Tag Archive | tax

We shouldn’t declare Trump’s $1tn tax cut a failure just yet

(This post originally appeared on The Guardian)

Earlier this week a new report from the National Association for Business Economics said that the 2017 Tax Reform Act had no major impact on how US businesses invested or hired.

The report concluded that the number of businesses who said they do not plan to accelerate their investments rose to 84% from 81% a quarter earlier. In fact, spending plans from businesses fell to their lowest levels since July 2017. Employment growth did improve, but only modestly, with just a third of the respondents saying their employment at their firms grew this quarter compared to 31% the previous quarter.

The good news is that the most of the survey’s 106 business economists who belong to the association and who responded to the survey do not expect a recession within the next 12 months. Nearly two-thirds – 64% – of respondents expect expansion. But the damage was done and opponents of the bill pounced.

“So far, the investment response has been modest and underwhelming,” Owen Zidar, an economics and public affairs professor at Princeton, told CNN. “The idea there would be an enormous boom was pretty optimistic.”

It was not great news for supporters of the bill. But hold on … Read More…

These unexpected companies are claiming a tax credit for research and development

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(This post originally appeared on The Washington Post)

If you’re an accountant, like me, then you’re probably familiar with the federal research and development tax credit. The concept isn’t tough to understand: The federal government wants to reward companies that are doing innovative things that employ people. The calculation? That’s a little more complex, of course.

The R&D tax credit has survived many threats to its existence since it was introduced in 1981. Although it’s always been the kind of thing associated with technology companies, the credit has recently been benefiting some very non-tech firms. Read More…

Tax savings? Smaller companies plan to use it for tech, not people

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(This post originally appeared on The Washington Post)

You would think that larger companies would have the highest tax rates, but they don’t.   

Because many of these companies are able to shelter money in destinations that have lower taxes, it turns out that the average tax rate for companies included in the S&P 500 is around 28 percent. The reality is that it’s the smaller firms– like those included in the Russell 2000 index of U.S. small and mid-cap stocks–that generally pay the highest tax rates, with an average of about 31.9 percent.  

It’s those firms that would gain the most by the current Republican tax reform proposal, which includes a cut in the corporate tax rate from 35 percent to 20 percent as well as a potential cut in tax rates for smaller, “pass-through” entities like limited liability companies and S-corporations. This is why the Russell 2000 index has been rising over the past few weeks. Read More…

Attention Amazon sellers: This tax amnesty program could save your business thousands

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(This post originally appeared on Fox Business)

If you’re an Amazon merchant, you could be facing an unexpectedly large tax bill, unless you take action fast.

For years, states have been complaining that online merchants were not disclosing and paying sales taxed owed for products shipped from within their borders. They want their money. Read More…

A Melbourne cafe is charging an 18 percent ‘man tax’

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(This post originally appeared on The Washington Post)

One of the many benefits of being your own boss is that you can use your business as a platform to raise awareness about social issues — assuming that you can withstand the controversy. A Melbourne business owner is doing just that, and creating quite a stir.

According to the Telegraph, Alex O’Brien who owns the Handsome Her eatery, is taking a stand against the country’s significant gender wage gap. She’s doing this by levying an 18 percent “man tax” on her male customers, and also she’s giving her female customers seating priority. All of this comes in the wake of a recent government report warning that Australian women faced another 50 years of pay inequality “unless significant changes are made.” How to change? This business owner figures that making men pay more at her business is a start. Read More…

Richmond Va. says a ‘mystery business’ raked in $475K for paying too much tax

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(This post originally appeared on The Washington Post)

Would you take a guaranteed 10 percent return on your money?  In this day of very low interest rates, that’s an offer that’s difficult to refuse. Apparently, one Richmond, Va. business took the opportunity–and collected about $475K of the city’s money.

Here’s what happened, according to this story from the Richmond Times-Dispatch. Like many municipalities Richmond asks its businesses to pay in taxes based on estimated profits during the year and assesses an automatic 10 percent penalty for underpayments. But what’s apparently little known is that the opposite is also true: if a taxpayer overpays they’re due a refund from the city…plus 10 percent. Read More…

44 Taxes We Pay as Residents of the Great City of Philadelphia

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(This post originally appeared on The Philly Post)

Governor Wolf introduced his budget on Tuesday. And in it he proposed an increase in spending, no pension reform, no long-term deficit reduction and no cuts in costs. And although he’s lowering business and real estate taxes, there are proposed increases in our state income and sales tax. Mayor Nutter introduced his budget yesterday. And he wants a 9 percent property tax increase (oh, and good luck with that). Now the mayoral candidates are talking about a plastic bag tax.

And why not? We Philadelphians are used to taxes. It’s no big deal.

In fact, depending on whether you live and/or work and/or run a business in the city, you might be paying as many as 44 different taxes, fees and tariffs every single year — maybe more! Don’t remember them all? Who could blame you! So here’s a list to refresh your memory. And please let me know if I’m leaving anything out. I’m definitely forgetting something, right? Read More…