Archive for Taxes

What Was That All About?

An occasional series here to stop and reconsider a one-time big ruckus, now forgotten—a journalistic ghost town, if you will. ObamaCare in two years’ time, for example.

Or France’s 75% tax rate:

It was supposed to force millionaires to pay tax rates of up to 75 percent: “Cuba without the sun,” as described by a critic from the banking industry. Socialist President Francois Hollande’s super tax was rejected by a court, rewritten and ultimately netted just a sliver of its projected proceeds. It ends on Wednesday and will not be renewed.

And that critic of the tax? He’s now Hollande’s economy minister, trying mightily to undo the damage to France’s image in international business circles.

The tax of 75 percent on income earned above one million euros ($1.22 million) was promoted in 2012 by the newly-elected Hollande as a symbol of a fairer policy for the middle class, a financial contribution of the wealthiest at a time of economic crisis.

But the government was never able to fully implement the measure. It was overturned by France’s highest court and rewritten as a 50 percent tax paid by employers.

Faced with a stalling economy and rising unemployment, the government reversed course in 2014 with a plan to cut payroll taxes by up to 40 billion euros ($49 billion) by 2017, hoping to boost hiring and attract more investments.

Cutting taxes to boost hiring and investment—those crazy French. When’s the next Jerry Lewis film festival, Marcel?

Où sont les taxes d’antan? Loosely translated: what was that all about?


It’s Constitutional, Bitches

Illegal aliens? Legal, with a wave of his hand.

Fidel Castro? From villain to ally, by his say so alone.

Michael Young and Eric Garner? Misdemeanor to martyr, at his direction.

I just hope Obama shows the same mercy to these “folks”:

People without insurance are running out of time to avoid the hefty ObamaCare penalties that the IRS will be handing down in 2016.

Consumers face a Feb. 15, 2015, deadline to buy insurance, after which those without coverage could be hit with fines of $325 per adult or 2 percent of family income, whichever is higher.

And you thought the Patient Protection Affordable Care Act was about patient protection and affordable care. Sucker:

In promotional materials, H&R Block and Jackson Hewitt Tax Service say they can provide consumers relief, arguing that healthcare reform is making tax planning more difficult.

“The ACA [Affordable Care Act] has changed the landscape of both healthcare and tax,” H&R Block states online, inviting consumers to calculate their mandate penalty or receive a “tax impact analysis” when they become a client.

Jackson Hewitt urges consumers to stop by one of its locations, promising that their employees “work harder to keep up with the latest tax law changes to protect you from possible penalties — not everyone else does.”

The marketing around the healthcare law is taking flight at a time when surveys show the public remains deeply confused about the mandate.

Not the Surgeon General or the AMA—H&R-[bleeping]-Block.

Forget that $325; it’s only going to be higher. Two percent of $16,250 is $325. That’s about minimum wage; such people are sure to be subsidized. Two percent of, say, $60,000? Twelve hundred dollars—after-tax dollars.

It’s either that or jail, because it’s the law of the land. Just don’t add insult to injury:

Anne Filipic, president of the campaign-style group Enroll America, said the mandate is coming up more frequently this year.

“We will always lead our conversations with the great benefits that are available to consumers,” Filipic said in a joint interview with The Hill and The Wall Street Journal last month.

“As for the fine, that is something that we will communicate to consumers about as well. It’s about delivering the facts.”

ObamaCare has never been about the facts, you lying… I can’t say it, as Barbara Bush once demurred, but it rhymes with with witch.


Pity The Poor Teachers

Philadelphia teachers now have to pay $140/month for health insurance

Philadelphia teachers vowed to fight a sudden move by the district Monday that cancels their union contract and forces them to start paying health premiums of as much as $140 a month.

The teachers union, with about 15,000 members, accused the state-led School Reform Commission of ratcheting up its “war on teachers.”

However, district leaders said there was nothing else to cut after years of funding woes that have prompted nearly $1 billion in cuts that includes the loss of 5,000 positions and the closure of 30 schools. Many Philadelphia schools operate without a nurse or librarian on duty.

“If the contract is blown open, what’s going to happen to things that matter to our kids, (such as) student class size?” said Anissa Weinraub, 34, a high school English teacher who has gone through several layoffs and three forced transfers in nine years. “I’m nervous about what else might be imposed.”

