The Economy - page 66
by Tweety | 21,716 Views | 780 Comments
Things were so bad the last four years, that any improvement is actually still not good. But a little good news is still good news. I've noticed my retirement funds are growing and I'm happy about that. I hope things continue... Read More
- 1Aug 5, '12 by tntrnI am curious. Just how does one not pay their taxes? They must have taxes withheld from their paychecks. Then what? And what is the IRS doing about it?I do know how inept the IRS is, having had a disconcerting experience with them years ago. They claimed we werent sent a notice because they didnt know where we lived.....but we had filed taxes every year and they left a notice in the hands of my then 7year old at our home, so their claim was a lie. That interaction, btw, has now resulted in the biggest claim against them in history. They are paying wronged taxpayers, including us, bigtime. Part of the proceedings proved the IRS paid people to lie under oath. And we are soon to have thousands more working there. Great, just great.j
- 0Aug 5, '12 by herring_RN GuideWell, like nurses they may be short staffed. Their budget was cut. -- IRS seeks nearly $1 billion budget increase for hiring spree | Fox News
But I think a nurse who made a mistake would apologize rather than make a lame excuse.
- 0Aug 6, '12 by tntrnQuote from herring_RNTheir budget needs to be eliminated. Waiting nearly ten years to notify us that a tax shelter they had previously approved was now not approved AND we owed not only penalties but also interest on interest is inexcusable.Well, like nurses they may be short staffed. Their budget was cut. -- IRS seeks nearly $1 billion budget increase for hiring spree | Fox NewsBut I think a nurse who made a mistake would apologize rather than make a lame excuse.
- 0Aug 6, '12 by TweetyI've been pretty lucky with the IRS so far. I pay my taxes via my paycheck and then file at the end of the year. Tens and millions of us do that. The IRS expected over 230 million returns last year. Obviously there's going to be mistakes but cutting the budget isn't going to help (cut bombs instead...sorry had to get that dig in), especially with complicated forms many of the mistakes being the fault of the filer.
When I lived in Atlanta in the 80's I applied for a part time job with them during the season, but decided it was too much to work all and and in the evening. But my best friend did and he said it was chaos. The pressure to produce and get things filed was tremendous to the point people were literally running up and down the aisles. Hopefully things have gotten better with technology.
Still if a business was run this way they would probably fail, it's dysfunctional. I agree that waiting 10 years to notify someone of a mistake is lame. I was notified by them that they passed a new law that I overpaid when I claimed tuition reimbursement, per their requirement as "income" and got that refunded which I thought was cool.
- 1Aug 6, '12 by JolieThe urrent IRS hiring spree is not only to correct "understaffing", but to gear up for IRS enforcement of new taxes and penalties under Obamacare.
Warning: Hidden Obamacare Taxes Will Cost You More Than You Think - Money Morning
The bill for Obamacare is on its way, and guess what? It's addressed to you.
You see, all those great benefits included in the Affordable Care Act don't come cheap, which is why the new healthcare law includes a barrage of new "Obamacare taxes."
And don't believe for a second the new Obamacare taxes will hit only the "rich" or those making over $250,000.
Some do, but you'd be surprised at how many of these new taxes also hit the middle class....
Obamacare Taxes You'll Pay Directly
In addition to the hidden Obamacare taxes, which we'll get to shortly, the law reaches directly into your pocket in several ways:
- Investment Income Surtax: If your gross income is more than $200,000 ($250,000) for joint filers, you'll pay a 3.8% surtax on your "investment income." That includes dividends, interest, rent, capital gains, annuities, and house sales. While middle class Americans normally would not get hit by this, the sale of a home could trigger this tax in a given year.
- Medicare Payroll Tax Hike: This Obamacare tax also is aimed at the top income group. For them it raises the Medicare payroll tax deduction from 2.9% to 3.8%.
- Itemized Deduction Limit: Now we're getting to the Obamacare taxes that will affect everyone. Starting in 2013, the itemized deduction limit for medical expenses will rise from 7.5% to 10% of adjusted gross income. That means you'll need to spend more than 10% of your AGI on medical expenses before you can deduct any of it.
- Flexible Spending Account Cap: Many Americans take advantage of flexible spending accounts (FSAs), which let you set aside pre-tax money each year to pay your medical expenses. There's no limit now, but in 2013 such accounts will be capped at $2,500.
- Penalty on HSA Withdrawals: The penalty for taking money out of a Healthcare Savings Account for a non-medical reason doubles from 10% to 20%.
- "Medicine Cabinet" Tax: Starting in 2011, using an HSA, FSA or health reimbursement account (HRA) to pay for over-the-counter medicines is no longer allowed.
- Tanning Tax: If you use indoor tanning services, you started paying an extra 10% tax on them in 2010.
- Individual Mandate "Tax": This is the notorious tax/penalty you'll pay for refusing to buy health insurance as of 2014. The amount you pay depends on your income. The penalty is set to rise by fixed amounts through 2016; thereafter it is indexed to inflation.
Because the government knows people don't like to pay taxes, the architects of Obamacare shifted most of the costs to businesses. While companies may "eat" some of the extra cost, most of the money will eventually come out of the pockets of average Americans.
These more stealth Obamacare taxes include:
- Medical Device Tax: As of 2013, a 2.3% sales surtax will be added to the cost of all medical devices costing more than $100. According to the Cato Institute, this tax covers "everything from CT scanners to surgical scissors....almost everything used by doctors, hospitals or clinics would be taxed." Such costs could add hundreds of dollars to a family's annual insurance premiums.
- Pharmaceutical Companies Tax: Starting last year, Obamacare specifies that a fixed amount of tax be extracted from the sale of prescription drugs. The amount rises from $2.5 billion in 2011 to $4.2 billion in 2018. Big drug companies must pay a portion of this tax based on their aggregate revenue from their brand-name drugs. You'll feel this tax every time you visit the pharmacy.
