Archive for the ‘Taxes’ Category

Will 143 million households notice that their taxes have been cut?

January 2, 2018

Trump and the GOP face some formidable headwinds …

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First, let’s deal with the numbers …

According to a recent Monmouth University poll,  50% of the public believes the federal taxes they pay will go up under the GOP’s tax plan; 25%think their taxes will stay the same, and just 14%say their taxes will go down.

Say, what?

The good news – according MarketWatchMarketWatch and the non-partisan Tax Policy Center   — is that about 143 million “tax units” (think: households) will pay lower taxes next year and only about 8.5 million will pay higher taxes. That’s a 94% / 6% split.

Note: The Joint Committee on Taxation, which is Congress’s independent number cruncher, came up with similar numbers. They found the average tax rate would fall to 19% from 20.7%. The tax rate for those with an adjusted gross income between $50,000 to $75,000 would see their tax rate fall to 13.5% from 14.8%.

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For the most popular bracket — the $50,000 to $75,000 range – the average tax cut will be $870.

Technical note: The Tax Policy Center slots folks based on “expanded cash income” that includes cash income plus tax-exempt employee and employer contributions to health insurance and other fringe benefits, employer contributions to tax-preferred retirement accounts, income earned within retirement accounts, and food stamps.

The big question is whether the tax cut beneficiaries will notice the difference and applaud the tax cut.

My conclusion: The GOP is facing some perceptual headwinds…

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Obama’s tax cut bigger than Trump’s … say, what?

December 23, 2017

There’s spin … and then there’s dizzying spin.

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I like to tune in to MSNBC to get a sense of what the far left is saying … and, for pure entertainment value.

To say the least, I was surprised that a constantly looped headline following Trump’s signing of the tax reform package was:

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I had to scratch my head: What Obama tax cut?

At first, I assumed that they might be referring to Obama’s billion-dollar stimulus program which gave a dollar-a-day Tax Credit ($400 per worker and $800 per couple) in 2009 and 2010.

Nope.

Here’s what they were talking about …

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My biggest beef with the GOP tax plan …

December 21, 2017

… and still, nobody seems to be talking about it.

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Now that the tax reform package is in the books, I should be elated, right?

But, I’m quite ambivalent.

On the plus side, I do think that the stock market will stay el fuego.

Selfishly speaking, that dwarfs all of the negatives.

But …

  1. Based on my calcs, I’m in the 20% of folks whose taxes are going up, not down.  I’m thinking that I may be the only person who doesn’t reside in CA, NY and NJ whose taxes are going up. Ouch.
  2. Carried interest is alive and well.  C’mon Donald, you promised. And please, don’t tell me that hedge funds and private equity are engines of growth.  May be small potatoes re: tax revenue, but it’s what Rudy Giuliani would call a “broken window”.
  3. Are Google and Facebook really going to invest their tax savings here in the USA? I’m betting the under on that one. Wish the corporate tax benefits were tied more directly to employment levels.

And. my biggest concern is the long-run tilt in voting dynamics.  Tax cuts will no longer have any campaign whallop.

Why?

Remember Mitt Romneys ill-timed observation about “47% of Americans”.

No, they weren’t deplorables, they were simply the folks who pay no Federal income taxes.

Well if the GOP tax plan goes through, the 47% will be be alive .. and well … and growing.

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Source

Let’s start with some data…

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Polls: Near-majority opposes GOP tax plan.

December 18, 2017

Gomer Pyle observes: Surprise, surprise, surprise.
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MSM is taking great delight reporting polls that show a near- majority of opposing the emerging GOP tax plan.

Some polls have the opposition as high as 55%.

USA Today reports that 48% oppose it and explains:

“53% of those surveyed predict their own families won’t pay lower taxes as a result of the measure.”

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Let’s unpack the survey results ….

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Is repatriation of cash really a big deal?

December 14, 2017

The WSJ and FT disagree on the impact.  I disagree with both.

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Let’s start with some background …

Currently, when a company earns money abroad, it’s taxed in the local jurisdiction where it’s earned … and then the Feds collect U.S. income taxes when the company brings the cash associated with the earnings back to their U.S. accounts.

