It's almost April 15, and that means tax day is fast approaching. As people scramble to get their taxes done in time, many will be looking for an accountant to make the onerous task of filing income taxes a little bit easier.
For people filing taxes in Texas, that search for an accountant is tougher than most other places in the United States. Texas is the second-worst state in the nation for tax help. This news comes from a new report by the financial social network Wallet Hub.
The rankings in the report are based on a variety of statistics relating the state's tax returns and the availability of accountants. Texas ranked near the bottom in many of these measurements.
Texas is a growing state and Governor Perry has let his low tax/low regulation rhetoric trump our growing infrastructure needs. The Texas Association of Business has already warned that businesses in Texas are threatened by the state of our education system. That's why it is so ironic that in the same week he started a million dollar ad buy to lure companies from other states to Texas, he also had to add transportation, a very basic need, to the call of a very expensive special session.
There is wide speculation that Perry will cede the Governor's mansion to Greg Abbott, and run for president again, but it's not clear how mocking other states or taking their jobs will be a campaign asset. Essentially on the national level Perry's "job creation" in Texas amounts to "job shifting". His plan of letting other states educate a workforce and incubate businesses merely to lure them to Texas is at best a cynical one, but is the focus of his "Texas Wide Open For Business" website. There Texas' job numbers and industry profiles are highlighted in what Perry claims are the, "opportunities and freedom available to families and businesses thanks to Texas' healthy economy." But what is oddly missing is anything about the health of the people of Texas, or our top ranking uninsured population, instead under the "Quality of Life" tab you will find information about the state's sports franchises and our natural resources. There is, as Dan Harr of the Hartford Courant put it, a "dark underbelly" to every aspect of the Texas model. For instance that our sheer size alone lends itself to many of the pros Perry is selling like, low cost of living, and high number of exports.
It's no surprise the Governor's ads will be airing in the blue states of New York and Connecticut as he has made similar pitches to businesses in California and Illinois. Probably the most insincere aspect of his pitch for limited government is how much he has used it for purposes of personal gain and business development. The Texas Open For Business website includes a host of "incentives" targeted at business, which if they were truly people would be called tax cuts, subsidies or at the very least loopholes. Also worthy of note is that it is all being paid for by TexasOne, an organization funded by private corporate donations, local governments and economic development corporations, and overseen by the Governor's office. And, while Perry's office claims that no tax dollars were used to purchase ads or pay for travel, the Houston Chronicle found that over $2 million of the almost $5 million raised by TexasOne did infact come directly from sales taxes.
See the commercials airing in CT and NY this week below the jump...
A report released this week by the CBO examining the 10 largest 2012 federal income tax expenditures found that the top 20% of wage earners received over 50% of expenditures, with 17% having gone to the top 1%, and the bottom 20% accounted for less than 10%. It also found that the middle class receives the least benefit when measured relative to after-tax income, at about 7%. These federal "tax expenditures", named so because they "contribute to the federal budget deficit", include: itemized deductions, charitable contributions, "preferential tax rates on capital gains and dividends", tax credits, mortgage interest payments, some Social Security benefits and employer-sponsored health insurance.
The 10 largest expenditures amount to about 2/3s of the, "total budgetary effects of all tax expenditures for 2013", and together account for more than $900 billion, or 5.7% of GDP. That means while 1%ers like Rush Limbaugh and Mitt Romney complained about the 47% of Americans not earning enough to pay federal income taxes, their income quintile raked in almost half a trillion dollars in direct tax benefits from said federal government. The different types of expenditures are strongly correlated to income level. The CBO estimates that 70% of benefits of reduced tax rates on capital gains went to households with incomes in the top 1%, while about half of the benefits from the earned income tax credit went to households in the bottom 20%.
President Obama addressed concerns over inequalities in our tax system in his reelection campaign as well as in his plans to raise revenues during recent budget talks. Asking the wealthy to "pay their fair share" became the President's go-to bumper sticker phrase that sympathized with the frustrations of the middle class. This was met with cries of "class warfare" by the far-right and for once I agreed. Not only are tax expenditures distributed unfairly, but incomes themselves have been rising for the top earners while at best staying flat for the middle class. Average CEO pay rose from about 40 times an average worker's pay in 1980 to 263 times in 2009. Do employees really believe that their company's CEOs are working that much harder than they are for a paycheck? Now average working Americans receiving the short end of our growing inequality can see definitively why getting ahead has been so hard lately -- if you want to get rich, it's best to start that way. That revelation is antithetical to the concept of the American Dream, that working hard will afford you a better life. If as a nation we really believe in equality and justice, we should start to demand a little more of it on our tax code.
