Free Republic

Housing Numbers Were Skewed, Lehman Says (RTTNews) - Housing starts were biased higher in June due to a change in the building code in New York City, observe the analysts at Lehman Brothers. Starts jumped 9.1% to 1.066 million in June as multi-family construction in the Northeast surged 102.6%. Effective July 1, the 421-a tax incentive program for multi-family construction in NYC will expire, encouraging builders to rush to start construction. This also pushed up permits for multi-family construction in the Northeast, which jumped 73%, as developers rushed to lay foundation after receiving permits. We expect a reversal in multi-family...

SACRAMENTO -- One severely broken part of California's state government is the tax code. It's antiquated and unreliable. Government financing is too heavily dependent on the rich, who have good and bad years, causing roller-coaster tax trauma in the Capitol. And there isn't enough help from the creaky old sales tax. The volatility of the tax system keeps getting worse, making it increasingly difficult for policymakers to plan ahead. New Assembly Speaker Karen Bass (D-Los Angeles) has taken up the cause and is bent on creating an independent blue-ribbon commission to overhaul the tax code. "The economic crisis is national,...

Incoming state Assembly Speaker Karen Bass on Tuesday said one way to solve California's continual budget mess is to revamp the state's tax code, possibly raising income taxes on the wealthy, levying sales taxes on services and closing tax loopholes. In an interview with The Associated Press, the Los Angeles Democrat said she wants a bipartisan panel to examine the code and recommend ways to change it. "The state of California is in a crisis," Bass said. "I want to set up a commission outside of the Legislature that will look at more long-term solutions and evaluate whether the tax...

Tax Policy: The "rebate" side of the economic stimulus package would split the nation about equally between payers and takers. Will we now get a taste of class warfare to come?Leona Helmsley once notoriously proclaimed that "only the little people pay taxes." Turns out she was wrong. Not only did the billionaire end up going to prison for federal tax evasion, she didn't even get the trend right. When it comes to federal income taxes, Leona's "little people" have been migrating off the rolls in large numbers for a couple of decades. Now it's the "big" (i.e., rich) people who...

WASHINGTON -- The IRS is making a big push this year to make sure certain taxpayers know they can take the earned income tax credit, a benefit for lower income workers and working families that goes unclaimed by up to 25 percent of those who are eligible.The EITC is intended to offset a portion of Social Security and Medicare taxes, thus boosting take-home income in low-wage jobs and providing an incentive to work. It's a "refundable" credit, meaning that after it is figured against your tax liability, the IRS sends you any money you're due.For 2007 tax returns, the maximum...

The Alternative Minimum Tax may be the all-time winner of Good Ideas Gone Bad award. Written to make sure tax-dodgers didn't pile up deductions to escape the IRS, it's now threatening to sweep in 25 million taxpayers, up from four million last year. This headache of a tax grew in scope thanks to inflation and rising incomes as lower-earners graduated into a higher tier. But it's also provided a stage for Congress to display a knack for feuding instead of fixing. The result could be a longer tax season, ample confusion and deepening voter resentment. Since it was passed in...

Republicans have rejected a request by Majority Leader Harry Reid (D-Nev.) that the Senate approve by unanimous consent a one-year patch to the Alternative Minimum Tax (AMT) with no accompanying tax increases. Democrats quickly made political hay of the GOP move, which contradicted earlier Republican calls for extending tax relief with no offsets. Sen. Max Baucus (D-Mont.) blamed Republicans for obstructing tax relief, and called Reid’s request a “huge concession” on the part of Democrats. “If the AMT hits more taxpayers next year, it’s because of the Republican caucus. That’s clear,” said Baucus, who chairs the Senate’s tax-writing committee. Sen....

