Tag: tax

Amazon Threatens Cuts Over State Taxes

Seth Anderson1 Comment

Hey, Illinois legislators, don’t do this, ok?

Darth Vader

Cash-strapped states trying to force retailers to collect taxes on online sales are spurring efforts by Internet retailer Amazon.com Inc. to avoid being swept under the proposed laws.

North Carolina is close to passing a law that would force online retailers to collect the state’s 4.5% sales tax from marketing affiliates, people who get a sales commission from online customer referrals. Amazon, of Seattle, Wash., told its North Carolina marketing affiliates on Wednesday that it would stop doing business with them by July 1 if the law takes effect. Cutting the affiliates would enable Amazon to avoid collecting tax on sales in the state.

“We believe the way North Carolina is going about collecting the sales tax is unconstitutional,” said Amazon spokeswoman Patty Smith. “It isn’t appropriate for us to have to comply with an unconstitutional burden.”

[Click to continue reading Amazon Threatens Cuts Over State Taxes – WSJ.com]

I don’t make much money on Amazon affiliate linkages, but I make enough to pay for my hosting fees, and would be quite saddened if that revenue stream dried up. North Carolina ought to stop subsidizing tobacco farmers if they are so concerned with their budget.

Reading Around on April 15th through April 16th

swanksalot0 comment

A few interesting links collected April 15th through April 16th:

  • The White House – Blog Post – A Vision for High Speed Rail – "The report formalizes the identification of ten high-speed rail corridors as potential recipients of federal funding. Those lines are: California, Pacific Northwest, South Central, Gulf Coast, Chicago Hub Network, Florida, Southeast, Keystone, Empire and Northern New England. Also, opportunities exist for the Northeast Corridor from Washington to Boston to compete for funds to improve the nation’s only existing high-speed rail service:"

    Sign me up!

  • Broward Palm Beach – The Juice – Fort Lauderdale, You Have Tea On Your Face – "And I'm a reporter, I took an (imaginary) oath to comfort the afflicted.

    "What freedoms have you had taken from you?"

    She looked confused. I thought, perhaps in the places Jane gets her news (cough cough Fox News cough) reporters don't worry about those pesky follow-up questions. There was a long pause.

    "Uh…uh…the freedom to choose…the…uh…" Awkward moment"

    idiots – protesting without any clue what they are even protesting.

  • honoria in ciberspazio – Proposal for Live Art Blogging Interactive Austin 2009 – "Problem: After a stimulating conference, attendees' notes lay black and white and sometimes unreadable on the page while vital insights are bright, yet fading in participants' memories.

    Solution: Honoria Starbuck creates live colorful abstract artworks that zing with the high energy in the conference room. Honoria's drawings highlight epiphanies and explore expanding new directions with dynamic aesthetic gusto. These abstract drawings keep the open nature of inquiry buzzing in the wake of the conference."

Reading Around on March 28th through March 29th

swanksalot0 comment

A few interesting links collected March 28th through March 29th:

  • The Washington Independent » After the Laughter, Grim GOP Numbers – While reporters hooted at the comically simplistic charts and lack of details in the House Republican leadership’s budget plan, the green eyeshade types at Citizen’s for Tax Justice crunched the numbers (PDF). They conclude that a quarter of all households, most of them poor, would pay more taxes under the GOP plan, while the richest one percent would pay $100,000 less.

  • TidBITS Media Creation: iMovie ’09 8.0.1 Update Brings More than Just Bug Fixes – “I understand that Apple isn’t creating its products for writers, and it can (and does) change features whenever it wants. The updates here are great for iMovie users. But since the development teams must keep internal lists of what’s changed anyway, is it really so hard to spend an hour and turn those into useful release notes?”

    Amen to that. Maybe make a preference toggled in Software Update: terse details as the default, but have the ability to set a preference and get more detailed release notes. Please Apple, it shouldn’t be so difficult to say what’s new.

