Unequal protection under the law

On Thursday, the House ethics committee recommended that Rep. Charles Rangel (D-NY) be censured for failing to pay taxes on income he received from a vacation villa in the Dominican Republic. A slap on the wrist, and he gets to stay in office.

Contrast that with the case of Wesley Snipes. The actor was convicted in 2008 on three misdemeanor counts of willful failure to file his income tax returns. He has just been sentenced to three years in prison. That's three years of his life taken away for not turning in a form that in essence violates the Fifth Amendment's prohibition against self-incrimination.

There should be equal protection under the law, which means everyone, including Hollywood actors and 20-term congressmen, should be treated the same. But, as Orwell pointed out, some are considered more equal than others.

Wyoming Rep.: Estate tax rise has some planning death before Dec. 31

CHEYENNE, Wyo. (Casper Star-Tribune) - U.S. Rep. Cynthia Lummis says some of her Wyoming constituents are so worried about the reinstatement of federal estate taxes that they plan to discontinue dialysis and other life-extending medical treatments so they can die before Dec. 31.

Lummis, a Republican who holds her state's lone seat in the House, declined to name any of the people who have made the comments.

But she said many ranchers and farmers in the state would rather pass along their businesses -- "their life's work" -- to their children and grandchildren than see the federal government take a large chunk.

(Full story)

U.K. proposes all paychecks go to the state first

(CNBC) - The UK's tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer.

The proposal by Her Majesty's Revenue and Customs (HMRC) stresses the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid.

(Full story)

States working harder to collect online sales taxes

(MSNBC) - It's too early to know exactly how much the Nebraska chapter of the March of Dimes raised this week at its annual Signature Chefs Auction in Omaha, but odds are that more than 10 percent of the charity's proceeds are going straight to the tax man.

That's because the March of Dimes went online when it bought about 4,000 T-shirts from a Florida vendor to give to donors during its March for Babies Walk last April. The charity often buys supplies and other materials online, and it also raises money online by selling items at auction — racking up a big tax bill in each case.

(Full story)

Drive-through tax proposed for road money

CHARLESTON, W.Va. (WSAZ) - The time you save using the drive-through could end up costing you more.

The West Virginia Department of Transportation is floating the idea of charging an additional tax on food purchased at drive-throughs. The idea was discussed Monday at a meeting of state legislators.

(Full story)

Bloggers in Philly required to pay $300 for business license

When greedy government bureaucrats get a whiff of money, it ignites the kind of feeding frenzy one might expect to see during Shark Week on the Discovery Channel. In the City of Brotherly Love, however, it's business as usual.

If you reside in Philadelphia and maintain a blog that rakes in about $50 over a few years, the city wants its cut. You'll have to pay $300 for a business privilege license, or suffer the consequences.

(Full story)

Why I'm not hiring

by Michael P. Fleischer (Wall Street Journal) - With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

Before that money hits her bank, it is reduced by the $2,376 she pays as her share of the medical and dental insurance that my company provides. And then the government takes its due. She pays $126 for state unemployment insurance, $149 for disability insurance and $856 for Medicare. That's the small stuff. New Jersey takes $1,893 in income taxes. The federal government gets $3,661 for Social Security and another $6,250 for income tax withholding. The roughly $13,000 taken from her by various government entities means that some 22% of her gross pay goes to Washington or Trenton. She's lucky she doesn't live in New York City, where the toll would be even higher. ...

... When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

(Full article)

Fines, small tax bill send Baltimore home to tax sale

(Baltimore Sun) - Tim Nickels' rowhouse in Baltimore went to tax sale over less than $4 in unpaid property taxes and hundreds of dollars in citations for a messy yard.

Perfectly legal, under the city's rules. But Nickels was flabbergasted.

Baltimore's annual tax sale, an effort by the city to collect on delinquent accounts, has drawn criticism for putting residents at risk of losing their homes over municipal bills as small as $250. Nickels' past-due tab of $955.60 — including the citation fines and late fees — was one of 6,421 unpaid city bills recently sold as liens to investors, who can move to foreclose later this year if the owners don't pay up with interest.

(Full story)

U.S. pockets $20.6 billion in sin taxes in 2009

(Reuters) - Americans armed themselves to the teeth and paid through the nose to have a smoke, according to a U.S. government report released on Wednesday.

