A cartoon to start the week

Another excellent A.F. Branco cartoon, this one seen at The Patriot Post:

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The Infernal Revenue Service

 

Here’s Cal Thomas at Newsbusters on torture at tax time:

Thanks to the beneficence of the Internal Revenue Service -- and the fallout from COVID-19 -- we half of Americans who pay federal income taxes have been given until May 17 to file.

Since I began earning enough to file Form 1040 and associated forms, I have only known one person who prepared his own taxes. That was Bill Archer, a Texas Republican who formerly headed the House Ways and Means Committee. I once asked Archer why he prepared his. His reply was that not only did he think it was fun, but because he helped write the tax code, he felt a responsibility to demonstrate competence in filling out the forms.

These days, the forms are so complicated, hardly anyone I know understands them. The instructions need instructions.

I have again filed jointly with my wife (more than 70 pages). She owns a business, so it is more complicated than if we filed separately. Still, the forms require translating a language I have never studied and wouldn't want to. If you call the IRS and ask for help, you are still responsible for interest and penalties if they give the wrong advice.

How complicated is it? Here are just a few examples. Right off the top, I am threatened with prison should I knowingly fudge information on the form. The federal government does threats very well, including those read by flight attendants. Refuse to wear a mask, even if vaccinated, and you risk arrest. Don't even think of tampering with the smoke detector. Even the post office is now spying on us.

How's this for clarity from the estimated tax worksheet: "Add lines 2a and 2b. Subtract line 2c from line 1. Figure your tax on the amount on line 3 by using the 2021 Tax Tables. Caution: If you will have qualified dividends or a net capital gain or expect to exclude or deduct foreign earned income or housing, see worksheets 2-5 and 2-6 in Pub. 505 to figure the tax."

Got that?

There are schedules and forms for everything. They are nearly as numerous as the growing list of gender identities. Under Schedule D, Profits and Losses, there is this gibberish: "Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions). However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b."

Say what?

No civilized society should force its citizens to go through this annual torture.

. . .

The rest is here.

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Stop the Job Killing Big Tobacco Bailout

Big Tobacco companies have inserted an amendment to the massive federal highway bill that is currently being debated in Congress.  This amendment reclassifies all small Roll Your Own (RYO) cigarette retail shops as “cigarette manufacturers” for the sole purpose of driving them OUT of business, killing jobs across the country and limiting consumer choice.

Beginning Tuesday, May 8, the House and Senate will begin meeting to discuss this bill in a conference committee.

From Tax Tracker --

We’ve all played a good game of hide & seek, right? Cover your eyes, count to ten, run around and find your friends? It’s fun because you get to exercise just how clever you can be. If you can stay hidden, you’re clever. If you can find people, you’re clever. It’s a game that is SO much fun, some members of Congress are still playing!

Hidden in the Senate’s massive version of the 2012 transportation reauthorization act is a teeny weeny provision allowing Big Tobacco companies to SQUASH small businesses. You heard me. In between money for roads, bridges, airports, trains, and Amtrak is a monumental United States Government bailout for Big Tobacco.

TODAY’S MESSAGE: Enough hide and seek. Tell Congress REMOVE the #BigTobacco bailout from the highway bill. It’s a job killer. http://bit.ly/NewTax

If you’re a frequent reader of my blog, you already know this. But, we’re getting new readers every day so here it is again:

Big Tobacco has bought some lawmakers. These lawmakers have introduced legislation reclassifying small tobacco shops where you can roll your own smokes as “tobacco manufacturing” facilities. This throws small, roadside tobacco shops into the same tax and regulatory category as mammoth cigarette manufacturing facilities. Unfair, right? Well, the pain doesn’t last long for Mom & Pop tobacco shops. They pretty much go out of business immediately.

Why is Big Tobacco doing this? Because 99 percent market share isn’t enough. They make no money off people who roll their own smokes. If they can eliminate our ability to roll our own, Big Tobacco thinks they’ll pocket more money. Which, they probably will if they’re successful.

That’s where you come in.

You can help by reaching out to members of Congress. Scroll through some of my previous posts for lists of folks to hit.

Today: Engage a few members in the morning and a few members in the afternoon. Take a few minutes for Facebook. And if you have time, take a few minutes to post in the comments section of online news stories. Members of the news media appreciate heads’ up on how their member responds to your inquiries!

