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A professor argues that raising the tax on beer would reduce both consumption and crime. But powerful lobbies make that move unlikely.

By Teresa Mears Feb 4, 2011 6:21PM

This post is by Janet Novack of Forbes. 

 

Forbes.com on MSN Money
Would raising the tax on beer reduce the number of young folks who get caught up in crime and the high budget and social costs of  locking up so many people?

 

In a provocative article, "The Economist’s Guide to Crime Busting," in the new issue of The Wilson Quarterly, Duke University’s Philip J. Cook and the University of Chicago’s Jens Ludwig suggest that it would. (The article is here, but isn’t free.)

 

The profs argue that crime policy (from an economist’s point of view) should focus "both on making criminal opportunities less tempting and the law-abiding life more rewarding" and offer three strategies which they say have been shown to do just that: raising the mandatory age through which kids must attend school; creating business improvement districts with private security guards (a tactic Los Angeles has used with great success); and yes, raising taxes on alcohol.

 

"It’s obvious," they write "that in considering criminal opportunities, such as whether to break a beer bottle over the head of the obnoxious Yankees fan on the next bar stool, people often make foolish, impulsive choices. There are many reasons for that -- hormones, immaturity, stress -- but surely one of the most important is intoxication."

 

Taxpayers got $33 million in credits for vehicles that didn't qualify, including a Hummer.

By Teresa Mears Feb 3, 2011 6:04PM

This article is by Ken Thomas of The Associated Press.

 

Car companies are slowly rolling out rechargeable electric cars. But that didn't stop thousands of U.S. taxpayers, including prisoners and some IRS employees, from incorrectly claiming lucrative tax credits for the electric vehicles last year.

 

A Treasury Department inspector general report says nearly 13,000 taxpayers erroneously claimed about $33 million in credits for plug-in electric and alternative vehicles during the first six months of 2010. The inspector general says about 20% of the $163.9 million in credits provided to taxpayers were claimed in error.

 

President Barack Obama has pushed for 1 million electric cars on the road by 2015 and the tax breaks are part of that strategy. The government has offered numerous incentives to drum up interest in the vehicles, including a $7,500 tax credit for a plug-in electric drive motor vehicle and incentives for converting a car into a plug-in.

 

Senators agree to revert to old law and throw out new requirement that businesses send 1099s to vendors. Landlords still must do additional reporting.

By Kay Bell Feb 3, 2011 2:54PM

They did it! They really did it!

 

Democratic and Republican Senators actually worked through the 1099 repeal issue yesterday afternoon, agreeing to scrap the expanded reporting version and go back to the way the system operated pre-health care reform.

 

The repeal of the provision was tacked onto the $34.5 billion Federal Aviation Administration reauthorization bill. Competing versions were debated and votes actually taken.

 

The 1099 amendment that was approved, offered by Sen. Debbie Stabenow, D-Mich., calls on the Office of Management and Budget to cut unnecessary unobligated spending, but exempts Social Security Administration administrative expenses from the budget ax.

 

The FAA measure, like the 1099 repeal add-on, enjoys wide bipartisan support, so there's hope that the House will leave the Senate version pretty much as is so that we can finally be done with this controversial reporting requirement.

 

Agreement between the IRS and federal prisons seeks to end scam in which prisoners filed fake tax returns to collect refunds.

By Teresa Mears Feb 2, 2011 5:33PM

This article is by Michael Gormley of The Associated Press.

 

A new agreement aims to stop federal prisoners from filing for and collecting millions of dollars in bogus tax refunds from their cells.

 

Pressure from U.S. senators in New York, Ohio, Minnesota and Florida led to an agreement signed Wednesday between the Internal Revenue Service and the federal Bureau of Prisons to break down bureaucratic and regulatory barriers to end the practice. The memorandum of understanding struck between the two agencies overcomes legal obstacles that hindered their own efforts and paves the way for states to make similar agreements that apply to their prisons.

 

Jackson Hewitt sues H&R Block over commercials offering to fix mistakes in past returns.

By Kay Bell Feb 2, 2011 2:42PM

H&R Block has been hitting the airwaves this filing season touting the ability of its offices to get taxpayers money back that they overpaid in earlier tax years.

 

Dubbed the Second Look Review, the Kansas City, Mo.-based tax preparation giant says that its analyses of previously filed tax returns find mistakes in the majority of those old 1040s.

 

Now I've watched these H&R Block ads, mainly because I'm fascinated by the poor woman who runs a small business and apparently overpaid the IRS by more than $5,000.

 

Sure she points out the obvious, that numbers are not her thing. But really? Five grand? She couldn't have gotten some tax software and saved herself at least some of that tax bill? 

 

As I recall, this woman doesn't say who did her prior return. In fact, I got the impression that she screwed it up all on her own. Again, lady, software!

 

In fact, I don't recall hearing any other company specifically named in the TV spots.

 

But then, I might have just missed the finger-pointing. Apparently, Jackson Hewitt Tax Services didn't.

 

The country's number two tax preparation company says the H&R Block ads are "false, misleading and highly disparaging" and Jackson Hewitt executives want them off the air.

 

The Parsippany, N.J., tax prep firm has filed a lawsuit in U.S. District Court for the Southern District of New York to force the commercials' immediate removal.

 

The IRS is accepting returns and sending refunds electronically. Maybe it's time to do all your tax paperwork online.

By Kay Bell Feb 1, 2011 4:42PM

I ordered a bedskirt online a couple of weeks ago. Or I tried to. The company's order process didn't provide me with a confirmation page. So I called customer service and placed the order by phone.

 

On Friday I got the bedskirt. On Saturday, I got another bedskirt. Apparently, even though the company's website didn't tell me it got my order just fine, it did. I'll be sending one bedskirt back, after I make sure the company will pay the return shipping.

 

You might be thinking that, given this experience, I'm done with online ordering. I am, but only with that company.

 

In most everything else, I'm a big fan of electronic communications (hey, you're reading this blog post, right!?) and commerce.

 

And that applies to my taxes, too.

 

So that's why Today's Tax Tip is to take your taxes electronic.

 

Most of you are like me, wired in our daily lives, so it only makes sense to go electronic at tax time, too.

 

Couples who trust each other may be able to dispense with expensive estate planning tactic.

By Teresa Mears Jan 31, 2011 6:05PM

This article is by Deborah L. Jacobs for Forbes.

 

Miami lawyer Nelson C. Keshen and Talma, his wife of 45 years, have always Forbes.com on MSN Money
had simple "I love you" wills leaving all their assets to each other directly. That's remarkable, considering he has spent decades drafting more complicated estate plans for other affluent couples -- plans designed to minimize estate taxes by putting some assets of the first spouse to die into a "bypass" trust for the kids. But regardless of tax costs, Keshen says, he didn't want his own widow (should he die first) to have "to account to my children or grandchildren."

 

The estate tax overhaul President Obama signed in December liberates many other well-off couples to follow the Keshens' lead and dispense with costly, cumbersome trusts -- assuming they are in stable first marriages and trust each other to manage their joint wealth. Here's what married folks need to know and do now.

 

Treasury secretary explains why administration favors lowering rates while eliminating deductions and credits.

By Teresa Mears Jan 28, 2011 1:38PM

This article is by David Wessel of The Wall Street Journal.

 

In his State of the Union address, President Barack Obama called on Congress to embark on a major revamp of corporate taxes: "[S]implify the system. Get rid of the loopholes. And use the savings to lower the corporate tax rate for the first time in 25 years -- without adding to our deficit."

 

Wall Street Journal on MSN Money
On Wednesday, Treasury Secretary Timothy Geithner talked to The Wall Street Journal's David Wessel about the initiative. Geithner emphasized the administration's insistence on offsetting the corporate rate, now 35%, by eliminating deductions, credits and incentives.

 

Raising more revenue from businesses in light of global competition "isn't realistic," he said. But, given the deficit, "We can't raise taxes on individuals to lower business taxes."

 

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