Big companies use all the legal tools at their disposal to cut the amount they pay the government.
It's been a week since we all learned about General Electric's innovation in the corporate tax realm.
The company's vice president for communications and public affairs, Gary Sheffer, responded to The New York Times' story breaking the GE's tax saving situation via a letter in Thursday's newspaper:
It was significant losses at GE Capital in the financial crisis, not 'tax avoidance' strategies, that reduced General Electric's 2010 overall tax ratebelow historic levels.
Without these financial crisis losses at GE Capital, G.E.'s tax rate would have been near the average of other multinational corporations. Our tax rate will return to more normal levels this year as GE Capital recovers from the financial crisis. In short, when you lose money, you don't pay taxes, and that's what happened at GE Capital.
The Times points out that G.E.'s job numbers in the United States are down over the past decade, but does not provide the context: G.E.’s employment in the United States has increased in this period, apart from the sale of businesses. Those jobs weren't eliminated; they moved to other companies.
While the GE tax situation has highlighted the corporate tax reform debate, the company is not alone in finding ways to reduce, or eliminate, tax liabilities.
The Daily Beast has put together a gallery of 15 major corporate tax dodgers. The website focused on the largest American companies, as well as ones it says are "are notorious in accounting circles for consistency in doing whatever they can to minimize their U.S. tax liability."
The men in this poll don't look like good husband material: They think they're 'special' and would cheat in other situations, too.
About 15% of Americans cheat on their taxes, and those that do are typically young single men.
That’s the finding of a survey conducted by the marketing firm DDB Communications, which asked approximately 6,400 Americans whether they intended to cheat on their taxes. Of the 15% who said yes, a substantial majority -- 64% -- were identified as single, male and under the age of 45.
So what compels these eligible bachelors to swindle Uncle Sam? On the face of it, money issues seem to be a common thread. Forty-two percent insisted they were “one missed paycheck away from disaster,” while just 29% of non-cheaters said the same of their financial situation.
Yet a closer look at the conspiring cheaters suggests that it’s not a simple case of economically-desperate people forced into tax malfeasance. There seems to be an undercurrent of narcissism at play here as well.
Voters support higher taxes on the wealthy, but governors and legislatures are hesitant.
This article is by Robert Frank and Laura Saunders of The Wall Street Journal.
In the partisan fight over taxing the rich, state "millionaire's taxes" have emerged as the latest and most hotly contested battleground.
In New York, New Jersey, Maryland, Oregon and California, state governors are at war with legislatures over taxing their state's highest earners to plug revenue gaps.
Advocates of the taxes say that with the wealthy riding the recovery of stock markets and global growth, and with less fortunate Americans facing unemployment and a housing slump, the top earners can best afford to foot the government's bills. Opponents say the taxes amount to a redistribution of wealth and encourage runaway government spending.
Polls show that many voters support taxing the top 1% or 2% of earners in each state. A Marist Poll, for instance, found that 64% of New York voters support preserving New York's millionaire's tax, which hits residents of the state who earn $500,000 or more a year.
That email is NOT from the IRS. Also, be careful with your files, both paper and electronic, to avoid identity theft.
While you’re spending time preparing your tax returns this spring, scam artists are hard at work figuring out ways to steal your money and your identity. ID thieves are particularly active during tax time because your return contains all the information they need -- your Social Security number, name, address, work information, investment accounts -- to open accounts in your name or steal your refund.
"Everything is there," says Robert Siciliano, an ID-theft expert. But there are some simple precautions you can take to stay a step ahead of the bad guys.
Federal tax of 10 cents a roll to upgrade sewer systems would be the ultimate user tax and ease the squeeze on city funds.
If Washington, D.C., is going to demand that local governments upgrade their sewer systems, then Washington, D.C., should help pay for the improvements.
And what better way than a federal excise tax on toilet paper?
The extra 10 cents on every roll of toilet paper was one of the ideas from Omaha, Neb., Mayor Jim Suttle, who's looking for ways to help pay his city's $1.7 billion federally mandated sewer project cost.
Given the linking of taxes and bathroom humor, the toilet paper tax proposal pops up across the country now and then.
Suttle admits that he got the idea from an Oregon lawmaker who suggested a similar plan a couple of years ago as a way to help cities and the environment. But the
Midwest mayor thinks the time might actually be right for such a tax.
Almost 100 offices nationwide will be open to answer questions and help with returns. We also have tips on other sources of free tax-return help.
Tax day is fast approaching. This year you get a few extra days, but you might want to start working on your tax return now to get it sent to the Internal Revenue Service by the April 18 deadline.
If you need some help, the IRS will have offices open this Saturday throughout the country to provide free help to taxpayers. The offices will be open 9 a.m. to 2 p.m. local time Saturday, March 26.
"We are opening our doors on these Saturdays to help taxpayers who may not have a chance to seek assistance during the work week," IRS Commissioner Doug Shulman said in a news release. "If taxpayers need help preparing their tax returns or have an account question, we encourage them to visit one of our open houses."
Start by filing on time and paying as much as you can. Ignoring the problem will just make it worse.
March 6, 2011
What if you owe money to the IRS but don’t have the cash to pay the bill?
Don’t panic, but don’t ignore the problem, either. File your 2010 tax return by the April 18 deadline, even if you can't pay the full amount you owe. The late-payment penalty is 0.5% per month of the unpaid amount, up to 25% of the balance. Still, that's a lot better than the failing-to-file penalty of 5% a month.
Pay as much of your tax bill as you can when you file your return, to reduce the penalties and interest that will continue to accrue until the balance is paid in full. Then wait for the IRS to send you a bill for the balance. That should take about 45 days and give you some time to come up with some or all of the cash.
The IRS is having problems processing the returns of those who got the 2008 homebuyer tax credit. It's a small but vocal group.
This has not been a good filing season for the Internal Revenue Service.
First, Congress screwed around into December before passing tax laws that apply to 2010 returns. That forced the IRS to push back the start of the 2011 filing season for many taxpayers as it reprogrammed its computers.
Then, thanks to a glitch in those computers, the IRS erroneously demanded payments of folks whose direct tax debits are in the works.
Now there's a passel of first-time homebuyer credit claimants who are not happy about another IRS glitch that's placed their tax returns and, in some cases, their refunds in limbo.
The problem is with filers who claimed the original $7,500 homebuyer credit for the 2008 tax year. It wasn't really a credit back then. Instead, it was a 15-year, no-interest loan that has to be paid back, starting with 2010 tax returns.
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