"Towards the government I feel no scruples and would dodge paying the [income] tax if I could. Yet I would give my life for England readily enough, if I thought it necessary. No one is patriotic about taxes." George Orwell, Wartime Diary, August 9, 1940. (HT-Radio Derb)
(I guess this now means we can question Congressman Rangel's patriotism)
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Friday, September 19, 2008
Tuesday, April 15, 2008
A little humor for April 15th
"I'm proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money." -- Arthur Godfrey
A nice list of tax related quotes can be found here
A nice list of tax related quotes can be found here
Saturday, April 12, 2008
Of sunshine and taxes
Yes, I have not posted in a week. First off, last weekend, the weather here in Chicago was nice for the first time since forever. So Alex decided we had to play soccer in the park.
Then came taxes, and yes, I am still procrastinating and have not yet filed.
But I promise I will.
Then came taxes, and yes, I am still procrastinating and have not yet filed.
But I promise I will.
Friday, November 2, 2007
Tax Reform
House Ways and Means Committee Chairman Charles Rangel has proposed a tax reform bill, which the GOP immediately denounced as a big tax hike.
Maybe however, it would be better for the GOP to take a good look at the bill. The bill is being touted as a reform of the Alternative Minimum Tax paid for by a surtax on the highest incomes. I personally am not that worked up about the AMT (despite having to pay it 3 out of the past 4 years). The AMT really acts as a back door flat tax and addresses the myriad of tax preferences in the code (such as the deduction of state and local taxes -- I live in a high tax city in a relatively high tax state but think people would care more about local taxes if this subsidy was repealed).
However, Rangel is looking at something which you would think is anathema on the left -- namely, lowering the corporate tax rate. Think about that. A very liberal Democrat from Harlem is proposing to use money from tax reform to partially reduce corporate income taxes.
Corporate income is really taxed twice, at the corporate level and when dividends are paid. Most of the other industrialized countries have a system whereby corporate income is taxed only once. Further, the US taxes corporations on their world wide income while in other countries, especially those with a value added tax, give relief on foreign earned income. If I had my druthers, I would replace the current two step corporate tax with a corporate level tax which is credited to dividend recipients. That would still tax corporate income paid to tax-exempt and foreign owners while taxing corporate income only once.
Given the politics, there will not be a major tax reform bill passed next year (though you may see some stopgap AMT relief. There is an election on and President Bush has no political capital left. But historically, there have been major tax reform packages in the first year of the last few presidents. And if Charles Rangel has placed the corporate income on the table, that means a chance of real reform of the tax system is possible,
Let's not reject this out of hand.
Maybe however, it would be better for the GOP to take a good look at the bill. The bill is being touted as a reform of the Alternative Minimum Tax paid for by a surtax on the highest incomes. I personally am not that worked up about the AMT (despite having to pay it 3 out of the past 4 years). The AMT really acts as a back door flat tax and addresses the myriad of tax preferences in the code (such as the deduction of state and local taxes -- I live in a high tax city in a relatively high tax state but think people would care more about local taxes if this subsidy was repealed).
However, Rangel is looking at something which you would think is anathema on the left -- namely, lowering the corporate tax rate. Think about that. A very liberal Democrat from Harlem is proposing to use money from tax reform to partially reduce corporate income taxes.
Corporate income is really taxed twice, at the corporate level and when dividends are paid. Most of the other industrialized countries have a system whereby corporate income is taxed only once. Further, the US taxes corporations on their world wide income while in other countries, especially those with a value added tax, give relief on foreign earned income. If I had my druthers, I would replace the current two step corporate tax with a corporate level tax which is credited to dividend recipients. That would still tax corporate income paid to tax-exempt and foreign owners while taxing corporate income only once.
Given the politics, there will not be a major tax reform bill passed next year (though you may see some stopgap AMT relief. There is an election on and President Bush has no political capital left. But historically, there have been major tax reform packages in the first year of the last few presidents. And if Charles Rangel has placed the corporate income on the table, that means a chance of real reform of the tax system is possible,
Let's not reject this out of hand.
Thursday, September 13, 2007
The Bin Laden Tax Plan
Folks are having lots of fun with the latest bin Laden videos. From the beard that looks like it is covered with a gallon of "Just for Men" to questions about "freezing" to jokes about bin Laden's concerns about Koyoto, you have to laugh.
But what I find most interesting are the tax comments. In the video "bin Laden" discusses that the only tax under Sharia would be a 2.5% tax on wealth. Some are joking that maybe al-Qeada is going after the low tax green vote.
As I understand it however, the Zakaat is an annual wealth tax. in the West, most taxes are either taxes on net income (such as the income tax) or taxes on sales transactions (such as consumption taxes or sales taxes). The estate tax is an example of a wealth tax.
So even though a 2.5% rate looks attractive, the actual rate as a percentage of income will be higher.
Steve Forbes therefore probably will not be endorsing bin Laden.
But what I find most interesting are the tax comments. In the video "bin Laden" discusses that the only tax under Sharia would be a 2.5% tax on wealth. Some are joking that maybe al-Qeada is going after the low tax green vote.
As I understand it however, the Zakaat is an annual wealth tax. in the West, most taxes are either taxes on net income (such as the income tax) or taxes on sales transactions (such as consumption taxes or sales taxes). The estate tax is an example of a wealth tax.
So even though a 2.5% rate looks attractive, the actual rate as a percentage of income will be higher.
Steve Forbes therefore probably will not be endorsing bin Laden.
Thursday, August 16, 2007
Pope Benedict to Address Tax Evasion and Tax Havens
It was reported today that the Pope's second encyclical letter will address tax evasion and tax havens. As a tax lawyer, I considered going into my group head and saying that I needed to be excused from work, but then thought better of it.
This is not a new requirement. The Catechism (of which Pope Benedict was an important contributor) lists tax evasion as a morally illicit business practice. US law recognizes the difference between tax evasion (which is illegally arranging your affairs to evade paying taxes) and legal tax avoidance (which is arranging your affairs so that you pay the minimum amount of tax due). Someone owning Microsoft stock purchased in 1982 is not required to sell it to pay tax -- the taxpayer is perfectly permitted to hold the stock, borrow against it, and use it in such a way that no tax is due.
It will be interesting to see what the letter says. I believe it probably must be read in the European and specifically the Italian milieu where money is transferred secretly offshore into haven jurisdictions.
This is not a new requirement. The Catechism (of which Pope Benedict was an important contributor) lists tax evasion as a morally illicit business practice. US law recognizes the difference between tax evasion (which is illegally arranging your affairs to evade paying taxes) and legal tax avoidance (which is arranging your affairs so that you pay the minimum amount of tax due). Someone owning Microsoft stock purchased in 1982 is not required to sell it to pay tax -- the taxpayer is perfectly permitted to hold the stock, borrow against it, and use it in such a way that no tax is due.
It will be interesting to see what the letter says. I believe it probably must be read in the European and specifically the Italian milieu where money is transferred secretly offshore into haven jurisdictions.
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