Dems Shameless, Sneaky Tax Grabs
March 25, 2010
A little late to be grousing about what might have been, but when it comes to shameless, backdoor grabs, those who control everything, these days, take the cake.
Like this little sleeper, as pointed out last week by House Subcommittee on Oversight ranking member, Charles Boustany (R-La): a provision which would allow the IRS to confiscate tax refunds of those who choose to suffer the other penalty for not purchasing government mandated health insurance.
Quoth Boustany, this provision “dangerously expands, in an ominous way the tentacles of the IRS and its reach into every American family.”
And don’t worry about the extra workload–the Congressional Budget Office says the Revenooers will be asking for about $10 billion over the next decade, and something like 17,000 new employees to allow it to stay on top of things.
And didn’t the Wall Street Journal hit the nail on the head, in an editorial last week: “ObamaCare’s Worst Tax Hike.”
Referring to Obama’s 11th hour decision, of course, to slap the 2.9% Medicare payroll tax on “unearned income,” including interest, dividends, capital gains, annuities, royalties and rents earned by folks with adjusted gross income over $200,000 ($250,000 for joint filers). The first time ever, by the way, that the Medicare tax would be imposed on forms of income other than wages.
Take note, “rich” folk, that this means the top capital gains rate will leap from 15% to 22.9% (a modest 52% increase) come next New Year’s Day when the “Bush tax cuts” are set to expire. And if that isn’t bad enough, consider almost half of your dividend income will be flying out the door, when the top rate on that item of income will soar to 42.5% (from the present 15% in most cases) – a modest 183% increase.
Put all of that in your pipe and smoke it, in consideration of prognostications issued by the Institute for Research on the Economics of Taxation, which thinks the new investment tax would depress GDP by about 1.3% and reduce capital formation by about 3.4%, thus reducing the after-tax income of everyone who isn’t hammered by these new levies to about 1.2%. There just is no free ride.
And so just what do the economic geniuses populating the White House know that the rest of us don’t?
And finally this week, from our “really big money” department comes word that a couple of IRS agents swooped down on a Sacramento car wash, last week, seeking payment of delinquent taxes–4 cents, to be exact.
IRS spokesman Jesse Weller isn’t commenting “due to privacy and disclosure laws.”
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.