  • Mady Comfort – Biography – Mady (or Mattie) Comfort was a jazz and lounge singer, dancer, and model. She was married to bassist Joe Comfort, who worked with Lionel Hampton and Nat King Cole, and who played on many of the Frank Sinatra/Nelson Riddle Capitol recordings. Gene Santoro, in his biography of Charlie Mingus (Myself When I Am Real), says that she was also a girlfriend of Duke Ellington, and that she is the “Satin Doll” about whom Ellington, Strayhorn, and Mercer wrote the song “Satin Doll.”

    Also sang the hell out of a Nat King Cole song, I’d Rather Have The Blues (aka Blues From A Kiss Me Deadly) in the 1956 noir film, “Kiss Me Deadly”“. Whoa.

Not Insane: Payroll Tax Holiday

swanksalot0 comment

I’m with The New Yorker’s Henrik Hertzberg on this one – let’s at least temporarily reduce the various payroll taxes1 that are deducted from most workers paychecks2.

Moto and the devouring of money2

Where income taxes are concerned, even Republicans seldom argue that taxing added income over a quarter million dollars at, say, thirty-six per cent rather than thirty-three per cent is wrong because the affluent need more stuff. They argue that making the rich richer enables them to create jobs for the non-rich. More jobs: that’s a big argument for capital-gains and inheritance-tax cuts, too. But the payroll tax is a direct tax on work and workers—on jobs per se. If the power to tax is the power to destroy, then the payroll tax is, well, insane.

[David] Frum is not the only Republican on the case. “If you want a quick answer to the question what would I do,” Mitch McConnell, the Senate Republican leader, said recently, “I’d have a payroll-tax holiday for a year or two. That would put taxes in the hands of everybody who has a job, whether they pay income taxes or not.” Other Republican politicians and conservative publicists have made similar noises. They haven’t made it a rallying point, though; it would, after all, shape the over-all tax system in a progressive direction. Anyhow, their sincerity may be doubted: when President Obama proposed a much more modest cut along similar lines—a refundable payroll-tax credit of four hundred dollars—they denounced it as a welfare giveaway.

Liberals have been reticent, too. The payroll tax now provides a third of federal revenues. And, because it nominally funds Social Security and Medicare, some liberals regard its continuance as essential to the survival of those programs. That’s almost certainly wrong. Public pensions and medical care for the aged have become fixed, integral parts of American life. Their political support no longer depends on analogizing them to private insurance. Besides, the aging of the population, the collapse of defined-benefit private pensions, the volatility of 401(k)s, and pricey advances in medical technology mean that, no matter what efficiencies may be achieved, Social Security and Medicare will—and should—grow. Holding them hostage to ever-rising, job-killing payroll taxes is perverse.

[From Not Insane: Comment: The New Yorker]

I say give it a shot. The Republican plan of cutting taxes on the upper income brackets, having been the mantra of the Congress for over a decade, has obviously not worked so well for the rest of us.

Footnotes:
  1. Social Security tax, the Social Security and Medicare tax, or the Federal Insurance Contributions Act (FICA) tax consume about 15% of a typical paycheck [↩]
  2. Not that it matters, but I’m for this even though it wouldn’t affect me directly (indirectly, if our economy resumes its typical strength) – I don’t have a sort of job where I get paid every week, two weeks, or even every month. I’m lucky if I get a few lump sums of cash a year, some years there are only lumps of coal, some years there are several projects that pay out. Like I said, not sure if it matters, really, to the matter at hand [↩]

Reading Around on March 6th through March 9th

swanksalot0 comment

A few interesting links collected March 6th through March 9th:

  • It Didn’t Take Dem “Plotting” to Make Limbaugh GOP Leader – Eyes On Obama – “The bottom line is that Rush Limbaugh is unequivocally the most simultaneously loved, respected, revered, and feared man on the right. According to Machiavelli, that makes him the leader.Democrats didn’t concoct some false connection between Limbaugh and the Republican Party. It’s always been there, and as Rush has grown more popular, he’s grown more powerful in his ability to deflect criticism, to the point that his very presence downright deters it. Republicans know if they cross Rush (or speak against him publicly in even the smallest way), the firestorm he unleashes may be enough to end their careers. And so he speaks daily to an audience of millions, unchecked by his fellow conservatives.”