Washington – The Club for Growth praised Senator Fred Thompson for the release of his pro-growth tax reform plan this morning on Fox News Sunday with Chris Wallace. The seven-part plan is the most comprehensive tax reform plan offered to date by a presidential candidate. The plan will: Permanently extend the 2001 and 2003 tax cuts Permanently repeal the Death Tax Repeal the Alternative Minimum Tax Reduce the corporate tax rate to no more than 27% Permanently extend small business expensing Update and simplify depreciation schedules Expand taxpayer choice Most commendable is Thompson’s plan to expand taxpayer choice by adopting...

One advantage of having a subscription to The Atlantic is finding out what the Democrats propose to do next. Clive Crook in under the rubric of "The Agenda" wrote a recent article on homeownership called Housebound. After agreeing with some benefits of homeownership he then lists the reasons why this is a bad idea. Among his complaints are: Homeowners are less mobile. Homeowners act as cartels interfere with zoning changes, suppress new developments, etc. And, not the least is that they have an unfair advantage in mortage-interest deductions. The last of these, interest deduction for mortgage interest, seems to be...

Senior Democrat proposes U.S. tax overhaul Thu Oct 25, 2007 9:51am EDT WASHINGTON (Reuters) - The top U.S. congressional tax writer proposed sweeping tax legislation on Thursday that would repeal a tax for the rich that has been hitting more middle-class Americans and replace it with a new tax on high-income earners. The $1 trillion bill proposed by Rep. Charles Rangel, chairman of the Ways and Means Committee in the U.S. House of Representatives, would also reduce taxes for millions of middle- and low-income taxpayers. Private equity fund managers who pay a 15 percent capital gains rate on earnings from...

When 2008 rolls around, investors who anticipated a capital gains tax exemption on the sale of their investment real estate may run across a kink in their plans. HR 3648, a bill working its way through Congress, would alter the requirements for exemption on primary residences so that many investment properties will no longer qualify, leaving investors to pay a capital gains tax from which they would previously have been exempt.

Folks who move into their second homes and later sell won't get as big a tax break as they may be expecting, thanks to legislation that Congress will pass this fall. A provision in a pending mortgage relief bill blocks homeowners from excluding all of their gain on a second home, even if the home is sold more than two years after it becomes their primary residence. Here's how the change will work: Currently, you can sell your primary residence and exclude up to $500,000 of gain ($250,000 for singles) if you lived there for two out of the past...

The Tax Foundation has published Summary of Latest Federal Individual Income Tax Data: New data released by the IRS today offers interesting insights into the distributional spread of the federal income tax burden, new analysis by the Tax Foundation shows. The new data shows that the top-earning 25% of taxpayers (AGI over $62,068) earned 67.5% of the nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86%). The top 1% of taxpayers (AGI over $364,657) earned approximately 21.2% of the nation's income (as defined by AGI), yet paid 39.4% of...

<p>Manchester – Calls to abolish the Internal Revenue Service and repeal the Constitutional amendment that established the federal income tax drew loud applause yesterday for Republican presidential candidate Ron Paul.</p> <p>The Texas Congressman drew an eclectic mix of more than 500 supporters -- young and old, Libertarians and anti-war Democrats, independents and conservative Republicans -- who cheered his message of limited government, low taxes, free markets, bringing the troops home from Iraq, and returning to a monetary policy based on the gold standard.</p>

John Dingell proposes not only a huge gas tax but also ENDING THE HOME MORTGAGE DEDUCTION for “large” homes–all this to fight global warming change. (Pause. Laugh. Roll eyes.) Now, Dingell’s not serious about any of this–he said as much over the summer on the Sunday talk shows. He says he just wants to get the discussion going–and, if my memory is correct, he also said that he wants to show others that it’s impossible to pass this kind of stuff. But just now he’s acting serious about it. As a conservative/libertarian, this is wonderful news to me. There is...

A Tax Break for Driving to Work? The Fair Tax Will Fix This By Herman Cain August 20, 2007 There is a little-known deduction in the tax code that 400,000 people know about, and by which they avoid $150 million dollars in taxes each year. The issue is not that most of us do not know about this little sneak-a-tax, or even the amount that the rest of us are picking up through a higher federal deficit. The issue is that this is another example of how the tax code is used to encourage a desired behavior. The deduction encourages...