Click below the jump for a link to the full report....
Ben Stein struck again on Fox News when sitting on a panel he simply tore through Charlie Gasparino with facts.
Ben Stein Says as he is constantly interrupted.
Charlie with all due respect there is no data, no reputable study showing that raising taxes on rich people inhibits growth
Charlie Gasparino injects
Nineteen eighties, Nineteen eighties, cutting capital gains
Ben Stein retorts through continuous interruption
sir from 82 to 88 every year Mr. Reagan raised taxes
Republicans have been trying for a long time to suppress all the reputable studies that show clearly that raising taxes on the wealthy do not adversely affect the economy. In fact because the marginal propensity to consume of the middle class is greater proportionally than the rich, and because marginal tax increases does not inhibit any marginal spending increase by the rich, it can actually improve the economy. How? If that tax increase is returned mostly to the economy and partially for debt relief, there is a large multiplicative effect to the economy. This was borne out under both President Reagan and President Clinton.
Of course Reagans huge budget deficits were very stimulative and as such most of his economy was based on stimulus and not on inherent real increases in permanent investments in America as a whole.
See the video below. It is quite informative of the deceptive practices of the characters on Fox New.
If one watches CNBC or most financial channels, the impression is given that the free market as the best allocator of resources if left unfettered is the solution to all that ails the country's economy. This god, the free market, will ensure that productivity and efficiency are rewarded. Additionally ones wage is somehow proportional to their worth within the economy.
The reality is that all those pretty words and theories amount to hogwash. As productivity increased in this country, and employees provided more value, only those at the top that do little got the spoils. These are theories intent to keep a class system in which a very select few control most of the capital and the government. A selected buffer class just large enough to be very obvious, that has the semblance of prosperity guards the gates. And then, there is the rest, the struggling middle class and the poor class.
Firstly, there is no free market. Corporations are grabbing patents or acquiring patents left and right however dubious the claims. Farmers are losing their ability to grow their crops free with their own seeds, because of cross pollination with genetically modified seeds of major corporations who own the patent on those seeds. New innovations are stifled when corporations stop them based on some dubious claim of patent infringement.
Secondly, while politicians are elected democratically, they are generally elected on false premises. The fact the mainstream news media is controlled by a few companies, means that the messaging heard by Americans are corporate centric. As such, only politicians that toe the line tend to get the ability to get a message out that can get them elected.
Most Americans are broke. There is a semblance of having but they are broke. Even assets that use to be considered sacred, an asset to be passed to the next generation, one's home, is being taken away by using advertising that induce bad decisions. The reverse mortgage while in very few instances can be a good thing, is sapping the last piece of wealth the average middle class American could count on.
Thirdly, the current tax structure mathematically ensures the demise of the middle class. This is a mathematical fact. The working person's income comes mostly from wages. The wealthy person's income comes mostly from municipal bonds and capital gains. Wages are taxed at up to 39% and municipal bonds interest is not taxed at all while capital gains are taxed at 15%. It is a mathematical impossibility that the wealthy will not continue to get a very disproportionate take of the pie. Worst, if the growth rate of the pie is stagnant or near stagnant it means income and wealth inequality and poverty accelerates. All of this is borne out by today's American reality.
Right Wing and centrist "economist" would like to make one believe that the reason for most of these problems are caused by job polarization, high skill and low skill employment growth, while the middle stagnates mostly because of technological changes. The article, "Job Polarization in the 2000s?" dispels this fallacy.
The elite talking class on the major networks, whether from the center or the right have misled Americans. The wealth of most Americans has been in a state of stagnation since the institution of Ronald Reagan's supply side economics (termed voodoo economics by George HW Bush) that America is still living under. Until this form of economics is disbanded and corrective action taken via the tax system, the middle class will continue to falter and the Plutocracy will continue its unfettered reign.
The White House Office of Public Engagement (OPE) has tapped organizers from 18 states to help President Obama fulfill his second term agenda starting with the fiscal cliff. I, along with the group of roughly 75 others from across Texas had the honor of visiting the White House to participate in these discussions. We often hear from Texas Republicans that this administration has forsaken Texas but nothing could be further from the truth. We had the opportunity to hear from Jon Carson, Director for the Office of Public Engagement, and he told us how important Texas was to this administration particularly with respect to our high number of uninsured as it relates to our coming health care exchange. Whether it is expanding health insurance coverage or Medicaid, Texas leaders continue to reject much needed federal assistance while simultaneously claiming we are being ignored. The fiscal cliff is the first challenge but we were assured that these conversations will continue throughout the President's second term.
