GOP governors seek to reshape taxes

Source: http://www.usatoday.com/story/news/politics/2013/01/13/republican-governors-push-tax-changes/1830907/

Republican governors are introducing bold proposals that would abolish income taxes, business taxes and other unpopular levies and often offset those cuts by boosting sales taxes.

Many of the proposals wouldn't cut taxes overall. The governors say their plans aim to reshape tax systems to promote economic growth.

By contrast, Democratic governors are mostly standing pat, having sometimes raised taxes in the past few years during the economic downturn when revenue fell.

Louisiana Gov. Bobby Jindal has the nation's most dramatic GOP plan: eliminate the state's income tax — top rate 6% over $100,000 — and raise the sales tax up to 3 percentage points. That would give Louisiana the nation's highest sales tax rate — about 12% when state and local taxes are combined — and result in about a $3 billion annual tax shift.

The idea wins praise from free market economists but criticism from liberal economists who say sales taxes hit poor people hardest because they spend a greater share of income on consumer goods.
"This is a very good step," says economist Scott Drenkard of the Tax Foundation's Center for State Tax Policy. He says income taxes, especially on corporate income, hinder economic growth and get passed on to consumers anyway.

Economist Dean Baker of the liberal Center for Economic Policy Research says it's "a great idea if the point is to make everyone else pay more so that the wealthy pay less." He says people will shop online and in other states to avoid the sales tax.
Other Republican tax plans:

• Virginia. Gov. Bob McDonnell wants to abolish the gas tax and increase the sales tax from 5% to 5.8%, spending the extra money on transportation. Virginia would be the first state to drop a fuel tax.
• Florida. Gov. Rick Scott wants to exempt businesses from paying sales taxes when buying manufacturing equipment and to make the corporate income tax start at $75,000 rather than $50,000.
• New Mexico. Gov. Susana Martinez wants to cut the corporate income tax rate from 7.6% to 4.9%.
• Idaho. Gov. Butch Otter wants to eliminate a $141 million property tax on business equipment.
• Ohio. Gov. John Kasich wants to raise taxes on oil and gas production and cut the personal income tax.

Governers seeking to reshape taxes

Virginia Gov. Bob McDonnell wants to abolish the gas tax.(Photo: Steve Helber, AP)

Alaska is the last state to kill an income tax, in 1980, when oil money started flowing. Today, nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Five states have no sales tax.

The nation has 30 Republican governors, and 25 of those have state legislatures controlled by Republicans. Eliminating a tax is difficult because of its financial and political consequences.

Oklahoma Gov. Mary Fallin and the Legislature tried last year to cut the income tax and eventually phase it out. The effort bogged down, so the Republican government didn't end the income tax or even agree on a tax cut.

Jindal, a potential presidential candidate, also wants to get rid of the corporate income tax and a tax tied to a business's value. To replace this money, the sales tax would not only be raised but expanded to new goods and services such as landscaping. Louisiana's tobacco tax would go up, too.

"There's a lot of romance about eliminating corporate and personal income taxes; how we get there is the hard part, and that's what we're discussing," says Louisiana Senate President John Alario, a Republican.

Contributing: Greg Hilburn, The (Monroe, La.) News-Star

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Better Business Bureau's Top Ten Scams of 2012

Source: http://abclocal.go.com/wls/story?section=resources&id=8945041

January 8, 2013 -- Ariane Daguin, owner of organic meat purveyor D'Artagnan will be in town on Thursday, January 10 to host an event with Chef David Burke of David Burke's Primehouse.

(RELEASE)

Topping the list of scam activity for 2012 is work-at-home schemes that account for over 33-percent of scam inquiries to the Better Business Bureau serving Chicago and Northern Illinois. This scam is especially tempting for those out of work or needing additional income. Coming in a close second, with 30-percent of scam inquires, is advance fee brokers. This scam attracts vulnerable consumers that need cash urgently.

The BBB's Top Ten Scams are ranked based on number of specific inquiries made by consumers to provide insight on the deceptive and sometimes illegal business practices in 2012.

"In 2012, many consumers were still working on improving their financial situations in these challenging economic times," said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and Northern Illinois. "Scammers were ready to capitalize on this vulnerability and take advantage of consumers.
Bernas explained, "Being aware that these scams exist is extremely important so that people can avoid becoming a victim and losing money or personal financial information."

The complete list of Top Ten Scams in 2012 from the BBB includes:
1. Work-At-Home Schemes. There are certainly legitimate telecommuting jobs, but many work-from-home opportunities are scams. Promising convenient work always attracts attention; however, when the requirement is to send money for materials first, consumers should always be on guard. Do not purchase services or products from a firm that's reluctant to answer your questions and be cautious of any company that offers an exceptionally high salary requiring few skills and little work. Check offers out thoroughly for free with the BBB at www.bbb.org.

2. Advance Fee Brokers. Often these appear to be very professional operations with attractive websites and advertisements. However, it is illegal for a business to charge a fee prior to providing a loan. Typically, after wiring money to the scammer, the victim never receives the loan. These "lenders" will use fake physical addresses or the addresses of real companies that are victims of identity theft.

3. Credit Repair Services with Advance Fees. Consumers with bad credit ratings are particularly vulnerable to this scam. Everything a credit-repair operation offers an individual can do personally at little or no cost. Credit repair operations cannot ask for money in advance and they cannot automatically remove legitimate negative reports from your credit history.