Both Superintendent William R. Hite and Philadelphia Federation of Teachers President Jerry Jordan, along with Mayor Michael Nutter, agreed that the problem lies in the state funding formula for education.

“The cuts by the commonwealth over the last few years have had a devastating financial impact on the school district and the quality of education,” Nutter said. “There’s no debate about that.”

Hite nonetheless backed Monday’s decision, saying the money would yield more than $50 million a year for classroom and other needs.

Philadelphia is one of those cities that likes to put it to businesses. The end game of that sort of thing will always be that businesses find another place to be. The folks left behind might not have the resources to pay taxes. And what do the teachers think that ObamaCare did to the business community? So, as you can tell, Gentle Reader, my heart is bleeding all over the keyboard. One hundred and forty dollars a month is a steal.

– Aggie


Number 32 With a Bullet

To the head:

On Monday the Tax Foundation, which manages the widely followed State Business Tax Climate Index, will launch a new global benchmark, the International Tax Competitiveness Index. According to the foundation, the new index measures “the extent to which a country’s tax system adheres to two important principles of tax policy: competitiveness and neutrality.”

A competitive tax code is one that limits the taxation of businesses and investment. Since capital is mobile and businesses can choose where to invest, tax rates that are too high “drive investment elsewhere, leading to slower economic growth,” as the Tax Foundation puts it.

The index takes into account more than 40 tax policy variables. And the inaugural ranking puts the U.S. at 32nd out of 34 industrialized countries in the Organization for Economic Co-operation and Development (OECD).

One small correction: the authors of the study list Slovenia and Slovakia separately when everyone knows they’re the same thing. And is there really a Switzerland and a Sweden? Someone should clean that up.

Aside from that, however:

Any day now the White House and Sen. Charles Schumer (D., N.Y.) will attempt to raise taxes on business, while making the U.S. tax code even more complex. The Obama and Schumer plans to punish businesses for moving their legal domicile overseas will arrive even as a new international ranking shows that the U.S. tax burden on business is close to the worst in the industrialized world. Way to go, Washington.

With the developed world’s highest corporate tax rate at over 39% including state levies, plus a rare demand that money earned overseas should be taxed as if it were earned domestically, the U.S. is almost in a class by itself. It ranks just behind Spain and Italy, of all economic humiliations. America did beat Portugal and France, which is currently run by an avowed socialist.

The new ranking is especially timely coming amid the campaign led by Messrs. Obama and Schumer to punish companies that move their legal domicile overseas to be able to reinvest future profits in the U.S. without paying the punitive American tax rate. If they succeed, the U.S. could fall to dead last on next year’s ranking. Now there’s a second-term legacy project for the President.

And people wonder why Recovery Summer V has been no more successful than Recover Summers I-IV. (People wonder, but the media seem not to.)

But get a load of this remedy. Are you sitting down?

Rather than erecting an iron tax curtain that keeps U.S. companies from escaping, the White House and Congress should enact reform that invites more businesses to stay or move to the U.S.

OMG! You are one bad-ass newspaper, WSJ. Next you’ll be arguing for a cut in the capital gains tax rate:

A rising tide lifts all boats, but Obama warned us that the tide would stop rising if he were elected president. One promise he kept.


A Billion Here, A Billion There… Pretty Soon We’re Talking Real Money

You believed that the government would verify the accuracy of people’s income statements? SUCKAS!!!

The government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace and has been unable so far to fix the errors, according to internal documents and three people familiar with the situation.

The problem means that potentially hundreds of thousands of people are receiving bigger subsidies than they deserve. They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.

How many “folks” do you think are receiving payments below what they are entitled to receive? And how many are receiving too much in subsidies? The Most Incompetent Administration Evah.™

– Aggie


Who Did ObamaCare Hurt The Most?

Interestingly, my husband and I were having this conversation this morning. I was opining that the Obama administration has hurt self-employed people, very small businesses, and construction related workers – whether they are engineers or guys running cranes. I say this is true for the entire administration, beginning with Shovel Ready Projects.

Now there is evidence that the largest class of victims of ObamaCare are some of these same “folks”.

A new study in the journal Health Affairs by Benjamin D. Sommers, a professor at the Harvard School of Public Health, provides fresh details on people who lost coverage on account of Obamacare, a group that may have totaled nearly 5 million Americans. But the majority of those people probably would have switched insurance anyway in 2014, even without the new law, according to the study. Most of them probably got new policies, so they’re covered now. And many switchers who got a new policy through one of the healthcare exchanges set up under Obamacare probably got a better deal than they would have before the law.

But there are three subsets of people whose policies were canceled and who are likely to end up as losers under Obamacare — people who are self-employed, over 35, white, or some combination of all three. People in this smaller group were far less likely to switch policies on their own, since they were generally happy with their coverage and less likely to change their employment status, one big reason people typically drop an individual policy. For this group, “cancellations related to the ACA represent an unwanted change in coverage options that may be quite disruptive,” the Health Affairs study concludes.

Yes. That is the group that was hurt the most by this administration. The beauty of it is that as they tighten their belts, refuse to spend, the “recovery” languishes. Because what goes around comes around.

Here’s one guy who makes my point:

Jim Stadler, a 50-year-old freelance writer who lives outside Charlotte, N.C., got a notice from his insurer last fall saying his family’s policy would be canceled because it didn’t meet all the new requirements under the ACA. Stadler was happy with that policy, which kept costs down and provided access to good doctors. After several fits and starts, his insurer, Blue Cross Blue Shield of North Carolina, was able to offer a similar policy — but the premium rose from $411 per month to $540, a 32% increase. “I’m giving an insurance company money I could be spending on groceries or durable goods or other things,” says Stadler. “I’m paying more, and for what, I don’t know.”

And here we find out that Obama targeted political opponents, although journalists refuse to believe it:

The biggest Obamacare losers are people who lost their insurance but are unlikely to qualify for subsidies through one of the new exchanges, which require an income of less than $47,000 for an individual or $95,000 for a family of four. So they’re the ones who lost coverage and probably have to pay more for a new policy, even if they enroll through an exchange. Some people who lost coverage report paying twice as much for a new policy, or more.

It just so happens those demographic groups hurt most by Obamacare tend to be Obama’s political opponents. Whites are more likely to say they’re Republican than Democrat, by 34% to 28%. People under 35 — one group more likely to benefit from Obamacare — lean strongly toward the Democratic party, while that edge evens out among people over 35. And among small-business owners — a big chunk of people who consider themselves self-employed— Republicans outnumber Democrats by as much as 3 to 1. Stadler, for one, voted for Obama in 2012 but has since helped promote anti-Obamacare campaigns.

They (and their journalistic lap dogs) deny the connection:

There’s no reason to think Obama and other backers of the ACA deliberately targeted Republicans when they made decisions that would determine winners and losers under the health reform law. It seems more likely Obamacare architects, thinking in broad, public-policy terms, simply failed to anticipate the firestorm that would erupt over canceled policies. To many of the law’s drafters, the ACA would bring a net improvement in healthcare coverage. And those who ended up paying more, they reasoned, would be getting better insurance.

So, in other words, this journalist is calling Obama, and they people his administration hired to do this work, idiots. They are saying it nicely, but they are saying it. And I say: If it walks like a duck and quacks like a duck…

– Aggie


Open Your Wallets, Gentle Readers

Obama is in talks to bail out Detroit

Chicago and LA are in line right behind Detroit.

The Obama administration and state officials are in discussions on a deal that would free up an additional $100 million to soften the blow to Detroit pensioners, two people familiar with the talks told the Free Press late Tuesday.

The two sources, who spoke on condition of anonymity because they weren’t authorized to disclose the information, confirmed that there have been talks about the federal government supporting a move by the state to give Detroit $100 million in federal money for blight remediation. That, in turn, would free up $100 million of the more than $500 million that emergency manager Kevyn Orr planned to spend for blight removal over the next 10 years. Orr could then use that money to reduce pension cuts.

Libs win, you lose.

Question: What would you say to a young adult who is torn between having fun – lots of vacations, parties clothes – vs. saving aggressively for the future. I always advise a lot of savings, but I wonder if there is any point?

– Aggie


Obama Administration Desperate For Money, Stealing Tax Refunds From Children If Parents Failed To Pay Up Back In The 1970s

Yes, folks, an authoritarian, lawless regime can do stuff like this. If you like your tax refund, you can keep your tax refund.

I am alerting you to this, because who reads the Washington Post? :) Readers of BTL will make it go viral.

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check.

Mary Grice
Mary Grice

The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam.

