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July 2009

Sorry, pet owners. The W-K9 form below is just for fun. Thanks to TaxProf and The Bonnie & Marie Show for this faux form gem. For a better view, click the image (or link above it) to open, then click that image to enlarge. Yes, I know. It's terribly unfair that our furry children can't be claimed as dependents so we can make use of associated tax write-offs. Many times they cost as much as human kids to feed, care for and even clothe (I'm talking about you Paris Hilton, and all your wannabe fans!). But while we may have... Read more →

Tax holiday head start in Ga., Miss.

Here's a quick reminder for tax-savvy shoppers in a couple of southern states: Georgia's four-day sales tax holiday begins today. Mississippi kicks off its two day no-tax event tomorrow. The Peach State holiday runs through Sunday, Aug. 2, and allows shoppers to purchase certain pieces of apparel (costing $100 or less), computers and accessories (with a $1,500 limit) and, in keeping with the back-to-school hook, some school supplies (priced at $20 or less). The Georgia Department of Revenue provides detailed lists of tax-exempt items for each product segment -- clothing and shoes, computers and classroom material. From those pages, you... Read more →

The good news for Californians is that your state now has a budget. Gov. Arnold Schwarzenegger signed the fiscal 2010 document yesterday. The bad news is that having a budget in place doesn't necessarily mean that California will quit issuing IOUs. These pieces of paper, officially known as registered warrants, started going out earlier this month to Golden State vendors and, yes, taxpayers who were due state tax refunds. California Controller John Chiang and his staff now must crunch the numbers to make sure they really do have enough cash to pay people with real legal tender. That analysis is... Read more →

The case for taxing healthcare benefits

As Congress continues its political and tax policy struggle to find a way to pay for healthcare reform, New York Times economics writer David Leonhardt lays out the case for taxing healthcare benefits themselves. Most of the financing options being discussed, says Leonhardt in today's Health Care Reform and the Unpopular T-Word, have a basic flaw: They do not raise revenue as quickly as health costs rise. Revenue from most taxes, he notes, increases only as fast as the economy grows. Health costs, however, grow much more quickly than the economy. That's something everyone with coverage can attest to and... Read more →

Alright, everybody sing along to the new hit from Congress, set to Dwight Yoakam's "Guitars, Cadillacs and Hillbilly Music." As Congress struggles to come up with ways to pay for healthcare reform, some members are again pushing the taxation of insurance companies that offer high-cost, gold-plated healthcare plans, or as it's popularly known, "Cadillac" coverage. The Wonk Room cites Kaiser Family Foundation data that shows the average family pays approximately $13,000 for health coverage, 9 percent of workers have family coverage with premiums of $17,000 or more and the top-line "Cadillac" coverage of $25,000 or more is available to less... Read more →

There's word out of D.C. that some lawmakers want the country's beautiful people to pay for healthcare reform. To be precise, they want the beautiful people who got their good looks thanks to plastic surgery to pay. According to the Drudge Report (via Tax Policy Blog), Senate Finance Committee members have discussed imposing a 10 percent excise tax on cosmetic surgery deemed unnecessary for medical purposes. Personally, I plan to continue to age gracefully, mainly because my pain threshold is markedly lower than my vanity threshold, so this proposed tax wouldn't affect me. But I still think it's a bad... Read more →

IRS agent indicted in refi scheme

Talk about your major conflict of interest! An IRS agent who worked for a mortgage company on the side allegedly pressured delinquent taxpayers whom he was investigating to go to his other employer to refinance their mortgages so they could get enough cash to pay their tax bills. According to court filings, Mark Claybrooks of Brentwood, Calif., worked as an IRS revenue officer in Walnut Creek, Calif., contacting people whose federal tax bills were overdue. From 2003 to 2005, he also worked for Faith Mortgage Group in Antioch Calif., refinancing residential loans. The indictment handed up last week alleges that... Read more →

Massachusetts and D.C. are out. Maryland is on hold until 2010. And Illinois briefly considered it, but decided "no." I'm talking of course about back-to-school sales tax holidays. These perennial events offer shoppers a chance to buy certain products -- typically clothing and/or school supplies -- without having to pay the state's sales tax on the items. In many cases, local jurisdictions forgo collection of their additional levies, too. A tough economy and shrinking state coffers have prompted some locales to abandon, at least temporarily, their annual sales tax holidays. I'm still keeping an eye on Massachusetts. Last year it... Read more →

Older homeowners in one small Maine town are getting the chance to reduce their property taxes by as much as $750 by working them off. Actually, the 20 participants of the Saco, Me., tax-abatement program that began this month are volunteers, notes the Westbrook, Me., Sun Chronicle. Since the older residents don't technically get salaries, they don't have to worry about reporting income which could affect eligibility for some government benefits they receive. Instead, they get a tax credit, calculated at an hourly rate by the municipality, which then is used to reduce the volunteer's property tax bill. Saco is... Read more →

I'm a big proponent of charitable gifts, in part because of the tax breaks they often afford the givers. And I'm particularly impressed by this creative giving approach: Donating a house to a fire department so the structure can be burned down as a training exercise. In the Columbus, Ohio, suburb of Upper Arlington, such donations and subsequent tax deductions have been common for at least two decades, according to the Columbus Dispatch. The IRS, however, has snuffed out this type of tax write-off for some of the community's donors. James and Lori Hendrix and Kirk and Allison Herbstreit have... Read more →

