Kansas passes Tax Act meaning that business owners are not taxed at all on income derived from business profits. "Who will still be paying Kansas income tax? Only three groups: 1) employees, 2) some retirees and 3) individuals whose investments are so modest that they cannot afford to create a trust or partnership to shelter their investment income." The $3.7bn pa cost of the tax cuts is said to create the risk of a $2.5bn pa deficit by 2018.
Following an amendment in the recent Conservative Party budget, VAT on 'Baked Goods' will be re-instated. In response, the question of whether or not David Cameron once ate a Greggs pasty infects the British press. The Telegraph have a live blog covering what has been termed by some Pasty Gate
Though no longer a Republican presidential candidate, Herman Cain has resumed publicizing his bold, marginally practical flat-tax plan (previously). Cain Connections has released several new videos including: "9-9-9 The Movie: Slaying the Tax Monster," [YT] a 5-minute animation, and "This is the Economy on Stimulus," a bleak, child-narrated criticism of the stimulus. [more inside]
Inside Romney's Tax Returns: A Reading Guide. From ProPublica.
This is why I don't give you a job. Hungarian blogger Jakab Andor breaks down the numbers and explains why taxes and regulations make it highly unappealing for him to start a small business employing people in Hungary. He also argues that these same factors make women and older people particularly unappealing prospects. His comments generated quite a bit of controversy (warning: most comments in Hungarian), to which he responded with an offer.
Effect of Herman Cain's proposed "9-9-9" tax reform plan on average household tax liability. Cain is leading the field of GOP Presidential candidates in polls of Iowa, South Carolina and Florida. Previously 1 2
If you're occupying a financial center, you might want to pass the time with a game of Monopoly. Though Hasbro gives ahighly contested "official history" asserting that the game was invented by an unemployed Philadelphia man, it actually originated 30 years earlier as The Landlord's Game, an anti-capitalist protest against the movement of wealth from poor to rich via real estate profiteering. Designed and patented by a Georgist Quaker woman, Elizabeth Maggie, in 1904, it was published by her Economic Game Company, but also spread far and wide - including in circles of socialist-leaning academic economists like Scott Nearing - as a hand-drawn and independently printed folk game. [more inside]
A few weeks ago the USA Weekend, an insert to USA Today, published some very bad advice on rejecting pay raises in order to avoid a higher tax bracket, eagerly confusing average taxes for marginal tax rates. Corrections were made. Meanwhile, worries over pay raises may reflect a more common fear based on a widespread misconception of progressive tax rates.
Subsidizing Healthy Foods by Taxing Unhealthy Foods. Mark Bitman proposes a "national program that would make progress on a half-dozen problems at once — disease, budget, health care, environment, food access and more — while paying for itself." [NYT] [more inside]
Clean Energy Future. Australia has embarked on a tradeable carbon permit system, covering about 60% of emissions, beginning on 1 July 2012, and mixing in substantial progressive tax reform, putting a line under a very long debate on this matter indeed.
Ten Charts that Prove the United States Is a Low-Tax Country from the Center for American Progress.
In the wake of ever deeper budget cuts, public schools have begun charging students for basics, such as registering for honors or elective classes.
The Destruction of Economic Facts - "Renowned Peruvian economist Hernando de Soto argues that the financial crisis wasn't just about finance—it was about a staggering lack of knowledge" (via) [more inside]
9 Things The Rich Don't Want You To Know About Taxes - "4. Many of the very richest pay no current income taxes at all: Paulson made himself $9 billion in fees in just two years. His current tax bill on that $9 billion? Zero... 9. Other countries do it better: no one in Germany or the rest of the modern world goes broke because of accident or illness" (via) [more inside]
"Customers wanting a RAL paid Jackson Hewitt a $24 application fee, a $25 processing fee, and a $2 electronic-filing fee, plus 4 percent of the loan amount. On a $2,000 refund, that meant $131 in charges—equivalent to an annual interest rate of about 170 percent—not to mention the few hundred bucks you might spend for tax preparation."
With the crackdown on smoking and higher cigarette taxes in New York City, people who sell individual cigarettes, also known as loosies, are rapidly gaining new customers.
