Did You Make $2 Billion This Year? No? Well, You’ll Have to Pay Taxes–Sorry!

If you’re like me, you didn’t clear $2 billion this year. I know, I know, it was a terrible year for all of us. I’m sure that next year will be better. Especially for A.I.G., which won’t be paying any taxes this year, and probably not for the next several years, either!

Apparently, despite A.I.G.’s sizable $1.6 billion in profits (they declared more than $17 billion, but $1.6 reflects reality), they will be taking this year off from income tax preparation because of a fancy loophole our delightful government arranged for them. Sorry, H&R Block! Insert populist-leaning rabble-rousing here:

This rule-twisting could deprive the government of tens of billions of dollars, assuming the firm remains profitable. The tax dodge, and let’s be honest, that’s what it is, also will most likely help goose the bonuses of A.I.G.’s employees, some who helped create many of the problems that led to its role in the financial crisis.

You see, when A.I.G. suffered catastrophic losses and required a taxpayer bailout, they also were able to declare those losses in some sort of ridiculous tax avoidance scheme (something called “net operating losses”); moreover, because of our ridiculously unfair tax code, they are able to spread those losses over several years, thus eliminating the need for a 1040 for the next decade. Also, A.I.G.’s executives will be able to use such NOL’s to pad their bonuses:

The tax break for A.I.G. also perversely benefits employees who are paid based on the company’s performance and usually in stock, which is being lifted by this backdoor handout. The biggest beneficiary is Robert H. Benmosche, A.I.G.’s chief executive since 2009, who has been granted tens of thousands of shares.

Congrats, Bob! I can imagine that replacing all those worn-out bootstraps really adds up.

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Obama is the Best Republican President Ever

For a while now I’ve been convinced that Republicans dislike Obama for at least two reasons: the first is because many of them are racist assholes. The second, and I believe more salient, reason is simply because Mr. Obama is a far better Republican president than any of their hopefuls would be. Consider the following:

  • Obama has been fairly friendly to resource development interests: Chopping down trees? Check. Drilling for oil? Check. Water resource development? Check.

And now, best of all, Obama is offering to lower the corporate tax rate. Yes, you heard that correctly, although I don’t know why you’d be surprised; did you skip the bulleted talking points?

The administration plan to revamp a corporate code that is widely derided as inefficient and anticompetitive has been in the works at Treasury for two years, and is a priority of Mr. Geithner. Yet he has been preoccupied with crisis management, and is unlikely to see the project through since he plans to leave office after this year.

The proposed overhaul “will help level the playing field for businesses and allow the government to collect needed revenue while promoting economic growth,” Mr. Geithner told a Congressional committee last week, without details.

Naturally, since it’s Obama, there’s going to be trouble with congressional morons–sorry, Republicans–over the rate. They’ll likely seek a 25% rate, and they’ll definitely want the loopholes and subsidies to stay in place. Because that’s how American corporations pay next to nothing in income tax, despite bitching about how high our tax rates are.

Personally, I see nothing wrong with revamping the tax code to make it equitable and competitive. But since “equitable” and “competitive” are not synonymous with “fattening a rich asshole’s bank account,” it’s not likely that we’ll ever see anything of the sort.

“Dude, Where Did You Put the Tax Revenue? Whoa…My Hands are Huge…”

Economic downturns frequently force cities to get creative with their budgeting. But Oakland might not have to be as creative, considering their thriving medical marijuana dispensary sector:

The city has raised taxes on marijuana dispensaries several times in the past few years, and last year it collected $1.4 million in taxes from them — nearly 3 percent of all the business taxes it collected. Now Oakland plans to double the number of dispensaries it licenses, to eight from the current four, in the hopes that it can collect even more revenue.

Other cities are beginning to see the benefit of taxing marijuana as well; cash-strapped Colorado Springs made $700,000 last year from marijuana taxes (that’s like…70 billion dimebags, dude!), and Denver saw almost $3.4 million from taxes and application fees.

The revenue is not without headache (or tracers), however, as the Feds have decided to reneg on their promise not to harsh the States’s mellow; now, the IRS is claiming that many of these businesses are, in fact, drug-trafficking organizations. Even so, business is still pretty good, and medical dispensaries are providing much needed revenue to cash-strapped municipalities.

Plus, the dispensaries are providing some very excellent bud, and the guys that work there don’t insist on matching bowls when all you want to do is go home, cook a Tombstone pizza, and watch Zardoz on Blu-Ray.

This Rich Guy Pays More Taxes than Mitt Romney

Okay, so this article by Jimmy Stewart in the New York Times is a lengthy jumble of numbers and tax blah-dee-bloo, so I won’t attempt to summarize it (also, I got bored while I was reading it and skimmed quite a bit). But basically, there’s a rich dude with a ton of money who’s paying 102% of his income in taxes (the rich dude is named James Ross):

…Mr. Ross told me that he paid 102 percent of his taxable income in federal, state and local taxes for 2010. “My entire taxable income, plus some, went to the payment of taxes,” Mr. Ross said. “This does not include real estate taxes, sales taxes and other taxes I paid for 2010.” When he told friends and family, they were “astounded,” he said.

Clearly there’s some crazy shit going on if this guy is paying 102% of his taxable income, and Mittensus is paying something like 30%. It’s perhaps difficult to feel bad for a guy who is still rich after paying that much in taxes, but it at least highlights the clear disparities in our tax code. Really, how the hell is one rich guy paying so much less than another? This is America! All rich guys should pay as little as possible! Paying for government programs is the job of the middle class, and creating jobs (insert laughter here) is the job of the job-creating class.

This is a bit off the topic, but do you think rich guys have job-creating class reunions? Oh, wait…those would just be their normal Harvard class reunions. I guess I answered my own question.

Bad News: The IRS Wants to Ruin Your “Up in the Air” Fantasies

Yes, it would seem that now some of your airline miles might be treated as taxable income. This doesn’t affect me, personally, because I can’t afford to travel, and I can’t open up any new lines of credit, but it might be a hardship for someone who insists on getting free miles wherever they can:

The AP notes that – generally — frequent-flier miles given as credit card rewards have not been considered taxable “because they’re treated as rebates on spending, according to the Tax Institute at H&R Block.”

However, the catch in this situation is that miles doled out as a “reward” for opening a new checking or savings account may be viewed differently. The AP says that’s because “you don’t spend any money to receive it,” meaning it’s not really a rebate on spending.

“So the gift is instead treated similarly to interest income, meaning that it’s taxable,” AP writes.

“When a customer receives a gift for opening a bank account — whether cash, a toaster or airline miles — the value of that gift is generally treated as income and subject to reporting,” Citibank says in a statement to AP.

Thus, it would seem your miles earned as a reward for spending are safe–the IRS can’t touch those miles you earned from that discounted Real Doll eBay shopping spree you went on last week. But that toaster you got from Bank of America better show up on your tax returns, buster.

Also, fuck you and your airline miles, you hi-falutin’ fatcat.

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