Tuesday, Congress reconvenes to hammer out a final 2012 transportation reauthorization act. Let our voices be heard!

Americans Spend More $$$ on Taxes than Housing, Food & Clothing

Under the four years of failed leadership and "share the wealth" policies of President Obama, you will be spending more of your hard earned money on paying taxes to support others -- than you will on your own housing, clothing ad food expenses combined!

From The Tax Foundation --

In 2012, Americans will pay approximately $4.041 trillion in taxes, which is $152 billion, or 3.9%, more than they will spend on housing, food, and clothing combined, according to a new study from the Tax Foundation. In addition, an increasing proportion of government benefits now go to pay for those same basic expenses of low-income Americans.

Examining the trends of tax collections and expenditures on housing, food, and clothing for the past several decades, the study shows that an ever-increasing amount of taxpayer money has gone into government programs that subsidize or pay for essential household goods. Cash and voucher benefits now pay for over a third of basic household expenses, up from less than 1% in 1929 and less than 20% in the early 1970s.

"Transfer payments, or government social benefits, have grown to represent a substantial portion of money spent on living expenses, encompassing housing, food, clothing, healthcare, and transportation," said Tax Foundation Adjunct Scholar Kevin Duncan. "This means that the government is picking up an increasing portion of the tab for these essential goods."

From the creation of Medicare in 1965 through 2010, transfer payments rose from 11.39% to 34.79% of living expenditures. While some money spent on transfer programs is spent on other items besides healthcare, food, clothing, transportation, and housing, the strong prevalence of in-kind benefits, or government transfer payments for a specific item or service, keeps this as a small fraction of overall expenditures.

Between 1929 and the early 1980s, aggregate tax collections were less than total expenditures on housing, food, and clothing. From 1929 to 1980, tax liabilities grew from $10 billion to $751 billion, while expenditures on housing, food, and clothing grew from $41.6 billion to $775.7 billion. The gap between tax collections and expenditures on essential goods reached a maximum in 2000, when Americans gave 19% more to the government than they spent on these items.

But, this makes it official that President Obama has finally held true on one of his campaign promises - Hope & Change.  Yes, you "hope" you will have some "change" left after President Obama gets his hand out of your pocket so he can pay for others.

National Association for the Self-Employed: "Lawmakers need to simplify the Tax Code'

From National Association for the Self-Employed --

Move Would Help Narrow $345 Billion Tax Gap, Decrease Taxpayer Headaches

Washington, D.C., June 30, 2011 – With spending up and revenues down, Senate lawmakers are looking to rein in the tax gap in order to bring down the national debt. The tax gap is the difference between what the IRS is owed versus what it collects each year and is currently estimated at $345 billion. The National Association for the Self-Employed (NASE) has been very active in suggesting ways that the gap might be closed, including small changes to current tax code and tax policy.

“Congress has been eager to pursue methods for reducing the tax gap, often at the expense of the self-employed and micro-businesses,” said NASE Executive Director Kristie Arslan. “Instead of further complicating the tax code with added regulatory burdens on small business and increasing enforcement activities, we suggest a more balanced approach that includes simplifying the tax code and enhancing taxpayer education.”

In the past, the federal government has targeted the self-employed (Schedule C filers) as part of their collection efforts. Recently, some agencies have publically acknowledged deficiencies in the tax system, including the IRS and the Government Accountability Office.  Both offices have acknowledged that most noncompliance is the result of inadvertent errors and tax loopholes that provide opportunities for noncompliance.  These agencies suggested what the NASE has said for years, that simplification of the tax code is a key component to narrowing the tax gap.

It is important to note that in review of current proposals to address the tax gap, we see that they solely focus on business to business transactions. Business to business transactions are already highly regulated and have substantial reporting requirements. A large area of potential non compliance and under reporting stems from business to consumer transactions. These dealings are currently not subject to reporting requirements and the creation of those requirements would likely be prohibitive to consumers and politically unappealing to legislators.

“In the fervent drive by Congress to recoup revenues for our fast depleting federal coffers, we must take the necessary steps to make certain the path we choose is balanced and effective, rather than detrimental. The NASE believes that the collective focus should be on supporting efforts for the survival, growth and innovation of small business as a foundation for long-term economic vitality,” remarked Arslan.

