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Is President Obama Insane When It Comes to Tax Policy?

Posted on by Caleb Newquist

Yesterday we learned how President Obama would pay for his jobs bill. If you make more $200k ($250k for marrieds), have carried interest income, have a corporate jet or are an oil & gas company, you probably won’t be too happy with the ideas put forth.

If any of these proposals sounds familiar, that’s because they’ve been put through the ringer already and they weren’t received warmly. It’s unlikely that this time around will be any different.

Considering all that, Christopher Bergin at Tax.com is perplexed:

What I can’t figure out is why the Obama administration keeps trying the same thing over and over again expecting different results.

Joe Kristan only goes so far to call these recycled ideas “lame” but if you hold Rita Mae Brown in high regard, then the President definitely has a screw loose.

President Obama’s Tax Plan: ‘No Games, No Politics, No Delays’ — No Chance [Christopher Bergin]

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Grover Norquist Did His Best to Educate the Patriotic Millionaires on How to Pay Their Fair Share of Taxes

Not everyone agrees with tax hit man Grover Norquist’s ideas. While GGN would like nothing better than to see every federal and state levy banished to the darkness, there are a number of people who don’t share this view. A certain group of these people are from the more affluent corners of society and they’ve organized themselves as the “Patriotic Millionaires” in order to make the case that they are sick and tired of being able to afford competent CPAs to legally reduce their tax burden to an unfair amount. Grover, being the big softie that he is, realizes (not from personal experience, mind you) that the burden of not paying your fair of taxes is a heavy one. And because he’s upstanding patriot himself, he went to the Hill yesterday to meet with these troubled folks to help alleviate their pain:

“If you think the federal government can spend your money better than you can, then by all means” pay more in taxes than you owe, said Grover Norquist, of Americans for Tax Reform, a group that has gotten almost all congressional Republicans to pledge to vote against tax hikes. The IRS should have a little line on the form where people can donate money to the government, he suggested, “just like the tip line on a restaurant receipt.”

Tipping! Millionaires know how to do that, don’t they? I mean with all the servants and eating at fancy restaurants and whatnot, this should be an easy way for the wealthy to ease their low tax guilt. But despite all his suggestions and support, some did not receive the message all too well:

One of the millionaires suggested that if Norquist wanted low taxes and less government, “Renounce your American citizenship and move to Somalia where they don’t collect any tax.”

Well! If that’s the thanks Grover gets, don’t expect him to be so forthcoming with the advice next time.

With supercommittee silent, millionaires and others eagerly jump in with their own advice [WaPo]

Section 409A: Worst Tax Enactment of the Decade

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for thumbs down col.gifEditor’s note: Welcome to GC’s first edition of “Taxes: Because We’re the Little People” by Joe Kristan. Joe Kristan is a tax shareholder for Roth & Company, a Des Moines, Iowa CPA firm, where he works with closely-held businesses and their owners. Prior to helping start Roth & Company, he worked for two of what are now the Final Four CPA firms. He writes the Tax Update Blog and is available for seminars, first communions, Bar Mitzvahs, etc.
Sure, those Northwest pilots who missed Minnesota were off the mark. So was Arthur when he signed off on the Enron audit. But as badly as they missed the target, they look like Annie Oakley compared to Congress in its response to Enron.
Congress takes aim at the national firms whose audits failed to spot the looting at places like Enron. The result? SarBox, the greatest gravy train for the Final Four firms since the invention of the senior accountant.


The Congressional response on the tax side took a different approach. Rather than reward the guilty, they chose to beat the innocent. Hence Section 409A.
The Enron scandal featured elaborate deferred compensation plans to provide executives a gilded liferaft when the ship sinks. Congress responds with a code section affecting schoolteachers. They showed Ken Lay what for by designing a tax on folks on money they may never see because of somebody else’s foot fault.
Sec. 409A clobbers its victims two ways:
• It taxes employees on their deferred comp balances when the plan is out of compliance, even if the employee doesn’t get the money, ever.
• It hits them again with a 20% excise tax.
Worse, the code section imposing these penalties is so complicated that it took 3 years to complete the regulations that run to 200 pages, and are so complicated and intrusive that accidental noncompliance must be rampant.
This all makes Sec. 409A my choice as the worst tax enactment of the decade. But tastes differ. Let us know your nominee for the worst tax provision enacted from 2000 through 2009 in the comments and if we get some good submissions, we’ll put it to a vote.

If Mitt Romney Releases His Tax Returns He Could Be the Next Richard Nixon

As we all know, 1% posterboy and GOP presumptive presidential nominee Mitt Romney hasn't released […]