Category

Government

Taxes

Six 'Dirty' Tax Scams You Need to Avoid

With taxes due today (Monday), the IRS has some warnings for you that can be summed up in a few words: Beware tax scams.

Plenty of con artists and cheats are champing at the bit to "help" anyone who wants to pay as little as possible.

So if you're one of the more than 200 million Americans who will file taxes this year, make sure you have a trusted accountant or other reliable person who can help you comply with tax IRS rules.

"This tax season, the IRS has stepped up its efforts to protect taxpayers from a wide range of schemes, including moving aggressively to combat identity theft and refund fraud," IRS Acting Commissioner Steven T. Miller said. "The Dirty Dozen list shows that scams come in many forms during filing season. Don't let a scam artist steal from you or talk you into doing something you will regret later."

So if you haven't already filed your taxes, do so before it's too late – and don't fall for these scams.

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Washington

Obama Budget 2014 Busts Open the Middle-Class Piggy Bank

With a little sleight of hand in how the government calculates inflation, the Obama budget 2014 released today (Wednesday) proposes to both raise taxes on the middle class and reduce future payments to Social Security recipients.

That's quite a reversal coming from a Democratic president who had promised to protect the American middle class.

In the past, U.S. President Barack Obama has focused his desire to raise more federal revenue on the rich, who he has repeatedly said "need to pay their fair share."

But the reality is that the wealthy citizens of the United States don't have nearly enough money – even if all of it were taxed – to solve America's many fiscal problems.

Practically speaking, there are only two ways to attack the trillion-dollar deficits that have plagued the country: massive spending cuts or massive tax hikes on the middle class.

The Obama budget 2014 offers some token reductions, but putting the middle class in the budget crosshairs is a new and ominous White House strategy.

"While it's not my ideal plan to further reduce the deficit, it's a compromise I'm willing to accept," President Obama said on Saturday in his weekly address.

Oh, and don't expect much resistance from the Republicans on this, despite their historic opposition to tax increases. Last year, it was Republican leaders talking up the need to adjust the Consumer Price Index (CPI).

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Washington

Sequestration Cuts Hit Cancer Patients While Billions Wasted

As of April 1, cancer clinics began turning away thousands of Medicare patients because of sequestration spending cuts while the University of Iowa is using almost $900,000 of taxpayer money to study whether there is any benefit to sex among New Zealand mud snails.

It's taken about a month, but the mandated federal spending cuts of sequestration have finally started to have a real impact.

Not as dire an impact as President Barack Obama warned about in the weeks preceding the sequester, but the consequences are growing more serious every day.

But what's most galling about all this is that despite the real harm the sequestration cuts are causing, wasteful government spending has continued unabated.

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U.S. Economy

How These Companies Get Away with Paying Peanuts in Corporate Taxes

Even though the United States has the highest corporate tax rate in the world, many American companies pay little or nothing in taxes – and some even get refunds.

That doesn't mean that U.S. companies necessarily cheat Uncle Sam, but the steadily falling amount of corporate taxes paid has clearly helped boost profitability.

A recent analysis by The Washington Post showed that it was typical for companies in the Dow Jones Industrial Average in the 1960s and 1970s to pay federal taxes that were between 25% and 50% of their global profits.

Today, most big U.S. companies pay half that.

A study by NerdWallet of the 500 biggest U.S. companies last fall showed that while the statutory corporate tax in the U.S. is 35%, the actual rate paid – not the amount companies set aside for taxes – is down to an average of 13%.

According to the NerdWallet data, 20% of the top 500 U.S. companies paid nothing in corporate taxes in 2011, and 42% paid between 0% and 15%.

The discrepancy has led some in Washington to call for corporate tax reform, which many U.S companies actually support – but mainly because they'd rather pay even less.

"We need to take steps to make our tax system more competitive and better aligned with the rest of the world by undertaking comprehensive tax reform that will reduce the corporate tax rate," Bob McDonald, CEO of The Procter & Gamble Co. (NYSE: PG), said in a statement released before a meeting of top U.S. CEOs with President Barack Obama in November.

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Washington

How the Richest Members of Congress Made Their Fortunes

Capitol Hill is brimming with millionaires, but if you think that most of the richest members of Congress got that way from working hard, guess again.

When you browse through the list of the richest members of Congress, one of the most common themes is that many of them married into wealth, regardless of gender.

The best-known beneficiary of spousal wealth is former Sen. John Kerry, D-MA, who recently left the Senate to serve as Secretary of State in the Obama administration.

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Washington

Sequestration Is a Gift – Not an Apocalypse

Everybody sing along…

It's a happy day… Oh happy days. It's a happy day…Oh happy days. When sequestration rules it drives the tears away… Oh happy days!

Apocalypse!

