by: Jeffrey Quinn
An interesting study published by the Tax Foundation, last week, brings Joe the Plumber again to mind.
Recall the apparently unintended gaffe uttered by Obama when first confronted by Joe--that the real game plan was to "spread the wealth around?" Barack danced around the comment for a while, but here we are, now, stuck with his presidency and finding out more and more, like it or not, that spreading is exactly what is happening.
The Tax Foundation notes that its analysis of Obama's budget plans indicate that he is targeting the country's highest earners for greater income redistribution. By 2012, the Federal government is expected to be redistributing an extra $79 billion (with a 'B') from the top earning 5% of families, and $71 billion of that will be paid by the top 1% of income earners.
Nice incentive to work hard and create growth for all.
"Part of that change is higher taxes, and part is lower spending on items that benefit high-income people," quoth the Tax Foundation's study's lead author, Senior Economist Gerald Prante.
And of course the whole redistribution concept brings to mind the "Cap and Trade" fiasco pushed through the House, last week, by Madame Speaker Pelosi and others.
Another Tax Foundation study shows that the "Cap and Trade" proposal, ostensibly designed to reduce greenhouse gas emissions by about 15% would not come free--indeed would place an annual burden of some $145 billion on American households! The Foundation notes that the annual household burden would be something like $1,218, or approximately 2% of the average household income.
And if you want to find out the cost to your particular household's pocketbook, check out the calculator located on the Foundation's website. Most of you in these parts will immediately take note of the fact that your share will be a whole lot more than $1,218 per annum, we're sure.
And a little leeway emanated from the IRS this week, with regard to all the recent hysteria regarding taxpayers' reporting of foreign banking and investment account arrangements. Recall that IRS had launched a sort of "amnesty" period, giving folks until September 23, 2009 by which to get caught up on all of those foreign bank account filings which they somehow had "forgotten" about in the past. And with hell to pay for those who would choose not to take advantage of the amnesty largesse if later caught as non filers.
But along with the amnesty came vague and potentially alarming new rules for folks such as hedge fund investors and other foreign investment funds--some thought that these investors might indirectly be construed to have filing obligations--and if so, such filings for the 2008 tax year would have been due by June 30, 2009.
"Some taxpayers recently learned that they have an FBAR (foreign bank account reporting) filing obligation, but they do not have sufficient time to gather the information necessary to properly file the FBAR by the June 30, 2009 due date," quoth the IRS on its web site. "Taxpayers who reported and paid tax on all their 2008 taxable income but only recently learned of their FBAR filing obligation and have insufficient time to gather the necessary information to complete the FBAR, should file the delinquent FBAR report…" by September 23.
Whew!
CONSULT YOUR TAX ADVISOR - This article contains general information about various tax matters. You should consult your CPA regarding the implications to your 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 twelfth edition of Tax Savvy for Small Business, published by Nolo. He can be reached at 831-7288, and welcomes comments at
jquinn@ashleyquinncpas.com.