Read more here about the NASE’s position on specific tax gap proposals.

Over 27% of Your Workday Goes Towards Taxes

Below is a very useful article and chart to put in perspective exactyly how much of your work day goes towards paying taxes.

From The Tax Foundation --

In 2011, Americans will devote 2 hours and 13 minutes of every eight-hour workday, or over a quarter of their working hours (27.7%), to paying taxes. In a nine-to-five workday, it takes until 11:13 a.m. to earn enough to pay that day's share of taxes at the federal, state and local level.

If we add the federal deficit to the picture—that is, if the federal government were planning to col­lect enough in taxes during 2011 to finance all of its spending—Americans would work until lunchtime, 12:07 p.m., for the government, before keeping any of their earnings for themselves.

The Tax Bite in the Eight-Hour Day, which measures the nation's tax burden in hours and minutes, is an offshoot of the Tax Foundation's annual Tax Freedom Day calculation, which measures the tax burden in months, weeks, and days. These calendar- and clock-based illustrations are a useful way to explain how much the nation as a whole spends on government. Both Tax Freedom Day and the Tax Bite in the Eight-Hour Day illustrate, in similar ways, what portion of their income Americans keep for themselves and what percentage they spend on government.

How Long Do Americans Work for Each Type of Tax?

Figure 1 shows how long the nation must work in the average workday to earn enough to pay each type of tax:

• Individual income taxes require the most work. All but seven states, and some localities, levy an income tax. When these are added to the federal income tax burden, income taxes are projected to amount to an average of 46 minutes of work in an eight-hour workday.
• Social insurance taxes (taxes dedicated to funding social insurance programs such as Social Security and Medicare) require 29 minutes of work.
• Sales and excise taxes require 20 minutes of work.
• Property taxes require 16 minutes of work.
• Corporate income taxes require 16 minutes of work.

Figure 1: How Much of Each Eight-Hour Workday Goes to Paying the Nation's Tax Bills in 2011?

To read the whole article, please click here.

Action Alert: Help Stop the Lorain County Tax Increase

From the North Ridgeville TPP --

If you live in Lorain County, our lame duck county commissioners have a scheduled board meeting this Wednesday at 9:30am and a public hearing immediately following at 10:00am to discuss a tax rate increase of one-quarter (1/4%) of one percent totaling 4.75%.

Please try to attend and show these politicians we are not going to stand for any more taxes and are willing to make what ever sacrifices needed. If you're unable to attend the 10:00 am hearing there will be another one at 6:00pm. (Click here for Meeting Agenda)

Date: Wed. December 8, 2010

What: Lorain County Comissioners Board Meeting
Time: 9:30AM
Location: CountyAdministration Building (Meeting Room B)
Address: 226 Middle Avenue, Fourth Floor Elyria, OH

What: Public Hearing for Unvoted Tax Increase ProposalTime: 10:00AM & 6:00PM
Location: CountyAdministration Building (Meeting Room B)
Address: 226 Middle Avenue, Fourth Floor Elyria, OH

Please contact the Lorain County Commissioners and share your thoughts on them considering imposing a tax without a vote of the people;

Commissioner Betty Blair
PH: (440)329-5112
FX: (440)323-3357
Email: bblair@loraincounty.us

Commissioner Ted Kalo
PH: (440)329-5301
FX: (440)323-3357
Email: tkalo@loraincounty.us

Commissioner Lori Kokoski
PH: (440)329-5101
FX: (440)323-3357
Email: lkokoski@loraincounty.us

Small Business to Shoulder over a Third of Tax Increase on Top Earners

And here is more proof that President Obama's so called "tax cuts" for the middle class will hurt small business. This would be the small Mom & Pop type business that built this country. These so called cuts will kill the small to medium size companies that in the aggregate employ millions of Americans across the country.

From Tax Foundation --

Advocates of allowing the top two federal income tax rates to expire claim that only 2 or 3 percent of businesses would be affected, but a new Tax Foundation report shows that more than one-third of the revenue from an increase in the top two rates would come from business income.

About 39 percent of the $630 billion tax increase on high-income taxpayers (defined by President Obama as individuals earning more than $200,000 and married couples earning more than $250,000) in 2011 would come from business income. This amounts to an extra $246 billion in taxes on business income over 10 years.