It took four months for the administration to organize around a message after his first inauguration and I can remember quite clearly Democrats and progressives questioning how such an effective election campaign had failed to seamlessly convert campaign promises into legislative victories even though our party held both chambers of Congress. This was partly due to the transition into the world's most difficult job but also legal constraints preventing Obama For America (the campaign) to act as an official arm of the White House. Though the 2nd issue remains this time around the Administration knew on day one what its priority would be. The President would use his political capital to pass a more fair tax plan that involved raising taxes on the most wealthy among us - a laudable and responsible goal considering the increasing wealth disparity in the US is beginning to look more in line with 3rd world nations.
At the behest of OPE our group held breakout sessions where we discussed many aspects including social media, messaging, advocacy, testimonials and letters to newspaper editors across the state. The social media breakout group came up with a Texas version of the White House's own My2K, and the independent The Action called Don't Jump Texas. The My2K concept is based on the fact that the average middle-class American taxes will go up by $2000 if Congress does not act to avoid the fiscal cliff, and asks Americans what an extra $2K would mean to this this holiday season. The Action was created as a hub for ideas and actions taking place across the country to assist the administration in their efforts to bring tax rates for the top 2% to that of the Clinton era.
Don't jump Texas is the result of our efforts to create an outlet that is Texas-centric and focuses on how going over the cliff will hurt our state. You can join the conversation on twitter by following @DontJumpTX, using the hashtag #DontJumpTX along with #FiscalCliff or find us on facebook at facebook.com/dontjumptx. If you would like to be part of our video testimonial of what the fiscal cliff or an extra $2K means to your family please contact us on either facebook or twitter.
There isn't much time and the White House assured us that the President is prepared to tackle an aggressive second term agenda but that they need this important victory behind them when he lays out his vision on inauguration day January 21st. If you need further proof that this President plans to work closely with Texas in his 2nd term, just ask the administration what they hope could be his greatest 2nd term accomplishment - comprehensive immigration reform.
8.7 million middle-class families will see their federal income taxes go up.
A typical median-income family of four (earning $65,900) could see its income taxes rise by $2,200.
Families will receive a smaller Child Tax Credit, and 3,391,000 low-and moderate-income working families with children will lose access to the Child Tax Credit altogether, costing them an average $1,010 a year.
963,000 middle-class families will no longer get help paying for college from the American Opportunity Tax Credit.
Small businesses will be able to claim immediate tax deductions for only $25,000, rather than $250,000 of new investments.
The Austin American-Statesman reported Tuesday that former Texas great Vince Young is out of work and out of money. According to the Statesman:
"Six years after entering the NFL as the third player taken in the draft, Vince Young finds himself without a team and with just a fraction of the money he received from a contract that guaranteed him $26 million."
"Young is suing his former agent, Major Adams, and a North Carolina financial planner, Ronnie Peoples, alleging that they misappropriated $5.5 million. In some instances, the pair forged his signature or impersonated him on the phone or in emails, according to the lawsuit, filed in Houston in June.
The suit was filed five days after a New York lender notified Young that a loan of nearly $1.9 million obtained in his name during the NFL lockout in 2011 was in default. Young is now seeking to stop the lender, Pro Player Funding LLC, from enforcing a judgment of nearly $1.7 million, claiming he wasn't involved in obtaining the loan and that the proceeds went to Adams and Peoples."
With 26 million pre-tax dollars in the bank, the question follows: where did it all go? Two even nastier currents underlie that question: 1) Just another dumb football player who wasted his money; and 2) if I had that much money, that would never happen to me. If only .
Young's case is not noteworthy because he's "bad with money." Young's case is news because of who he is and because of the scale of the losses (for a single man; banks are another order of magnitude entirely). But Young's case is not unique. Many (arguably, most) people are bad with money. A few figures begin to illustrate how widespread Young's problem is.
According to the American Bankruptcy Institute , in 2007, there were approximately 822,000 non-business (i.e.: consumer) bankruptcy filings in the United States. In 2008, that number rose to more than 1 million, reaching more than 1.3 million annual non-business bankruptcy filings in the United States in 2011.
