Economy Feed

It's good to be aviation king. Just ask Boeing. States are falling all over themselves, promising tax subsidies to get the aircraft manufacturer to move some of its production facilities to their jurisdictions. Boeing's home state of Washington has enacted $8.7 billion in tax breaks, believed to be the largest corporate tax break any state has ever given to a single company, to try to get Boeing to make its new 777X jets in the Evergreen State. Boeing 777X image courtesy Aircraft Recognition A fight with the International Association of Machinists, however, has sent the aerospace giant looking for a... Read more →


Tax reform isn't happening any time soon. One group of researchers says that's not so bad. In fact, their study found that a key component of tax reform -- a lower corporate tax rate -- wouldn't deliver promised rewards to the rest of the country. It's been almost an article of faith for some time now that the United States needs a lower corporate tax rate for businesses to be more globally competitive. That, in turn, will help rev up a sluggish economy and produce much needed jobs for American workers. Supporters of cutting business taxes point to data showing... Read more →


Washington State on Monday, Nov. 11, enacted the largest corporate tax break any state has ever given to a single company. Boeing, the giant aerospace company from which Seattle gets its Jet City nickname, is the beneficiary. Boeing's Everett, Wash., factory as seen from above in October 2011; Photo by Jeremy Elson via Wikimedia Commons The new law extends a business and operating tax cut for the aerospace giant through 2040, streamlines the permitting process and invests in a transportation package the company had sought. The hurried crafted tax package, estimated to be worth a total $8.7 billion over the... Read more →


Here's something definitely not worth toasting. Craft beer brewers are now taking a hit in the federal government shutdown. Treasury's Alcohol and Tobacco Tax and Trade Bureau (TTB) is no longer issuing permits to new breweries. TTB also approves new beer recipes and labels, which are on hold until Congress can agree on how to fund all federal agencies. This is a major problem for the craft beer industry, which relies on customers who are used to a regularly flowing supply of new and seasonal beers. Paul Gatza, director of the Brewers Association, says the federal work stoppage could essentially... Read more →


Last week's (Aug. 15) jobless report from the Department of Labor showed initial claims for unemployment at a seasonally adjusted 320,000. That was the lowest level since October 2007, two months before the recession officially began. That's good news, pushing the country's unemployment rate down to 7.4 percent. Hiring, however, remains sluggish. Companies are laying off fewer workers, but they aren't in a hurry to hire new workers. Payrolls increased by only 162,000 in July. That means that lots of folks still rely on unemployment benefits. These payments come from a federal-state program that's funded in large part by the... Read more →


If you're out of work, thank you for taking a break from LinkedIn and job hunting sites to stop by the ol' tax blog. I wish you the best in your job search. But I also must provide some unwelcome news. As this week's Weekly Tax Tip notes, even if you're unemployed, you still could face some tax issues. Paying tax on unemployment: First, the biggie. Unemployment benefits are taxable income. Wait, you say. You heard some unemployment is tax-free. That was the case years ago; in 2009, up to $2,400 in unemployment benefits were not taxed. But that tax... Read more →


The Motor City is getting a lot of attention today. Unfortunately, it's because Detroit has filed for bankruptcy. Detroit, Mich., viewed from Windsor, Ontario, Canada, across the Detroit River; photo by Andrea_44 via Flickr The process is different for a municipality that files bankruptcy than when a company or an individual goes broke. But the bottom line is that all entities have determined that this last-ditch effort is the only way to get their finances back in any kind of workable shape. Taxes obviously are a part of the equation. In Detroit's case, the falling individual and corporate population has... Read more →


The slow but steady economic recovery is starting to pay off for some state treasuries. State collections of personal income taxes in the first quarter of 2013 are up by an overall 17.6 percent compared to the same period a year earlier. That pace, according to a recent Rockefeller Institute of Government at SUNY-Albany report, is the strongest growth since the start in 2007 of the Great Recession. But before all you state tax officials start doing a collective happy dance, there are two big reasons for the early 2013 bump in taxes paid. ATRA and California: First, say Rockefeller... Read more →


I quit smoking cold turkey more than 30 years ago as a gift to the hubby. But every now and then during tax filing season, I think about lighting up again. I suspect I am not alone in that response to stress. Dependence on, or addiction to if you prefer, cigarettes is one reason why taxing the product is so popular. Sure, sure, lawmakers say it's for our own good. That by making us pay more for a pack of cancer sticks, we'll smoke less or give them up altogether. And that does work, especially for younger smokers who have... Read more →


The stock market is soaring. Unemployment is down. More houses are being built. And today Uncle Sam reported that we're spending more at stores. The economy's back, baby! Not so fast. Yes, Department of Commerce data show that retail sales in February were stronger than anticipated. Total sales last month were up 1.1 percent over the January numbers and were 4.6 percent higher than in February 2012. Those numbers were substantially better than projections of a 0.5 percent monthly increase and a 0.2 percent annual improvement. But there's a definite divide in recent spending patterns. "The things you'd expect the... Read more →


