Grumpy Editor

Christmas tree tax proposal quickly fizzles --- for now

After word got out yesterday about the Obama administration immediately imposing a 15-cent fee (that means a tax in Washington) on all fresh Christmas trees, the White House reacted quickly to an influx of complaints and decided to sideline the plan for now, notes Grumpy Editor. 

As outlined in the Nov. 8 Federal Register --- which major media missed:

Purpose of the Christmas tree tax was to run a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expend existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry.” 

The proposal called for the Secretary of Agriculture to appoint a Christmas Tree Promotion Board to oversee funds collected via the Yule tree tax. 

No mention was made on composition of the Christmas Tree Promotion Board, number of members and if they will be on the federal payroll. 

Live Christmas trees already have a promotion source:  The National Christmas Tree Association which represents more than 5,100 “Christmas tree professionals.” 

The Christmas tree tax was merely shelved at this time. 

With the delay in implementation of the tax, the U.S. Department of Agriculture promised it will “revisit this action."

 

Study finds much tax avoidance among Fortune 500 firms

With plenty of talk on taxes these days, editorial page writers will have some interesting material to digest after next week’s release of a study focusing on federal income taxes paid by 282 large, publicly-held U.S. corporations among the Fortune 500, learns Grumpy Editor.

The compilation finds widespread tax avoidance.

An advance clue indicates the report, to be released on Nov. 3, will show most of America's most profitable corporations are paying far less than the 35 percent official corporate tax rate and many pay little or nothing as a result of various loopholes and deductions in the extensive tax code.

 The report promises “surprising results” in what companies pay on U.S. profits vs. taxes to foreign countries on overseas profits.

Issuing the findings are Washington, D.C.-based Citizens for Tax Justice, a public interest research and advocacy organization focusing on federal, state and local tax policies and their impact on the country, and Institute on Taxation and Economic Policy, a non-profit, non-partisan research organization that concentrates on federal and state tax policy.

The study covers the 2008-2010 period and includes tables and detailed company-by-company thumbnails.

 

Proposed taxes likely to cut 10,000 airline industry jobs

With U.S. job creation static while some in Washington consider “taxes” their favorite word, Air Transport Association of America (ATA) President and CEO Nicholas E. Calio sums up what he considers a job-killing equation:  “Add taxes and lose jobs,” notes Grumpy Editor.

ATA is the industry trade organization for leading U.S. airlines. 

Just in case ATA’s warning is not in your newspaper today, the organization points out nearly 10,000 airline industry jobs could be cut within one year if two new proposed passenger security and airline departure taxes are approved by Congress. 

More broadly, adds ATA, nearly 181,000 jobs could be lost across the economy related to reductions in aircraft manufacturing, airports and supporting businesses. 

The airline industry is the third greatest contributor to the U.S. economy after energy and farming, yet it is among the least profitable, says Calio. 

“Tripling the passenger security fee and creating a new $100 departure tax will have a devastating effect on the U.S. economy and our customers, who already pay more in taxes for air travel than they do for alcohol, tobacco and firearms," cites Calio. 

“The proposed new taxes will impact fares and reduce service, which equates to a one-way ticket to the unemployment line for thousands of Americans." 

Calio declares, "The president is proposing a huge new tax on the least profitable and most highly taxed industry in the economy while all its competitors are left untouched.  Airlines and their passengers should not shoulder the burden to pay for the country's security, or even worse, to pay off the national debt.” 

 

Will Yankees soothe IRS tax tab on catcher of Jeter's ball?

As the Internal Revenue Service moved with dispatch to indicate that it will be seeking to collect income tax from Christian Lopez, the New York Yankees fan who caught the ball that represented Derek Jeter’s 3,000^th hit, it provides Yankees management with a great opportunity to lift interest in baseball and do a good deed while achieving a smart public relations job --- by paying the taxes for the solid fan in the stands, feels Grumpy Editor.

Lopez, a 23-year-old Verizon customer sales representative, grabbed the prized home-run ball, one of five Jeter hits at Saturday’s game, and returned it to the Yankees captain, whom he called “an icon.”

In doing so, he nixed pocketing up to $300,000 that the ball would likely fetch an auction.

As a reward for his action, Yankees management gifted Lopez with luxury suite tickets for all remaining home games and any post-season games the Yankees may play plus autographed bats, balls and jerseys.

Total value of the items was estimated at about $32,000.

Noticing that, the IRS quickly jumped in and figured Lopez would be good for between $5,000 and $13,000 in income tax.

Lopez told the New York Daily News that he’ll pay the tax rather than relinquish the prized seats.  “If worse comes to worse,” said the Yankees follower, “I’ll have to pay the taxes”…“I’m not going to return the seats.”

 

Obama at Twitter event: small business taxes cut 16 times

Sailing over the heads of most reporters covering Wednesday’s televised Twitter forum from the White House, President Barack Obama again trumpeted, “We have provided at least 16 tax cuts to small businesses” in response to a “where are the jobs” tweet from House Speaker John Boehner, observes Grumpy Editor.

The “16 tax cuts to small businesses” boast has been mentioned for months and few reporters ask what they are.

Going back to last fall, an Oct. 30 New York Times blog by Robb Mandelbaum (who did ask) listed these “tax cuts,” as provided by the White House.

• A new small-business health-care tax credit. 

• A new tax credit for hiring unemployed workers. 

• Bonus depreciation tax incentives to support new investment. 

