Posts Tagged ‘Rudy Penner’

Tax Roundup, 12/19/2012: B is for Boehner. And Blizzard.

Wednesday, December 19th, 2012 by Joe Kristan

20121219-1Plan B.  House Speaker Boehner has proposed a “Plan B” that would increase the top rate to 39.6% for taxpayers with taxable income over $1 million.  Tax Analysts reports ($link):

Boehner’s Plan B would also permanently extend the alternative minimum  tax patch and the current-law estate and gift tax rules with a portable  $5 million individual exemption and a 35 percent top rate. Dividends and  long-term capital gains would be taxed at 15 percent for income below  $1 million and at 20 percent above that threshold. The bill would not  renew any tax extenders, emergency unemployment insurance, or the 2 percentage point payroll tax cut, and would not raise the federal debt limit.

It’s nice to see a permanent AMT fix in both the Boehner and Obama plans.  I like not renewing any of the “extenders,” but I suspect he plans to do that separately next year anyway.  An estate tax fix is also welcome.  It looks like there is no hope continuing the 15% rate for dividends or capital gains.

 

Meanwhile, a blizzard approaches.  From KCCI.com:

Six to 12 inches of snow is expected by Thursday morning. The heaviest snow axis will be along a line from near Des Moines to Tama. The lowest amounts are expected near the Missouri border. Snow drifts several feet deep will be possible given the strong winds.

Winds/visibility:

Winds will become very strong Wednesday night from the north northwest. Sustained winds of 25 to 35 mph are expected with gusts over 45 mph possible.

I know what I’m doing tomorrow morning.  Hello, shovel.

 

Fiscal Cliff Notes

Wall Street Journal,  Boehner Weighs ‘Cliff’ Backup Plan

Janet Novack,  Strange Bedfellows: Boehner, Buffett And Obama All Support Millionaires Only Taxes

Andrew Lundeen,  How Many Days of Christmas Could the Fiscal Cliff Buy? (Tax Policy Blog)

Joseph Thorndike,  Republicans Shouldn’t Pin Their Hopes on The Origination Clause.  “In practice, the Origination Clause is more a nuisance than an obstacle to tax-happy senators.”

Howard Gleckman, What Adjusting the Price Index Would Mean for Taxpayers (TaxVox)

Rudy Penner,  How to Control Entitlements: A Challenge Ike Did Not Face (TaxVox)

 

TaxProf,  Fleischer: How Local Tax Rates Affect High-Income Professionals:

The study finds that an increase in the marginal income tax rate leads to a decrease in the average skill of the NBA free agents that migrate to that team. Unlike in baseball, basketball teams in high-tax jurisdictions actually end up with a worse free-agent talent pool, all else equal. …

These papers do serve as a useful reminder that if the goal is to remedy income inequality, state and local taxes are a weak policy instrument. To the extent that tax policy is used to achieve redistribution, redistribution should take place at the federal level.

Despite what Warren Buffett, the President, and the Speaker of the House say, marginal rates matter.  That’s also true at the state level; when you have to bribe businesses to locate in your state, as Iowa likes to, you have a sick tax systemRelated: David Brunori, If the Shoe Fits: Oregon Lawmakers Get Rolled (Tax.com)

 

Kay Bell,  Cupid says note year-end marital status; Reindeer Year-end Tax Games Tip #6

Paul Neiffer,  Annual Exclusion Does Not Eat Into Lifetime Exclusion.

Trish McIntire,  Identity Theft PIN

Peter Reilly,  Tax Court Not Quick To Find Abuse In Innocent Spouse Case

TaxGrrrl,  Lawmakers, Guns and Money: Where Do We Go After Sandy Hook?

Robert Goulder,  Starbucks Pays More Tax Than It Owes (Tax.com).  That’s silly.

It’s Wednesday, so it’s time for a fresh Buzz.  Robert D. Flach obliges.

 

The world is saved from its most dangerous criminals.  Quebec Police Arrest 3 in Maple Syrup Heist

 

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Tax Roundup, 12/18/2012: Fiscal cliff rumors — higher threshold for rate hikes; deduction benefit limits.

Tuesday, December 18th, 2012 by Joe Kristan

20121116-1iabizThe “Fiscal Cliff” negotiations seem to be heating up.  The inane haggling over the final version of the inevitably awful tax law that we will have for this year and next year seems to have heated up a bit yesterday.  Details are cloudy and could change, but here’s what it looks to me like they are talking about for taxes:

  • An increase of the top ordinary income tax rate to 39.6%, but at a level of $400,000 or higher; the President had been holding out for a $250,000 threshold.
  • Some stupid restriction in the tax benefits of itemized deductions — perhaps capping the value of the deductions at 28%.
  • An AMT patch retroactive to last year and extension of all of the “expiring provisions.”

The President’s most recent offer includes some surprisingly good tax policy in the midst of the general awfulness of the tax increase plans.  From the Wall Street Journal:

On the tax side, the administration’s biggest proposal would permanently
extend relief from the alternative minimum tax. That’s a provision
designed decades ago to target the wealthiest Americans that now hits
tens of millions of middle-class households, in part because it wasn’t
indexed for inflation.

That would be great news.  The politicians play with fire by temporarily increasing the AMT exemption every year or two as a cheap ploy to pretend they will receive additional AMT revenue after the temporary “patch” expires — allowing them to appear slightly less irresponsible.

Also:

The administration’s new proposal also would permanently extend a raft
of temporary tax breaks that Congress has passed over the years,
benefiting businesses as well as individuals. Notable examples include
the research and experimentation credit for businesses, as well as the
deduction for state and local sales tax for individuals.

While I would prefer just letting these expiring provisions expire, I’d rather they be made permanent than going through the charade of re-enacting them every year or two just to play stupid budget games.

Fiscal Cliff Notes:

Nick Gillespie & Veronique de Rugy,  Obama and Boehner, Both Reckless Spenders

New York Times,  Obama’s New Offer on Fiscal Crisis Could Lead to Deal

Russ Fox,  Fiscal Cliff Deal Near?

Kay Bell,  Boehner offers Obama a $1 million top income tax bracket in fiscal cliff talks

Ashlea Ebeling,  Millionaires Are Doing Roth Conversions Before The Fiscal Cliff Hits, Should You Too? (Forbes)

Jason Dinesen,  An Example of What Could Happen if an AMT Patch Isn’t Passed

 

IRS extends employee – independent contractor settlement program.  The IRS yesterday announced (Announcement 2012-46) that it is extending its program to resolve the classification of workers as employees or independent contractors.

 

Rudy Penner,  How Eisenhower and Congressional Democrats Balanced a Budget (TaxVox).  They spent a lot less, that’s for sure.

Dan Alban,  IRS Rule Threatens Tax-Preparing Entrepreneurs

Jeremy Scott,   Democrats Should View Japan as a Warning (Tax.com)

Joseph Henchman,  IRS Reverses Course, Will Continue Providing Migration Data (Tax Policy Blog)

Paul Neiffer,  What Does Unified Credit Mean?

Robert D. Flach,  WHAT’S NEW FOR NEW YORK STATE INCOME TAXES FOR 2012

TaxGrrrl,  Actor Called Out As Unpatriotic For Move Over Taxes Fires Back.  So patriotism means letting them pick your pocket?

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