The U.S. federal government collected $20.6 billion in taxes on alcohol, tobacco, firearms and ammunition in fiscal year 2009, up 41 percent from the previous fiscal year, according to the annual report of the Alcohol and Tobacco Tax and Trade Bureau.

(Full story)

Some customers heated over indoor 'tan tax,' which was part of health-care law

(Washington Post) - The sun hasn't exactly set on Solar Planet, but anxiety over the fate of the Arlington tanning salon has been running high ever since a "tan tax" took effect last Thursday.

One of the less-publicized measures in the new health-care law, the tax imposes a 10 percent surcharge on the use of ultraviolet indoor tanning beds.

(Full story)

Philadelphia threatens jail for tax deadbeats

PHILADELPHIA (WHYY) - The city of Philadelphia collected about a third more than it expected from its tax amnesty. Now the city is threatening jail-time for some of those who have not paid up.

Mayor Michael Nutter: "We want our damn money, you owe it, we want it, and I plan to collect it."

Nutter says the city collected over $40 million and another $20 million for the schools during the 54 day amnesty program, but there is close to $500 million still owed. Revenue Commissioner Keith Richardson says the city will step up its collection efforts.

(Full story)

Six months to go until the largest tax hikes in history

(Americans for Tax Reform) - In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.

(Full story)

New York Assembly looks at millionaire's tax

(MyFoxNY.com) - New York Assembly Speaker Sheldon Silver is reportedly pitching a plan for an increased "millionaire's tax" aimed at 75-85 thousand New Yorkers making $1 million or more a year.

Political columnist Fred Dicker , who appeared on Wednesday's Good Day New York, says Silver secretly proposed a $1 billion tax hike on the highest income earners to Gov. Paterson.

(Full story)

"Temporary" tax hikes being used to fill budget gaps

(USA Today) - Many states and cities coping with hard times are asking residents to open their wallets for the latest fashion in taxation — the temporary tax.

Governments are raising taxes for a specific period of time and promising the hikes will go away when good times return.

(Full story)

Health care law's massive, hidden tax change

NEW YORK (CNN) - An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

(Full story)

In a state's search for sales tax, Amazon raises privacy concerns

(NY Times) - North Carolina last month began an audit of online businesses, assuming that millions of dollars in sales taxes owed to the state had disappeared into the Internet.

"This is really an issue of fairness and equity for small businesses, the brick and mortar, corner store operations," said Kenneth R. Lay, the state's secretary of revenue. "These businesses are at a competitive disadvantage when they have to collect sales taxes that other businesses do not."

The response of one of those online businesses, Amazon.com, was succinct: back off. (Full story)

"We know who you are"

Want to get rich? Work for feds

(Washington Examiner) - For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let's not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector.

(Full story)

Tax Fury on Facebook

Gary North writes:

A showdown is coming in November. It will be a showdown between the old boy network and the social networks. A new political force is on the move, that the Establishment has not yet learned how to manipulate.

The social networks are examples of what free market economist F. A. Hayek called the spontaneous order. It is outside the old boy network.

The fury over taxes is increasing. This is moving toward a fury over the deficits. This is new. It means that Congress can run, but it can’t hide. Congressmen can run, but they can't hide.

This will be fun to watch.

Read the full article here.

Why more U.S. expatriates are turning in their passports

(Time) - For U.S. citizens, cutting ties with their native land is a drastic and irrevocable step. But as Overseas American Week, a lobbying effort by expatriate-advocacy groups, convenes in Washington this week, it's one that an increasing number of American expats are willing to take. According to government records, 502 expatriates renounced U.S. citizenship or permanent residency in the fourth quarter of 2009 — more than double the number of expatriations in all of 2008. And these figures don't include the hundreds — some experts say thousands — of applications languishing in various U.S. consulates and embassies around the world, waiting to be processed. While a small number of Americans hand in their passports each year for political reasons, the new surge in permanent expatriations is mainly because of taxes.

Considering that an estimated 3 million to 6 million Americans reside abroad, the number of renouncements is small. But expatriate organizations say the recent increase reflects a growing dissatisfaction with the way the U.S. government treats its expats and their money: the U.S. is the only industrialized nation that taxes its overseas citizens, subjecting them to taxation in both their country of citizenship and country of residence.

(Full story)