Tax figures are also illuminating. According to a 2011 article in USA Today, sourced with numbers from the IRS Taxpayer Advocate Service, in fiscal year 2010, the IRS filed tax liens against more than 1 million taxpayers. Generally, taxpayers with liens against them are taxpayers who could not timely pay their tax liabilities and who had not entered into a payment arrangement or offer in compromise with the IRS.
Notably, these bankruptcy filings and IRS liens only account for those who went into the system in those particular years. Those numbers do not account for those already in the system and subject to workouts of various types. For instance, a Chapter 7 bankruptcy case will normally take between three and five months to proceed through the federal court system. A Chapter 13 bankruptcy case permits a bankrupt debtor to pay debts over a time period often lasting between three and five years. Moreover, those numbers don't account for those who have yet to appear on the grid.
This is to say that at any given time, the number of people who can relate to Vince Young from a balance sheet perspective may correspond significantly to the number of people who brand Vince Young a spendthrift getting his comeuppance.
NONPROFITS FOR THE UNPROFITABLE
So, what's a taxpayer or debtor to do? If you are Vince Young, you can sue your former business partners or managers and try to resolve the situation with not inexpensive counsel or advocates. If, however, you're not Vince Young (despite any similarities in debt to income ratio), help lies elsewhere.
With money in hand, a reputable attorney or financial advisor could be a prudent choice to help navigate those shallow legal and financial shoals. However, when the very problem blocks access to the solution, there are always nonprofits. Some offer counseling and legal services; others offer financial education services of varying degree and scope. A quick Google search focused on Central Texas yielded I Live Here, I Give Here, which, among other things, catalogues nonprofits that can help those in financial distress and those who want to avoid it in the first place. For instance, and without endorsing any service or program, we were able to find the Financial Literacy Coalition of Central Texas .
The point is that there is a robust demand for these services and apparently, a supply to meet it. So, America and Texas, denounce Vince Young, get it out of your system, and then dig out the pile of unopened bills on the kitchen table and get to work. You've got a lot of it.
If Senator Jon Kyl's accusation that Obama talks too "incessantly" about the middle class wasn't enough of an indication, Republicans aren't very concerned with the middle class lately. And in their latest tax plan, it really shows.
It came as no surprise that when President Obama proposed a package that would give tax cuts to all Americans - including the top 2 percent - Republicans pushed for an extra tax cut for the top 2 percent, on top of the one they're already getting.
Now it seems that a double tax cut for the wealthy wasn't the worst of it - in order to pay for the tax breaks, the Republicans actually want to raise taxes on the middle class.
Tax cuts for 98 percent of Americans. (The wealthiest two percent would also still get a tax cut on their first $250,000 of income.)
TAX CUTS REPUBLICANS ARE INSISTING ON:
An extra tax cut for the wealthiest 2 percent of Americans, including millionaires and billionaires.
TAX INCREASES REPUBLICANS WANT:
Limiting eligibility for the child tax credit, which constitutes a tax increase on 12 MILLION families. This works out to an average tax increase of $800 per family. In the case of a family made up of one person earning minimum wage and two children, the tax increase would be much larger according to one estimate: $1545.
Curtailing tax credits for higher education expenses from $2500 a year to $1800 and reducing the years of eligibility from four years to two. This translates into an average tax increase of $1100 for 11 MILLION families.
Cutting back on the earned income tax credit for families with three or more children and worsening the so-called "marriage penalty" on working poor couples, which translates into an average tax increase of $500 for 6 MILLION families.
All told, these Republican tax increases would hit more than 25 million poor, working, and middle class families.
The Republican commitment to tax cuts for the wealthy at the expense of the working and middle class is nothing new. Tax breaks the wealthiest two percent of Americans has been a cornerstone of Republican economics over the past decade. But proposals like these bring to light what exactly they're willing trade for it - and that they're willing to hit the people who need it most.
The Senate is voting on the tax cuts today, and we'll update after the vote with a Texas roll call.
The article pertains to an attempt to change in practice in which Texans will now have to pay sales tax for items bought via Amazon. In pertinent part:
It would also mean thousands of Texans would have to start paying tax on the electronics, clothes and other items they buy from Amazon - just as they do when they go to the mall or local Walmart.
Such a practice only makes sense and does present a fairer playing field. I cannot fault Ms. Combs for that.
My question for the BOR readers:
Can anybody think of an example, say corporate or business taxes, in which Ms. Combs was not as zealous in collecting?
My point - is she being politically selective in making sure the State collects taxes from Amazon, meanwhile looking the other way when other more politically potent organizations have tax debts here in Texas.
Think hard and write well (at least better than I do) if you come up with something.