  • cocaine and the swinging 1970s

  • Media Matters – Media Matters: The media’s tax fraud – When is a tax cut for 98 percent of taxpayers portrayed as a tax increase? When some of the small handful of people whose taxes will go up happen to control the nation’s news media.

    Last week, President Obama unveiled a budget outline that extends the Bush tax cuts for all but the top two percent of taxpayers and makes permanent a tax credit of up to $800 for low- and middle-income workers that was included in the recent stimulus package, among other tax cuts.

Moguls Steal Home While Companies Strike Out

Seth Anderson2 Comments

Has Bill Moyers been reading our blog? Ridiculous question, but he comes to the same conclusion as us regarding the new Yankee’s stadium – it is a boondoggle.

Sunset at Safeco Field
[Safeco Field, Seattle, WA]

Yankee star Alex Rodriguez had a better year than [Babe Ruth or New York Governor Al Smith]. This season, A-Rod is making $28 million, just part of an annual Yankee payroll of $209 million, the richest in baseball. Their owner, George Steinbrenner, is among the Forbes 400, one of the country’s richest tycoons.

But when it came to paying for the new, $1.3 billion pleasure dome, the millionaires on the field and King Midas in his skybox came up with some razzle-dazzle plays to finance their new wealth machine – tax-free bonds, requiring ordinary citizens to subsidize the construction, and hundreds of millions more for new parking garages, a train station and parks that supposedly will replace the ones seized by the city to make room for the new stadium. The Little League games that used to flourish on sandlots just outside the old ballpark have been moved miles away, sent down to the minors on a long road trip.

That’s okay, you may think, there will be plenty of room in the new stadium for the tax-paying public to come root, root, root for the home team – even the Coliseum in ancient Rome had bleachers for the commoners. But, in fact, there will be 5,000 fewer seats in the stands. And while the Yankees reportedly promise that half of what’s left will cost $45 or less, those seats that used to cost $250, right behind the dugout, will now cost you $850. And if you want to be near home plate, you’ll have to cough up $2500 – per game.

Meanwhile there will be more luxury suites and party rooms where fat cats can gather, safely removed from the sweaty masses. Corporations and wealthy individuals will be able to rent the luxury suites for anywhere from $600,000-$850,000 a year – tax deductible – assuming they haven’t filed for bankruptcy this week.

Why aren’t the fans and taxpayers giving the Yankees a Bronx cheer? They did, but city officials rolled over them while making sure local politicians stay in the lineup. The pols are getting their own luxury suite at the new stadium for free – and first shot at buying the best available seats.

The new colossus will cast its majestic shadow across the South Bronx, one of the nation’s poorest neighborhoods. The residents will watch from the outside as suburban drivers avail themselves of 9,000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of New York City, respiratory disease is already so high they call it “Asthma Alley.”

Not that the well to do in the infield seats will have to hear the wheezing. They’ll have exclusive access to a private club, a private entrance and a private elevator, totems of this gilded age. Let the games begin.

[From Bill Moyers Journal: Bill Moyers & Michael Winship: Moguls Steal Home While Companies Strike Out]

Owners of sporting teams should have deep enough pockets to pay for their own damn stadiums, and not depend upon taxpayers to fund their profits for them. We should nationalize the teams instead of insurance companies like AIG.

Will Congress Extend Wind, Solar Tax Breaks

Seth Anderson0 comment

Would seem as if this should be bigger news: McCain would rather devote alternative energy tax credits to the poor, poor oil corporations who are underwriting his campaign instead of renewing or expanding tax credits to new green-collar industries.

Windy Day Just Like Any Other Day
[Windy Day Just Like Any Other Day]

The whole clean-energy ecosystem, from investors to manufacturers to developers, is on tenterhooks to see what will happen with the credits.