Minimum wage tax breaks information has been updated in this post published on July 6, 2021. If you make the minimum wage, you should get a raise today. Under the final phase-in of wage increases that started in 2007, the federal minimum wage for covered, nonexempt employees today goes up 70 cents per hour to a rate of $7.25 per hour. The increase got my friend Dara Quackenbush reminiscing on Twitter yesterday: Although it hasn't been that long ago since Dara graduated from college, her observation illustrates that things haven't necessary gotten better over the years. It's particularly tough out... Read more →

"Watching Barack Obama trying to push members of Congress toward some kind of agreement on a health care bill gives you a new appreciation for why Hillary Clinton decided to just write the whole thing herself and dump it on them." -- Gail Collins, The Health Care Sausage During a primetime national television press conference last night, the President again made his case for quick action on health care reform. Today, the House Energy and Commerce Committee, one of five Capitol Hill panels stirring this legislative pot, canceled (yet again) its healthcare markup session, making it unlikely that the House... Read more →

Speaking of high-net-worth individuals who have fallen from that category, add actor Stephen Baldwin to the list. He and his wife have filed for bankruptcy, brought about in large part by unpaid state and federal taxes. One of the -- you pick you adjective: famed, infamous, acclaimed, despised -- Baldwin brothers, Stephen's best role was as Michael McManus in the 1994 flick The Usual Suspects. describes the character as "a crack shot with a temper and a wild streak." Perhaps Baldwin nailed the role because it wasn't a stretch. Youthful escapades got him kicked out of college; he later... Read more →

If the numbers from a recent wealth survey are correct, then the healthcare surtax might be on shaky ground. Financial Advisor magazine, the publication for, you got it, professionals who offer financial advice, says that the number of wealthy individuals in the United States is dwindling. (Thanks to Twitter buddy CPA_Trendlines for the tip.) The number of high-net-worth individuals in the U.S. with at least $1 million in investible assets fell 18.5 percent last year, according to the consulting company Capgemini. Apparently, though, wealth, like real estate, is affected by that location, location, location factor. The magazine says that the... Read more →

GOP new media venture: 'Just Tax'

The Republican Party is looking for ways to invigorate the party and get a new generation of voters into their ranks. So what better way than to combine YouTube, Lady Gaga and taxes? CNN's Political Ticker reports that at Tuesday morning's weekly House GOP conference meeting, the party faithful were shown a clip of a video parody of the Lady Gaga hit "Just Dance." In the video, the song's refrain is replaced with "Just Tax." Peter Cowman, a recent graduate of the University of Washington in Seattle, created the video. Washington Rep. Dave Reichert asked Cowman for permission to show... Read more →

So now, Sonia Sotomayor waits to see if she'll be taking a seat on the country's highest court. Her U.S. Supreme Court confirmation hearings are over, but the verdict from the Senate Judiciary Committee has been put on hold by the panel's leading Republican until July 28. Don't ask me to explain the arcane rules that allow such procedural delays. It's the Senate and I'm just finishing up my first cup of coffee. Suffice it say that the judge who hopes to become the first Latina on the Supreme Court has to wait a bit longer for that to become... Read more →

'One small step ...'

I can tell you exactly where I was at 3:17:40 p.m. Central Standard Time 40 years ago today. My brother and I had been called from our play outdoors to come inside and watch astronauts walk on the moon. Even as I have trouble some days remembering what I did a week earlier, that memory of the Apollo 11 lunar module landing will forever be vivid in my mind. As a kid, space travel fascinated me. My dad helped nurture it by spending summer evenings with us staring up at the vast West Texas skies. So I had no problem... Read more →

Healthcare surtax not progressive enough

That's a headline -- and taxation approach -- that's sure to kick the already contentious health care reform debate up a notch. Frank Pasquale, writing in Concurring Opinions, says that beneath all the sturm und drang about soaking the rich with a health care surtax proposed in the House bill, the focus should be on three underlying realities: "First, income and wealth vastly increased at the top of the distribution over the past thirty years — in part because of corporate cost savings that included denial of health coverage to millions of workers. Second, inequality itself exacerbates the health care... Read more →

OK, I know I picked on states for offering tax amnesties yesterday, but now we learn the extent of why they're looking at any way possible to get any amount of money: Taxes collected by the 50 states dropped by 11.7 percent overall during the first quarter of 2009, compared to the same period a year earlier -- the largest such decline in 46 years. That discouraging word on state revenue comes from the latest report on state finances by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. Overall, state tax... Read more →

The tax amnesty train just keeps chugging along. Earlier this year, several states allowed their tax delinquents to pay their overdue bills and, in most cases, avoid at least some of the associated penalties and interest. Now amnesties are coming up in Louisiana, Oregon and Vermont. But before I get to the specifics, allow me a moment to rant. Bad tax "parents:" The states reason that they don't have the money to effectively operate programs to collect money they are owed. It's easier to at least get some of the money, the actual taxes owed, forgo the penalty costs and... Read more →