4. Foreign Lotteries. Any lottery from a foreign country is illegal in the United States. Stating a person can win, or is a winner already provides a strong incentive; however, people should never send money to obtain lottery money. Scammers using fictitious addresses will request you send "fees and taxes" to them through a wire service, they take the cash and never provide any winnings because there are no winners.

5. Prize Promotions. There are several variations of this scam, but most include some aspect that requires people who are identified as "winners" to provide money or some type of personal information, such as a credit card or social security number, to verify being a winner. In the end, no prize is awarded and the personal information is then used to withdraw a victim's money from accounts or for identity theft.

6. Office Supplies - Sale by Deceptive Telemarketing. This scam features fake invoices for office supplies being sent to a business, often for only a couple of hundred dollars. This relatively low amount makes it easier for company personnel to quickly sign off and feel it is not worth their time to check the invoice's validity, which would be done if it was for a larger amount.

7. Pyramid Companies. Pyramid schemes within companies are fraudulent because returns to investors are paid from personal money or the money paid by the newest investors, rather than from any actual profit earned by an individual or organization running the operation. These scams collapse because payouts exceed investments, or because the legal authorities prosecute the organizers for sale of unregistered securities. Often the organizers simply disappear with funds sent to them.

8. Debt Relief Services (Non-Compliant with FTC rule). The Federal Trade Commission has established rules for debt relief services (for profit businesses that represent that they renegotiate, settle or alter the terms of payment for an unsecured debt). The FTC rule governs disclosures and representations that debt relief services can make and does not allow advance fees. There are legitimate debt relief companies that comply with the FTC rule and the Better Business Bureau is identifying only the non-compliant companies as scams.

9. Paving, Painting, Home Improvement by "Traveling" Workers. Never pay upfront to a "traveling" contractor who just happens to be in the neighborhood, is doing work nearby, or has extra materials. The technique to get your money often requires you to pay for added materials. Once you pay the contractor, he disappears with the money and no work is ever done. Having access to your property also provide an opportunity for these people to check what valuables you may have for a future burglary or ID theft.

10. Sweepstakes. If you don't remember entering a sweepstakes, be very suspicious about being declared a winner. If the prize provider wants you to send money or give your social security number to receive your prize, take no action. If you send money you will likely never receive a prize, or you will get a prize of lesser value than the money you've sent.

"Remember, before giving any company credit or debit card information, the BBB recommends reviewing the business fully to avoid potential billing nightmares," said Bernas. "As always, if an offer seems too good to be true, it probably is."

For more information on these top 10 scams, visit www.bbb.org

These posts are for informational use only to educate people about their online income taxes and the financial world around them. If you found this helpful, share the original article or this one, and help spread the word! With tax season rapidly approaching let us get you the best income tax return you can possibly have by e-filing! Leave a comment if you know of any more tax scams!

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The Lopsided Fiscal Cliff Deal: All Tax Hikes, No Spending Restraint

Republicans were just rolled – yet again. Throughout the 2012 presidential campaign, and up until New Year’s Eve, President Barack Obama kept insisting that any solution to the U.S. “fiscal cliff” required what he called a “balanced approach” — meaning that forthcoming federal budget deficits should be narrowed partly by tax hikes (on “millionaires and billionaires”) and partly by spending restraints. Of course, we all know that Mr. Obama and the Democrats wanted only tax hikes, while the Republicans mainly wanted only spending restraint.

In the November election, we know Democrats won the White House, while the GOP won the House of Representatives. Thus a “balanced” result seemed justified. But instead, the so-called “fiscal cliff” deal that was struck last week in Washington, approved by the Senate (89-8) and House (257-167) alike, was lopsided: it entails all tax hikes (on the rich and middle class alike) and no spending restraint.

How can this be? Find out the rest of the story by visiting the original article here: http://www.forbes.com/sites/richardsalsman/2013/01/08/the-lopsided-fiscal-cliff-deal-all-tax-hikes-no-spending-restraint/

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Electronic Tax Filing News Update: Scam Targets Elderly Texans

Texas Attorney General Greg Abbott said the state is investigating a fraudulent tax return scheme and warned East Texas residents to avoid recruiters from Syam Tax Services LLC.

The Texas Attorney General’s Office does not typically acknowledge investigations but disclosed the investigation into Syam Tax Services in order to help prevent additional victims from being harmed by the tax fraud scheme.

Although the state’s investigation is still ongoing, the preliminary results show that Syam Tax Services enlisted recruiters to canvass small East Texas churches and senior residences for elderly victims who receive Social Security or disability benefits. Prospective victims are told that low-income Social Security recipients are eligible for a cash benefit under a federal stimulus funds program.

Elderly Texans beware, your identities could be at risk!

Next, victims are told to complete a form, which includes providing their driver’s license, Social Security and bank account numbers to Syam’s recruiters in order to receive their federal stimulus benefits. Without the victim’s knowledge, Syam subsequently prepares and files a fraudulent tax return in the victim’s name.

Read the rest of the article for tips to avoid this scam and what to do if your identity is stolen: http://www.accountingtoday.com/news/Tax-Scam-Targets-Elderly-Texans-65028-1.html

These posts are for informational use only to educate people about their online income taxes and the financial world around them. If you found this helpful, share the original article or this one, and help spread the word! With tax season rapidly approaching let us get you the best income tax return you can possibly have by e-filing!

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