Most folks agree that represents punitive double taxation.

So, companies tend to keep the cash associated with offshore earnings parked offshore … deferring U.S. income taxes as long as possible.

Currently, the 50 top overseas cash holders have almost $1 trillion parked outside the U.S.

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click for full top 50 list

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The GOP tax plan moves towards “territorial taxation” … meaning that U.S. companies will only be taxed in the jurisdiction where money is earned.

That makes complete sense to me.

The GOP tax plan also  includes a one-time “deemed repatriation rate” on earnings now held abroad … that rate is proposed to be 14% to 14.49% … lower than the current corporate rate of 35% or the proposed rate of 20%.

Why not a deemed repatriation rate of zero?

I guess the logic is that the current stockpiles of offshore cash were earned under the old double taxation rules … so the companies “owe” the Feds around 35% … offering a deemed rate of 14% roughly splits the difference between 35% and zero.

Here’s were things get interesting …

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Which states get hit hardest when SALT deduction is eliminated?

December 13, 2017

Looks like it might just be rich folks paying their fair share.

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Everybody knows that tax-payers in liberal-leaning states (CA, NY, NJ, MA, CT) will get hit the hardest when the GOP plan to eliminate the SALT (state & local taxes)  deduction is disallowed.

And, everybody has probably heard Chuckie Schumer whine about how New Yorkers toss more into the government coffers than they get back.

The Rockefeller Institute of Gov’t pulled together those 2 observations into an interesting (albeit a bit complicated) chart.

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click to enlarge

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Let’s decode the chart …

The vertical axis basically indicates if a state puts a low or high SALT burden on its residents.

The horizontal axis indicates if a state’s Balance of Payments with the Feds is positive (to the left) or negative (to the right).  That is, does the state get back from the Feds (in goods and services) more or less that its residents pay in Federal taxes.

For example, Hew York is in the upper right quadrant.

Chuckie is right: New York (a high SALT state) pays more to the Feds than it gets back.

Maryland and Virginia are in the upper left quadrant: residents pay high SALT but get more back from the Feds than they pay in Fed taxes.

All of which illuminates a couple of interesting points …

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Reality Check: How much will YOUR income taxes go down (or up)?

December 11, 2017

Here’s a simple online  calculator that rudely awakened me.

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My son who admonished me to “stop calling it a tax cut until you run your numbers” … I finally did run my numbers.

For me — a discounted-rate college prof – my Federal income taxes will go up about 30%.

Whoa, Nelly.

What’s going on?

The key drivers: (1) loss of personal exemptions ($4,050 times 2)  (2) non-deductibility of state income taxes (Virginia has turned purple with a Dem governor) and (3) loss of 1/3 of my local real estate taxes (assuming the House version that still allows $10,000).

The alleged reduction in rates doesn’t offset those deductions lost.

Nuts.

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If you want to see what the likely impact will be on you, pull out the first couple of pages of your 2016 tax return so you can plug a few numbers into the CALCXML online tax calculator.

Here’s an example for a family of 4 – husband, wife, 2 kids under 18 … filing jointly … $150,000 combined income … no “unearned investment income” (dividends & capital gains which get taxed at a preferential rate) … $500,000 mortgage @ 4% …. $5,000 local real estate taxes .

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click for CalcXM’s online tax calculator

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And, the answer is …

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What’s the biggest tax loophole ?

December 1, 2017

… and, why isn’t it part of the tax reform conversation?

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I’ve been scratching my head over what the Senate & Congress are going after under the “tax reform” umbrella … and, what are being treated as sacred cows.

For example, the deductions for mortgage interest and state & local taxes are on the chopping block … but the biggest “Federal tax break” according to Simpson-Bowles and the Pew Foundation is the tax-free status of employer-paid health insurance.

Real tax reform would put employer-paid health insurance under a microscope: it’s clearly compensation that should be recorded on W-2s and taxed at ordinary income tax rates, right?

And, the loophole creates a severely unlevel playing field.

