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August 2010

This should get discussion going. Ezra Klein, who writes about "Economic and Domestic Policy, and Lots of It" for the Washington Post, last week posted a graphic showing how many dollars various income groups would save under Dubya's soon-to-expire tax cuts and under Obama's tax plan. The circles, which indicate that the middle class would fare better under Obama's plan whereas wealthier folks would do quite well if the current tax rates remain in effect, prompted, says Klein, a lot of reaction. So he followed up that post/graphic with another tax distribution chart, based on research (and even more graphic... Read more →

Late last month I reported on the Tax Foundation's online calculator that will let you compare your 2011 federal income tax liabilities under three possible tax collection scenarios. Not a group to just sit and wait, the Foundation's numbers crunchers have updated the interactive calculator to include the Democrats' plan for the expiring Bush-era tax cuts. Now at you can look at your potential IRS bill if: All the tax cuts expire completely at the end of this year; All the tax cuts are extended into 2011 or made permanent; Obama's budget is adopted, which would allow the tax... Read more →

Sorry for the Postal Service style headline, but states have gone tax amnesty crazy! Which prompts the question, what's up with them and taxpayer friendly programs in this economy? First a batch of states held sales tax holidays this month. Texas' tax-free weekend this weekend will close the August events, but more are scheduled in the fall.Now some states are letting folks who owe off the tax hook. OK, off the hook might be a bit extreme. What's happening is tax amnesty periods. They've been going on for the last couple of months in Florida, Nevada and New Mexico (as... Read more →

N.C. taxpayers might not get refunds

Don't panic if you're still waiting for North Carolina tax officials to send you the refund indicated on the 2009 return you filed this year. The state should get you that money shortly. But if in years past you just happened to overpay your taxes and didn't realize the mistake, it looks like the Tar Heel State might hold onto that extra money. The Raleigh News & Observer says a change in how the state's Revenue Department decides a tax overpayment has been discovered is to blame. Previously, a computer would flag returns on which filers had mistakenly paid too... Read more →

Can the Consumer Financial Protection Bureau save us from ourselves?

Last week I went off on a rant about irresponsible homeowners and the disturbing trend of so many of them walking away from their contractual commitments. Some readers took issue with my position, arguing that irresponsible lenders were just as, if not more, at fault. Point taken. Enough bad decisions were made on all sides to keep the blame wheel perpetually spinning. But I started again thinking about the horrible way so many folks handle money when I read today's New York Times Sunday magazine piece Buyer, Be Aware. In the article, David Leonhardt examines the Consumer Financial Protection Bureau... Read more →

If you drive a car, have a nicotine habit or buy things, you're probably paying more this year. The tax services company CCH conducts an annual survey of state consumption taxes and the 2010 data indicates that many cash-strapped states are hiking sales, gas and cigarette taxes. "From the increases in consumer taxes, it's evident that many states are trying to shore up revenue shortfalls," said Daniel Schibley, CCH senior state tax analyst. "Many other states have not yet increased taxes, but may do so." CCH found that as of July 1, five states increased their gas taxes, five hiked... Read more →

On Aug. 14, 1935, President Franklin D. Roosevelt signed the Social Security Act into law.The Social Security Act (SSA) created a social insurance program for a variety of individuals. It started out providing a monthly benefit to those age 65 and older who no longer worked, the amount based on the retiree's payroll tax contributions. The SSA also provided unemployment insurance, aid to dependent children and grants to states for medical care. Over the years, changes have been made to the Social Security system. In fact, they started as soon as 1939, with the program shifting to family-based insurance rather... Read more →

Net worth of all U.S. presidents

A couple of weeks ago, I blogged about the 10 richest U.S. presidents. That list was interesting, primarily for who wasn't as comparatively wealthy as many of us (including me) thought. Well, just so we know the full story, The Atlantic ran the numbers and gives us the net worth of all our leaders, from the first George to Obama. "Because a number of presidents, particularly in the early nineteenth century, made and lost huge fortunes in a matter of a few years, the number for each man is based on his net worth at its peak," note the researchers.... Read more →

White House tax reform panel report
to be issued on Aug. 27

U.S. taxpayers, mark your calendars. The long-delayed and anxiously awaited tax overhaul recommendations will be made public on Friday, Aug. 27. Obama created the President's Economic Recovery Advisory Board (PERAB), which is led by former Federal Reserve Board Chair Paul Volcker (at right in the photo below), in early 2009. The task force (that's its working designation) has been charged, in part, with examining possible tax reform options. As with any Washington, D.C., panel, everything is on the table. When it comes to taxes, that means tax code simplification, closing tax loopholes, combating tax evasion and reducing what many see... Read more →

Teens, Botox and medical tax deductions

It's Friday the 13th, so it seems a perfect time to ask, What are you afraid of? Apparently, many teenagers are terrified of getting older. Good Morning America reported on today's show that the latest trend among teen girls is getting Botox injections. The American Society of Plastic Surgeons says that last year, botulinum toxin, more commonly known as Botox or Dysport, was injected into Americans ages 13 to 19 nearly 12,000 times, including some teenagers who got multiple doses. That's a 2 percent increase from 2008, the society said. Wow, maybe Congress was onto something when it tried to... Read more →

