Posts Tagged ‘Tax Increases’

Ongoing U.S. Economic Challenges May Cause Muni Bond Chaos

Friday, June 4th, 2010


Warren Buffet Turns Sour on Muni Bonds.  Thanks to Massive Underfunded Pensions, Dwindling Revenues and Inability to Raise Taxes – State and Local Agencies Are in for a Rough Ride.  Over $14 Billion of Muni Bond Defaults in 2008 and 2009.  This may be just the tip of the iceberg.


U.S. Unemployment Continues to Challenge Recovery.  Census Workers Cannot Cure the Problem (WSJ).


Long-Term U.S. Problems Continue (The Economist) -,%5Egspc,tlt,tbt,euo,man&sec=topStories&pos=9&asset=&ccode=

Healthcare Tax Timeline – AICPA Corporate Taxation Insider Newsletter

Thursday, April 29th, 2010

The following article details the various tax and penalty aspects (including effective dates for the multiple tax provisions) and health insurance mandates under the 2010 Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) [together the Healthcare Bill]:


For daily tax and financial updates, please follow me at:

2011 U.S. Budget – $1.6 Trillion Deficit

Monday, February 1st, 2010

Obama’s 2011 Budget Proposal – Winners and Losers

The Departments of Education and Energy will be applauding the President’s budget proposal since they might see increases of 16% and 6.8%, respectively.

On the other hand, the petroleum industry, NASA and those pesky taxpayers making more than $250,000 will be less enamoured with the 2011 budget.

The debate will likely be heated over the coming months as the final budget is hammered out in Congress as fiscal accountability takes center-stage.

For more details, please see the article links below:

Office of Budget and Management – The Facts With a Little Less Spin:

Reuters’ Analysis:

Heritage Foundation Analysis:

An Analysis From the U.K/ Financial Times -


For daily updates, please follow me on Twitter @:


Thank you

Senate Delivers a Sack of Coal (Plus More Taxes) For Christmas

Thursday, December 24th, 2009

Just in time for the Holidays, the Senate passed their version of healthcare reform.

Don’t spend that cash and those gift cards you receive for the Holidays — you may need them for living expenses, your shrinking paycheck  or increased insurance premiums very soon.

Now the real work will begin for the Conference Committee to hammer out a reconciliation of the House and Senate versions and come up with a final bill that can pass both houses.

$398 Billion in New Taxes: You may need to spend some time studying this information to figure out how these bills are purportedly going to save taxpayers hundreds of billions of dollars over the next decade.   If you make more than $200,000 annually, use medical devices, require presription drugs, pay medical premiums, or own a business (that should cover the vast majority of you) you might be subject to one or more of the following:

 - 5.4% surtax on your taxable income above $500,000,

- 2.5% excise tax on medical devices,

-40% excise tax on “High Cost” insurance plans, 

- 62% increase (from 1.45% to 2.35%) in the hospital portion of payroll taxes for taxpayers making more than $500,000,

- penalties ranging from $750 per individual to 8% of payroll on companies and individuals for not having health coverage,

- numerous proposed fees on medicines, drugs and procedures,

- 10% tax on indoor tanning salons (no tax proposed on beachs YET).

Tort reform and healthy living incentives seem to be in short supply in both bills.

And all of these taxes will be collected a few years before the revised healthcare coverage goes into effect – so even though the government has never been able to save more than they spend – it is much easier when they sock away your money (vs. theirs).

Don’t be too upset with Congress though, your state representatives will be looking for new ways to tax you to cover the billions of dollars the feds will be shifting to the state level via Medicaid revisions.

The family gatherings over the next few days will be a great opportunity to educate your family members about what is really in these two pieces of legislation and encourage everyone to reach out to their representatives to ensure that their voices are heard.

