Self-described non-partisan group Change Maryland is convinced the 31,000 individuals who left Maryland from 2007 […]
Rich People in the U.S. Seem to Be Pulling Their Tax Weight Relative to Other Industrialized Countries
The United States relied more on tax revenue from wealthy individuals and families than other industrialized countries during the middle of the last decade, the Tax Foundation said Monday. Citing data released in 2008 from the Organization for Economic Cooperation and Development, the nonpartisan group said that the ratio of what higher-income households paid in taxes compared to their share of market income was bigger here than in certain other countries. The richest 10 percent of American households paid a 45 percent share of the nation’s taxes in the mid-2000s, the OECD found, while having a 33.5 percent share of market income. That 1.35 ratio was higher than countries including Australia (1.29), Canada (1.22), France (1.1) and Poland (0.84). [The Hill]
Tom Bloch is so ready in fact that he wants his to go up first.
“Congress will have no choice, in my opinion, but to raise taxes sooner rather than later.
“I also believe that the rich are significantly under-taxed compared to the middle class. That’s why I suggest that raising taxes on the very wealthiest taxpayers must be the first step toward restoring equity in our income tax system and ensuring the financial security of our children’s future.”
US taxes are too low, should be raised: H&R Block heir [PhillyDeals]
Republicans take control in the House of Representatives this week and boy, are they ever ready. With the ink safely dry on the extension of the Bush tax cuts, the GOP is moving on to spending cuts, supporting the troops, restoring honor, launching investigations and whatever hell else was in that pledge. Wait, that last one wasn’t in there?
Anyhoo, the idea of lower taxes and spending cuts to get the federal budget in ship shape has been the GOP song and dance long before Ronnie had his own float at the Tournament of Roses Parade but a recent poll has discovered that lots of people don’t agree with that sentiment:
Raising taxes on the rich beats out cuts to defense spending, Medicare and Social Security as U.S. adults’ top preference on how to close the deficit, according to a 60 Minutes/Vanity Fair poll.
Sixty-one percent of Americans said that increasing taxes to the wealthy should be the first step toward balancing the budget.
By contrast, 20 percent of respondents preferred cuts to defense spending as the first option, while 4 percent said that cutting Medicare would be the best way to start cutting the deficit. Three percent said they preferred cutting Social Security.
Now you might expect a major backlash from the more affluent citizens, you know, grumbling at polo matches, yacht races and beside the swimming pools filled with gold doubloons but surprisingly, quite a few of them are okay with it:
Increased taxes on the wealthy tops those four options even among higher earners who might be most affected by a tax hike, the poll suggested. Fifty-eight percent of respondents making between $50,000 and $100,000 per year rated tax hikes as the best first step to balancing the budget, while 46 percent of those making more than $100,000 said it was their top choice, as well.
But as we have learned, the GOP isn’t really down with this. Besides, tax rates won’t be an issue again the until the second and third weeks of December 2012, so they’d prefer we concentrate on things that aren’t already safely chiseled into the political dogma.
Our favorite minority attention whore, House Republican leader and next Speaker of the House John Boehner, seems to feel as though all this nonsense over extending the Bush tax cuts is chicken crap, whatever that is supposed to be. Did he mean bullshit? Just tell us what’s on your mind, Mr Boehner, we won’t hold it against you if you say bullshit on C-SPAN. “I’m trying to catch my breath so I don’t refer to this maneuver going on today as chicken crap, all right?” he said. “But this is nonsense, all right? The election was one month ago. We are 23 months from the next election, and the political games have already started trying to set up the next election.” No no, homie, this has nothing to do with the next election, this has to do with y’all just getting around to this now when no one’s cared since 2002.
If there are any doubts as to the stimulative or depressive effect of a tax rate change in terms of tax receipts received by the Treasury, check out this WSJ op-ed by W. Kurt Hauser which tells us that historically, tax revenues as a share of GDP have averaged just under 19%, whether tax rates are cut or raised.
Anyway, regardless of our feelings on the matter (many of which include expletive-filled rants like “WTF, why are you guys just now trying to figure this out?!”, “please! Can’t you work well with others for just once in your life” and/or “Gee, maybe if we addressed the problem of an overly complicated tax system this wouldn’t be such an epic pain in the assets”), the House has finally made a decision. Frankly we couldn’t be happier to see the light at the end of the W-2 on this at last.
