Saturday, November 10, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* 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!”