Following is a link to a nice Reuters article which summarizes the House and Senate versions:

FACTBOX – Major Differences in the Seanate and House Bills –

Here are some other links to inform you of the impact on business and individuals and to highlight some of the issues which your congressional representatives may not be sharing with you:

Wall Street Journal – Businesses Brace For Health Bill’s Costs:

WSJ – Key Numbers –

WSJ Blog – Reactions From Doctors/ Industry –

U.S. Chamber Denounces Passage of Healthcare Bill:

Financial Times (UK) – The Honest Case For a Bungled Healthcare Reform:

Congressman Ed Royce Reacts to Government Takeover of Healthcare:

Senate Advances $873 Billion Healthcare Bill

Sunday, December 20th, 2009

Early Monday morning the U.S. Senate agreed to advance their version of Healthcare reform.  The action highlighted the partison divide with 58 Democrats and 2 Independants voting to advance the bill and all 40 Republican Senators voting “nay”.

Despite the purported cost savings, the bill contains 12o references to “tax increases” and the latest version includes a last-minute Harry Reid insertion which bumped the Social Security payroll tax increase from the originally proposed .5% increase to .9%.  This increase is not set to become effective until 2013 – leapfrogging the end of Obama’s initial 4-year term to minimize this being an election-year issue. 

The cumualtive tax increases are estimated to total over $500 billion.

Read more about the payroll tax increases in the attached article:


The House and Senate versions must now be reconciled in Conference Committee and this will be a very contentious process.

Stay tuned for the continuing circus.

Federal Tax Proposal Will Harm U.S. Based International Businesses

Monday, June 22nd, 2009

On the heals of $200 Billion in federal tax hikes and $9 Billion is California tax increases in the past 9 months, Congress is considering a major overhaul to the international tax structure of the Internal Revenue Code applicable to U.S. based companies operating in foreign jurisdictions. 

Currently U.S. tax applicable to taxable income earned in a foreign subsidiary is generally deferred until the profits are repatriated to the U.S. (unless such earnings are classified as "Subpart F Income").

The Obama Administration has proposed revamping the system (with a proposed 2011 effective date) to accelerate the imposition of federal tax on these earnings, regardless of when the profits actually make their way into the U.S.. Therefore, growing businesses that  re-investing their overseas profits will find this accelerated tax burden a significant cash-flow drain.

The vast majority of industrialized countries we compete with have lower federal tax rates and more liberal tax rules (click to read an excellent article comparing worldwide tax rates by my business partner Professor Chuck Swenson):,

This proposed change will place U.S. businesses operating internationally at a further disadvantage in the world marketplace.

Read my latest commentary on the potential economic impact from this proposal:


web link:

pdf:  Download 2009 International Tax Legislation – Press Telegram


Access all my AICPA Corporate Tax columns:


Obama Tax Hikes and California Freefall

Wednesday, February 25th, 2009

Obama National Health Care Plan – More Taxes / Less Medicare Funding

Following through on his campaign promise of raising taxes on the "wealthy", the Obama Administration will be rolling out their $318 BILLION tax hike including expiration of the Bush tax cuts and an increase in personal tax rates from 33% to 35% over the next few years.  In addition, a scale-back of home mortgage interest and contribution deductions are also anticipated under President Obama's proposal.   Not-for-Profit entities are suffering from the economy just like taxable businesses; therefore, this is an odd time to reduce the tax benefit for home mortgage deductions and reducing the incentive to support charitable organizations, which are typically very efficient in their operations. 

Another $316 BILLION of spending cuts tied to: i) reductions in government payments to private health-care providers supplying Medicare services and ii) other healthcare reductions are also planned.

These combined tax increases and spending cuts of $634 BILLION are designed to pay for President Obama's planned Single-Pay Medical Plan.

Download Obama Tax Hikes Feb 26 2009 WSJ


The Fall of California 

Dennis Prager insightfully summarizes the steady decline of the California economy and identifies the architects of its demise.

Download California Destroyed by Left – Dennis Prager

Download CA Tax Rates article 12.2007