Tax the Rich?
A few days ago, an opinion piece that appeared in the Wall Street Journal[i] began as follows:
“President Biden’s effort to pass the largest tax increase in U.S. history is based on the verifiably false claim that Americans with high incomes don’t pay their ‘fair share.’ In no other country do
September 2021
What was your month like?
If you’re a transactional professional – a class in which I include those who advise clients on the purchase and sale of businesses and investment assets, as well as those who assist clients in developing and implementing estate plans – it may be that the Earth’s 24-hour day, not to mention your own physical limitations, are preventing you from satisfying all your obligations as thoroughly and as quickly as you would like.[i]
Continue Reading Tax Hikes, Senator Manchin, and Effective Dates – OH MY!
Where Are We?
Have you seen the Triumvirate of late? No, not Julius, Pompey, and Crassus.[i] I’m referring to more contemporary political figures, whose names and exploits are not likely to appear in volumes[ii] that will be studied throughout the world for centuries.
The lower cased “t” triumvirate of which I speak consists of President Biden, Senate Majority Leader Schumer, and Speaker of the House Pelosi.[iii] The group’s standings in polls are anemic.[iv] Not a good place for life-long politicians.
First Step
Last Wednesday, the House Ways and Means Committee approved that portion of the 2022 budget legislation with which it was tasked by the Congressional Budget resolution of August 24. The text of the bill prepared by the Committee – almost nine hundred pages long – was passed along party lines, except for one Democrat who joined her Republican colleagues to oppose the measure.[i]
Continue Reading Disposing of Assets Under The Ways and Means Committee’s Proposals
Living the Dream
“How was your weekend?” Thank you for asking. Awful.[i]
“Why?” you ask. (Humor me. Pretend you’re interested.) I’ll tell you.
One word, with 535 syllables: Congress.[ii]
When the reconciliation budget resolutions were passed by the Senate and then the House,[iii] the committees to which reconciliation instructions were given were also directed “to submit legislation to the Committee on the Budget by September 15. . . though this date is not binding.”[iv]
With its passage of the resolution, the Senate went on vacation; with its passage, the House resumed its vacation.
The Senate officially returns from its recess today, the House next Monday.
Continue Reading Tax Hikes, Effective Dates, and Selling a Business
Extra, Extra![i]
Last Friday afternoon, as millions of unsuspecting Americans prepared for the long Memorial Day weekend[ii] – for many, perhaps, their first mask-less holiday celebration in almost 15 months – the Biden Administration released its 114-page “Green Book” for the federal government’s 2022 fiscal year.[iii]
Tax Gap
In a report released last week, the U.S. Treasury Department explained that the so-called “tax gap” – i.e., the difference between the amount of federal income taxes owed by taxpayers for a taxable year and the amount actually paid for such year – “disproportionately benefits high earners who accrue more of their income from non-labor sources where misrepresenting is common.”[i]
According to the report, the largest contributors to this shortfall are the underreporting of income and the overclaiming of deductions on tax returns. These practices, the report continues, are prevalent among higher-income taxpayers with “opaque income sources,” among which the report includes sole proprietorships, partnerships and S corporations, rental real estate, and small C corporations;[ii] in other words, the owners of closely held businesses.
The President is relying upon the data in the Treasury’s report to pressure Congress into closing the tax gap, in part, by increasing the IRS’s enforcement capabilities, requiring more information reporting with respect to “opaque income streams,” and regulating tax return preparers.[iii]
Continue Reading “Opaque Income Sources” + “Tax Gap” = More Enforcement + Tax Hikes = Anyone’s Guess
“Yeah, I’m the Tax Man”[i]
Last week, several media outlets reported that Mr. Biden will soon propose that Congress increase the federal income tax rate applicable to long-term capital gains recognized by individual taxpayers.[ii]
The time and place at which this and other changes to the Code are expected to be proposed is this Wednesday, April 28, when the President, at the invitation of House Speaker Pelosi, will appear before a Joint Session of Congress[iii] to advocate for his $2.3 trillion American Jobs Plan.[iv]
These reports should not have surprised anyone. After all, candidate Biden ran on a platform that called for increases to the individual federal income tax rates applicable to items of both ordinary income and long-term capital gain.[v] As President, Mr. Biden has not wavered from this position.
Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman
Yeah, I’m the taxman
Continue Reading Biden’s Proposed Income Tax Increases And the Sale of the Baby Boomer Business