• 75 percent exclusion of small business capital gains. 

• Expansion of limits on small business expensing. 

• Five-year carryback of net operating losses. 

• Reduction of the built-in gains holding period for small businesses from 10 to seven years to allow small business greater flexibility in their investments. 

• Temporary small business estimated tax payment relief to allow small businesses to keep needed cash on hand. 

• Zero capital gains taxes on key investments in small businesses. 

• The highest small business expensing limit ever –- up to $500,000. 

• An extension of 50-percent bonus depreciation. 

• A new deduction for health care expenses for the self-employed.

• Tax relief and simplification for cell-phone deductions. 

• An increase in the deduction for entrepreneurs’ start-up expenses. 

• A five-year carryback of general business credits. 

• Limitations on penalties for errors in tax reporting that disproportionately affect small business. 

Yes, there are 16.  But media should ask how many entrepreneurs and small businesses --- such as beauty salon operators, dentists and printers --- are seeing improved bottom lines as a result.

In this week’s Twitter session, Obama also mentioned the December passage of  a payroll tax cut “that put an extra $1,000 in the pockets of almost every single American.  That means they’re spending money. That means that businesses have customers.  And that has helped improve overall growth.”

That “extra $1,000 in the pockets of almost every single American” phrase didn’t raise eyebrows of media, either.

Some folks are still checking their pockets.

 

New anti-smoking push will lead to taxes elsewhere

News reports in today’s newspapers relating to upcoming revamped anti-smoking messages on cigarette packs and advertising in efforts to deter puffing fail to mention that governments --- from federal to municipal ---  will lose millions of dollars in tax money collected from cigarette sales, observes Grumpy Editor. 

That lost tax money will have to be made up elsewhere.  So look for an upswing in new strange and unusual tax targets. 

The federal cigarette tax rate, upped last year, is $1.01 per pack, reflecting a 62-cent increase that President Barack Obama signed into law in February, 2009. 

States also slap taxes on cigarettes.  In addition, several municipalities, including New York City, Chicago and Anchorage, also tack on a cigarette tax. 

The new anti-smoking labels must be on cigarette packages and in advertisements no later than September, 2012. 

The warnings also are to take up the top 20 percent of tobacco companies’ ads. 

One scary message (out of nine selected), unleashed by the U.S. Food and Drug Administration, shows a label with, “Warning: Cigarettes are addictive” alongside a graphic of a male smoker holding a cigarette as smoke spews through a dime-size hole on his neck. 

The FDA says the messages are intended to help prevent children from smoking, encourage adults who already do to quit and ensure every American understands the dangers of smoking.

 

Stories focus on class size as school budgets tighten up

School districts around the country are being squeezed as budgets shrink, triggering newspapers to run sympathetic stories on the problem, notes Grumpy Editor. 

An example of  “crowded classrooms” was spotlighted this week as the Las Vegas Review-Journal ran the first in a series that will span three weeks, focusing on the Clark County School District, the nation’s fifth largest. 

The series kicked off with the headline CROWDED CLASSROOMS in capital letters across the front page, above the fold.  Subhead read:  “As budgets shrink, class sizes grow.” 

It all sounded pretty dire, a reader pointed out, until reaching an inside page where, tucked away in the second paragraph, was "Officials expect to raise the average class size in grades 6-12 from 32 students to 34."

No mention was made that in belt-tightening times, two more students shouldn’t create a hardship.  Also, figuring two or four absences per class bring the total to about unchanged or below average class size. 

The story did not indicate total enrollment (latest figure: 312,761 in 2009). 

With Las Vegas ranked as the U.S. home foreclosure capital, school attendance likely has decreased from one and two years ago as parents during the recession were forced to relocate to other states in search of jobs.

Also forgotten:  In good times, when money was no object and hefty property tax funds were rolling in, the school district went on an expansion spree, complete with planting of expensive mature palm trees in school parking lots.

 

Added taxes, lost jobs cited in Obama-backed actions

No doubt about it, wallets will be squeezed more starting next year, based on new rules in the mammoth 2,300-page financial reform legislation, spurred by Sen. Chris Dodd (D., Conn.) and Rep. Barney Frank (D., Mass.), and other money-siphoning measures in the Washington hopper.

While the actions affect all Americans, few print or broadcast outlets have spelled out the various dollar-draining details, leaving it to a non-journalist, businessman Wayne Allyn Root, to explain the nitty-gritty in an easy-to-understand commentary that made print Sunday, observes Grumpy Editor.

Root, a former vice presidential nominee for the Libertarian Party, offers 14 highlights from what he calls, “Obama’s reign of destruction.”

First on his list, Root cites “the biggest income tax increase in the history of America will take effect on Jan. 1.”

Then he gets into increases in the capital gains tax and a hike in taxes on dividends, along with new taxes on income, investments and even tanning bed users.

“Worse,” he adds, “18,000 new IRS agents will be hired to enforce these taxes.”

New rules and regulations, especially for small businesses, are mentioned plus the threat of “a gigantic new national sales tax.”

Root points out a new IRS law (with passage of ObamaCare) “requires business owners to file thousands of new forms each year documenting virtually every expenditure made by their business.”

“And you wonder why there are no jobs?” poses Root.  “You wonder why there is no recovery?  This is the ‘Teleprompter Depression.’ Every time Obama steps in front of a Teleprompter another thousand businesses die.”

Read the full commentary here.