People often laugh when I say on the campaign trail that the tax code should be taken behind the barn and killed with a dull axe. In fact, one man in Iowa was so excited by this proposal that he presented me with an axe before I finished my remarks (fittingly, I was speaking in a barn). There's a reason people welcome my proposal to kill the tax code -- it's a monster of inscrutable complexity, and I say that as a former lawyer who took every tax law class I could. Today's tax code -- which is sixteen times...

NEW YORK, June 26 -- Warren E. Buffett was his usual folksy self Tuesday night at a fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a system that allows the very rich to pay taxes at a lower rate than the middle class. Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

A modest proposal: Let’s dump the entire tax code. Let’s gather all the tax documents we can find, put them in a big heap, and have a nationally televised Tax Code Burning Day. If the tax lobbies protest, toss them on the fire, too. Good riddance. Tax Code Burning Day is possibly a bit extreme, but the idea of chucking our income tax system has been around for quite a while. When I suggested 10 years ago that we were all suffering from TDB - Tax Debate Burnout - 5,000 readers agreed. They sent in letters and postcards in support...

While Americans struggle to comply with one of the world’s most complicated tax codes, it’s worth noting that about one-dozen nations have adopted simple and fair flat-tax systems. Hong Kong has had a flat tax for nearly 60 years, and has gone from being one of the poorest places on the planet to a first-class economic powerhouse. Even the rulers in Beijing who now control the former British colony are smart enough to realize that it would be foolish to change course and kill the proverbial goose. Too bad American politicians aren't as economically astute as Chinese communists. Congress occasionally...

Behold the simple virtues of a fair national sales tax : Tax code is a disgrace that needs an overhaul By LEO LINBECK WITH millions of Americans once again struggling to complete their federal income taxes, it is a good time to reflect on the profoundly dysfunctional and highly punitive federal tax code that only gets more complicated year after year. ADVERTISEMENT The patchwork quilt of tax loopholes, exclusions, adjustments and various forms and schedules that we all struggle to understand is a reflection of the wholesale auctioning off of the tax code over the last several decades into the...

WASHINGTON (AP) -- Dissatisfaction remains high after numerous changes in tax law since the late 1980s. The Reagan administration led a tax overhaul two decades ago that significantly lowered tax rates and eliminated or reduced several deductions. The first President Bush abandoned his "read my lips, no new taxes pledge" in a 1990 budget deal that raised taxes. The Clinton administration won passage in 1993 of a deficit-reduction measure that blended tax increases, budget cuts and rebates for the working poor. And the second Bush administration pushed successfully for tax cuts that lowered the top income tax rate to 35...

On Tax Day, $125 billion in waste By Matt Schumsky April 14, 2006 Another dreaded April 15th – Tax Day – is nearly upon us. Our annual tax ritual requires over 26 hours from the average person filing a standard 1040, and over 60 percent of Americans seek professional help. The reason: The U.S. tax code now exceeds 60,000 pages, and those pages often give conflicting advice. No wonder that in 1976, presidental candidate Jimmy Carter declared, “Our income tax system is a disgrace to the human race.” In many ways, things are worse today than they were then. Our...

WASHINGTON - Almost as certain as death and taxes is the public's feeling that the U.S. income tax system is not fair. An Ipsos Poll released this week found almost six of 10 people, 58 percent, say the system is unjust, a number that is virtually unchanged from two decades ago. ADVERTISEMENT People think the middle class, the self-employed and small businesses pay too much in taxes, the poll found. And they think those with high incomes and big businesses don't pay enough. The survey was conducted in the days before the mid-April deadline for filing income tax returns. Dissatisfaction...

