General Business
Google “hidden taxes” and you get “about 63,300,000 results (in 0.17 seconds).”
Dictionary.com defines hidden taxes as “any tax paid by a manufacturer, supplier, or seller that is added on to the price the consumer pays.” Others define it more broadly to include things like inflation and the costs of regulatory compliance.
Last week the U.S. Department of Transportation issued new regulations that require airlines to include all mandatory taxes and fees in the advertised ticket price. Proponents say the new rules help consumers make better choices because of clearer pricing.
Opponents, including Spirit Airlines, say the new rules are intended to hide high federal taxes. Three carriers, including Spirit, Southwest and Allegiant, have filed a federal lawsuit to stop the new rules.
If you’d like to see the taxes separately stated, check out http://keepmyfareslow.org/ You’ll find out more about the new rules, and how you can contact your representative.
If you’re in favor of the new rules, just look for the best deals and enjoy your flight!
We report. You decide.
General Business
Illinois Governor Pat Quinn gives his State of the State Address on Wednesday and Illinois legislators return to Springfield next week.
Illinois officially has the worst funded pension system in the nation, with the State only funding 51% of its liabilities, according to the Pew Center. And Moody’s has downgraded Illinois debt to the lowest rating of any state.
Illinois Comptroller Judy Barr Topinka reports that the state has $8.5 billion in unpaid bills. The legislature will also need to put $6.9 billion into the pension systems in the next budget in order to meet its statutory requirement.
Not surprising, Illinois has dropped from 16th to 28th in the latest Tax Foundation “State Business Tax Climate Index”.
Looks like our legislators have their work cut out for them when they return next week.
You can find the Pew Center report at http://www.pewcenteronthestates.org/initiatives_detail.aspx?initiativeID=85899358839 .
The Tax Foundation Index is available at http://taxfoundation.org/research/show/22658.html
General Business, Tax Planning
Yesterday the Chicago Tribune had a good editorial about capital gain taxes that’s worth a read.
The Tribune makes some excellent points:
1) The main goal of low capital gains tax rates is to encourage investment.
2) Higher capital gains rates increase the cost of capital that businesses need to grow — and grow jobs.
3) The lower capital gains rates apply to everyone – not just the wealthy.
On that last point, check out our Blog on Tax Planning for Middle America at http://blogs.duganlopatka.com/general/2011/10/05/tax-planning-for-middle-america/
By the way, you can find our just released 2012 Handy Tax Guide in PDF format at http://www.duganlopatka.com/images/PDF/dl-handy-tax-guide-2012.pdf
And you can read the full Tribune editorial at http://www.chicagotribune.com/news/opinion/editorials/ct-edit-romney-20120130,0,486473.story
General Business, Tax Planning
On the political front, the Republican Presidential debates continue and President Obama delivers his State of The Union Address tonight.
On the budget side, the Administration has asked Congress to raise the nation’s debt ceiling by $1.2 trillion. And the national debt stands at over $15.2 Trillion and counting.
How about taxes? Actually, there’s not much going on right now, and that’s a problem for everyone.
More than 60 tax provisions expired at the end of last year, according to the Joint Committee on Taxation. We covered a few of them in a recent blog, which you can find at http://blogs.duganlopatka.com/general/2012/01/09/2012-tax-changes/ .
And there’s the 2 month extension of the payroll tax cut that expires at the end of February.
Most commentators feel that Congress and the Administration will find some way to extend the payroll tax cut through the end of the year. We’ll see.
On the other hand, many fear that the legislative process will effectively shut down for the duration of the 2012 campaign. If that happens, all of those expired tax provisions won’t be addressed until after the elections.
You can check the latest on the national debt at http://www.usdebtclock.org/ .
And the Joint Committee on Taxation has a complete list of expiring tax provisions from 2011-2022, which you can find in PDF format at http://www.jct.gov/publications.html?func=startdown&id=4380
General Business, Tax Planning
Congress left town last month without acting on a “tax extenders” bill. Those are the tax credits, deductions and exclusions that expire each year – but always get extended for another year.
Here are some of the key tax provisions that expired at the end of last year.
- The research and development tax credit.
- The 100 percent bonus depreciation deduction – which means the lower 50% bonus depreciation deduction applies for qualified property acquired and placed in service this year.
- The AMT “Patch” – which means some 34 million taxpayers will incur the tax this year, accordingly to the Congressional Research Service.
- A reduced Section 179 expensing limit. For tax years beginning in 2012, the expensing election is reduced to $139,000 from $500,000 last year. And the investment ceiling amount is reduced to $560,000 down from $2 million last year. For tax years beginning after 2012, the limit is further reduced to $25,000 with a $200,000 ceiling.
We’ll see what happens with the tax extenders when Congress comes back to town. Stay tuned.
