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E-News 4/13/12

The Week Ahead: “Tax Freedom Day” Arrives Later and Later

Danger Zone: A Small Business Hiring Slump?

IRS Hiring More Auditors to Enforce the New Healthcare law?

Your Tax Filing in Challenging Financial Times

 

The Week Ahead: "Tax Freedom Day” Arrives Later and Later

“Taxpayers will have until Tuesday, April 17, to file their 2011 tax returns and pay any tax due because April 15 falls on a Sunday, and a local holiday observed in Washington, D.C. this year is on Monday, April 16. Therefore, all taxpayers will have two extra days to file this year.

“April 17 is also an important date symbolically. According to the non-partisan Tax Foundation, it is also ‘Tax Freedom Day’ - the day each year in which Americans have worked long enough to pay all of their state, local and federal tax bills. 

“Across the country, ‘Tax Freedom Day’ arrives four days later than last year due. That means Americans will work 107 days into 2012, from January 1 to April 17, to earn enough money to pay this year’s combined 29.2% federal, state, and local tax bill.

“It’s important to note that ‘Tax Freedom Day’ does not arrive in New Jersey until May 1. That’s no surprise, given the higher property and sales taxes in our home state.

“Of course, ‘Tax Freedom Day’ is not official. But it is a useful illustration of the cost of government and it gives Americans a clear way to gauge the overall tax burden from year to year.

“Unfortunately, without leadership by the President and action by both Houses of Congress, America is headed for the largest tax hike in its history on January 1. That guarantees the Tax Freedom Day in 2013 will be much later than April 17!

“We don’t know the exact date, but we do know for sure that higher taxes and more government spending will kill jobs and economic growth!”

Rodney Frelinghuysen

Read more about "Tax Freedom Day" here.

Danger Zone: A Small Business Hiring Slump?

Next week, the House will debate another bill designed to help America’s small businesses retain and hire new employees. If passed by the Senate, the measure will come just in time to help free up capital and spur small business job creation in the real economy.

That’s because after six months of rising small business optimism, a new survey by the nation’s largest small business trade association, the National Federation of Independent Business (NFIB), shows small business optimism fell last month. The nearly two percentage-point decrease means that small business owners are projecting decreased sales and profits, and a decline in hiring new workers.

In the NFIB survey, nine of the 10 components fell last month, and while new jobs per firm increased by the most in a year, fewer business owners planned to hire new workers.

“I hear it all the time in every corner of Essex, Passaic, Morris, Sussex and Somerset counties: what’s most discouraging to small business owners these days is the prospect of more taxes and more government red tape,” Rodney said. 

“These men and women need more opportunity to grow, invest in their businesses and retain and hire new workers. The Small Business Tax Cut Act will attack these challenges by giving 22 million hard-working small business owners a 20 percent tax cut that will help them retain and hire new employees.”

Click here to read more about the Small Business Tax Cut Act.

Recommended Reading: President Obama’s new health-care initiative, long touted as a means to control costs, will actually add more than $340 billion to the nation’s budget woes over the next decade, according to a report in Monday’s Washington Post.  Read “Health-care law will add $340 billion to deficit, new study finds” here.

IRS Hiring More Auditors to Enforce the New Healthcare law?

Published reports indicate that the Obama administration is quietly diverting roughly $500 million to the IRS to help implement the President’s health care law.The money is only part of the IRS’s total implementation spending, and it is being provided outside the normal appropriations process.

The Chairmen of two key House Committees wrote to the IRS Commissioner this week, requesting details about the reports.  In their letter, the Chairmen specifically request how many employees are being hired and which of the many tax increases in the health care law they will be working on.

The nonpartisan Congressional Budget Office has warned that the IRS could need up to $10 billion to implement the new health care law over the next decade. 

The Chairmen wrote, “This expansion of the IRS’ power and reach into Americans' daily lives includes the IRS verifying that you have acceptable health care coverage, penalizing you if you don’t and increasing audits.  The American people deserve to know how and why this one-half billion in taxpayer dollars are being spent, and how many additional IRS agents, auditors and other workers are being hired to enforce all the hundreds of billions of dollars in new taxes and penalties in the new health care law.”

Read the Congressional letter here.

Read the story in The Hill here.

Your Tax Filing in Challenging Financial Times

Many families and individuals are facing challenging financial circumstances these days.  Some of them may find that there's a tax impact to events such as job loss, debt forgiveness or tapping a retirement fund. For example, if your income decreased, you may be newly eligible for certain tax credits, such as the Earned Income Tax Credit.

For a list of “what if” scenarios, visit this page on the IRS website.

Taxpayers may be worried about paying their tax bill. These families and individuals should contact the IRS immediately. In many cases, there are steps that the IRS can take to help ease the burden.

Recommended Reading: Even with rising powers China, India, Brazil and Turkey asserting themselves in world affairs, the United States is still the preeminent superpower.  Read Walter Russell Mead’s “The Myth of America’s Decline” in the Monday Wall Street Journal here.