Think of the small business owner (or his employees).

They have to buy their health insurance with after-tax dollars …

That’s not fair, is it?

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Before you hit me with the “healthcare is different (and untouchable)” argument, consider this:

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To bring back jobs, don’t cut the the corporate tax rate … here’s another idea.

November 28, 2017

Last week, we asked: if increasing the number of well-paying manufacturing jobs is important —  then rather than the usual proposed bromide of just cutting corporate taxes across-the-board, why not offer employers a double tax deduction for workers’ wages earned in the U.S.?

Here’s a complementary idea (to doubling the wages deduction) that might be worth worth considering …

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To bring back jobs, don’t cut the the corporate tax rate …

November 21, 2017

Rather, double the corporate tax deduction for workers’ wages earned the U.S. workers.

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Let’s start with an interesting analysis from Nate Silver’s  535.com titled Manufacturing Jobs Are Never Coming Back

“It’s understandable that voters in 2016  were angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers.”

“Manufacturing in particular embodies something that seems to be disappearing in today’s economy: jobs with decent pay and benefits available to workers without a college degree are vanishing. The average factory worker earns more than $25 an hour before overtime; the typical retail worker makes less than $18 an hour.”

“In 1994 there were 3.5 million more Americans working in manufacturing than in retail. Today, those numbers have almost exactly reversed, and the gap is widening. More than 80 percent of all private jobs are now in the service sector.”

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How can that be?  Aren’t we hearing a lot about “re-shoring” and foreign capital investing in U.S. based manufacturing plants?

(more…)

My biggest beef with the GOP tax plan …

November 20, 2017

… and nobody seems to be talking about it.

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Remember Mitt Romneys ill-timed observation about “47% of Americans”.

No, they weren’t deplorables, they were simply the folks who pay no Federal income taxes.

Well if the GOP tax plan goes through, the 47% will be be alive .. and well … and growing.

image
Source

Let’s start with some data…

(more…)

Should my trash pick-up be tax deductible?

November 6, 2017

… and what about HOA fees?

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For openers, let me declare: I think that I end up worse off under the proposed GOP tax plan.

That said, I’m all for eliminating the deduction for state & local taxes.

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Here’s why I’m not swayed by the whiners in the high tax & spend states ..

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In total, how much do Americans pay in taxes? For what? To whom?.

January 26, 2017

Since tax reform is on the front burner, it’s time for some tax facts.

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Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

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By type of tax

Roughly 1/3 of the $5 trillion is income taxes individual and corporate)

about 1/4 is ad valorem taxes (think sales and property taxes)

just under 1/5 are social insurance (i.e. Social Security, Medicare, Medicaid)

… slightly more than 1/5 are fees and charges (think tolls, business licenses)

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Income taxes

Roughly 1/3 of the $5 trillion – about $1.8 trillion — is income taxes

…  83.4% are individual income taxes; only 16.6% are corporate income taxes

… about 80% of income taxes go to the Feds; around 20% goes to the States & Locals

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Ad-valorem taxes

Roughly 1/4 of the $5 trillion in total taxes paid – about $1.2 trillion – is ad-valorem taxes – taxes paid based on the value of something bought or owned.

…  about 40% of ad-valorem taxes are Local property taxes

…  about 1/3 are Sales Taxes …  going mostly to the States

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Social Insurance

Roughly 1/5 of the $5 trillion in total taxes paid – about $961 billion – is social insurance – with about 80% going to the Feds

…  roughly 60% of the social insurance payments going to the Feds is for Social Security

…  almost 1/4 of the social insurance payments going to the Feds is for Medicare.

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Pulling it all together Ken’s Rosetta Stone of Taxes

All the details — now much? to whom? for what?

Click for a PDF: Ken’s Rosetta Stone of Taxes

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PDF          Data Source

>> Latest Posts

To bring back jobs, don’t cut the the corporate tax rate …

January 25, 2017

Rather, double the corporate tax deduction for workers’ wages earned the U.S. workers.

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Let’s start with an interesting analysis from Nate Silver’s  535.com titled Manufacturing Jobs Are Never Coming Back

“It’s understandable that voters were angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers.”