As you watch tonight's Academy Awards ceremony, listen for the winners to thank lawmakers for tax breaks. OK, it's not likely to happen, although 30 Rock's Tina Fey did just that a few years ago in accepting her NBC show's best comedy Emmy win. Fey was being more than polite. She knew that her ratings-challenged sitcom needed every bit of help it could get. The same is true every year for lots of television shows and movies. Without tax breaks, many of this year's Oscar-nominated films would not have been made. Or at least they wouldn't have been made in... Read more →


It's baaaaack and for some folks it is as scary as the ghosts in Poltergeist. It is the full 6.2 percent payroll tax once again being collected from employees. In 2011 and 2012, the amount of tax taken out of workers' paychecks to go toward Social Security was 4.2 percent. The so-called payroll tax holiday was created to give workers more spending money incrementally throughout the year in the hope that they would pump the cash back into the stumbling economy. Although we've technically been out of recession for a while, things still aren't all that rosy. So there was... Read more →


Assume crash positions, people. We are going over the fiscal cliff. The Senate is still working on a proposal to deal with the expiring/expired tax provisions that are part of the fiscal cliff. The House, however, has called it a day. Regardless of what the Senate might do later today, the House will vote on it tomorrow at the earliest. So technically, we're all part of the Wyle E. Coyote cartoon family, dropping helplessly into a financial canyon. Cliff jump courtesy surfbunny.tumblr.com.. Realistically speaking, it won't matter that much if the final tax deal is done at 11:59 p.m. tonight... Read more →


Alan Simpson goes 'Gangnam Style' in deficit reduction video effort

Alan Simpson, longtime U.S. Senator who's now better known as part of the Simpson-Bowles budget deficit reduction plan, belies (and defies) his 81 years and takes to new media to encourage young people to get involved in federal debt reduction efforts. And if that means going Gangnam Style in the video for the Campaign to Fix the Debt and The Can Kicks Back, then Simpson doesn't have any issue with, as he put it, making "a perfect ass" of himself. So all you whippersnappers, Uncle Alan wants you to "stop Instagramming your breakfast and Tweeting your first-world problems and getting... Read more →


This weekend I was sorting through some stories on the difficulty that Congress has in reaching an agreement on tax issues. I know, you wish you had my life, right? Here are some headlines that caught my eye. Now here's the really interesting thing. Only one of these five assessments of Congressional tax deliberations is from 2012. Can you figure out which is the most current? It's the fourth one, "Guessing at the law." That's the headline on a story in the September 2012 issue of Accounting Today about the trouble we're all having in trying to make year-end tax... Read more →


President Obama spent about an hour this afternoon on Twitter answering a few questions about fiscal cliff consequences, proposals, negotiations and Chicago sports teams (you knew someone would ask). Not surprisingly, there were no stunning new revelations on how Congress, particularly the Republicans, and the White House are going to keep us from doing a financial Thelma and Louise. As soon as the White House announced the social media question and answer session, directly from the prez with his -bo online signature ... ... the #My2k hashtag, created by the Administration to collect stories of what the estimated average middle-class... Read more →


The U.S. economy is dependent on consumer spending. A threat to that spending and a lucky draw that gave a few folks many more disposable dollars were dicussued last week at my other tax blog. The White House released a report that says higher tax rates on the middle class are a major economic scourge. The report by the President's Council of Economic Advisers predicts that if middle-class tax rates go up via expiration of the Bush-era tax cuts, plus the cost of an unaddressed alternative minimum tax increase, the country's real gross domestic product growth is likely to slow... Read more →


Have you finished your Black Friday shopping? My mother and I -- at her insistence, I must make clear -- will run out to pick up a few things later this afternoon. Unlike the crazy sheep most shoppers today, we're not looking for bargains or buying Christmas gifts. I understand both of those goals, but I still don't understand why every person must go searching for them on one day. But I digress. Seasonal staffing time: Chances are good that as thousands us head to our local stores between now and the end of the year we will be helped... Read more →


How optimistic are you that the White House and Congress will cobble together a deal to keep the U.S. economy from falling off the fiscal cliff on Jan. 1, 2013? I'm hedging my bets and predicting a short-term deal (six months or maybe a year) by year's end that would keep the worst from happening but not really make anybody happy. We are, after all, at the mercy of politicians. I hope I'm wrong. I hope both sides can agree to something a little more permanent, whatever that means on Capitol Hill. And I really hope that whatever the decision,... Read more →


Before Tuesday's votes were cast, House Speaker John Boehner (R-Ohio) was talking tough on taxes. "We're not raising taxes on small-business people," Boehner told POLITICO during an election-eve interview in Columbus, Ohio. "Ernst and Young has made this clear: It's going to cost our economy 700,000 jobs. Why in the world would we want to do that?" Predicting Republican victories, Boehner said his party would have "as much of a mandate as [President Obama] will — if that happens — to not raise taxes." Boehner's election crystal ball was right on both counts. Before the election, Republicans had 241 House... Read more →