Category: Tax

Herman Cain’s Economics Advisor Was Trained in the Arts of Debits and Credits

As we mentioned, former Pizza Godfather and current GOP Presidential candidate Herman Cain’s 9-9-9 tax plan hasn’t impressed a lot of people. Bruce Bartlett called it “a distributional monstrosity” and that it “stands out as exceptionally ill conceived.” When Bloomberg’s Julianna Goldman told Cain that the ‘Berg found that his plan wasn’t revenue neutral, Cain simply said, “that analysis is […] incorrect.” Despite the haters, Cain’s plan seems to have captivated the media psyche, it has helped boost him in the polls and he says that it will be delivered in 30 minutes or less (i.e. “[it] will pass”).

Who is the mastermind behind this plan? Is it a young economics policy wonk? Is it a Ivy League economist known the world-over? Is it one of Cain’s former delivery boys who came up with the plan after sharing a jay with an extra friendly customer? NOPE! It’s Rich Lowrie. Rich Lowrie of Cleveland? No? He went to Case Western Reserve University and got an accounting degree. Still nothing?

Herman Cain says his much-touted 9-9-9 plan is the product of extensive testing and thinking, but the only man he cited as involved with its research — Rich Lowrie of Cleveland — is not a trained economist.

Instead, Lowrie — who’s the only economic adviser Cain has been willing to mention by name — is a wealth manager for a division of Wells Fargo and according to his LinkedIn page holds an accountancy degree from Case Western Reserve University. Lowrie also spent three years on the advisory board of the conservative third-party group Americans For Prosperity.

Now that we’re clear about the credentials behind one of the masterminds behind 9-9-9, don’t you feel better about it?

Herman Cain’s economic adviser is not an economist [Politico]

Warren Buffett Takes a Burlesque Approach to Releasing Tax Return Info

The Oracle of O proves to be a master tease artist:

In a letter to Republican Rep. Tim Huelskamp Tuesday, Buffett revealed that his adjusted gross income last year was $62,855,038 and that his taxable income was $39,814,784.

Buffett said he paid $15,300 in payroll taxes. Buffett also said his federal income tax bill came to $6,923,494, or 17.4% of his taxable income — two points he revealed in a New York Times op-ed in August urging Congress to tax the wealthy more.

In another act of twirling his pasties, WB repeated his challenge to all his fellow “ultra-rich” peers to whip out their tax returns. Not sure if the OWS gang has jumped on this band wagon yet but it’s worth putting out there.

Buffett made $62,855,038 last year [CNN via Felix Salmon]

You’re Not Alone If You Think Herman Cain’s 9-9-9 Tax Plan Is a Gimmick

At a minimum, the Cain plan is a distributional monstrosity. The poor would pay more while the rich would have their taxes cut, with no guarantee that economic growth will increase and good reason to believe that the budget deficit will increase. Even allowing for the poorly thought through promises routinely made on the campaign trail, Mr. Cain’s tax plan stands out as exceptionally ill conceived. [NYT via TaxProf]

New York Post Goes for the Obligatory Tax Coverage Re: Steve Jobs’s Death

The Post reports that the Jobs family can avoid a lot of taxes on the Apple stock that they will inherit from Steve if they sell the stock right away. He held about 5.5 million shares, priced at just under $370 today. Of course he also was large shareholder in Disney, with shares worth about $4.4 billion. So between those two little grips, maybe Adrienne was right about SJ. [NYP via TaxProf]

Is the IRS Going to War with Canada?

Wars with Canada turn out badly. While the Canadians are a seemingly peaceful people, content with their Tim Horton’s and their hockey, they seem to come out on top in a fight. Ethan Allen and Benedict Arnold learned that lesson early on, and things went no better in 1812.

Now IRS Commissioner Shulman is baiting Canada for another war:

Premier David Alward, one of New Brunswick’s best known dual citizens, says he has been caught in the same broad net U.S. officials have cast to catch international tax evaders.


This prominent Canadian has been dragged into a U.S. tax nightmare the same way as thousands of other well-meaning expats:

Alward was born in Beverly, Mass., and spent his early years in the United States before his family settled in New Brunswick.

“I’ve had to scramble like thousands of other people,” Alward said, adding that he is complying with the U.S. demand for tax returns going back years and detailed disclosures.

The IRS is going after offshore tax violators in a big way. It’s natural that there are more in Canada than anywhere else because of geography and economics. But the IRS approach has been to enforce traffic safety by shooting jaywalkers.

While the US taxes its citizens on worldwide income, many, maybe most, expatriates have little or no U.S. tax liability. The foreign earned income exclusion and the foreign tax credit take care of that. But the long-obscure “FBAR” requirement to report foreign financial accounts over $10,000 threatens to impoverish many of these people anyway. The penalties for failing to file the FBAR Form, Form TD 09.22-1, are the greater of $10,000 or half the value of the account. The IRS is freely asserting these penalties even when little or no tax is due, and is even applying them to Canadian retirement accounts of U.S. expats like Alward.