“Manufacturing in particular embodies something that seems to be disappearing in today’s economy: jobs with decent pay and benefits available to workers without a college degree are vanishing. The average factory worker earns more than $25 an hour before overtime; the typical retail worker makes less than $18 an hour.”

“In 1994 there were 3.5 million more Americans working in manufacturing than in retail. Today, those numbers have almost exactly reversed, and the gap is widening. More than 80 percent of all private jobs are now in the service sector.”

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How can that be?  Aren’t we hearing a lot about “re-shoring” and foreign capital investing in U.S. based manufacturing plants?

(more…)

Isn’t it time to dust off the Simpson-Bowles Report ?

January 24, 2017

Now that tax reform and spending “rationalization” are on the front-burner, I wonder why there has been nary a mention of old Simpson-Bowles Report.

You may remember that former President Obama commissioned Simpson, Bowles and a blue-ribbon committee to recommend ways to cut the deficit  … and the skyrocketing national debt.

The report took shots at some sacred cows like capping home mortgage deductions and taxing employer-paid healthcare.

But, S-B had the gall to suggest pulling back some entitlements so Obama deep-sixed the report.

Maybe DJT should try to locate a copy.

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Maybe it’s time to re-visit the Simpson-Bowles Report .

Here are some of the highlights …

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Flashback: Buffett says”increase taxes on estates (since mine is sheltered)”

October 4, 2016

OK, he really didn’t say the last part …  I added that nugget.

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The NYT dust-up on Trump’s tax loss carryforward reminded me that Hillary is proposing to jack-up the estate taxes on fat cats.

Of course, her favorite billionaire — Warren “I’m with her” Buffet — won’t be subject to the higher estate tax rates.

Why not?

Let’s flashback to my long ago proposed “Buffett Rule” … designed to get fat cats like him to stop whining about their too low taxes and pay their fair share.

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According to CNBC, Warren Buffett is one of several dozen wealthy people who have signed a statement calling for a “strong tax on large estates.”

Buffett & friends say:

  1. “Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward a plutocracy.”
  2. We (the wealthy) have “benefited significantly” by government investments in schools, infrastructure. and public safety, among other things, so it is “right morally and economically” to have a “significant” tax on large estates because it “promotes democracy by slowing the concentration of wealth and power.”
  3. “It is right to have a significant tax on large estates when they are passed on to the next generation …  it is right morally and economically, since an estate tax promotes democracy by slowing the concentration of wealth and power.”

OK, so what constitutes a sizable estate and how much of it should the government take?

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NY Times Bombshell: Trump had a tax loss carryforward … disqualifying?

October 3, 2016

 P.S. Hillary had one, too (but the NYT missed that one).

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This would be laughable except it will probably gain more traction with the MSM than Miss Piggy.

Here’s the “smoking gun”:

The New York Times obtained records from 1995 showing that Donald J. Trump declared a $916 million loss.

The figure is so substantial that it could have allowed him to legally avoid paying federal income tax for 18 years.

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Let’s unpack this journalistic gem …

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Happy Tax Day … and, about the 47%.

April 18, 2016

Infographic from CNBC cuts to the chase re: the “money comes in, money goes out.”

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More interesting: What’s up with Mitt Romney’s infamous 47%?

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What percentage of Americans prepare their own taxes? How many of them like it?

April 15, 2016

Since we’re heading down the home stretch to Monday’s filing deadline …

According to Pew Research:

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

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Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Even if manufacturing may be coming back … manufacturing JOBS, not so much.

March 23, 2016

Interesting analysis from Nate Silver’s  535.com titled Manufacturing Jobs Are Never Coming Back

There’s no mystery why candidates love to focus on manufacturing and trade.

“It’s understandable that voters are angry about trade. The U.S. has lost more than 4.5 million manufacturing jobs since NAFTA took effect in 1994. And, there’s mounting evidence that U.S. trade policy, particularly with China, has caused lasting harm to many American workers.”