- Insurer Tax: Obamacare taxes health insurers as well, but based on their market share. This tax is similar to the one on prescription drugs, but the revenue targets are much higher: $8 billion in 2011, rising to $14.3 billion by 2018. Insurers will likely recover this tax by charging customers higher premiums.
- Cadillac Tax: Effective in 2018, the healthcare law places a 40% tax on the dollar amount of a healthcare plan that exceeds set limits. It will mainly affect comprehensive healthcare plans, which typically cost more. Employers are responsible for paying the tax, but most will simply pass it on to workers. This Obamacare tax could creep up on you: The trigger values are indexed to inflation, as opposed to higher-than-inflation increases in medical costs. That means each year more and more health plans will be subject to the tax. Consulting firm Towers Watson concluded in 2010 that 60% of large employers' health plans would be affected by 2018.
- States Subsidies for Medicaid: Another provision of Obamacare requires states to extend their Medicaid programs to cover all citizens with incomes below 133% of the poverty level. At first the federal government will pay 100% of the cost of this expansion, but by 2017 the states will have to start pitching in. Since some state programs are closer to compliance with the new federal standard than others, the impact of this burden on taxpayers will vary from state to state. But any state facing billions in new Medicaid costs would soon be forced to raise taxes. One caveat: The Supreme Court ruling in June said the federal government could not impose a penalty on states for opting out of this requirement. So some Republican-controlled states may escape this hidden Obamacare tax.
- 2Aug 6, '12 by TweetyQuote from JolieThanks for bringing that up. Trying to find a source that wasn't right wing was difficult, but apparently that's a true statement. One billion dollars of the Act was already budgeted for administration of the Act...the cost of implementation is budgeted, but trying to wrestle that already budgeted money isn't proving easy.The urrent IRS hiring spree is not only to correct "understaffing", but to gear up for IRS enforcement of new taxes and penalties under Obamacare.
The administration already has given the IRS about $238.2 million out of a $1 billion fund designated by the Affordable Care Act for federal agencies as they implement the law. Last year, the president’s budget requested another $473 million for the agency to hire 1,269 workers, but House Republicans responded by passing an amendment banning the government from enforcing the individual mandate.Frustrated that Senate Democrats blocked most of their attempts to defund and repeal the Affordable Care Act, Republicans settled on trying to undermine the $1 trillion law however they could, calling the designated implementation dollars a “slush fund” and charging that the IRS workforce would expand by thousands.
- 2Aug 10, '12 by herring_RN GuideRegulators to big US banks: Don't count on government help if you get in trouble
By Rick Rockather, Reuters
U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.
The two-year-old program, which has been largely secret until now, is in addition to the "living wills" the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.
Officials like Lehman Brothers former Chief Executive Dick Fuld have been criticized for having been too hesitant to take bold steps to solve their banks' problems during the financial crisis. ...
Regulators to big US banks: Don't count on government help if you get in trouble - Bottom Line
- 2Aug 16, '12 by herring_RN GuideFrank: Unemployment Would Be Below 8% If We Had More Public Workers
"When you cut back so substantially, you're not just doing social harm, you're doing economic harm because you do not have the spending power in the economy that you ought to have. Look, again, it's now clear," Rep. Frank said.
"We would have unemployment below 8% if it weren't for the fact that Republican policies have forced cities and states to lay off 700,000 people. Firefighters, police officers, teachers, public works employees, people who collect garbage, people who shovel snow because they've been hit by the property tax collapse. So, they have been losing.
We've tried to help them out and the Republicans say no, we have to preserve tax cuts for the wealthy, we've got to send money overseas to the military in useful ways, and the result has been 700,000 jobs lost from state and local governments over these past couple years," he said. …
Barney Frank: Unemployment Would Be Below 8% If We Had More Public Workers | RealClearPolitics
- 0Aug 18, '12 by DoGoodThenGoQuote from tntrnOne of the largest problems facing the IRS is what is known as the "tax gap". That is what the government is owed in theory versus what it reported/paid in taxes. The amount is growing larger each year and the IRS really doesn't have the tools to attack it head on.I am curious. Just how does one not pay their taxes? They must have taxes withheld from their paychecks. Then what? And what is the IRS doing about it?I do know how inept the IRS is, having had a disconcerting experience with them years ago. They claimed we werent sent a notice because they didnt know where we lived.....but we had filed taxes every year and they left a notice in the hands of my then 7year old at our home, so their claim was a lie. That interaction, btw, has now resulted in the biggest claim against them in history. They are paying wronged taxpayers, including us, bigtime. Part of the proceedings proved the IRS paid people to lie under oath. And we are soon to have thousands more working there. Great, just great.j
If you work for someone else (employee) then by and large long as your employer is doing the right thing your wages are reported and taxes paid. However over the years the underground cash economy has been growing and the IRS does not have means to ferret all that unreported or under-reported income out.
Be it nannies, housekeepers, personal trainers, plumbers, dog walkers, home base business, small businesses, hookers, escorts, whatever; long as persons are paid mainly in cash it becomes very difficult to for state and the federal government to find such wages for taxation purposes. On the "one percent" side of things various changes have been made regarding the reporting of dividend and other income such as investments, rents etc that some had played fast and loose with in order to avoid paying taxes, but the larger problem is still totally unreported income.
To be fair some persons do report part of their "cash" income otherwise it becomes difficult if not impossible to purchase a home or some such. Also in order to invest and or save funds the money must be reported, as the bank/brokerage reports to the federal government interest and other information about the account. If you aren't filing tax returns but have a stock account trading several thousands you can bet sooner or later the IRS is going to sit you down.