Tax News Oct. 25-29

---

News
FRIDAY
Obama to Promote Business Deduction to Spur Investment
President Barack Obama will make the case that his proposal to let companies take immediate tax deductions for the full cost of new equipment will help the economy grow and create jobs by encouraging about $50 billion in new investments through 2011.
NY sales tax collections up 10.5 pct through Sept.
Sales tax collections rose 10.5 percent in New York in the first three quarters of 2010 through September, but the gain was mostly due to higher rates and other factors, the state comptroller said on Thursday.

THURSDAY
Tax Shortfalls Spur New Fear on Europe’s Recovery Bid
With economic conditions weaker than expected, tax revenue is coming up short of projections in parts of Europe.

WEDNESDAY
Employers in U.S. Start Bracing for Higher Tax Withholding
Lawmakers won’t start debating whether to extend the cuts, which expire Dec. 31, until after the Nov. 2 elections. Because it takes weeks to prepare withholding schedules, the Internal Revenue Service will probably have to assume the cuts will expire and direct employers to increase payroll deductions starting Jan. 1, experts say.
Acne Cream? Tax-Sheltered.
Denture wearers will get a tax break on the cost of adhesives to keep their false teeth in place. So will acne sufferers who buy pimple creams.
Alcohol Tax Debated in States Across the Nation
It's not the lagging economy that's caused his small business to lose $250,000 in revenue and its staff to shrink from 14 to nine employees, says James Alexander.

TUESDAY
Puerto Rico unveils tax cuts to reignite economy
Puerto Rico's governor on Monday announced plans to cut business and income taxes by more than a $1 billion annually over the next seven years in an attempt to jumpstart the U.S. territory's economy.
Bye-bye, tax breaks?
Tax experts almost uniformly say the next Congress should rethink the more than 200 tax breaks in the federal code that cost more than $1 trillion a year. And, yes, that includes even the really, really popular ones.
Watchdog: Funny math used on AIG bailout
The Treasury Department changed its accounting style and produced an overly optimistic estimate of taxpayer losses in the AIG bailout, the special investigator for the federal bailouts said in a report released Monday.

MONDAY
Unresolved Tax Questions Worry Taxpayers
Predicting your annual federal tax bill is rarely anyone's idea of a good time. But now the process has been made all the more confounding, thanks to a host of questions over what the tax code will look like in 2011.
Key Tax Breaks at Risk as Panel Looks at Cuts
Sacrosanct tax breaks, including deductions on mortgage interest, remain on the table just weeks before the deficit commission issues recommendations on policies to pare back with the aim of balancing the budget by 2015.

Economist Comments
FRIDAY
And the FAIR Tax Trap
Democrats turn a conservative fad against GOP candidates.
Why We Should Eliminate the Corporate Income Tax
The FT has a piece today on the administration's plans to lower the corporate income tax rate in exchange for simplification--getting rid of a bunch of deductions.  This is a decent plan--and not just because it's the Full Employment for Policy Pundits Act of 2011--but this seems like a good time to once again charge into the fray and argue that we ought to just eliminate the damn thing altogether
The Tax Me More State
Two initiatives that would further punish California.

THURSDAY
Democrats’ Estate Tax Plan Trips Next Secretariat: Amity Shlaes
The estate tax is one topic getting lost in the dust of the midterm races. That’s a pity. This tax, now quiescent, is set to roar back like a stallion in 2011 if lawmakers don’t rein it in with new legislation.
Ready For Pay Cut?
It's one thing when the wonks tell you to get ready for a tax hike that may or may not come. It's another when your employer tells you he's getting ready to cut your take-home pay and give it to the tax man.
Tax Breaks For The Wealthy Do Boost Economy
Congress is biting the hand that feeds long-run economic growth by raising tax rates on the rich.

WEDNESDAY
The lamest of lame ducks
What if Congress held a lame duck session, did virtually nothing and quit for the year?
Who wins if foreclosures halted?
Moratorium would impose huge losses on taxpayers, feds

TUESDAY
Obama's Imaginary Tax Cuts
The 111th Congress has already enacted $352 billion in net tax increases and may, in the upcoming lame-duck session, enact the largest tax increases in history, which will hit every man, woman and child — as well as every business in America.

MONDAY
POWELL: The tempting path of protectionism
Every conceivable interest group wanted higher tariffs to prevent American consumers and businesses from taking advantage of better values available from overseas suppliers. As historian E.E. Schattschneider warned, "No party that undertakes a revision of the tariff can be confident it won't start a prairie fire."

Blogs
FRIDAY
IRS Paid Out $111 Million in Erroneous Stimulus Tax Breaks
The U.S. Internal Revenue Service had difficulty implementing new tax benefits in 2010, paying $111 million in erroneous benefits related to the stimulus law, a Treasury Dept. report said.
A Rolling Stone gathers no taxes
For skeptics in the incentive effects of taxation:
Popularizing Deadweight Loss
Indy requests a popularization of deadweight loss. Let's do the deadweight loss from a tax.
Understanding The Differences Among Tax Credits, Deductions, and Adjustments
Here are the simple facts about the differences among tax deductions, adjustments, and credits and how they’ll affect your next tax return.
Why Tax Day won't Be April 15th in 2011
In 2011, D.C. will celebrate Emancipation Day on April 15, a day earlier than normal since April 16 falls on a Saturday. In observance of the D.C. holiday, Tax day will be moved forward on business day this year landing on April 18.

WEDNESDAY
300 Economists Counter White House Claim on Taxes
Then there is the 362,000-member National Taxpayers Union, which sent a letter to Congress on last month signed by 313 economists, including a Nobel laureate, in support of extending all of the 2001 and 2003 the tax cuts.
Rating State Business Tax Climates
The best climates: South Dakota, Alaska, Wyoming, Nevada, Florida, Montana, New Hampshire, Delaware, Utah and Indiana.
Morning Bell: Red Tape Rising
According to a report released last month by the Small Business Administration, existing total regulatory costs already amount to about $1.75 trillion annually. This “hidden tax” on the economy is nearly twice as large as the sum of all individual income taxes collected last year.

TUESDAY
Trick or Treat Taxes!
After all, if you can't tell that a green, kiwi-flavored Jelly Belly is bad for kids and that a black, licorice-flavored Jelly Belly is a healthy alternative, it's up to the government to use its taxing power to keep children safe.
Ratcheting Taxes
Nobel laureate economist Milton Freidman once quipped, “Nothing is so permanent as a temporary government program.” Indeed, once created, government programs remain long after the precipitating event has passed.

MONDAY
Possible compromise on tax cuts?
Vice President Biden said Democrats may be willing to raise the $250,000 threshold at which higher taxes come into effect under President Obama's proposal.
Settling the Question of a Real Estate Tax in Obamacare
The new law is certain to add to the federal deficit. It increases taxes on all Americans in a number of different ways, encourages employers to dump coverage, and will cause many to lose their current health plan.

Reports
None.