No one seems eager to take credit for reopening all these long-closed cases. A Social Security spokeswoman says the agency didn’t seek the change; ask Treasury. Treasury says it wasn’t us; try Congress. Congressional staffers say the request probably came from the bureaucracy.

The only explanation the government provides for suddenly going after decades-old debts comes from Social Security spokeswoman Dorothy Clark: “We have an obligation to current and future Social Security beneficiaries to attempt to recoup money that people received when it was not due.”

Since the drive to collect on very old debts began in 2011, the Treasury Department has collected $424 million in debts that were more than 10 years old. Those debts were owed to many federal agencies, but the one that has many Americans howling this tax season is the Social Security Administration, which has found 400,000 taxpayers who collectively owe $714 million on debts more than 10 years old. The agency expects to have begun proceedings against all of those people by this summer.

“It was a shock,” said Grice, 58. “What incenses me is the way they went about this. They gave me no notice, they can’t prove that I received any overpayment, and they use intimidation tactics, threatening to report this to the credit bureaus.”


Hey O-Bots, what if Granny didn’t pay? Do you suppose the government can come after you?

Grice filed suit against the Social Security Administration in federal court in Greenbelt this week, alleging that the government violated her right to due process by holding her responsible for a $2,996 debt supposedly incurred under her father’s Social Security number.

Social Security officials told Grice that six people — Grice, her four siblings and her father’s first wife, whom she never knew — had received benefits under her father’s account. The government doesn’t look into exactly who got the overpayment; the policy is to seek compensation from the oldest sibling and work down through the family until the debt is paid.

The Federal Trade Commission, on its Web site, advises Americans that “family members typically are not obligated to pay the debts of a deceased relative from their own assets.” But Social Security officials say that if children indirectly received assistance from public dollars paid to a parent, the children’s money can be taken, no matter how long ago any overpayment occurred.

They are doing this because they can.

Grice, who works for the Food and Drug Administration and lives in Takoma Park, in the same apartment she’s resided in since 1984, never got any notice about a debt.

Social Security officials told her they had sent their notice to her post office box in Roxboro, N.C. Grice rented that box from 1977 to 1979 and never since. And Social Security has Grice’s current address: Every year, it sends her a statement about her benefits.

“Their record-keeping seems to be very spotty,” she said.

Ya’ Think???? Are you suggesting that the government is maybe a touch incompetent? Hey, here’s a thought. Let’s given them an additional 1/6th of our economy to manage – our health care system – and see how it goes. Maybe if they can’t raise enough dough there, they can come after saps like you and me.

Treasury officials say that before they will take someone’s refund, the agency owed the money must certify the debt, meaning there must be evidence of the overpayment. But Social Security officials told Grice they had no records explaining the debt.

“The craziest part of this whole thing is the way the government seizes a child’s money to satisfy a debt that child never even knew about,” says Robert Vogel, Grice’s attorney. “They’ll say that somebody got paid for that child’s benefit, but the child had no control over the money and there’s no way to know if the parent ever used the money for the benefit of that kid.”

Grice, the middle of five children, said neither of her surviving siblings — one older, one younger — has had any money taken by the government. When Grice asked why she had been selected to pay the debt, she was told it was because she had an income and her address popped up — the correct one this time.

You see? They took it because they could. Plain and simple. They wanted, they took.

Think Ms. Grice’s case is a fluke?

In Glenarm, Ill., Brenda and Mike Samonds have spent the past year trying to figure out how to get back the $189.10 tax refund the government seized, claiming that Mike’s mother, who died 33 years ago, had been overpaid on survivor’s benefits after Mike’s father died in 1969.

“It was never Mike’s money, it was his mother’s,” Brenda Samonds said. “The government took the money first and then they sent us the letter. We could never get one sentence from them explaining why the money was taken.” The government mailed its notice about the debt to the house Mike’s mother lived in 40 years ago.

And for all you math whizzes out there, cogitate on this for a moment: How much employee time was spent stealing $189.10 from Brenda and Mike Samonds of Glenarm, Illinois? Because I will bet you a nickel that they spend more, for more, finding and collecting that money than they acquired in stealing it. If we really want to add to the Treasury, perhaps we should fire 10% of all IRS staffers?

Here’s a nice quote:

“I’ll put in the request,” a Social Security clerk told Verbich, “but in reality, you’ll never get anything.”

In other words: We take because we can.

