Greek Taxation a Harbinger?
Hopefully our friends in Greece won’t be setting any trends when it comes to the more creative aspects of revenue “enhancements,” as the politicians in these parts like to call tax increases.
The Wall Street Journal reports that the Greek Revenooers are looking under every conceivable rock to find a few more drachmas. “Tax collection is not coming in as expected, so the government, beyond pushing on that front, will look for other ways to close the gap. Seeking funds from unclaimed inheritances and from (bank) accounts from people long deceased, are some things that are being considered.”
That’s it – hit ’em while they’re down (and under). Seems that the unclaimed assets of the deceased could produce over $5 billion in newly-found revenue!
And another nugget recently noted by the WSJ is the counterproductive attitude of many states (California, just to name one) when it comes to hitting up its “rich” populace. The numbers apparently show that about half of California’s income taxes before the recession came from the top 1% of earners – households which earned more than $490,000 per year. But big income folk (often entrepreneurial types) tend to have a fair bit of volatility and unpredictability in the level of their income from year to year. Which may be why the recent recession saw the earnings of “rich” folk drop by more than twice as much as the income generated by the rest of the hoi polloi.
Quoth Brad Williams, former economic forecaster for the Golden State, “We created a revenue cliff. We built a large part of our government on the state’s most unstable income group.”
Likewise the experience of other places – such as New York, New Jersey, Connecticut and Illinois.
“Soak” the rich, and receive what you deserve.
As recently noted by the Tax Foundation, among OECD (Organization for Economic Cooperation and Development) countries, the U.S. leads the way in progressivity – of 24 OECD countries, recent stats show that the top 10% of households in America pays over 45% of all income taxes (personal and payroll) – the highest proportion among all of the 24, the average of which is about 32%, with Switzerland of all places taking the least from the top 10% – only about 21%.
So, keep “soaking,” Obama, and find out where the next dip in the recession takes you.
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 & Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 775-831-7288, and welcomes comments at firstname.lastname@example.org, and invites readers to view his other commentaries at www.taxlawtips.com.