“Manufacturing in particular embodies something that seems to be disappearing in today’s economy: jobs with decent pay and benefits available to workers without a college degree. The average factory worker earns more than $25 an hour before overtime; the typical retail worker makes less than $18 an hour.”

“In 1994 there were 3.5 million more Americans working in manufacturing than in retail. Today, those numbers have almost exactly reversed, and the gap is widening. More than 80 percent of all private jobs are now in the service sector.”

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How can that be?  Aren’t we hearing a lot about “re-shoring” and foreign capital investing in U.S. based manufacturing plants?

(more…)

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

February 16, 2016

According to Pew Research

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

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Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

On the move: “We’re outta here” …

January 12, 2016

Each year, United Van LinesUnited Van Lines published a report indicating the number of net moves made into and out of states.

Here’s the summary …

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And, here are the details re: states with the highest outflows and inflows …

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Bernie Sanders missed a big opportunity on Monday …

August 26, 2015

Yesterday, we posted about high frequency traders crowing about their high profits from Monday’s unprecedented stock market volatility.

Arguably, their methodology — hinging on fast data and low transactions’ costs — fanned the volatility flames.

I was surprised that Bernie Sanders didn’t seize the moment to say “I told you so” … and to pitch his Financial Transactions Tax.

Given the stock market bounces this week, I though it would be timely to reprise a post from a couple of weeks ago which has heightened relevance and timeliness …

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Shocker: I agree with Bernie Sanders’ Financial Transactions Tax … err. make that “half-agree”

Dem-Socialist candidate Bernie Sanders doesn’t serve up much that I agree with … but, there is one reheated idea that I half-support.

Sanders proposes that financial transactions be taxed … roughly 1/2% for most trades … slightly lower for for some categories of investments … say, Municipal Bonds.

Sanders would use the new tax proceeds to fund public college for low-income students.

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Let’s dissect the proposal … then, for what it’s worth, I’ll tell you where I agree and where I disagree …

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High frequency traders crow: “Best day since the 2010 Flash Crash” … say what?

August 25, 2015

Yesterday was a historically spectacular day on Wall Street … DJIA down 1,000 on the open, rebound by about 750 points, back down by 750.

Unprecedented volatility.

DJIA 08-24-15

Geez, was the world’s economic structure changing that much hour-to-hour?

Was new economic  information flowing in at warp speed?

Nope.

Sure, there was a deepening understanding that the market is over-valued and that China’s economy is in trouble.

That explains a big correction, but what about the hour to hour volatility?

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Jet: Start-up targets Amazon and Walmart … say, what?

July 29, 2015

After months of testing and and network-building, the e-commerce start-up Jet.com opened its digital storefront last week, marking the official kickoff of the company’s ambitious effort to battle Amazon and Walmart for price-conscious customers.

According to the Washington Post, Jet is taking a new approach to pricing. Its algorithm doesn’t simply look at the price of each individual item in your online shopping cart.

It looks at all the items you want to buy, as well as your Zip code, to determine which retailer or warehouse can ship that unique combination of items to you the cheapest.

Shoppers can only buy things on Jet if they’ve signed up for a $49-per-year membership.

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Let’s dig a little deeper and assess the odds …

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Shocker: I agree with Bernie Sanders’ Financial Transactions Tax … err. make that “half-agree”

July 22, 2015

Dem-Socialist candidate Bernie Sanders doesn’t serve up much that I agree with … but, there is one reheated idea that I half-support.

Sanders proposes that financial transactions be taxed … roughly 1/2% for most trades … slightly lower for for some categories of investments … say, Municipal Bonds.

Sanders would use the new tax proceeds to fund public college for low-income students.

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Let’s dissect the proposal … then, for what it’s worth, I’ll tell you where I agree and where I disagree …

(more…)

Nums: Who pays taxes? Who benefits?

April 15, 2015

Since it’s tax day, I thought I’d flashback to a drill down I did on the tax system —  who pays in, where does it go and who benefits …

In a prior post, we drilled down on taxes … or, as my Dem friends would say government “revenues”.

We posted that in 2012 Americans paid a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively. Note that the Federal portion is just under $2.5 trillion.

