Apr 152013
 
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taxDeadline-street

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Despite the fact the IRS is the enforcing arm of an almost incomprehensibly complex tax system designed to accommodate the needs of a very dysfunctional republic in which inequality now reigns supreme, the bureaucracy per se are not monsters, just plain folks (who also have to pay unfair rates of taxation like you and me while the hedge managers and the “unearned income” folks are forgiven enough cash to build extra McMansions) doing a thankless job made horribly unpopular by the sheer corruption of the politicians and the overwhelming perception that a lot of public money is being wasted on wars, bankster relief and other grand pickpocketing expeditions that scarcely benefit the public interest. Phew! That was a mouthful. 

Among the obligations that cause the most agita among Americans, April 15 must surely count as the queen of all stresses. Why so many people file late is perfectly understandable: no one likes to part with his/her money, especially when the dough is in very short supply, a situation now afflicting the vast majority, and the tax rules are simply not for the faint-hearted.  Many careers in heavy alcoholic consumption have been detonated by confrontations with impenetrable forms. Yes, it takes brains, people. And huge tolerance for pain. Indeed, the tax code is the great leveler between accountants and brain surgeons.  Be that as it may, the end result is a mad rush to file by the April 15 deadline—or—many believe—land in big doo-doo. If you believe this (and you may be excused for doing so given the perennial media scares that crop up around this time), here’s something that may comfort you.  It boils down to this: file within reasonable time and the sky won’t fall. Period. The indispensable Cecil Adams, of The Straight Dope, clarifies the situation in the cardio-beneficial essay below. —PG

PS/ We have also added other opinions to balance the possible risk of Mr. Adams being plain wrong.
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Apr 112012
 
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Last November, Citizens for Tax Justice and the Institute on Taxation and Economic Policy issued a major study of the federal income taxes paid, or not paid, by 280 big, profitable Fortune 500 corporations. That report found, among other things, that 30 of the companies paid no net federal income tax from 2008 through 2010. New information for 2011 shows that almost all these 30 companies have maintained their tax dodging ways.

In fact, all but four of the 30 companies remained in the no-federal-income-tax category over the 2008-11 period.

Over the four years:

  • 26 of the 30 companies continued to enjoy negative federal income tax rates. That means they still made more money after tax than before tax over the four years!
  • Of the remaining four companies, three paid four year effective tax rates of less than 4 percent (specifically, 0.2%, 2.0% and 3.8%). One company paid a 2008-11 tax rate of 10.9 percent.
  • In total, 2008-11 federal income taxes for the 30 companies remained negative, despite $205 billion in pretax U.S. profits. Overall, they enjoyed an average effective federal income tax rate of –3.1 percent over the four years.

“These big, profitable corporations are continuing to shift their tax burden onto average Americans,” said Citizens for Tax Justice director Bob McIntyre. “This isn’t fair to the rest of us, it makes no economic sense, and it’s part of the reason our government is running huge budget deficits.” Continue reading »

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 Posted by at 2:46 pm