by | BLOG
I don’t say it very often, but I have it hand it to them Dems. The House vote taken today on whether or not to adjourn the House before deciding on the fate of the Bush tax cuts was a smart one. 39 Dems voted with the Republicans, making it a narrow 210-209 vote but ultimately adjourning.
What they did was take the seats that are on the bubble in this election and have them vote against adjournment. Then those Democrats can go back to their districts and say to their constituents and print in their mailers that they voted to stay in Washington to have a vote on the Bush tax cuts. And with a vote that close, every vote counted.
Not that they’d actually vote for extensions, but this vote leaves it open-ended at the very least. For instance, Freshman Congressman Tom Perriello (VA-5) was one of the 39 Dems who broke rank with his vote, and his seat is THE race to watch in the state of Virginia. But his local newspaper, the Daily Progress, just recently reported that Perriello ultimately plans to end the tax cuts for the uppermost tax bracket.
It’ll be interesting to see how these seats play out on Election Day, and if any incumbents actually do go on to vote for the extension. As I mentioned in an earlier post, if Democrats can be persuaded to extend investment tax cuts, then we are a little closer to the possibility of extending the Bush tax cuts on individual taxes for all citizens–especially the top income earners who bear and pay the lion’s share of tax revenue in this country.
http://thehill.com/blogs/blog-briefing-room/news/121599-boehner-decries-punt-on-tax-cut-vote-
by | BLOG
Now this looks promising as a step in the right direction. The AP is reporting that 47 House Democrats are breaking rank and urging Congress to extend tax cuts on investments. This means keeping the current rates on capital gains and dividends. A letter purportedly sent to House Speaker Pelosi states the following:
“Raising taxes on capital gains and dividends could discourage individuals and businesses from saving and investing,” said the letter, dated Friday and released Tuesday. “We urge you to maintain the current tax rate for both dividend and long-term capital gains taxes.”
These rates are supposed to revert to their old rate of 20% at the end of the year. If this tax cut measure is extended, it is possible that the tax rate for highest income earners could be extended as well. Both would do a wealth of good for economic recovery.
http://news.yahoo.com/s/ap/20100928/ap_on_bi_ge/us_tax_cuts_2
by | BUSINESS, TAXES
In an attempt to placate voters, President Obama signed into law the new $ 30 billion small business bill full of lending and tax credits, which he misleadingly calls tax cuts. This program will only provide some minor and temporary benefits to businesses and will hardly impact our much-needed economic recovery. Unlike politicians who only plan for the next election, businesses engage in long-term planning. The only sensible program would be to extend the Bush tax cuts for the long haul, so that businesses and higher income earners can invest. Unfortunately, our president is unwilling to pursue such a measure.
http://www.reuters.com/article/idUSN2710251620100927
by | ECONOMY, TAXES
The WSJ is reporting this evening that Congress has decided to delay voting on the status of the Bush tax cuts until after the election. While they lay the blame on Republicans, the truth is that the Democrats are running scared in the late stages of election season and incumbents don’t want their vote to go on record.
This further impacts Americans and small businesses who will have to wait to know how their taxes will be affected next year.
Mark Zandi, chief economist of Moody’s Analytics, wrote last week. “The uncertainty of not knowing what tax rates will be just a few months from now is adding to the collective nervousness.” He called the impact on business decision-making, especially hiring, “discernible”.
The Democrats have proven yet again that they are willing to sell out the wealth and health of our nation’s economy for a few Congressional seats.
http://online.wsj.com/article/SB10001424052748703384204575509793142421332.html?mod=WSJ_hpp_LEFTWhatsNewsCollection
by | NEW YORK, TAXES
Seems that El Rushbo was correct when he chose to vote with his feet last year and leave New York City.
Back in early 2009, Limbaugh warned that impending tax hikes on New York City residents would crush a top income earner like himself, and cited these taxes as the reason why he was leaving NYC for good. Now there’s even more proof that’s true. According to a recent study by the Tax Foundation, if Obama’s tax plan is adopted by Congress, “state, local and federal levies would result in a top 50.8 percent rate on high-income New York City residents”.
That’s half of your money– not yours anymore.
The rest of the article is a worthwhile read regarding the impact of Obama’s plan on taxes, deductions, and exemptions in different tax brackets. As a practicing NYC CPA, whose clientele is composed of many of these highest income earners, the news is grim indeed.
http://www.bloomberg.com/news/2010-09-22/new-york-hawaii-top-earners-face-highest-tax-under-obama-plan-study-says.html
by | BLOG, OBAMA, POLITICS, TAXES
The Weekly Standard has a fascinating discussion this week regarding the Obama Administration and Koch Industries. It describes how Obama singles out these libertarian billionaires for their opposition to Democrats — something that other Democrat politicians have begun to do en masse.
Apparently, as part of Obama’s attack strategy, his administration disclosed tax information about Koch Industries (which, under law, is supposed to be confidential) in an effort to hint at tax impropriety.
There was also another important part of the article regarding taxes that was misrepresented by the Obama Administration.
“According to Mark Holden, senior vice president and general counsel of Koch Industries, a senior Obama administration official told reporters at an August 27 on-the-record background briefing on corporate taxes:
So in this country we have partnerships, we have S corps, we have LLCs,we have a series of entities that do not pay corporate income tax. Some of which are really giant firms, you know Koch Industries is a multibillion dollar businesses. So that creates a narrower base because we’ve literally got something like 50 percent of the business income in the U.S. is going to businesses that don’t pay any corporate income tax. They point out [in the report] you could review the boundary between corporate and non-corporate taxation as a way to broaden the base.
Holden tells THE WEEKLY STANDARD that this quotation from a senior administration official “came to our attention from different avenues”.
Folks, here we have a senior Obama Administration official going after non-corporate entities on-the-record. Austan Goolsbee intimated this very line of thought during his recent interview with Chris Wallace on September 12. That’s pretty bad.
What the administration also purposefully does not explain, however, is that the reason why these businesses file as non-corporate entities is so that they can avoid the egregious problem in our tax code known as double taxation.
Some companies–say a Fortune 500–pay taxes at corporate rates. The highest corporate rate is 35%. Right now, if a corporation pays taxes and reinvests its profits, there is no extra tax. But if it profits are given to the owner, they are taxed again on that amount–which is knows as double taxation. Those business owners who wish to avoid the double taxation instead pay at individual rates, the highest of which is also 35%.
Obama is specifically trying to discredit Koch Industries and a plethora of small businesses by leaving the impression that not paying corporate taxes is somehow wrong or underhanded. These types of small businesses are the backbone of our country. They will further be impacted if the Bush tax cuts for the top earners is allowed to expire because many of these non-corporate entities pay in that highest individual tax bracket, which is set to rise to 39.6%.
For an administration to target small businesses in this way is unacceptable. Doing it while discussing sensitive tax information that likely should not be disclosed (from my perspective as a CPA) is quite alarming.
by | BLOG
The media continues to debate Obama’s plan to let the Bush tax cuts expire for the highest tax margin. With percentages set to rise to 39.6 percent, top earners will have tens of thousands less in their pockets to reinvest in the economy. My discussion ensues at the Palm Beach Post:
But Dlugash, the New York CPA, says the tax increases would sap much-needed investments made by the wealthy. For a $1 million earner, the tax increase amounts to a year’s tuition and fees at a top private college, or 160 shares of Apple Inc.
“This is $43,000 extra a year,” Dlugash said. “To whom do you think that doesn’t mean a lot? To think that that’s not important is crazy.”
Obama is intent on punishing higher income earners for the sake of fairness.
http://www.palmbeachpost.com/money/what-would-end-of-tax-breaks-for-rich-918539.html
by | BLOG
The standard cliche for Labor Day is that it’s the day to celebrate the triumph of workers over exploitive capitalist employers. This got me thinking about a better cliche–The Cliches of Socialism, by Hans F. Sennholz. For today, I recommend Number 11, which ends on this little gem:
“The rise of unionism during the past century is a result of the fallacious labor theory of value, which held that all profit and rent and interest had to come out of the “surplus value” unfairly withheld from the workers. Labor unions are the bitter fruit of this erroneous theory, with a record of exploitation of workers far more grievous than the alleged evils the unions were supposed to rectify”.