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If these are “revenues” there must be matching services provided, right?

I found a study by the non-partisan Tax Foundation that analyzes taxes paid and benefits received.

The study is old – using 2004 data – but, in my opinion is a good starting point to calibrate the answer.

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Taxes: The only thing to love about the AMT …

April 9, 2015

Just finished this year’s taxes.

One interesting twist ….

In 2012, like a lot of folks, I sold a bunch of stocks to beat Obama’s hike in the capital gains tax …  from 15% to 23.8% (including the 3.8% ObamaCare surcharge)

As a result, my state tax bill paid in 2013 was higher than usual … Virginia’s share of the capital gains.

At first I was delighted this year.

Why?

Because, on my Federal return,  I could deduct the higher-than-normal taxes that I paid to Virginia.

Unfortunately, the thrill was short-lived.

I’d forgotten about the AMT … you know, the Alternative Minimum Tax.

I’d forgotten, but TurboTax hadn’t.

Bottom line: My VA tax deduction got wiped away by the AMT calculation.

Like many folks, I had internalized that state income taxes are annoying, but no big deal since they get written off at the Federal level.

Not so if you’re among the millions of Americans who get snared in the AMT trap.

Oh, well.

At least there is one small delight I get from the AMT …

(more…)

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

April 2, 2015

Since, I started preparing my taxes this weekend, I got curious …

Pew Research says that overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

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Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Hacked: File early to beat crooks to your tax refund …

March 31, 2015

A couple of years ago I jumped on the bandwagon and e-filed my first ever tax return.

 

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A couple of weeks later I was an identity theft victim.

Coincidence?

I can’t prove the connection … I also can’t shake the suspicion.

Now, crooks have a new online hack: filing online returns that claim other folks refunds.

I good friend just got burned on this specific new tax hack.

Here’s what’s going on …

(more…)

Why is gas cheaper in New Jersey?

March 12, 2015

I’ve always wondered that … especially since NJ is the only place on Planet Earth that won’t let you self-pump your own gas.

Nope.

Gotta wait for the attendant to notice you’re there and do it for you.

 

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Of course, the attendants don’t look like the guy in the picture.

Nope.

They all look like folks who should be reported to Homeland Security.

My point: having attendants should push gas prices up, right?

A common hypothesis is that there are a lot of gas storage facilities along I-95.

Cheaper supply?

That doesn’t square since there isn’t much gas drilled in the local area.

OK, so what is it?

I may have stumbled on the answer …

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Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

March 3, 2015

Since it’s tax time, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

image_thumb.png

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

(more…)

Nums: What percentage of Americans prepare their own taxes? How many of them like it?

March 2, 2015

Since, I started preparing my taxes this weekend, I got curious …

Pew Research says that overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

image

Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

(more…)

Hacked: File early to beat crooks to your tax refund …

February 11, 2015

A couple of years ago I jumped on the bandwagon and e-filed my first ever tax return.

 

clip_image001

A couple of weeks later I was an identity theft victim.

Coincidence?

I can’t prove the connection … I also can’t shake the suspicion.

Now, crooks have a new online hack: filing online returns that claim other folks refunds.

Here’s what’s going on …

(more…)

Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

January 21, 2015

Since yesterday Obama was pitching tax increases in the SOTU, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

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Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

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Flashback: Buffett says”increase taxes on estates” (since mine is sheltered).

August 28, 2014

OK, he really didn’t say the last part., I made that up.

Since Buffett shed his hypocritical “please tax us more” sham and hopped on the BK inversion deal, I thought it was fair to flashback to some of Buffett’s pro-tax rants and our proposed “Buffett Rule”

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According to CNBC, Warren Buffett is one of several dozen wealthy people who have signed a statement calling for a “strong tax on large estates.”

Buffett & friends say:

  1. “Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward a plutocracy.”
  2. We (the wealthy) have “benefited significantly” by government investments in schools, infrastructure. and public safety, among other things, so it is “right morally and economically” to have a “significant” tax on large estates because it “promotes democracy by slowing the concentration of wealth and power.”
  3. “It is right to have a significant tax on large estates when they are passed on to the next generation …  it is right morally and economically, since an estate tax promotes democracy by slowing the concentration of wealth and power.”

