*
Just as I was about to “go to press” with this installment of the BUZZ, Christopher
Rowland of BOSTON.COM told us “House Speaker John Boehner is Calling for a One-Year Delay in Fiscal Cliff; Obama to Speak Friday Afternoon” –
“Speaking just two hours before President
Obama was scheduled to issue remarks on the subject from the White House, House
Speaker John Boehner convened a press conference Friday to say he would prefer
extending all Bush-era tax cuts until 2013, including cuts for the wealthy.
That would give
lawmakers enough time to develop a comprehensive tax overhaul and
deficit-reduction plan, the Republican speaker said.”
I
wholeheartedly agree. And not only the
so-called “Bush” tax cuts, but also the AMT patch and perhaps the other
“extenders”.
Of
course the second paragraph of the quote is of vital importance – the idiots in
Congress MUST get off their arses and “develop
a comprehensive tax overhaul” plan in 2013!
*
Unfortunately, according to “Obama: Americans Agree With My Approach On Deficit”
at YAHOO NEWS, BO said in his Friday afternoon address that “he won't accept any approach to federal
deficit reduction that doesn't ask the wealthy to pay more in taxes”.
So the battle begins - or rather continues!
*
More SANDY relief from the IRS - “IRS Expedites Charity Applications and Urges Use of Existing Charities”.
“As part of the administration’s efforts to
bring all available resources to bear to support state and local partners
impacted by Hurricane Sandy, the Treasury Department and the Internal Revenue
Service today announced an expedited review and approval process will be
offered for organizations seeking tax-exempt status in order to provide relief
for victims of Hurricane Sandy. The IRS
also continues to encourage people to use existing organizations currently
working on immediate aid efforts.”
*
Read the “Prepared Remarks of IRS Commissioner Doug Shulman Before the AICPA, Washington, DC” as he says farewell on the day after the election.
*
The TAX FOUNDATION gives us the word on the success or failure of various state
tax-related ballot initiatives and questions.
Click here.
*
Sterling Raskie provides “A Nifty Little Trick to Increase Savings” in a guest
post at GETTING YOUR FINANCIAL DUCKS IN A ROW -
“ . . . once a debt is paid off, still treat
that payment as a bill – but now direct that bill payment to your bank account,
IRA, or employer sponsored plan.”
*
USATODAY tells us that “Fiscal Cliff Spurs Early Dividend Payment” by at least
one company so far –
“Leggett & Platt said Thursday it would
pay out its fourth-quarter dividend to shareholders in December instead of
January. The reason: they want to spare their investors from having a bigger
bite of their dividend income eaten up by taxes, which are slated to rise next
year from 15% to the higher individual tax rates unless Congress votes to
extend the Bush-era tax cuts.”
Chances
are other companies may also decide to do this.
*
Also at USATODAY, Rhonda Abrams’ list of “8 Ways Obama Can Help Small Businesses”
includes a truly horrible idea that I have not heard proposed before –
“A
self-employment standard deduction.
Instead of having to keep piles of receipts and track every expense, set a
sliding scale of standard deductions that sole proprietors can take based on
business income up to a set amount, say $75,000 or $100,000.
That would get rid of
a lot of paperwork.”
A
terrible idea indeed! Small business owners
should NOT be discouraged from
keeping receipts and tracking expenses.
It is often hard enough to get them to do so as it is. Small business owners MUST keep records and track expenses for a variety of very
important reasons – preparing their tax return is only one, and not the most
important one at that.
*
Michael Townsend of CHARLES SCHWAB speculates on the results of the election in
“Election 2012: Takeaways for Investors”.
The
item’s introduction indicates that perhaps the members of Congress are not the
only idiots in America (highlight is mine) -
“The election seemingly did nothing to change
the balance of power in Washington: President Obama was reelected, Democrats
retained control of the Senate and Republicans maintained control of the House
of Representatives. So, despite all
evidence that Americans are frustrated with policymakers' inability to come
together and solve problems, the election produced the outcome least likely to
change that—the same polarized dynamic that has tied Washington in knots for
the last two years is likely to continue.”
He
indicates what many, myself included, agree will most likely happen (again,
highlights are mine) –
“Congress returns to Washington November 13,
but most of the energy that week will be devoted to leadership elections,
orientation for newly elected members and practical things like allocating
office space for the new Congress. Lawmakers will then return home the week of
Thanksgiving and reconvene on November 27, which is when the serious
discussions will likely begin. It may be
the third week of December before we see a resolution.
And despite
negotiations, we don't think there will be any ‘grand bargain’ before the end
of the year. There is neither the time nor the inclination in Washington to try
to forge any kind of broad agreement on taxes, spending and entitlement reform
in the coming weeks. Instead, we think the
debate in Washington through the end of the year will focus on ways to put off
as much of the fiscal cliff as possible into 2013.”
One
result of the election is that the upcoming 2013 tax filing season will
certainly be FU-ed.
*
The internet’s TaxMama “tweeted” a great suggestion -
“If legislators cannot legislate, why should
the people pay them? Let their parties pay their wages and pensions.”
It
has my support.
*
Martin Sullivan suggests some principles for tax reform in “Tax Reform 2.0” at
TAX.COM.
While
all of his principles are good – his third one is, in my opinion, perhaps the
most important -
“Third -- and perhaps I am the one being
naïve here -- we need to constantly
place simplification at the forefront. Get rid of the AMT. Simplify rules
for pensions and retirement saving. Simplify education incentives. And in our
effort to maintain distributional neutrality, don't reinstate the Pease
provision and personal exemption phaseout (as proposed by Obama). And don't
install new phaseouts of itemized deductions (as suggested by Romney).”
THE
LAST WORD –
Regular
visitors to TWTP know that I do not think David Lettermen’s late-night show, or
his lame “bits”, are funny, with the possible exception of the occasional Top
Ten List.
But
Letterman hit the nail on the head with the following observation on Wednesday
night (I heard this in a promo – I do not watch the show) –
“President Obama defeated the
Republicans. You know what that means - four
more years of partisan gridlock!”
TTFN
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