Why Not a Negative Income Tax? "What kind of program could help protect every citizen from destitution without granting excessive power to bureaucrats, creating disincentives to work, and clogging up the free-market economy, as the modern welfare state has done? [Nobel-prize winning economist Milton] Friedman’s answer was the negative income tax, or NIT."
In Norway, Start-ups Say Ja to Socialism - We venture to the very heart of the hell that is Scandinavian socialism—and find out that it's not so bad. Pricey, yes, but a good place to start and run a company. What exactly does that suggest about the link between taxes and entrepreneurship?
How Private Is 'Private Charity'? Private charity may be more accurately described as "private donations coupled with involuntary, tax-financed public subsidies." And it's not fair: "very low-income people paying only payroll taxes get hardly any leverage for their donations. Very high-income people in states with high income-tax rates – such as New Jersey and New York – can through the tax code virtually double the money funneled to a charity per dollar of their own sacrifice." (previously)
Jonathan Blattmachr, one of the country's leading estates and trusts experts, feels that helping his clients reduce their tax liability helps the IRS close loopholes that he and his colleagues use. As with most attorneys, there are some clients who weren't happy with his work, but Mr. Blattmachr pushes on with his efforts.
The Honourable Gordon Campbell has resigned as Premier of British Columbia. Citing his spectacular unpopularity, his resignation comes after almost a decade in power. His tenure has been dogged by scandal, and most recently, a barrage of protest over the newly implemented HST. His most lasting legacy may prove to be the implementation of North America's first carbon tax.
A former magazine writer in his late fifties moves to San Diego and lives on very little money indeed. In the October 1977 issue of The Atlantic, he describes the stratagems behind his thriftiness. [more inside]
Mayor Michael Bloomberg has asked federal permission to ban the use of food stamps to buy sodas and sugary drinks in New York City. In an op-ed in the New York Times, the city and state health commissioners argued in favor of Bloomberg's proposal, saying the practice amounts to "an enormous subsidy to the sweetened beverage industry." [more inside]
Earning $250,000 Does Not Make You Rich, Not in My Town. A controversial blog post from a University of Chicago Law professor makes its way around the web as the debates about president Obama's tax plan get louder. "Our combined income exceeds the $250,000 threshold for the super rich...The problem is, we can’t afford it. Here is why." [more inside]
Bruce Bartlett, senior policy analyst in the Reagan White House, speaks out against Republicans - The monumental hypocrisy of the Republican Party is something amazing to behold. And their dimwitted accomplices in the tea-party movement are not much better. They know that Republicans, far more than Democrats, are responsible for our fiscal mess, but they won't say so. And they adamantly refuse to put on the table any meaningful programme that would actually reduce spending. Judging by polls, most of them seem to think that all we have to do is cut foreign aid, which represents well less than 1% of the budget. [more inside]
Single Link NYT Post: A Tax-Form For The Marginally Employed.
This morning, in Austin, Texas, a Piper Cherokee single-engine plane [was] crashed into an office building partially occupied by the IRS. It appears to be the work of an individual, but the story keeps getting weirder. The suspected person may have also burned his house down this morning.
Where does my tax money go? From USA Today, a calculator and graph that lets you enter your salary and shows you how your tax dollars are spent. You can also change the year shown, so that you can compare now and then.
Alan Grayson (D - FL) has introduced a bill to tax corporate political campaign donations at 500% (via). The bill is called the "Business Should Mind Its Own Business Act."
Blow the whistle on the rich and powerful, go to jail, while they avoid jail. Tax Notes, the weekly publication on federal taxation, announced its "2009 Tax Person of the Year" - a whistleblower from Swiss banking giant UBS whom it called "the Benedict Arnold of the private banking industry." Bradley Birkenfeld came forward and exposed the tax fraud dealings of UBS which led thousands of millionaire tax cheats to come forward and pay billions in back taxes. His reward? Tomorrow he goes to jail. The Government Accountability Project (GAP), a Washington watchdog organization that has extensive whistle-blower experience, says a chilling effect is already apparent: a senior executive at a European bank that offers similar U.S. tax shelters is having second thoughts about going public because of the Birkenfeld case.