Growing number of irresponsible owners walking away from home equity loans

There have been countless stories during the bursting of the real estate bubble about homeowners who've simply refused to pay their mortgages. Now it looks like there's an even larger group of deadbeats: Folks who leveraged their homes to the hilt and are just walking away from that home equity debt, too. I read the New York Times article on this trend around 8:30 a.m. this morning and put off blogging until now because it took me that long to quit being mad. And I need to type fast, as I feel my blood pressure starting to rise again. According... Read more →

Tax holidays this weekend (and beyond) in Connecticut, Florida & Massachusetts

Tax holidays continue this month, with three states' no-sales-tax days beginning this weekend. Florida reinstated its fall back-to-school tax holiday this year, but for the upcoming Friday through Sunday only. Massachusetts lawmakers took their sweet time, but were able to sneak in a holiday for this coming weekend. And Connecticut's seven-day tax holiday begins on Sunday. You'll find more info and links to the official state sales tax holiday Web pages in the table below. State Dates Items Connecticut Aug. 15-21 Clothing and footwear, $300 or less Full product listing Florida Aug. 13-15 Clothing, footwear and accessories, $50 or less;... Read more →

'Bad tax advice' negates $43 million charitable tax deduction

Billionaire hedge fund manager Leon G. Cooperman thought he was making a $43 million donation that would save him substantially on his 2005 and 2006 tax returns. The IRS, however, thought differently. The tax agency says instead of a deduction, Cooperman now owes Uncle Sam $14 million in back taxes and another $5 million in penalties. Adding insult to injury, Cooperman says he was just following the advice of his paid tax professionals. Looks like Cooperman needs to find some new tax advisers. You can read more about the Cooperman deduction mess in Forbes and my Bankrate Taxes Blog post... Read more →

Dan Rostenkowski, the chairman of the House Ways and Means Committee from 1981 to 1994, passed away on Wednesday, Aug. 11. Although his career ended in disgrace when he went to federal prison on corruption charges (he later was pardoned), the Illinois lawmaker also is remembered by many as a consummate Congressman. The quintessential Democrat also was a pragmatic politician. Rostenkowski believed in compromise and as head of the House tax-writing committee, he worked with Republican Pres. Ronald Reagan to shepherd the 1986 tax reform act into law. I was in D.C. then, working for a Representative who was on... Read more →

European golfers push Britain to change tax law before Ryder Cup tees off

While most sports spectators have been fixating on Tiger Woods' terrible play, professionals who play the game are fighting a tax battle with Great Britain. Participants in one of golf's premier events, the Ryder Cup, want to be let off the tax hook. Under current law, HM Revenue & Customs (HRMC) imposes levies on athletes' worldwide endorsement earnings. That means that if a sports star plays, for example, in two tournaments a year and one of those events is in England, the athlete could be charged 50 percent tax on half his or her total annual sponsorship money. The tax... Read more →

Last week I joined the chorus of folks cheering the IRS' decision to no longer provide lenders with a debt indicator for taxpayers. The assumption is that discontinuation of what is essentially a government provided credit check mechanism will likely reduce the number of refund anticipation loans (RALs). But you know what they say about assume. I still don't like RALs. Too many of the providers of these short-term loans prey on desperate people who end up in worse financial shape because of associated fees and the fact that they just can't pay back the loans, tax refund notwithstanding. Several... Read more →

Travel taxes continue to climb

Back in June I blogged about how many cities and states depend on the kindness of strangers, AKA tourists and business travelers, to help add cash to their struggling treasuries. The latest word from the National Business Travel Association (NBTA) Foundation is that travel-related taxes are going even higher. In many cases, the taxes are dedicated to local projects not connected to the travelers from whom they are collected. The Alexandria, Va.-based travel group looks each year at car rental, hotel and meal taxes in the top 50 U.S. travel destination cities. The 2010 data indicates taxes and fees on... Read more →

High taxes discourage childbirth

Now there's a contraception method I bet you never considered. But Washington Post columnist Robert Samuelson says that if taxes are raised to help keep the federal deficit from increasing, then policymakers need to be careful to structure any hikes so that they are more parent-friendly. If they don't, says Samuelson, "more Americans may choose not to have children or to have fewer children. Down that path lies economic decline." Samuelson's core argument in his "America's Parent Trap" column today is that the United States' current fiscal and tax policies "punish parents, who are taxed heavily to support the elderly.... Read more →

The man pictured at left is Donald Bren, chairman of the Irvine Co., a Southern California private real estate firm. Bren's net worth is estimated at $12 billion. Forbes recently ranked him as the 45th wealthiest person in the world. The man pictured at right is…. Nobody knows this guy's name, at least nobody at the Cerritos, Calif., branch of East West Bank. It was at that financial institution that the man at right opened several new accounts as Donald Bren. The photo is from the bank's surveillance video. Yep, even though the two men were definitely not separated at... Read more →

Is it just me, or is Alan Greenspan taking over the "Crazy Old Uncle in the Attic" title from Ross Perot? Lately, the 84-year-old former Federal Reserve chairman has been talking a lot to the press. And every time I see him or read a story in which he's featured, I also see in my mind's eye that shambling relative at the family reunion who has to loudly include his two-cents in every conversation all the whippersnappers are having. Now I'm not saying that people of a certain age don't have worthwhile insights to share. I myself am getting to... Read more →