Americans should be concerned about the competitive edge that our tax system gives foreign manufacturers. We should no longer allow the income tax to make foreign-produced goods more competitive than our own. Replacing the income tax with the Fair Tax, a highly progressive federal consumption tax, will end this practice and make American products 20 percent to 30 percent more competitive, both at home and abroad. What a break for U.S. producers and consumers as well! Getting rid of the income tax will dramatically lower production costs in this country. And competition will ensure that these cost savings will flow...

Recently the Internal Revenue Service released a report showing that nearly three quarters of 82 tax-exempt groups investigated during the 2004 elections took part in prohibited political activity. But now, churches and nonprofit organizations have a new resource to help keep them out of trouble with the IRS. The IRS says several of the organizations and churches will probably lose their tax-exempt status, a fact that will very likely affect future contributions to these groups. In an effort to help churches, ministries, and other faith-based institutions avoid such errors, The Rutherford Institute, a Virginia-based civil liberties organization, has issued guidelines...

Tax-Overhaul Panel Gives Bush Two Choices Options to Consider Include A Simplified Current System Or a Consumption-Based Levy By ROBERT GUY MATTHEWS Staff Reporter of THE WALL STREET JOURNAL October 19, 2005; Page A4 WASHINGTON -- President Bush's tax-overhaul panel agreed to offer two alternatives to the present tax code: one that streamlines the current income tax and another that would replace it with a progressive tax on consumption. SNIP Neither is likely to become law, but they offer the Treasury Department and the White House a framework for legislative proposals that could be considered by Congress next year. SNIP...

WASHINGTON, Oct. 11 - President Bush's tax advisory commission indicated today that it would not propose replacing the income tax with a national sales tax or a value-added tax but would recommend modifications in the popular tax deductions for mortgage interest and employer-provided health insurance. (Excerpt)

KPMG avoided the fate of Arthur Andersen yesterday... over the marketing and sale of "abusive" tax shelters. But the price of survival was high. The accounting firm will pay $456 million in fines and restitution and has agreed to let a federal monitor look over its shoulder. At the same time, no fewer than eight former KPMG executives and an outside lawyer were indicted on conspiracy charges for designing and selling the shelters.... KPMG will survive this "deferred prosecution" by admitting wrongdoing. But it's easy to forget amid the righteous indignation over tax shelters with names like FLIP, BLIP, OPIS...

President Bush says he wants to reform the tax system and has appointed a tax-reform commission that will issue a report in September. It was originally supposed to have reported by July 31, but the White House asked the commission to delay its report so that it would not interfere with the Social Security-reform effort, which needs a few more months before it can be declared legally dead. I've long thought that the White House had made a very serious error in attempting to do both Social Security reform and tax reform at the same time. The issues were too...

There’s an old tale which says that if you take a frog and throw him in a pot of hot, boiling water the frog will jump out. But if you take the frog and put him in a pot of cold water, and gradually turn up the heat, little by little over a long period of time, the frog’s body will adjust to the incremental increases of heat and eventually boil to death. The U.S. economy is like a frog in a pot of boiling water and he can’t jump out to save himself. One of his legs is the...

WASHINGTON -- As taxpayers recover from finishing their annual filing chores, a presidential commission studying the tax laws has reached the conclusion that there are just too many deductions and credits. To help taxpayers deal with college costs there are -- depending on which applies to a particular individual -- two different kinds of tax credits, a deduction for student loan interest and special tax-advantaged savings plans. Special urban and rural tax zones encourage investment and job creation. Dozens of other tax benefits help families raise children and save for retirement, encourage adoption, nudge drivers toward hybrid cars and push...

Champagne drinker: "Only the little people pay taxes" It won't seem that way to the millions of Americans who file their tax returns by the deadline on Friday, but there is a mountain of evidence that tax avoidance (the legal variety) and even tax evasion (the illegal variety) are growth industries. Accountants in the field have even come up with the term "tax avoision" to describe the grey areas in between. It was Leona Helmsley who said famously that "only the little people pay taxes". You might forgive her cynicism. The assertion was over-stated but not completely wide of the...