On January 1st, the U.S. estate tax will disappear. For exactly one year. Then it will come back higher on Jan. 1, 2011. Will lots of old rich people die? [more inside]
Secrecy Jurisdictions: Mapping the Faultlines highlights research on 'the jurisdictions and mechanisms used to facilitate illicit financial flows worldwide, including especially flows from developing countries. Those flows, from developing countries alone, are estimated at $850 billion - US$1 trillion per year. At the core of this project is the biggest survey of tax havens, or secrecy jurisdictions as we prefer to call them, that has probably ever been undertaken.' A project of the Tax Justice Network.
But most years were pretty close to $24,000. Despite his high income, he was not able to save or, as he said, “amass capital.” Fitzgerald reported every dollar he had entered in his ledger. He was impeccably honest in his reporting. But Fitzgerald did press tax conventions on some occasions. On his 1924 tax return, he deducted $2,450 as a business expense for a “trip to Europe for the purpose of obtaining material for stories, etc.” The American Scholar examines F. Scott Fitzgerald’s tax returns.
Tax authorities using social networks to find tax cheats Yet another reason to be careful who you accept a friend request from.
Economists Matthew Weinzierl (HBS) and Gregory Mankiw (Harvard) make a utilitarian case for a height tax. [more inside]
[E]ven if you are unemployed you still receive a base amount of [vacation money] from the government, the reasoning being that if you can’t go on vacation, you’ll get depressed and despondent and you’ll never get a job.After a year and a half of living in the Netherlands, American writer Russell Shorto compares the Dutch "welfare state" to the tax, health care and social security systems of the United States.
But does the cartoon image of [the Dutch system] — encapsulated in the dread slur "socialism," which is being lobbed in American political circles like a bomb — match reality? Is there, maybe, a significant upside that is worth exploring? [...] I think it’s worth pondering how the best bits might fit.
The Average Man's Tax Dollars from thetoiletpaper.com
The Tax Gap - "The Guardian will examine the extent of tax avoidance by big business, day-by-day over two weeks. We are naming more than 20 major British companies, and analysing their secretive tax strategies to ask: are they paying their fair share?".
The Next New Deal With the vaunted post-Cold War "Peace dividend" evaporating, the United States found itself unable to invest adequately in either its infrastructure or its children. Eventually people began to talk of another Great Depression, before the coming of the next New Deal.
Hillary and Bill Clinton's tax returns 2000 - 2007
The Every Child Matters Education Fund, a non-profit organization that lobbies for better education and services for children, released a report (audio accompanies link text) this week that reveals that geography is as important as race and class in determining which children succeed, and which fail. The five highest ranking states, based on such factors as child poverty, infant mortality rates, juvenile incarceration rates and the like, were all in New England, with Vermont on top. The bottom five were all in the central South, with Louisiana coming in last... States with a high tax burden did a far better job of minimizing childhood poverty than low-taxing states. Via John Ibbitson in the Globe and Mail [more inside]
A very special 'This American Life' about an administration with the endemic belief that laws only apply to the little people, and a limitless refusal to concede on even petty issues, no matter the costs. The highlight is about immigrant widows of US citizens (30:50). The program also discusses the constitutional beliefs of the presidential candidates. [more inside]
Chicago adds a 5-cent-per-bottle tax on bottled water. Will this reduce bottled water consumption?
The poll tax caused massive rioting in the UK. Will the pole tax move Texans to do the same? There's an interesting class-war aspect to the story. The bill specifies that the revenue generated will support sexual assault prevention programs, though the bill's legality is being litigated.
A new U.S. Treasury Report (press release) reports that tax returns from 1996 to 2005 show that income mobility in the U.S. is "considerable," with rising earnings, and top earners who often stumble. The WSJ crows. Pew releases its own research (reports, press release) on income inequality today with a multi-decade outlook, but summarizes the findings as that American families' income mobility is still highly dependent on their parents' position. Forbes and a The New Republic blog try to reconcile the reports. Meanwhile, blacks appear to be downwardly mobile.
New York State goes after Amazon "affiliates." So if you, as a New Yorker, link to your book on Amazon, you are now an independent contractor and shall be taxed accordingly (PDF). [more inside]