Dems Looking For More Tax Revenue
Which should come as no surprise, right?
Thanks to Representative Bill Delahunt (Dem – Ma), a bill came forth in the House last week which would change the rules of sales taxation for Internet transactions. Recall that folks purchasing via Internet sources generally don’t pay sales taxes–and bureaucrats galore have been ruminating over this whole issue for years, it seems. But Delahunt, with the concurrence of The National Conference of State Legislatures, moves on in an effort to allow states to collect as much as $23 billion in new taxes.
Co-sponsors of the “Main Street Fairness Act” include Representatives Michael Capuano, John Conyers, Stephanie Herseth Sandlin, and Peter Welch – all Dems.
And more than a few of you, out there, have been wondering just what in the world is going on with the estate tax – gone (at least temporarily) in 2010 and scheduled to return in
pre-Bush fashion next New Years Day. But even though concrete legislation to finally resolve all of this is not forthcoming, Democrats (Why do we keep mentioning them in discussions of new/additional taxes?) are doing their darndest to not only bring the estate tax back, but to do so retroactively to clip estates of 2010 decedents! We’ll see what happens here, but as the Tax Foundation notes, constitutional scholars have already observed that retroactivity just might be the first volley toward endless litigation.
Another interesting notion recently put forth by the Tax Foundation: that one of the earliest rationales for the estate tax (preventing excessive concentration of wealth) may actually be obsolete. IRS info on the highest-earning 400 tax returns show that between 1992 and 2007, only seven taxpayers appeared continuously in that top tier of income earners. At the same time, 2,515 taxpayers made only one appearance in that group during the same time frame. One argument for repeal of the estate tax, therefore, is that the economy has fundamentally changed since 1916 (when this notorious grab became firmly established in the law) and thus solved the concentration of wealth “problem” such that the estate tax may not even be necessary (except to simply provide the never-enough revenue requirements of the bureaucrats).
And more good stuff from the Tax Foundation – unless you’re an investor in this country, and collect a dividend every so often. Get ready for the impending expiration of the “Bush tax cuts” insofar as it affects your brokerage account. Combining such expiration with the new Medicare taxes on investment income (recently enacted as part of health care “reform”) will elevate the top effective tax rate on dividend income in this country to 68% in 2011!
Tax Foundation Senior Fellow Robert Carroll, Ph.D. notes that “The U.S. integrated dividend tax rate of 68% is substantially higher than in other nations. The average rate among OECD member nations is about 44% and the average among the larger G-7 economies is about 47%. The higher dividend rate is in addition to the high U.S. corporate tax rate of 39.1%, second only to Japan among industrialized countries.”
And people wonder why this administration’s economy is going nowhere?
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd. with offices in Incline Village and Reno. He is also a contributor to the recently published 13th edition of Tax Savvy for Small Business, published by Nolo. He can be reached at 831-7288, and welcomes comments below.