Of course, that’s not necessarily the fault of the Democrats who control Congress. Sen. John McCain famously missed the decisive vote on renewing the tax credits earlier this year, and missed another vote after that.

But it does explain why, as California senator Barbara Boxer said last night in Denver, “In the Senate, 60 is the new 50!”. Sixty Demcratic senators is a filibuster-proof majority. That means policy ideas turn into policies. Which is why some observers, like the WSJ edit page, figure the most important votes this election season won’t necessarily come at the top of the ticket—Obama versus McCain—but at the Congressional level.

With 60 Democratic senators, clean-energy advocates like Pennsylvania governor Ed Rendell may just get their wish: permanent tax credits for renewable energy.

[From Environmental Capital – WSJ.com : Pay Me: Will Congress Extend Wind, Solar Tax Breaks?]

1. Renewable resources like wind and solar, or 2. petro-dollar dictators like the Saudi princes. Hmmmm, let us collectively noodle on that choice for a second. Gee, let’s choose door number 1, Alex!

Tax This Biatch

Seth Anderson0 comment

Krugman on the tax issue:

Mr. McCain wants to preserve almost all the Bush tax cuts, and add to them by cutting taxes on corporations. Mr. Obama wants to roll back the high-end Bush tax cuts — the cuts in tax rates on the top two income brackets and the cuts in tax rates on income from dividends and capital gains — and use some of that money to reduce taxes lower down the scale.

According to estimates prepared by the nonpartisan Tax Policy Center, those Obama tax increases would fall overwhelmingly on people with incomes of more than $200,000 a year. Are such people rich? Well, maybe not: some of those Mr. Obama proposes taxing are only denizens of lower Richistan, although the really big tax increases would fall on upper Richistan. But one thing’s for sure: Mr. Obama isn’t planning to raise taxes on the middle class, by any reasonable definition — even that of the Bush administration.

O.K., the Bush administration hasn’t actually offered a definition of “middle class.” But in May, the Treasury Department — which used to do serious tax studies, but these days just churns out Bush administration propaganda — released a report purporting to show, by looking at the tax bills of four hypothetical families, how the middle and working class would be hurt if the Bush tax cuts aren’t made permanent.

And when the Center on Budget and Policy Priorities looked at the report, it made an interesting catch. It turns out that Treasury’s hypothetical families got all their gains from the so-called middle-class provisions of the Bush tax cuts: the Child Tax Credit, the reduced tax bracket for lower incomes and marriage penalty relief.

These all happen to be provisions that Mr. Obama proposes leaving in place. In other words, the Bush administration itself implicitly defines the middle class as consisting of people making too little to end up paying additional taxes under the Obama plan.

Of course, all the evidence in the world won’t stop Republicans from claiming, as they always do, that Democrats are going to impose a crippling tax burden on ordinary hard-working Americans. But it just ain’t so.

[From Paul Krugman – Now That’s Rich- NYTimes.com]

The True Cost of McCain’s Oil Industry Subsidies for Every State

Seth Anderson0 comment

McCain likes giving his starving oil buddies federal tax dollars: Republican corporate welfare helps keep McCain in office.

Oil and gasoline prices are setting all-time records, helping the five biggest publicly traded oil companies in the world earn a staggering $148 billion in profits over the past year. At the same time, the U.S. government continues to provide massive subsidies to oil companies.

These subsidies for some of the most profitable companies in the world, given directly and through the tax breaks, are a waste of taxpayer dollars and continue tax dollar investments in oil instead of shifting incentives to clean energy alternatives. Subsidies for the oil industry preserve our dependence on oil, which leaves our economy vulnerable to price surges, our security vulnerable to hostile oil-rich nations, and our climate vulnerable to greenhouse gas pollution.

