Tag Archives: tax

On stimuli

The Republicans in Congress have issued a list of stimulus package line items they consider wasteful . Looking at the list, it’s pretty easy to deduce how Republicans see the world: anything related to energy efficiency, pollution reduction, government infrastructure or public health is "wasteful".

Oh, sure, there are a few stupid items. $246m for Hollywood to buy film with is a waste of money; there are already more crappy Hollywood movies being released than anyone wants to go watch, and film is a dying technology anyway. Better would be to spend $246m on grants for independent movies and tax breaks for digital upgrades to cameras and movie theaters.

Then there’s $2b for clean coal. If you think it won’t work, it’s a dangerous distraction. If you think it will work, it’s a great idea–but still fantastically expensive and unlikely to produce energy at affordable prices. So yeah, that’s a bit of a waste of money.

I suppose you could argue that reducing substance abuse amongst Native Americans will harm the already-suffering alcohol, tobacco and illegal drug industries, but I’m going to give the Republicans the benefit of the doubt and assume that’s not the actual point they’re making. Similarly, floods are good for the GDP, but I doubt that’s the reason why spending money on flood reduction projects is being described as wasteful.

But overall, considering that the purpose of a Keynsian stimulus package is to spend government money on buying stuff and employing people, most of these items fit the bill. Several also help shore up and improve vital infrastructure.

So what would a non-wasteful stimulus bill look like, according to the Republican party? Go on, take a guess. I think maybe you can predict the answer.

It’s H.R. 470, the "Economic Recovery and Middle-Class Tax Relief Act of 2009". And if you take a look you’ll see that it’s one or two trillion dollars of tax cuts, plus a token 1% spending cut on discretionary government spending. It includes a couple of the usual hobby horses: repealing the AMT and cutting capital gains taxes, both utterly irrelevant to the current situation. (If there’s anyone out there who has capital gains this year and is worrying about AMT, I’d like to know who his fund manager is.)

We had eight years of tax cuts. They failed to prevent the crash. The Republican response seems to be "Tax cuts didn’t work? Well, it’s because we didn’t cut them enough! More tax cuts!" Still, looking at their speeches about the evils of the Obama stimulus plan, it’s nice to see them belatedly taking an interest in the budget deficit, considering they were the ones who ran it up to the highest level in recorded history.

Citizenship

In case you missed it:

Congress just passed a new law that will stop your capital — or at least a good portion of it — at the border, should you decide not to be a U.S. citizen anymore. Is it, perhaps, in preparation for the possibility that Americans might rebel at the debt and taxes incurred by their government by leaving for lower-tax locales?

You probably didn’t notice this little provision inserted into the Heroes Act of 2008, passed by Congress on June 17. The headlines in the press release about the law were about the increased benefits for veterans and families of deceased military.

But Richard Kohan of Price WaterhouseCoopers drew my attention to one section of the act, which states that anyone voluntarily giving up his or her citizenship will be taxed on all of his assets as if he or she had sold them — paying capital gains on assets that have increased in value, even though they have not been sold.

–MainStreet

Remember that US citizens have to continue to file and pay US taxes, even if they don’t live in the US.

This really has me wondering about the benefits of citizenship.

BOHICA

We filed our taxes today. We’ve been hit with a sudden tax bill to the tune of over $20,000. It turns out that after a certain number of years, property you aren’t living in automatically gets taxed on the assumption that it’s a profitable side business, rather than your only piece of real estate. Worse, standard practice in the US is to pay taxes on real estate on the basis that it gradually loses its value (yeah, right), and then pay the difference when you sell it.

Still, at least we can pay it off by wiping out the savings account. If you can’t cough up immediately, the IRS charges you 6% interest per month.

Still, Jesus H. Christ in a chicken basket. If this doesn’t make me turn Republican, nothing will.

I get out and do taxes

Yesterday: Random social activity at Jillian’s with Dan and a bunch of her other friends. Pool, video games, food… I was pretty exhausted by late afternoon, and hit the Red Bull. Perked up a bit, more games, came home, some TV and then crashed into bed.

Today: Finally got around to my 2001 UK Tax Return. They hadn’t asked me for one, and it says it’s due by “September, or two months after we ask you, whichever is the later”, so I’m taking them at their word. I’m also adding a note to say that if they want me to do one next year, they should ask.