Tax News Jan. 3 - 7

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News
FRIDAY
Proposed Tax Increase Bigger Than Expected
Top Illinois Democrats have agreed to push a plan that would temporarily boost income taxes by 75 percent and double cigarette taxes, Senate President John Cullerton said Thursday.
The Coming Talk on Tax-Reform: What's at Stake
Calendar-wise, we're overdue for a code clean up; they've typically arrived every 10 or 15 years but there hasn't been big tax reform legislation since 1986...
Tax reform jumps the line in Senate
Tax reform zoomed up the list of Senate priorities on Thursday, with both Senate leaders on board with examining the code.

THURSDAY
D.C.'s nickel-a-bag fee nets city $2 million so far
City officials had guessed the fee would raise $3.5 million to clean up the city's Anacostia River before the end of 2010.
Tax Code Overhaul Likely to Wait for 2012
Major surgery of the tax code is one of the ideas to trim the $1.3 trillion budget deficit that both Republicans and Democrats agree is needed.
I.R.S. Watchdog Calls for Tax Code Overhaul
...Americans spent 6.1 billion hours preparing their returns each year — the equivalent of 3 million employees working full time.

WEDNESDAY
Brace for Higher State Taxes
So at the end of last year we told you the good news: Your federal income taxes are not going to go up. But here's the bad news: your state taxes most likely will, if they haven't already.

TUESDAY
What to Expect for Finances in 2011
Happy New Year! Your Tax Refund May Be Delayed.

MONDAY
50 million taxpayers must delay filing - IRS
The IRS said that it needs until mid- to late-February to reprogram its processing systems because Congress acted so late this year cleaning up the tax code.
State tax gains and losses
State tax collections rose in the first nine months of 2010.
Obama Likely to Pursue Corporate-Tax Cut, Way to Pay for It
All signs point to President Barack Obama pursuing far-reaching changes to the corporate income tax, seeking to lower one of the highest statutory corporate-tax rates in the world by eliminating deductions, credits and loopholes.
Your Medicare taxes won't cover what you'll cost
...a newly updated financial analysis shows that what people paid into the system doesn't come close to covering the full value of the medical care they can expect to receive as retirees.

Economist Comments
TUESDAY
Why the Bush tax cuts overpromised and underdelivered
For many of the people whom President Obama calls "rich," the Bush tax cuts didn't make much difference. That's largely because of the Alternative Minimum Tax.
Toward A New Economic Consensus
Studies by professors from Harvard, Columbia, University of Chicago, University of Maryland, Stanford, University of California, UC Berkeley, the University of London and the London School of Economics now provide a growing body of empirical evidence in favor of the primacy of reducing tax rates combined with spending constraint to stimulate economic activity and increase employment.
Stimulus Now but Slowdown Later
What can we expect from such a $100-billion-plus payroll tax stimulus? A small and short-lived, miragelike economic recovery.
DAVIES: Payroll tax-cut cacophony
Social Security's claimed safety comes from the fact that Social Security surpluses are invested in Treasury bonds. However, the only guarantee you have is that Social Security surpluses will be invested in Treasury bonds. There is no guarantee that Social Security will pay you the money it invests.

Blogs
FRIDAY
Biggest problem facing taxpayers? The tax code
The time to reform the tax code was long before now. But that’s no reason why President Obama and Congress shouldn’t get started.
New Plastic Bag Tax Coming to a Store Near You
According to TBD.com, Virginia House of Delegates member Joseph Morrissey will introduce legislation next week to tax residents 20 cents for every plastic bag they receive at a grocery store or retailer.

THURSDAY
Why the Payroll Tax Cut May Not Be Such an Effective Stimulus
A typical worker will receive around an extra $800 this year.
Secondary Sources: Tax Collection, Taxes and Soccer, Fed Watch
David S. Hilzenrath reports on research criticizing the IRS’s collection tactics.

TUESDAY
A tax-rise to start the Brits' new year
...UK value-added tax—or VAT as this form of sales tax is commonly called—rises from 17.5% to 20%.

MONDAY
Assorted Links
Worried about revenue, local government fights ABC privatization in North Carolina…
Will The Tax Bill Stimulus Create Economic Growth?
When you net it all out, the total new tax relief for taxpayers is $229.7 billion. Compare that to a $13.3 trillion economy.
Social Security Funds and the Payroll Tax Cuts
Allan Sloan, editor-at-large of Fortune magazine, had a good piece in the Washington Post on Monday about how the cut in payroll taxes exposed the Social Security trust funds for what they are: accounts with IOUs, some of them even made of thin air.

Reports
THURSDAY
Beware of a VAT Attack on the American Economy
A widely anticipated federal budget crisis could provide an opportunity for big government proponents to slip the nation a tax-hike mickey in the form of a new VAT layered on top of the existing tax system.