Grice was also told there was little point in seeking a waiver of her debt. Collections can only be halted if the person passes two tests, Clark said: The taxpayer must prove that he “is without fault, and [that] repayment of the overpayment would deprive the person of income needed for ordinary living expenses.”

In other words: We are an authoritarian regime and you have no recourse.

The Moral of the Story? Never, ever overpay your taxes. Pay what you owe, fair and square, when it is due. They cannot confiscate your refund because your father happened to die in 1960, and your mother may or may not have received too much money in benefits, if there is no refund due.

– Aggie


Dismantling ObamaCare Continues, Quietly

Congress has voted to set the tax on not having health insurance at $0.

Undoubtedly the Senate will block this, but sooner or later that tax will go away. We will be left with two popular features of the bill: Allowing parents to keep children on their plans until age 26 and eliminating pre-existing denials. Everything else is garbage.

The House of Representatives passed legislation Wednesday afternoon to make the fine/“tax” for violating Obamacare’s individual mandate $0 for this year, and it did so by the wide margin of 90 votes (250 to 160). That’s 83 more than the 7-vote margin (219 to 212) by which Obamacare passed the House four Marches ago. Moreover, 27 Democrats voted for today’s legislation—27 more than the number of Republicans who voted for Obamacare when it passed. In all, 223 Republicans voted for today’s bill, while only one—Paul Broun of Georgia—voted against it. Here’s the member-by-member tally for the vote.

Earlier today, the Obama White House released a 3-paragraph statement on the legislation, noting that Obamacare “helps millions of Americans stay on their parents’ plans until age 26”—which, of course, has nothing to do with the individual mandate or the fine/“tax” for violating it—and saying that if President Obama were presented with the legislation, “he would veto it.”

Given the wide margin by which the legislation passed the House, along with the significant level of bipartisan support with which it passed, perhaps the Senate will actually take a vote, pass the bill, and give Obama that chance. That would provide a welcome reminder to the American people of the extent to which Obama’s centerpiece legislation relies upon coercion.

My guess is that Reid will not take it up for a vote. But sometime before the mid-terms, that tax is going bye-bye.

– Aggie


There’s The Rub

2 up-talking Brooklyn entrepreneurs talk about ObamaCare:

You know what I love, ladies? I love the idea of being able to retire with my husband and check out the world’s warmest beaches each and every winter. Nothing fancy. Florida will do just fine. But your “passion” is freezing me out. I hope health care costs send you back to your old jobs.

Here a grown-up explains things:

– Aggie


CBO Chair Explains That ObamaCare Disincentivizes Work

Ergo, ObamaCare creates poverty and income disparity increases. It also destroys jobs and raises taxes on those who are able to work.

– Aggie


“I Do Think At A Certain Point You’ve Made Enough Money”

So says President Obama. What say you, Warren Buffett?

The holding company run by US investor Warren Buffett has seen profits surge in the third quarter.

Berkshire Hathaway said net profit rose 29% to $5.05bn (£3.2bn) in the three months to September from the same period last year.

Does anyone think that Warren Buffett made five billion last quarter because he knows how to make one billion? He’s smart, shrewd, talented—what is there to resent about someone’s success?

Okay, maybe one thing:

Warren Buffett may be a fan of higher personal income taxes on the ultra-wealthy, but when it comes to Berkshire Hathaway, he’s all about tax avoidance.

On Berkshire’s balance sheet, you’ll find $49.5 billion in deferred income taxes — taxes that Berkshire Hathaway hasn’t yet paid. In fact, in all but one year in the last 10 years, Berkshire Hathaway’s deferred taxes have gone up.

How can Berkshire Hathaway — a company with the ninth-highest revenues in the world — get away with avoiding so much in taxes?

Buffett’s likes to buy-and-hold because it allows him to avoid paying taxes on his investment returns.

Because you pay capital gains taxes only when you sell, never selling can save you a fortune on your taxes.

Of course, you might be thinking that Berkshire Hathaway will eventually owe taxes on those gains. And it will. Eventually. But for the indefinite period of time in between, Buffett saves a fortune — and compounds his money faster — by delaying his tax bill.

Like I said: smart, shrewd.

Buffett is like Red Sox slugger David Ortiz waiting for his pitch. He takes some balls, fouls off others, but his patience is ultimately rewarded. A $5 billion profit or a tater deposited into the right field seats is the just dessert for such patience. (That both might play a little fast and loose with the rules is just jealous speculation.)


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