WASHINGTON - Most Americans think federal income taxes are too complicated, but they're not eager to simplify tax preparation by getting rid of some deductions and tax credits, according to an AP-Ipsos poll. Forty-five percent of those polled support eliminating them, while 51 percent oppose that approach. Millions of Americans are scrambling to meet the April 15 tax deadline. Many acknowledge they dread preparing the tax forms. "Anybody who says they don't mind their taxes is lying," said businessman William Long of Ferris, Texas. "I definitely put them off until the last minute, even when money is coming back. I...

Greenspan Calls for Simpler Tax Code Calling the existing U.S. tax code overly complex with an "overlapping web of deductions and exemptions, " Federal Reserve Chairman Alan Greenspan suggested a consumption tax could spur more personal savings and economic growth. Greenspan spoke Thursday before an advisory panel on tax reform appointed by President Bush. He referred to the last tax code overhaul in 1986. "Changes since the 1986 act have been largely incremental without the appropriate all-encompassing context that broad reform brings to the table," Greenspan told the group, according to The New York Times. "It is perhaps inevitable that,...

THERE THEY GO AGAIN! President George W. Bush and the Republican Party are determined to overhaul the tortuous federal tax system just in time for both the 20th anniversary of Ronald Reagan's 1986 tax act and next year's mid-term elections, which could see both parties fighting over large numbers of open seats. Bush promised in his State of the Union address to deliver a tax code that is "pro-growth, easy to understand and fair to all." The current code is so ponderous that it is driving an alarming number of taxpayers to underreport their incomes or not report incomes at...

Panel to Review U.S. Tax Code By Warren Vieth, Times Staff Writer WASHINGTON — A presidential commission today launched what it promised would be a top-to-bottom review of the U.S. tax code, but acknowledged that it might make more sense to modify the income tax than to try to replace it. Members of the president's advisory panel on federal tax reform said all options were on the table, including proposals to replace personal and corporate income taxes with variations on a national sales tax. "The president is committed to major tax reform, to real tax reform, to something more than...

<p>WASHINGTON -- Asked when he was near death to name things he regretted not doing, Andrew Jackson said: ``I didn't shoot Henry Clay, and I didn't hang John C. Calhoun.'' President Bush, who seems determined to leave office with nothing undone -- except, maybe, horsewhipping Harry Reid -- vows to transform not only Social Security but the hydra-headed tax code.</p>

WASHINGTON - Some leading Republicans in Congress are weighing whether to take a chance this year on a massive legislative package that would overhaul Social Security and the income-tax code at the same time - a challenge of historic proportion that could lead to sweeping changes throughout American society. Republicans have reached no consensus on the question, which would disrupt President Bush's preferred schedule of taking on Social Security first and tax changes later. The issue is expected to be one of the main topics that Republican lawmakers will debate during a retreat this week at the Greenbrier hotel and...

WASHINGTON -- President Bush on Friday called streamlining and reforming the U.S. tax code an "essential task for our country," but offered few hints of how he intends to get it done. Treasury Secretary John Snow said "everything's on the table," including possibly the popular home mortgage and charitable deductions and a former senator leading a tax-reform panel for Bush said that a national sales tax or flat tax also could be in the cards. "I am firm in my desire to get something done," Bush said at the end of a White House meeting with former Sens. Connie Mack,...

WASHINGTON (Reuters) - President Bush on Friday appointed two former senators -- Florida Republican Connie Mack and Louisiana Democrat John Breaux -- to head a panel to come up with recommendations on reshaping the tax code. snip Bush said Mack, the chairman, and Breaux, the vice chairman, would lead an effort to come up with recommendations on how to make sure the tax code "encourages economic vitality and growth," instead of discouraging it and requiring Americans to spend billions of hours filling out tax forms. snip The tax panel is to look at a broad array of options, ranging from...