If elected president, Sen. John McCain (R-AZ) would provide $39 billion in federal help for oil and gas companies over the next five years. Some of these subsidies already exist: McCain supports the continuation of many of the current subsidies, which will total $33 billion over the next five years according to a study by Friends of the Earth, “Big Oil, Bigger Giveaways.” While McCain would repeal some of these subsidies, he would also pass a corporate tax cut that would be worth more than $22 billion to America’s five largest oil companies over the next five years.

[From The True Cost of McCain’s Oil Industry Subsidies for Every State]

It isn’t as if the federal government needs money, no not at all.

Most corporations pay zero tax

Seth Anderson4 Comments

No wonder the US government is constantly in a deficit! Of course, the politicians rub their collective eyes, and say, “I have no idea why that happened. Must be the previous guy’s fault.”

Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office released Tuesday said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO’s estimate.

“It’s shameful that so many corporations make big profits and pay nothing to support our country,” said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

[From Report says most corporations pay no federal income taxes; lawmakers blame loopholes — chicagotribune.com]

and the investigators don’t want to know either:

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called “S” corporations pay taxes under individual tax codes.

“Half of all business income in the United States now ends up going through the individual tax code,” Edwards said.

The GAO study did not investigate why corporations weren’t paying federal income taxes or corporate taxes

Can’t really blame the corporations: if there is money to be had by slightly duplicitous behavior, a corporation worth its shareholder’s trust should take the free money. No, the culprit is a shoddy tax system which encourages abuse, and a corrupt Congress which writes a business-favorable tax code.

More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent of them, paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of large U.S. corporations — those with at least $250 million in assets or $50 million in receipts — did not pay corporate taxes.

The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S.

How about shifting the tax burden away from individuals, and back on corporations? An Alternative Minimum Tax1 for Fortune 500 companies? Something, please.

The report is here or the complete report (PDF)

Concerns about transfer pricing abuse have led researchers to compare the tax liabilities of foreign- and U.S.-controlled corporations. (Transfer prices are the prices related companies charge on intercompany transactions.) However, such comparisons are complicated because other factors may explain the differences in reported tax liabilities. In three prior reports, GAO found differences in the percentages of foreign-controlled and U.S.-controlled corporations reporting no tax liability. GAO was asked to update the previous reports by comparing: (1) the tax liabilities of foreign-controlled domestic corporations (FCDC) and U.S.-controlled corporations (USCC)-including those reporting zero tax liabilities for 1998 through 2005 (the latest available data) and (2) characteristics of FCDCs and USCCs such as age, size, and industry. GAO analyzed data from the Internal Revenue Service’s Statistics of Income samples of corporate tax returns. GAO does not make any recommendations in this report. In commenting on a draft of this report, IRS provided comments on technical issues, which we incorporated into this report where appropriate.

FCDCs reported lower tax liabilities than USCCs by most measures shown in this report. A greater percentage of large FCDCs reported no tax liability in a given year from 1998 through 2005. For all corporations, a higher percentage of FCDCs reported no tax liabilities than USCCs through 2001 but differences after 2001 were not statistically significant. Most large FCDCs and USCCs that reported no tax liability in 2005 also reported that they had no current-year income. A smaller proportion of these corporations had losses from prior years and tax credits that eliminated any tax liability. By another measure, large FCDCs were more likely to report no tax liability over multiple years than large USCCs. In 2005, comparisons of FCDCs and USCCs based on ratios of reported tax liabilities to gross receipts or total assets showed that FCDCs reported less tax than USCCs. FCDCs and USCCs differed in age, size, and industry. FCDCs were younger than USCCs in that a greater percentage had been incorporated for 3 years or less from 1998 through 2005. In 2005, FCDCs were larger on average than USCCs in that they reported higher average gross receipts and assets than USCCs. A comparison by industry in 2005 showed that large FCDCs were relatively more concentrated in manufacturing and wholesale trade, while large USCCs were more evenly distributed across industries. GAO did not attempt to determine the extent to which these factors and others, such as transfer pricing abuse, explain differences in tax liabilities.

