Thanks!