"The fact that 'only' 2 or 3 percent of taxpayers with business income would face higher taxes is meaningless to the debate," said Tax Foundation President Scott Hodge, who authored the paper. "What matters most is not the number of taxpayers impacted, but the amount of business income - and, therefore, business activity - impacted."

Tax Foundation Special Report, No. 185, "Over One-Third of New Tax Increases to Come from Business Income," is available online at http://www.taxfoundation.org/publications/show/26696.html.

More than 74 percent of tax filers in the highest tax bracket report some business income, compared to 20 percent of those at the lowest bracket.

Of the roughly $864 billion in taxable business income reported on individual income tax returns in 2008, nearly 68 percent was claimed by taxpayers earning more than $200,000, and 35 percent was claimed by taxpayers earning over $ 1 million.

"This means that the combined business income of every taxpayer earning up to $200,000 was still less than the total business income of taxpayers earning more than $1 million," Hodge said.

More business income is taxed under the individual income tax code as "pass-through" businesses (non-corporate firms such as sole proprietors, S-corporations, Limited Liability Corporations and partnerships) than is taxed under the traditional corporate income tax code. The number of pass-through businesses nearly tripled between 1980 and 2007, from roughly 10.9 million to more than 30 million. The number of traditional C-corporations declined steadily from 2.2 million in 1980 to 1.9 million in 2007.

In the same time period, net receipts for C-corps roughly doubled, from $752 billion to $1.4 trillion, and net receipts from pass-through entities saw a six-fold increase, from $315 billion to more than $1.8 trillion.

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.

A New Money Machine for Policy Makers: The Plastic Bag Tax

When first reading the headline about taxing plastic bags I thought what a novel idea. Surely we could support a tax that would promote limiting the "plastic faced bag" of the left -- Nancy Pelosi.

Upon further reading it was discovered this is really just another "money-grabbing" sin tax....

From ABC News --

Who knew the lightweight disposable sacks, which millions of shoppers use every day to lug home groceries and take-out, could help states bring in much needed revenue.

Starting next year, Seattle residents will pay for disposable bags at stores.

At least, that's what some policymakers have proposed. Only one US city – Washington, D.C. – has successful instituted a plastic bag tax, but at least 13 other states are considering one.

The plastic bag tax represents an expansion of so-called sin taxes, which have existed, in some form, since George Washington's whiskey tax.

This year, several states have increased sin taxes, especially cigarette taxes, to raise revenues. But more plastic bag taxes seem unlikely – two cities, Fairbanks, Alaska, and Seattle, Wash., have both repealed plastic bag taxes shortly after approving them in recent years. More...

We would still support a Anti-Pelosi Tax!

Small Business facing $11B More in Taxes Over next 10 Years

If you are a business owner operating as a small S Corporation -- this post is a must read for you!

From ABC News --

While a possible increase in taxes on the "carried interest" of hedge fund and private equity money managers is getting all the attention, in the same bill Congress is also creating a tax mess for small-business owners in the form of an $11 billion tax hike over the next 10 years.

The tax increase was included in H.R. 4213, a peddler's wagon of legislation (new spending, physicians' reimbursement, extensions of expired tax breaks, etc.) that was passed by the House in a narrow vote just before Memorial Day and is now being considered by the Senate. The Democratic-backed Senate version of the bill includes the same tax on small business.

The tax hit affects the owners of small S corporations (a common way many small businesses are organized) in "professional service businesses"--doctors, lawyers, accountants, engineers, architects and so on. An S corp pays no taxes but passes through all its profits to its owners' tax returns, even when those profits or "distributions" are reinvested in the business.

So what is a professional service business? Lawyers, accountants, doctors, dentists, architects, athletes, performing artists, consultants all will be included, according to the statute.

Note this new tax is imposed regardless of the dollars involved; it doesn't matter if, as an S corporation owner, you had $300,000 or $30,000 in nonwage profits--this tax will hit you.

Why is Congress raising taxes now on small-business owners? It is to offset other items in this same bill that the House wants--not just the extension of tax breaks but spending such as the Build America Bonds provision, which provides $28 billion in highly subsidized bond authority to state and local governments (with getting millions in fees). Read More....

And our current Congress claims they are for the little guy!

Tax & Spend

From the Tea Party Patriots