OK, so what constitutes a sizable estate and how much of it should the government take?

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Is that Warren Buffett driving BK’s getaway car?

August 27, 2014

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This one is too good to be true.

Burger King is planning to buy Tim Hortons – a Canadian coffee-and-doughnut chain.

Forget for a second that this is 2014 and doughnuts are, shall we say, a bit out of fashion,

Conventional wisdom is that BK isn’t strategically driving thru the doughnut hole left by Krispy Kreme’s woes.

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Though the company denies it, BK seems aimed at turning things upside down tax=wise.

You know, “invert” itself into a Canadian company so that it doesn’t have to pay U.S. taxes on money it earns outside the boundaries of the U.S.

Here’s where things start to get interesting ….

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Fed are raking in the dough … and still spending more than they get.

July 25, 2014

The WH-OMB estimates that, in FY 2014, the federal government will collect a record amount in inflation-adjusted tax revenues (i.e. taxes) while still running a deficit,


Source: CNS; See the Monthly Treasury Statement. for details

 

More specifically …

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Nums: Who pays taxes? Who benefits?

April 17, 2014

Since it’s tax week, I thought I’d flashback to a drill down I did on the tax system —  who pays in, where does it go and who benefits …

In a prior post, we drilled down on taxes … or, as my Dem friends would say government “revenues”.

We posted that in 2012 Americans paid a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively. Note that the Federal portion is just under $2.5 trillion.

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If these are “revenues” there must be matching services provided, right?

I found a study by the non-partisan Tax Foundation that analyzes taxes paid and benefits received.

The study is old – using 2004 data – but, in my opinion is a good starting point to calibrate the answer.

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Taxes: The only thing to love about the AMT …

March 5, 2014

Just finished this year’s taxes.

One interesting twist ….

In 2012, like a lot of folks, I sold a bunch of stocks to beat Obama’s hike in the capital gains tax …  from 15% to 23.8% (including the 3.8% ObamaCare surcharge)

As a result, my state tax bill paid in 2013 was higher than usual … Virginia’s share of the capital gains.

At first I was delighted this year.

Why?

Because, on my Federal return,  I could deduct the higher-than-normal taxes that I paid to Virginia.

Unfortunately, the thrill was short-lived.

I’d forgotten about the AMT … you know, the Alternative Minimum Tax.

I’d forgotten, but TurboTax hadn’t.

Bottom line: My VA tax deduction got wiped away by the AMT calculation.

Like many folks, I had internalized that state income taxes are annoying, but no big deal since they get written off at the Federal level.

Not so if you’re among the millions of Americans who get snared in the AMT trap.

Oh, well.

At least there is one small delight I get from the AMT …

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Who to trust: TurboTax or Revenooers?

December 9, 2013

From the “you can’t make this stuff up” file …

Last year a fried filed his NJ income tax return using Turbo Tax,

Based on the TurboTax calculations, he filed for a refund of $2,582.

A few weeks later, the State sent him a refund check for $3,556.

Not quite Power Ball, but a nice surprise.

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Now, a few months later, the story takes an odd twist …

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Tax havens … and tax hells.

July 18, 2013

According to a  Cato Institute recap

A couple of economists at a German think tank put together a “tax attractiveness” ranking based on 16 different variables.

They looked at the statutory tax rate  … and, they also considered policies such as “the taxation of dividends and capital gains, withholding taxes, the existence of a group taxation regime, loss offset provision, the double tax treaty network, thin capitalization rules, and controlled foreign company (CFC) rules.”

Drum roll …

Out of 100 nations, the German economists rated the U.S. #96 … in the pack with Indonesia, Philippines,  Zimbabwe, Japan and Egypt.

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Here are the rankings for all nations assessed …

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Nums: When is $87.6 million greater than $118 million?

July 9, 2013

Short answer: After-taxes … if you’re talking no income Red state (think Texas) and a high tax Blue state (think California).