A mere 29 days before the scheduled December 31st Tax Cut Armageddon, the
threats votes have been counted and it appears as though the yeas have it. With 6 minutes to go on the vote and with little help from House Republicans, Democrats rallied together to get the 218 votes they needed to extend tax cuts to those earning up to $250,000 and then some.
It doesn’t really matter because there’s no way the Senate is going to let this fly so you may go back to whatever you were doing and start socking away a few bucks for your 2011 tax bills.
Ahhh political process. It’s like watching a car crash in slow motion from the driver’s side.
The latest act in the ongoing circus known as the estate tax debate has three “liberal” senators – Bernard Sanders (I-VT), Tom Harkin (D-IA), and Sheldon Whitehouse (D-RI) – calling for billionaires to help close the $13 trillion some-odd federal deficit that these über-rich people ate.
Forbes reports that the Messrs. Sanders, Harkin and Whitehouse sent a letter to their fellow Senators laying out their case, “According to Forbes Magazine, there are only 403 billionaires in the U.S. with a collective net worth of $1.3 trillion. Clearly, the heirs to these multibillion fortunes should be paying a higher estate tax rate than others.”
The champs of the bill also go to the trouble of singling out Dan L. Duncan whose family stands to inherit his $9 billion fortune tax free. It’s a good thing those staffers pointed out that article in the Times to their respective Senators!
• Exempts the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009. Doing this would mean that 99.75% of all estates would be exempted from the federal estate tax in 2011 alone.
• Includes a progressive rate structure so that the super wealthy pay more. Under our bill, the rate for the value of the estate above $3.5 million and below $10 million would be 45%, the same as the 2009 level. The rate on the value of estates above $10 million and below $50 million would be 50%, and the rate on the value of estates above $50 million would be 55%.
• Includes a billionaire’s surtax of 10%. Our bill also imposes a 10% surtax on the value of an estate above $500 million ($1 billion for couples). According to Forbes Magazine, there are only 403 billionaires in the United States with a collective net worth of $1.3 trillion. Clearly, the heirs to these multi-billion fortunes should be paying a higher estate tax rate than others.
• Closes all of the Estate and Gift Tax Loopholes requested in President Obama’s Fiscal Year 2011 budget. These loophole closers include requiring consistent valuation for transfer and income tax purposes; a modification of rules on valuation discounts; and a required 10-year minimum term for Grantor Retained Annuity Trusts (GRATS). OMB has estimated that closing these loopholes that benefit the super-wealthy, would raise at least $23.7 billion in revenue over 10 years.
• Protects family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes. Under current law, the value of farmland can be reduced up to $1 million for estate tax purposes under § 2032(a) (Special Use Valuation). Our bill increases this level to $3 million and indexes it to inflation.
• Benefits farmers and other landowners by providing estate tax relief for conservation easements. Our bill provides tax relief to farmers and other landowners by amending estate tax rules for conservation easements through an increase in the maximum exclusion amount to $2 million and increasing the base percentage to 60%.
Nice work on those last two Senator Harkin; you couldn’t be more obvious.
In case you didn’t catch it in there, the estate tax on the billionaires will be 55% PLUS! an additional 10% surtax. Sounds crazy right? Congress royally fucks things up by letting the estate tax expire in the first place and then has the stones to throw the double whammy on the rich because of it. Had they simply extended the estate tax (which seems to be a popular solution, btw) this political pigskin wouldn’t even be an issue.
But guess what? There are people behind this thing lock, stock and barrel. For one, the United for a Fair Economy (“UFE”) more or less says that this legislation is the catalyst to fixing everything, “The Sanders-Harkin-Whitehouse Responsible Estate Tax Act is an important step on the road to an economic recovery that benefits all Americans.”
Well, not all Americans.
Accounting News Roundup: BP Weighing Options on Dividend; Will the “New Wealth Taxes” Affect You?; Medifast Keeps Things Vague | 06.14.10
BP unlikely to cancel dividend, but mulls several ideas: source [Reuters]
They may defer it, pay it in shares or “pay into a ring-fenced account until the oil spill liabilities become clearer.” All of which will please absolutely no one.
