One of the biggest problems with Texas Governor Rick Perry’s optional flat tax may be the choice it gives taxpayers. Perry says you can either pay his new tax or pay under today’s system, whichever results in a lower bill. That sounds great, but it is a policy disaster. This is the tax code we’re talking about, not some TV game show. [TaxVox]
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Is Philadelphia’s Tax on Bloggers That Big of a Deal?
Every state, municipality, township and hamlet is desperate to close their budget gaps. With such desperation comes a flood of bad ideas that include taxes on everything from juggling to hot air balloon rides.
The Philadelphia City Paper ran a story last week about the $300 Business Privilege Tax that the city is imposing on bloggers, freelancers and other contractors since they are engaged in the activity for profit. Seemingly, another stupid idea.
The City Paper speaks to a couple of bloggers – clearly doing it as a hobby – that are technically engaged in a for-profit activity because they have ads on their blogs. They were notified by the city that they owed the $300 for a lifetime business privilege license (you can also opt for a $50 annual license). The Philadelphia Department of Revenue argues that “simply choosing the option to make money from ads — regardless of how much or little money is actually generated — qualifies a blog as a business.”
Supposedly, changes to the city’s law are in the works to be introduced next month that would exempt the first $100k of a business’s profit.
However, there is a far simpler solution to this problem that is mentioned by Christina Warren over at Mashable which is, quit running ads on your blog. Maybe the city’s tax is excessive, annoying, desperate for reform or just plain stupid but if you don’t run ads on your blog – that wasn’t designed to make money – you avoid the business privilege license altogether. It’s as simple as clicking a mouse and the government is out of your life (at least this respect).
Or continue to be stubborn and fight the bureaucracy of the Philly City government. Your choice.
Pay Up [Philadelphia City Paper]
Philadelphia Tax Code Sparks Big Controversy with Small Bloggers [Mashable]
To Whom It May Going Concern: Jackson Hewitt Sucks
Welcome to the latest edition of To Whom It May Going Concern, our infrequent feature […]
Oh, By the Way, There’s Still a New 1099 Reporting Requirement for 2012 in the Proposed Budget
As you know, the bane of small businesses across this great land, the 1099 reporting requirement, was repealed by the Senate earlier this month. Despite some maneuvering amongst Senators to be crowned the biggest champion of small business, it seems that everyone agreed that this little sliver of the healthcare reform bill needed to go.
Now the House has taken up the charge but The Hill reports on a portion of President Obama’s proposed budget that is already annoying the hell out of some:
President Obama’s fiscal year 2012 budget still contains a portion of the 1099 provision while eliminating the requirement for goods but retaining it for services. The proposal is expected to raise about $10 billion over 10 years.
The National Federation of Independent Business blasted the new 1099 proposal as a “bait and switch.”
“We are disappointed that the president has not clearly heard what small businesses are saying,” NFIB senior vice president of Federal Public Policy Susan Eckerly said in a statement. “We at NFIB remain committed to helping the president and Congress understand the needs of small business as the budget process moves forward.”
But before you get your panties in a bunch, the Office of Management and Budget can explain:
“The administration recognizes the burden that this expanded information reporting provision will put on small businesses and proposes to repeal the provision,” the document says. “Instead, the administration proposes that a business be required to file an information return for payments for services or for determinable gains aggregating to $600 or more in a calendar year to a corporation (except a tax-exempt corporation); information returns would not be required for payments for property.”
If you call that an explanation.
Ways and Means schedules mark up of 1099 provision [The Hill]