Just ask former Laker Dwight Howard as he packs to head to the Houston Rockets.

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 Here’s the skinny and some nums

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Basic Econ: Red beats Blue …

June 4, 2013

Last week, the American Legislative Exchange Council (ALEC) – a right-leaning economic analysis group – released its 6th annual report on state economic performance.

 

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The 10 states that had the best economic performance over the decade 2000 to 2010 were …

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Notice anything common across those states?

Here’s the code-breaker …

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Apple’s taxes: Why the Fed’s argument is simply silly …

May 23, 2013

This week, Apple CEO Tim Cook was hauled in to DC to testify about Apple’s low corporate tax rate …

Cook explained that Apple makes a lot of money outside the U.S. … selling products that are made outside the U.S. under licenses held by foreign subsidiaries and sold in non-U.S. countries.

Said simply, no part of that income is earned in the U.S. either thru the development, manufacture, sales, or distribution of the products.

None.

But, our wise Senators think that Apple should pay U.S. corporate income taxes on that money any way.

Why?

Because Apple was legally formed in the U.S. and has it’s Corporate headquarters in the U.S.

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Here’s the code-breaking question to ask …

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Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

April 16, 2013

Since yesterday was tax day, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

(more…)

Taxes: How about an Alternative MAXIMUM tax ?

April 15, 2013

Interesting idea in today’s WSJ …  introduce an alternative maximum tax.

Here’s the gyst of the idea:

We need an alternative maximum tax as a simple, rough-and-ready way to limit the economic damage of increasing taxes. 

How much is the most anyone should have to pay? When do taxes indisputably start to harm the economy and produce less revenue — when government takes 50% of people’s income? 60%? 70%?

I like half, but the principle matters more than the number.

Once the country settles on a number, each of us gets to add up everything we pay to government at every level: federal income taxes, yes, but also payroll (Social Security, Medicare, etc.) taxes, state, city and county taxes, estate taxes, property taxes, sales taxes, payroll taxes and unemployment insurance for nannies, household workers, or other employees, excise taxes, real-estate transfer taxes, and so on and on, right down to your vehicle stickers and those annoying extra taxes on your airline tickets.

Once this total hits the alternative maximum tax, you’ve done your bit and federal income taxes can take no more.

You compute federal income taxes as usual, but then you get to reduce the “tax due” that the total is less than the alternative maximum.

For the dude’s supporting argument, see the the article America Needs an Alternative Maximum Tax

The plan has some holes, but it has potential …

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Nums: What percentage of Americans prepare their own taxes? How many of them like it?

April 12, 2013

According to Pew Research

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

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Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

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Taxes: Did you hear me screaming yesterday?

April 11, 2013

Timing is everything, right?

Yesterday, like many – err, make that some Americans, I was putting the finishing touches on my 2012 tax returns (which are due in a couple of days).

Like some – err, make that a few Americans, I have to pay income taxes.

Yesterday morning I swallowed hard and wrote out the check … the big check.

Lots of money … at least half of it will be out-and-out wasted by a cost-bloated government machine,

Most of the rest will be spent on stuff that I don’t agree with or support.

OK, it’s still my civic duty, right?

Tried to put taxes out of my mind.

Then, President Obama unveils his new budget.

The chart below tells the story.

Lots of taxes and some phony “savings” against grossly escalating budgets.

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Source

Bottom line: those who already paying all the taxes should pay even more …

Couldn’t the President at least had the courtesy of waiting for the ink to dry on my check before calling me out as a piker and saying I wasn’t paying my fair share.

Gimme a break, man.

You’re making ME want to stop working …

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Follow on Twitter @KenHoma                         >> Latest Posts

Nums: Did Clinton really end welfare as we know it?

March 29, 2013

Surprised me, but the answer is yes.

But, there’s more to the story.

Clinton’s (and Gingrich’s) initiative to pare the welfare rolls cut the number of people on welfare from about 5 million to under 2 million.

Surprising to me, the number has held pretty constant for the past 15 years or so.

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As I said, there’s more to the story …

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