TAX POLITIX
The Politics of Taxes
More Sin Tax Stupidity
The latest example of sin tax stupidity comes from Seattle, Washington. The new tax on sugary drinks began on January 1, 2018, as a means to "discourage consumers from buying sugary drinks while raising revenue for nutrition and education programs." It's a tax of 1.75 cents per ounce. For example, it will now cost $2.14 for a 20-ounce soda, up from $1.79. The tax on a 12-pack of Coke cans will be $2.52. And a 2-liter bottle of Coke which used to sell at $2.79 is now $4. Diet and...
IRS Bulletin IR-2018-14: Tax Filing Season Opens
IRS Announces 2018 Tax Filing Season Opens with April 17 Deadline; 155 Million Tax Returns Projected, 70 Percent Expect Refunds IRS YouTube Videos: Claiming EITC or ACTC? Your Refund May Be Delayed-- English | Spanish WASHINGTON — Marking the beginning of the nation’s tax season, the Internal Revenue Service said today that it successfully started accepting and processing 2017 federal individual income tax returns. More than 155 million returns are expected to be filed this year. People have...
Cuomo Unhinged
In a continued tantrum against the “Tax Cuts and Jobs Act,” Governor Cuomo called the tax changes an “economic missile” as he unveiled his new budget proposal for the fiscal year. His solution? Raise more taxes mainly on businesses and restructure certain taxes so that New York gets its share of the pie. One major change Cuomo has proposed is to eliminate the state income tax on wages for many New Yorkers; it would be replaced by a new payroll tax paid for by employers. This would be an...
Amazon, Beware!
It is utterly laughable that Amazon has announced that the New York City metropolitan area is among the final potential locations for Amazon’s second headquarters. New York’s Governor Andrew Cuomo is consistently anti-business, with burdensome regulations that are tort lawyers dream, always in the top three of highest taxes in the country, a Tax Department renown for its invasiveness, and consistently threatening to raise taxes on his most successful constituents. Mayor Bill de Blasio of NY...
Governor Cuomo: Clueless or Dangerous?
Governor Cuomo has come out blasting the new tax law, and in particular the substantial reduction in the deduction for State and Local Taxes (“SALT”), as unconstitutional and an “attack only on blue states.” But everybody who has any knowledge of taxation and its constitutionality knows that Cuomo’s assertion is ludicrous. The SALT deduction - and ALL deductions - are at the complete discretion of Congress. And as long as deductions apply under the same rules to every taxpayer no matter where...
The New Tax Law: Politics Over Reform
I am very glad the new Tax Cuts and Job Act is now law. With ongoing work reforming and reducing regulations, the tax bill will spur economic growth, and get people to understand the importance of reducing marginal rates. On the corporate side, the huge rate reduction (from 35% to 21%), move to territorial taxation, and expensing of equipment, is a home run. However, on the individual side, Congress allowed politics to get in the way of real reform, and that is inexcusable. Without any...
Rules for the Tax Plan
Everyone talks about how true reform of our tax laws should have three goals: 1) equitable; 2) efficient; and 3) simpler. In doing that, many have argued for removing the individual mandate, but at the same time have left in things like charitable deductions, SALT, and the mortgage deduction. This is ludicrous. With those three concepts above, the other provisions need to be addresses, as they are not equitable, efficient, or simpler -- they are political. To leave them in, while removing the...
Richard Rubin’s Tax Plan Follies
Richard Rubin makes some major errors in his summation of burgeoning tax bill. He uses a scenario of five people and goes through how they would be affected by the current proposed legislation. However, he does not get his calculations correct. He's comparing apples and oranges. He's also not looking at the reasons for the tax law changes and if the changes make the tax law fairer. He's only looking blindly at how the tax law changes affect the current tax burden of the people. Rubin should...
Why the Individual Mandate (Tax!) Needs To Go
While we're on the subject of tax reform, one particular item that could be included in the package is the elimination of the individual mandate. Since SCOTUS classified the penalty as a tax, it is one that can be repealed as part of the reform, and would produce an estimated savings of $338 billion over 10 years, according to current CBO figures. Eliminating the individual mandate would not affect Medicaid or pre-existing conditions; it would simply allow taxpayers to have the freedom to...
Senate Release Its Own Tax Plan; Wants to Delay Corporate Tax Cuts
The GOP Senate released its own version of a tax reform plan with a few differences from the House version. The most notable example is a one-year delay on cutting the corporate tax rate from 35% to 20% -- meaning that the tax change would not take affect until 2019. Their rationale is that the cost of the marginal cut would save $100 billion in costs. One drawback, however, is that companies would likely just sit and wait to make major changes and business decisions. This would certainly...
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Albert Einstein on the Income Tax
He's a pretty smart guy....
What Information Is On the Obamacare Tax Form 1095a?
Since there seems to be increased interest, and confusion, regarding tax filing and Obamacare this year, it is worth it add some more information to help navigate the process. The IRS Tax Form 1095a is officially known as the "Health Insurance...
Obamacare Forms: 1095A, 8962, and Deadlines
This year, taxes will get extra tricky, because filers will be required to account for their health insurance on their forms. There are four ways to do so: 1) For taxpayers who do not have Obamacare, the process is simple: check a box indicating...
IRS Budget Cuts: The Good, the Bad, and the Ugly
Budget cuts to the IRS will be impacting citizens more drastically this year. The Taxpayer Advocate, Nina Olsen, painted a bleak picture for filing season and beyond in her annual report to Congress. The Good: -- The number of audits will decline....