The IRS has had two “amnesties” to draw expats into its loving arms, and the program has been a disaster for many ordinary folks who have signed up to try to clean up their records. Taxpayers living in Canada since childhood are presumed to be tax cheats, and penalized accordingly.

The IRS could learn a lot from states in handling these issues. The IRS “amnesties” have been progressively more restrictive, with higher penalties, making it more and more dangerous for folks with trivial paperwork violations to come out of the cold. Many states, in contrast, have standing deals where out-of-state taxpayers can clean up their tax histories by filing a few years of back tax returns, no questions asked. If the IRS would take this approach, and waive FBAR penalties for accounts under, say, $200,000 — and for all retirement accounts –maybe we won’t have to worry about the White House getting sacked again.

Frank Wolf Has Grover Norquist’s Attention

Earlier we learned that Virginia Congressman Frank Wolf is completely creeped out by Tax Terminator Grover Norquist’s BSD status in the Republican Party.

It’s been bothering Mr. Wolf so much that his “conscience” compelled him to give a speech on the House floor today to remind everyone what kind of Grover company keeps (i.e. the “unsavory” kind).

And since Grover has Viking DNA coursing through his veins, you’d be a monkey’s uncle if you thought that he was going to let this shit slide:

Norquist branded Wolf’s speech a “hissy fit” and a “compilation of whack job criticisms.” He added that he thought the Virginia Republican, one of the relatively few GOP members of Congress to have not signed the tax pledge, was lashing out at him because he did not want to call out his Republican colleagues. “He is the only Republican arguing that tax increases are a good idea,” Norquist told The Hill. “What he has is a problem with the American people and the modern Reagan Republican Party.”

But hey, GN is old political cat; he knows how the game is played:

“[I]f he wants to chew on my ankles, I can take it.”

How’s that for a visual?

Norquist: GOP lawmaker’s criticism ‘beneath him’ [OTM/The Hill]

Warren Buffett Dares Rupert Murdoch to Whip It Out

His tax return, people. His tax return. Remember last week when the Journal told O^3 he should put up or shut up since he’s so gung ho about increasing taxes on the ultra-rich? Well, he sure does and he seemed delighted when someone asked him about it today:

Asked about the editorial on Tuesday at Fortune’s Most Powerful Women Summit, Buffett said he was willing to release his tax returns, on one condition: “I think it might be a terrific idea if they would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune, and we’ll both give you our tax returns and you can publish them,” Buffett said. “I’m ready tomorrow morning,” he added.

Your move, Rupes.

Buffett challenges Murdoch on tax returns [CNN]

Grover Norquist Gives Congressman Frank Wolf the Heebie Jeebies

“My conscience has compelled me to come to the floor today to voice concerns I have with the influence Grover Norquist, the president of Americans for Tax Reform, has on the political process in Washington,” Wolf read from a statement on the floor of the House of Representatives today. Wolf listed a series of associations that he said undermines Norquist’s credibility as a policy advocate. Among them, he cited a relationship Norquist had with former lobbyist and convicted felon Jack Abramoff. “Mister Abramoff essentially laundered money through ATR and Mister Norquist knew it,” Wolf said. [Bloomberg]

Tax Refunds From ‘Secret Government Accounts’ Still Turning Out to Be Bogus

What’s most interesting about this particular scam is that it involved more people – 55 – than some accounting firms’ entire headcount.

A grand jury has indicted 55 people for participating in scams that tried to bilk the government out of more than $250 million in undeserved tax refunds, prosecutors in California said on Monday. Thirty-two indictments were returned by the grand jury accusing the people of various schemes to obtain the refunds. Millions of dollars were paid out, including a check worth almost $1.2 million, the prosecutors said. The owners of one California company were accused of making presentations that claimed customers could get tax refunds from a “secret government account” after making payments to the company and agreeing to pay a percentage of any refunds they received, the prosecutors said.

Grand jury indicts 55 for $250 million in tax scams [Reuters]

Warren Buffett Would Like to Clarify His Feelings on The Buffett Rule

“It isn’t [my idea] to have the rich pay more taxes. It’s to have the ultra-rich pay more,” he said on Bloomberg Television Friday. “It isn’t to have the rich pay more taxes. It’s to have the ultra-rich who are paying very low tax rates pay more taxes. There’s all kinds of ultra-rich who pay normal taxes, but there is a small segment–but you can find them very easily–who pay very low taxes, including me. People who make money with money only pay very low taxes at very high levels of income. … What I’m talking about would probably apply to 50,000 people out of 310 million in the country. [BBR/The Hill]