Armageddon!

Those are the words President Obama used to describe what would result from sequestration.

Please, don't make me laugh. The sequester will not only not ruin America, it will in fact start the process of fixing what Congress can't – no, make that won't – fix.

What's the upside?

Our magnificent Founding Fathers were all together in the creation of the United States, but it didn't mean they all loved each other or that they all had the same views about government. They sure didn't. But, those differences were acknowledged and incorporated into the Constitution and sanctified – for the people – in the Bill of Rights.

That's divided government folks. This ain't socialism, though sometimes it feels like it.

And it's that nagging feeling that a slimy, slithering strain of socialism is snaking its way into mainstream politics that keeps me up at night, in case we, the people, are overrun by "them" – the usurpers of republican democracy.

Thank goodness that divided government gave us sequestration.

So, Congress can't get along. That's nothing new. The question is who gets to pander to their constituents. That's nothing new. We have sequestration. So, what? That's nothing new.

We need to cut crap out of the budget – A lot of crap. I'm sorry if that word bothers you… but I'm not allowed to use stronger language. Don't hate me because I'm fed up. You should be, too. Maybe you don't use strong language. Maybe you don't use colloquialisms (you're better then me, I grant you that, for sure) but I'm willing to bet that you're just as mad as I am.

The Republicans want to protect the rich and their tax loopholes – including carried interest. I get that, and I vehemently disagree (and believe me, folks, I enjoy carried interest). The Democrats want us all to share the cost of running a social welfare state to pander to their voting constituents. I get that, and I vehemently disagree.

So, they can't agree on tax increases (oh, wait, wait don't tell me… they did agree on $600 billion in tax increases in January, remember?) and they definitely can't agree on spending cuts. Why are spending cuts so hard? Because, silly, spending is the bread and butter that Congress feeds to their voting constituents – and campaign-backing cronies. Duh!

Sorry, I got carried away. Forget all that stuff. I just had to get it off my chest.

This is really about sequestration and how good it will be for the country.

We need to cut wasteful spending, period. What better way to do it that to take spending cuts out of the hands of Congress and put the task squarely in the hands of the departments and programs that are wasting the money in the first place? They should be tasked with making cuts and laying off unproductive people who do unproductive things. This is great!

The Budget Control Act, passed in August 2011, basically said, "Hey, if this Super Committee we put together can't cut $1.2 trillion from the federal budget over the next ten years (they were shooting for $1.5 trillion, go figure) then, by this law, sequestration will go into place to the tune of $1.2 trillion between January 2013 and October 2121."

Pretty simple, but no one figured we'd get here. Me, personally? I was praying we would.

Here's a brilliant, simple play-by-play I found from Brustein & Manasevit, PLLC, Attorneys at Law:

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Washington

The 9 Biggest Sequestration Lies

Though we've come to expect no better from our leaders in Washington, the sequestration lies rank among the most blatant whoppers ever to come out of the nation's capital.

Sequestration, of course, is the $85 billion in across-the-board spending cuts scheduled to go into effect at midnight Friday.

Instead of working together to come up with an alternative to replace the sequester, Republicans and Democrats have spent the past several weeks playing a maddening game of political chicken.

Both parties were counting on the fear of sequestration to force the other to cave before it happened.

Toward that end, leaders of both sides have tried to sway public opinion with exaggerations, obfuscations and outright lies.

Yes, business as usual in Washington, but an affront to U.S. citizens nonetheless.

Here are some of the biggest sequestration lies.

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Washington

The Sequestration Follies: How Washington Outsmarted Itself

It seems every politician in Washington is up in arms over sequestration, the devastating automatic budget cuts on track to take effect March 1.

For weeks, lawmakers on both sides have been calling sequestration a "bad idea" and criticizing any proposals put forth by the opposing party.

Politicians aren't happy that sequestration not only would cut billions of dollars in federal spending, it would also slash the budget indiscriminately with across-the-board cuts.

Just today (Tuesday), President Barack Obama urged Congress to delay sequestration for the rest of the year or risk damaging the U.S. economy.

"It won't help the economy. It won't create jobs. It will visit hardship on a whole lot of people," President Obama said. "If Congress allows this meat-cleaver approach to take place, it will jeopardize our military readiness; it will eviscerate job-creating investments in education and energy and medical research."

Listening to all the rhetoric, Americans with short memories might believe that those in Washington only have the best interests of the country at heart.

But the rest of us remember how this whole sequestration fiasco really happened. It was their idea – Republicans and Democrats, the White House and Congress. All guilty.

"The idea was that no sane person would allow such cuts to happen," Bob Schieffer, host of CBS News' "Face the Nation," said on that show Sunday. "Well, guess what. Even Washington managed to underestimate its own ineptitude."

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