Even before it’s become a public company, web giant Facebook’s has caught plenty of government attention, much of it around the company’s taxes and the impact its billions in stock options are likely to have on the tax coffers.
Today Senator Carl Levin, long active on tax issues, took to the Senate floor to point out the many things he dislikes about the company’s expected tax picture, hoping to tap into broader discussions about the need for greater fairness in the tax code.
A couple may have split, but that’s no reason to send more than necessary to Uncle Sam, explains Reuters personal finance editor Lauren Young. In this video she walks through the question: who should take the kids as a tax deduction?
Wyoming multimillionaire Foster Friess, whose super PAC strongly supported Rick Santorum’s candidacy, argues the best kind of taxation would be none at all. Government should step back and let the wealthy “self-tax” and so choose where to spend their money rather than letting the government do so, he says.
Citing philanthropic efforts by Bill Gates and others, Friess praises them not only as the creators of jobs and great products, but also as people who embrace the idea of helping their fellow man.
In a groundbreaking 1998 behavioral economics study, Berkeley professor Terrance Odean found that as a group, investors tend to hold on to their losers, hoping for a rebound, and instead sell their winners.
That’s often a bad idea, and not just because losers may keep descending. Hanging onto those losers also keeps you from taking advantage of some smart tax planning.
Influential Yale economics professor Robert Shiller favors a system of taxation that would keep inequality in check. He argues that such a system would help maintain harmony in the United States and benefit all, including the well-to-do.
Shiller is especially well known as co-creator of the S&P/Case-Shiller home price indices, and for two prescient calls: a 2000 forecast of the dot-com bubble’s bust, and a 2005 prediction that the housing boom would cause a recession.
The U.S. Court of Appeals ruled Wednesday against a couple who claimed a sizeable deduction after donating their house to be burned in a firefighter training. Circuit Judge David Hamilton wrote in the opinion:
“Taxpayers Theodore R. Rolfs and his wife Julia Gallagher purchased a three-acre lakefront property in the Village of Chenequa, Wisconsin. Not satisfied with the house that stood on the $675,000 property, they decided to demolish it and build another. To accomplish the demolition, the Rolfs donated the house to the local fire department to be burned down in a firefighter training exercise. The Rolfs claimed a $76,000 charitable deduction on their 1998 tax return for the value of their donated and destroyed house. The IRS disallowed the deduction, and that decision was upheld by the United States Tax Court… To support the deduction, the Rolfs needed to show a value for their donation that exceeded the substantial benefit they received in return. The Tax Court found that they had not done so. We agree and therefore affirm.”
Apparently these types of claims, though unusual, are not all together unknown, and the court found that the value of the donation would need to take into account the fact that it was made with conditions. In this case, the condition is the house being burned to the ground left the house with “essentially no value” according to the decision.
On Tuesday, two Democratic U.S. senators — Carl Levin and Kent Conrad — piled a laundry list of long-standing proposals into their “Cut Unjustified Tax Loopholes Act.”
Monday, February 6
Comment letters due on the Financial Accounting Standards Board’s proposed accounting standards updating the cumulative translation adjustment following the sale of a nonprofit or foreign business.
Tuesday, Feburary 7
The U.S. Congress Joint Economic Committee (JEC) will hold a hearing on extending the two-percentage-point payroll tax cut and continuing emergency federal unemployment insurance benefits through the end of 2012, including examining the economic impact of extending these policies versus allowing them to lapse.
(Reuters) – Facebook, the social network giant on the verge of a huge initial public stock offering, pays an unusually high tax rate, but that is likely to change soon, analysts said.
At 41 percent on an effective basis, Facebook’s tax rate is well above rates paid by larger, more mature high-tech groups, and above the top U.S. corporate income tax rate of 35 percent.
A major IRS and Justice Department crackdown on identity theft shows how widespread and common it has become. Tuesday the tax collector announced that a national sweep had led to 69 indictments, targeting 105 people in 23 states, including cases where people are alleged to have impersonated the dead, the mentally disabled and citizens of Puerto Rico in order to get their hands on millions in fraudulent tax refunds.
The government asserts that it stopped $1.4 billion in bad refunds last year, up from $262 million in 2010.