Auditors to reveal bank talks under new plans [FT]
Proposals by the ICAEW would require auditors to disclose their private discussions with bank audit committees afte showed that “the value of bank audits had shown investors especially were dissatisfied by the audit report. The internal process involved was perceived as helping to keep bank executives in check, but investors felt the report was only a box-ticking exercise.”
The Big 4 have historically resisted these types of proposals, arguing that it will expose them to additional legal liability.
Suggestions cited include assurance on the “front half of annual reports,” as well as an audit of the banks’ summaries of risks. The ICAEW said it was aware that this would add to the auditors’ workload.
Vantis trading suspension follows difficult financial period [Accountancy Age]
The court-appointed liquidator for Allen Stanford’s bank, Vantis, has had trading of its shares suspended by the AIM after the company was unable to obtain any funds for their services related to the Stanford case, among other financial difficulties.
Ernst & Young had issued a going concern opinion for the company back in February, warning that continued lack of cash flow would have to be remediated quickly for any possibility for the continuation of the business.
How the New Wealth Taxes Will Hit You [WSJ]
Are you one of those “rich” people? That is, do you have an adjusted gross income of $200,000 or more ($250,000 for joint filers)? If so, you’ll probably want to know that two new tax levies will come your way in 2013 as a result of the new healthcare legislation – a 0.9% levy on wages and a new 3.8% tax on investment income.
The 0.9% tax is on any wages over $200k/$250k. For example, if you are single and made $300,000, your additional tax would be $900.
Similarly, the investment income tax would tax any investment income in excess of the $200k/$250k threshold and the 3.8% tax would be applied. What’s investment income you ask?
Interest, except municipal-bond interest; dividends; rents; royalties; and capital gains on the sales of financial instruments like stocks and bonds. The taxable portion of insurance annuity payouts also counts, unless it is from a company pension. So do gains from financial trading, as well as passive income from rents and businesses you don’t participate in. All are subject to the 3.8% tax on amounts above the $250,000 or $200,000 threshold, as described above.
Income that is not considered investment income include: distributions from IRAs, pensions and Social Security, annuities that are part of a retirement plan, life-insurance proceeds, muni-bond interest, veterans’ benefits, and income from a business you participate in, such as a S Corporation or partnership.
KPMG considering move to 1801 K [Washington Businsess Journal (subscription required)]
KPMG might move their Washington, DC office location to 1801 K St. NW from 2001 M St. NW according to “real estate sources.” KPMG’s spokesman said that the firm is continuing to “examine all of our options.” The situation is fluid.
Open Letter to the [SEC]: Why You Must Review Medifast’s Revenue Accounting Disclosures [White Collar Fraud]
Sam Antar would like to put the SEC on notice that Medifast seems to be less than transparent when it comes to its disclosures, “it seems that Medifast is recognizing revenue upon shipment and not delivery. As a minimum, Medifast, like Overstock.com, should be required to expand and clarify its disclosures to avoid confusing investors.”
After asking pretty much everyone for their suggestions on tax reform, the President’s Tax Reform Panel has released 384 submitted suggestions and the American People did not disappoint.
The FairTax.org crowd turned out en masse and plenty of practitioners and academics also provided their $0.02.
We didn’t really read those but we’re sure they’re great. We were more interested in those people that were more or less thinking out loud.
Suggestion #239 Mike Finch:
I support yearly audits of all government big wigs and prison terms for any that are found to have made more than $100 mistake on their taxes.
Suggestion #249 from “Froggy” whose organization is “peace man”:
Tax the rich! tax the rich! tax the rich!. oh please please please tax the rich. I want the economy to sink further!
Suggestion #278 from Alex Clay:
Make it explicit that cheating on your taxes makes you ineligible for presidentially appointed positions or committee chairmanships in the congress
Suggestion #346 from Ed:
0% tax rate. Reduce the tax law to 2 pages.
David Laing’s suggestion (#359) must have gotten lost on its way to the health care debate:
No option is NO OPTION! No bill that does not contain a public option is not worth your signature.
Since most of you have checked out for the week, consider spending some digging through these for more gems (we haven’t been able to find an intern that’s up to the job) or suggest your own ideas in the comments.