Footnotes:
  1. apparently there is something like an Alternative Minimum Tax for Corporations, but obviously it is pretty easily manipulated [↩]

McCain and his Budget Whopper

Seth Anderson0 comment

John McCain wants desperately to preside over George Bush’s third term. And Hillraisers consider supporting this schmuck? That’s nothing but a spit in the eye to one of Bill Clinton’s undeniably positive legacies – balanced budgets and budget surpluses. Clinton’s former Secretary of Labor, Robert Reich, writes:

George W. Bush took the largest budget surplus in history and transformed it into a giant deficit. McCain’s economic plan, announced today, will to even worse. McCain says he’s going to balance the budget by the end of his first term (actually, he didn’t literally say that – he just “demanded” it – implying that a Democratically-controlled Congress would be ultimately responsible if it didn’t happen). And then McCain came up with numbers that will blow the deficit into the stratosphere.

The non-partisan Congressional Budget Office projects that the budget deficit will be $443 billion in 2013, the end of the next president’s first term, if Bush’s tax cuts are made permanent (which McCain pledges to do). So start with this $443 billion hole. Now add in McCain’s promise to cut corporate taxes by a hundred billion a year ($4 billion of this for American oil companies, more than a billion for Exxon-Mobile alone). Then add in McCain’s promise to get rid of the Alternative Minimum Tax, designed to ensure that the very rich pay at least a minimum percent of their income in tax. Obama would properly index it to inflation but McCain will let the rich pay as little as they can get away with. Non-partisan tax experts put the ten year cost of this at $1 trillion. All told, McCain promises more than $650 billion of new tax cuts per year. (That doesn’t even include McCain’s promise to allow corporations to immediately expense all their investments – which, he asserts, would add nothing to the budget deficit at all!)

Who gets all these cuts? Mostly, the very rich and big corporations. The non- partisan Tax Policy Center estimates that 25 percent of McCain’s cuts would go to people earning over $2.8 million a year (the top one-tenth of one percent). Each would get an average tax cut of $269,000, over and above what George Bush gave them.

[Click to read the rest of Robert Reich’s Blog: McCain’s Budget Whopper]

John McCain’s base (the national media) wring their hands re: Obama and tax increases, but John McSame is proudly an economic idiot, willing to destroy the American government any way possible, taking the rest of us with him.

McCain and Obama Tax Plans

Seth Anderson0 comment

Paul Krugman points to

the sad case of John McCain, part of whose lingering image as a maverick rests on his early opposition to the Bush tax cuts, which he declared excessive and too tilted toward the rich.

Since then the budget surpluses of the Clinton years have given way to persistent deficits, and income inequality has risen to new heights, vindicating his opposition.

But instead of pointing this out, Mr. McCain now promises to make those tax cuts permanent — and proposes further cuts that are, if anything, tilted even more toward the wealthy. And how is the loss of revenue to be made up? Mr. McCain hasn’t offered a realistic answer.

You can explain though not excuse Mr. McCain’s behavior by his need to shore up relations with the Republican base, which suspects him of being a closet moderate. But he’s not the only one seemingly trapped by the Bush fiscal legacy.

Barack Obama’s tax plan is more responsible than Mr. McCain’s: relative to current policy, the Tax Policy Center estimates, the Obama plan would raise revenue by $700 billion over the next decade, compared with a $600 billion loss for Mr. McCain.

The Obama plan is also far more progressive, sharply reducing after-tax incomes for the richest 1 percent of Americans while raising incomes for the bottom 80 percent.

[Click to read more of Paul Krugman – Fiscal Poison Pill – Bush’s Tax Cuts and the McCain and Obama Plans – Op-Ed – NYTimes.com]

But the die-hard Republicans, even the ones making less than $250,000, still believe that somehow Obama is going to find out their bank password, and rob their accounts at night, or otherwise steal money by ‘raising taxes’. Doesn’t matter what the facts are, doesn’t even matter what the candidates say, the viewers of Faux News think when a Democrat gets into power, all is ruin.