Wednesday, April 25, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION
BUZZ! BUZZ! The BUZZ is back!
* Read about “The Dumbest Tax Loophole In America: The Florida Rent-a-Cow Scam” by Jordan Weissmann of The Atlantic.
* The Tax Policy Center looks at “The Romney Plan (Updated)” – Mitt’s revised tax proposals.
“Governor Romney would permanently extend all the 2001 and 2003 tax cuts now scheduled to expire in 2013, repeal the AMT and certain tax provisions in the 2010 health reform legislation, and cut individual income tax rates by an additional 20 percent. He would also expand the tax base by cutting back tax preferences, but has supplied no information on which preferences would be reduced. Tax provisions in the 2009 stimulus act and subsequently extended through 2012 would expire. These include the American Opportunity tax credit for higher education, the expanded refundability of the child credit, and the expansion of the earned income tax credit (EITC). The plan would also eliminate tax on long-term capital gains, dividends, and interest income for married couples filing jointly with income under $200,000 ($100,000 for single filers and $150,000 for heads of household) and repeal the federal estate tax, while continuing the gift tax with a maximum tax rate of 35 percent.2
The plan would reduce the six current income tax rates by one-fifth, bringing the top rate down from 35 percent to 28 percent and the bottom rate from 10 percent to 8 percent. The accompanying repeal of the AMT would increase the tax savings from the rate cuts—without that repeal, the AMT would reclaim much of the tax savings.
The plan would recoup the revenue loss caused by those changes by reducing or eliminating unspecified tax breaks, thereby making more income subject to tax. Gov. Romney says that the reductions in tax breaks, in combination with moderately faster economic growth brought about by lower tax rates, will make the individual income tax changes revenue neutral compared with simply extending the 2001 and 2003 tax cuts. He also promises that low- and middle-income households will pay no larger shares of federal taxes than they do now.”
* FOX NEWS, not my first source of information, reminds us that “Taxmageddon Coming? Answer Could Cost Americans $500 Billion”.
The item quotes Curtis Dubay of the Heritage Foundation, "Taxmageddon falls 70 percent on middle and low income families. That's because 60 percent of the Bush tax cuts were for middle- and low-income taxpayers," and the Tax Foundation’s Scott Hodge, "No American will be unscathed at the end of this year. Taxmageddon hits all of us."
Hodge identifies the problem, caused, of course, by the idiots in Congress - "Almost the entire tax code has been put on a year-to-year lease, and in some cases, month-to-month lease, which is no way to run a tax system".
He also voices the opinion of many, myself included - "It's my guess that nothing will happen on any of these issues until after the election”.
Actually I expect that the idiots in Congress will extend the current Tax Code for one more year.
* Joe Arsenault gives a good overview of “What to do When a Family Member Dies” at CAFÉ TAX.
* Prof Jim Maule tells us about “Another Bad Tax Return Clutter Idea” at MAULED AGAIN, and goes into detail on just why it is a bad idea.
And in his introductory paragraph he reminds us –
“Much of what contributes to this aspect of tax complexity is the use of the tax law as a substitute for direct spending programs and use of the IRS as a substitute for other federal agencies that ought to be charged with administering programs in their respective areas . . . . . using the tax law and the IRS in this manner is inefficient, ineffective, and deceptive”.
* While I was on “hiatus” Joe Kristan filled the BUZZ void with his “Tax Roundup” series. Check out some of what we both missed during the season.
* Kay Bell, the yellow rose of taxes, reminded us that Tax Freedom Day 2012 fell on Tax Day – the 2012 filing deadline of April 17th – in her post “Happy Belated Tax Freedom Day 2012” at DON’T MESS WITH TAXES.