A C-SPAN look-in on President Bush’s challenge on tax reform featured two bright and experienced young scholars, libertarian in outlook. Mark Henrie, from the Intercollegiate Studies Institute, and Doug Bandow, appearing under the auspices of the Cato Institute, acknowledged that Mr. Bush’s reforms would not be shaped by fundamentalist models. Thoughtful reformers in the recent past have focused on alternative approaches to tax reform radical in character. The first would eliminate the progressive feature of the income tax — Rockefeller and his chauffeur would both pay 15 percent of their income. The second goes further, eliminating not only the...

Bush Plan Could Imperil Tax Write-Off for New York By IAN URBINA December 27, 2004 As the Bush administration looks to revamp the tax code, New York officials say they are particularly worried about one idea being considered: eliminating the federal deduction for state and local taxes. If the president pursues this plan, New York State would lose about $37 billion per year in federal tax deductions, more than almost any other state, according to Internal Revenue Service data. The change would affect about 3.2 million households in New York, three-quarters of which are middle- and low-income, tax records indicate....

We're on the NAACP's side.Kweisi Mfume recently announced his departure as NAACP President, and not a moment too soon. His tenure has been a disaster for the storied civil rights organization, driving it deeper into liberal irrelevance. But that doesn't mean it still shouldn't be defended against the current IRS probe of its tax-exempt status. Back in October the NAACP was informed that it may have violated a law that prohibits charities, churches and other nonprofits from engaging in partisan activities. Under Mr. Mfume and chairman Julian Bond, the group has accused President Bush of being at war with black...

WASHINGTON — As President Bush lays the groundwork for a possible overhaul of the U.S. tax code, one option under consideration would deal its biggest financial blow to citizens of blue states such as California and New York. Some conservative activists are urging the Bush administration to scrap the federal deduction for state and local taxes as part of a broader plan to revamp the nation's tax system. Although the proposal would hurt some taxpayers in nearly every state, it would hit hardest in states with higher-than-average income levels and bigger-than-average state and local tax burdens. High on the list...

Bush to Push Economic Agenda at Conference WASHINGTON (AP) -- President Bush will host a conference Dec. 15-16 to promote top items on his economic agenda, including overhauls of Social Security and the tax code, restraining federal spending and improving health care and education. Bush, Vice President Dick Cheney, Cabinet members and outside business leaders will participate in the forum at the White House, said spokesman Scott McClellan. Roughly a half-dozen panels will tackle various issues to ensure "America is the best place in the world to do business and how we secure our economic future for our children and...

In our current tax system (a graduated income tax) not everyone pays in a manner that is neutral.

An official says all provisions will be examined by a reform panel. Many experts think Bush will favor a piecemeal approach. As the White House prepares to name a blue-ribbon panel on tax reform, the labyrinthine U.S. revenue code could face the first top-to-bottom rewrite since President Reagan closed loopholes and slashed income tax rates on a historic scale in 1986. "This is a fundamental look at the entire code, every component of the code," a senior administration official said late last week. "Nothing is off the table." "Simplification would be the goal," Bush said Thursday during his first postelection...

What is best for America is to tax consumption instead of production. If all taxes were from sales tax, those who pay nothing would start to pay their fair share. Drug dealers, hookers, illegal aliens and others working for cash would pay tax with every Ford or Ferrari purchased. We could have the same goods and services from the government and PAY LESS TAX after shifting all taxes from income to consumption. In addition, that would reward saving - interest and dividends would no longer taxed. The saving rate in the US is far too low and needs to be...

Taxes: President Bush caused quite a stir by saying a consumption tax is an "interesting idea that we ought to explore seriously." Well, why not?Not that we advocate a consumption tax — also known as a national sales tax — but it's nice to hear some discussion about overhauling our tax code, which has become an absurd disgrace.As the chart shows, there are now nearly 50,000 pages of federal tax rules. That makes our tax code larger than the Encyclopedia Britannica — and far more complex.This is more than just a shame. It's an epic waste of time and money....