Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

New tax law could help big spenders

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
 
54anickel Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 09:17 AM
Original message
New tax law could help big spenders
Edited on Sun Nov-14-04 09:25 AM by 54anickel
http://www.delawareonline.com/newsjournal/business/kris...

Big spenders, start saving your receipts.

The recently passed American Jobs Creation Act of 2004 includes a provision that gives taxpayers who itemize deductions a choice: They can write off the state income taxes they pay, or they can choose to claim their sales taxes instead.

This new tax break was pushed by members of Congress in states without income taxes, who saw it as a way of getting their residents an added deduction. But it also has potential for big spenders in some other states. The catch: To get any real mileage out of the deduction, taxpayers may need to maintain a shoebox full of receipts.

Clint Stretch, director of tax policy with Deloitte & Touche in Washington said this provision would have the greatest effect in the seven states that either have no income tax or assess taxes only on dividends and interest. "But someone in a state like California might want to consider this if they had low income but high wealth, so they found themselves buying a luxury car or boat in a year that they didn't pay a lot of income tax," Stretch said.

Deduction tied to spending

For instance, a family of four with $50,000 in taxable income would pay $1,263 in California income taxes. The family, assuming it had fairly standard expenses, would be unlikely to have bought enough taxable goods to make the sales tax write-off worthwhile, said John Logan, senior state tax analyst with CCH Inc., a Riverwoods, Ill.-based publisher of tax information.

more...


edit to add couple of related articles:

http://www.spokanejournal.com/spokane_id=article&sub=21...

snip>

Chris Hesse, tax director at LeMaster & Daniels PLLC, of Spokane, says the American Jobs Creation Act of 2004, which President Bush signed into law late last month, repeals one provision for manufacturers who sell internationally, but adds another one for all manufacturers. It also expands rules regarding which businesses are eligible to become S-corporations, which could be a blessing for some mid-sized companies.

On the enforcement side, the new law tightens rules regarding deferred compensation to employees, and narrows a loophole involving charitable contributions, while stiffening penalties for using illegal tax shelters.

Meanwhile, the Working Families Tax Relief Act of 2004, signed into law early this fall, basically extends the effective date of a number of tax breaks already in place, Hesse says.

One purpose of the American Jobs Creation Acts provisions regarding manufacturers is to resolve a conflict between the U.S. and the World Trade Organization, Hesse says.

more...


New US Jobs Act to result in profit repatriation
http://www.accountingnet.ie/content/publish/article_816...

The new legislation, signed in to law by President George Bush prior to the recent election, will enable US multinationals such as Intel, Oracle and Hewlett Packard, to repatriate profits from their Irish operations at an effective US tax rate of 5.25% - instead of the normal rate of 35%.

Any profits repatriated must be reinvested in the US under a reinvestment plan for the purposes of job creation or retention. Ernst & Young explained how the one time tax relief, which is valid for 12 months, could reduce the amount US multinationals invest in the Irish Economy over the next year while they absorb and reinvest the cash brought home.

A note of caution was sounded at the briefing to Irish subsidiaries, that they need to be aware of the complex implications of following this US legislation in Ireland.

Commenting on the legislation, Kevin McLoughlin, Director Corporate Tax, Ernst & Young said: Irish subsidiaries of US multinational groups could breach Irish company law unless their CFOs and Directors are careful to ensure that the limits on the amount of dividends they can pay are not exceeded.

more...
Printer Friendly | Permalink |  | Top
Florida_Geek Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 09:30 AM
Response to Original message
1. So bush's big spenders in Florida and Texas will now pay less
income tax. GREAT.
Printer Friendly | Permalink |  | Top
 
FloridaPat Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 09:54 AM
Response to Original message
2. Sales taxes and gasoline taxes use to be deductions for everyone.
Living in a state without income taxes, it nice I can take other taxes off my income tax - if I ever get an income thanks to Bush's policy of sending programming jobs overseas. It would cover anyone who uses the long form - which is just about everyone with a mortgage. Not necessiarily the rich or big spenders. It would be clothing for kids, food, sales taxes on cars. We're at 6% here in Florida on sales tax. It would be nice to get some of that back.
Printer Friendly | Permalink |  | Top
 
TheFarseer Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:06 AM
Response to Original message
3. That would really hurt states that are already struggling
Texas has tourism money and oil money and Florida has tourism money but Nebraska has nothing. There's nothing to tax here except property and income. If you take away one of our few advantages in luring business here, we can't stay competative. It makes me really angry how Nebraska and other states like us constantly get screwed by the Feds. They take away our tax advantages, we get no defense money, how are we supposed to have any jobs?
Printer Friendly | Permalink |  | Top
 
Deja Q Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:11 AM
Response to Reply #3
4. I know a company that recently shifted itself out of MN and into Nebraska
Using 'lesser taxes' as the reason.

At least they're still in the US.
Printer Friendly | Permalink |  | Top
 
TheFarseer Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-14-04 10:17 AM
Response to Reply #4
5. I remember that
It was a merger and part of the company was in MN and part was in NE if I remember correctly. NE actually offered them an even better tax deal if they would move everything to NE. They said don't bother changing tax laws for us and moved it all to NE anyways. That was very cool of them. Probably not many companies would do that.
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Sat Aug 02nd 2014, 03:37 AM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC