More on “Half a Loaf”

For the second year in a row, Gallup is reporting that just a little less than half of we and thee think our income tax burden is too much, too little, but juuust about right.

We wonder whether that’s the same half that pays nothing—recall that only about half of us actually pay the freight in this country, with the other half in the cart just along for the ride.

Indeed, Gallup has been polling this one since 1956, over most of which time most Americans have expressed the view that their tax burden is too high.  Needless to say, about eight or so years ago, attitudes changes—the “too high” percentage dropped from 65% in April, 2001 to 47% in January, 2003.  And who was President then?

Regardless of your view on all of this, however, get ready to greet the 16,500 or so of new IRS agents who will soon be populating the realm, thanks to the Obama health “reform” program recently passed.  And that’s a mere 17% increase in the IRS workforce, we hear from ABC News, no less.

“When most people think of health care reform, they think of more doctor exams, not more IRS exams,” quoth Rep. Kevin Brady (R-TX), ranking member on the House Joint Economic Committee.  “Isn’t the federal government already intruding enough into our lives?”

Mebbe so.

And if you’re among the “wealthy” among us, take no solace in the recent Bloomberg report that the “U.S. Wealthy” lack easy loopholes to offset Obama’s tax plans.  One of the few left is to just hole up in a state which is hospitable to the overly taxed folk.  Take Arthur Laffer, for one—economist Laffer (who once counseled President Reagan) moved out of California to Tennessee a few years back.  And he says he’s not going anyplace, anytime soon.  He likes it in Tennessee, which apparently doesn’t tax earned income.  Bad enough that the Federal rate on this and other forms of ordinary income are going to rise to at least 39.6% (from the present 35% now) next year.  Load on top of that a state tax rate (like California’s roughly 10%) and you’re talking real money.

Think about that, Nevada, as you contemplate what to do about your budgetary problems.

And one more tax item to tuck into your pipe and smoke it this week:  The Revenooers might just start snagging your refunds to collect fines from folks who fail to buy health insurance, as Obama will soon require.  Recall that by 2016, folks without coverage could see fines of 2% of their income.

“There has been some insinuation about how we are going to approach our job,” noted IRS Commish Shulman at a recent speech to the National Press Club.  While under the new law, IRS apparently cannot seize assets, Shulman says tax refunds are fair game.

And you thought a receivable from the government was an asset—so what do you know?

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 or by commenting below. 

 

 

     

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