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Mayor Michael R. Bloomberg’s $1.2 billion property tax increase won approval from the City Council on Thursday, raising homeowners’ bills by 7 percent as the city grapples with a worsening economy and disappearing revenue.

As a result of the 33-to-18 vote, annual tax bills will increase by hundreds or in some cases thousands of dollars, effective Jan 1.

“Even though it won’t be popular, New Yorkers will understand,” Councilman Miguel Martinez of Manhattan said in explaining his support for the tax hike. “Times are hard, and we’re asking everyone to pitch in.”

Opponents warned that residents were already overtaxed. Since Mr. Bloomberg took office, property taxes have increased by 18.5 percent.

“Today, the Council votes to take the bucket to the same old well and ask homeowners to bear the brunt of a swelling budget among dwindling revenues,” Councilman Simcha Felder of Brooklyn said. He added, “I believe that is unacceptable and that will hurt all New Yorkers in this difficult time.”

The property tax increase comes as Gov. David A. Paterson is pushing more than 100 new taxes and fees on items from downloaded music to nondiet sodas, and the Metropolitan Transportation Authority is moving to impose fare and toll increases.

Manhattan homeowners who live in the most expensive co-ops will see their taxes go up by anywhere from $854 to $1,307, according to the city’s Independent Budget Office. People who own single-family homes valued between $1 million and $1.5 million, outside of Manhattan, can expect to pay an extra $464 per year. Taxes on more modest homes, such as a condominium in Queens in the $300,000 to $400,000 range, would rise by $111.

To help ease the pain, Council Speaker Christine C. Quinn announced that Mr. Bloomberg had agreed to send homeowners the much-prized $400 rebate checks by the end of the calendar year.

The mayor had tried to eliminate the checks this year, then delay their distribution, but council members animatedly objected.

In addition, the Council approved an increase in the hotel tax from 5 percent to 5.875 percent per room, or about $3 a night. That change is expected to generate perhaps $80 million between March and the end of the next fiscal year, in June 2010.

Still, no one was under any illusions that the increased taxes would be the last financially difficult decision in the foreseeable future.

Mr. Bloomberg, who in September ordered all city agencies to cut spending by 5 percent, asked that they come up with an additional 7 percent in cuts by Dec. 22. And even with those cuts, and the extra revenue from higher taxes, the city is still facing a budget deficit of more than $1 billion in the next fiscal year.

The vote on Thursday — a close one by City Hall standards — was the latest political victory for Mr. Bloomberg.
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China explained more on fuel consumption taxes hikes Friday after revealing a seven- to eight-fold increase on gasoline and diesel products a day earlier, part of a reform of fuel taxation and pricing approved along with slashing retail fuel prices.

Consumption tax on naphtha, solvents and lubricant oil would be raised from 0.2 yuan (almost three U.S. cents) to one yuan per liter, and tax on jet kerosene and fuel oil would rise from 0.1 yuan to 0.8 yuan per liter, the Ministry of Finance (MOF) and Ministry of Taxation said in a joint statement Friday, offering more details of the day-earlier announcement.

The National Development and Reform Commission said late Thursday that the country will raise the gasoline consumption tax from the current 0.2 yuan to one yuan per liter and diesel consumption tax from 0.1 yuan to 0.8 yuan per liter.

The two ministries also said consumption tax on imported naphtha would be reinstalled, while tax on jet kerosene would be temporarily postponed.

In addition, consumption tax on naphtha produced domestically and used for production of ethylene and aromatic hydrocarbon products would be exempt by the end of 2010, according to the statement. Tax already paid on imported naphtha for the same usages would be returned, it added.

The ministries said the country would exempt consumption tax onethanol gasoline produced with imported and already-taxed domestic oil, and ethanol gasoline produced with domestic gasoline would be taxed for gasoline used in the production only.

Taxes on gasoline and diesel products used in producing methanol and biodiesel products could be deducted from the total tax for the finished products, the two ministries said.

Ethanol gasoline, methanol gasoline and biodiesel products are all mixture of gasoline or diesel with ethanol, methanol or biodiesel.

An unidentified MOF official said such adjustments of consumption taxes on fuel products are aimed to play a role in promoting energy conserving and economic restructuring, and ensuring equal share of tax burdens among users.

Under a budget proposed by Gov. David A. Paterson Tuesday, the state would charge sales tax on activities that include downloading music, attending a ballgame and getting a massage.

Paterson’s executive budget included 88 fees, 10 fines and 39 tax changes that would bring in over $5 billion next year.

“The governor feels these fees are fair, reasonable and necessary to balance this budget,” said spokesman Errol Cockfield. He said the administration looked at areas where fees had remained the same for many years, where costs of services had gone up, and where revenue could be brought in quickly, “without unduly burdening our citizens, especially the most vulnerable.”

If the Legislature approves, the state would begin taxing hair salons, credit rating services, cable and satellite television and radio, movies and sporting events. Sales tax would be charged when downloading music, movies, photographs and games. Taxes would increase for cigars and malt beverages, as well as car rentals and limousines. The cost of vehicle registration and licensing would go up 25 percent.

The plan would eliminate the sales tax exemption on clothing and footwear under $110, and creates a luxury goods tax for expensive cars, yachts, jewelry and noncommercial aircraft.

State parks fees for camping, rentals, golf and marina use also would go up.

Senate Majority Leader Dean Skelos (R- Rockville Centre) opposed the increases and said, “It’s my hope we will be able to eliminate a number of these fees and taxes, especially those that impact the everyday working family person who just can’t make ends meet right now.”

The budget presentation said many states already collect taxes on entertainment, and New York City collects sales tax on personal services.

John Vargas, who owns Atlantic Massage Therapy in Merrick, said a sales tax on massage therapy is tantamount to exacting a tribute for self-care. “People are going to feel like the government is taking the money that’s for their wellness,” he said. “Are they going to start taxing doctors’ co-pays, too?”

Staff writer Laura Rivera, on Long Island, also contributed to this story.

The following are among the taxes and fees that Gov. David A. Paterson is proposing in his 2009-2010 budget.
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A federal appeals court has sided with Alabama in a lawsuit filed by Norfolk Southern Railway Co. that could have wiped out several million dollars in taxes that support public education.

Norfolk Southern claimed the state’s 4 percent sales and use tax on diesel fuel used by railroads is discriminatory because the railroads’ competition, the trucking industry, doesn’t pay the same tax.

But in a 3-0 decision Thursday, the 11th U.S. Circuit Court of Appeals in Atlanta said the sales and use tax is not discriminatory because it does not single out railroads. The court also noted that trucking companies pay other taxes on fuel that railroads don’t pay.

Margaret Johnson McNeill, attorney for the Alabama Department of Revenue, said the appeals court’s ruling was significant because similar suits had been filed by the other two big railroads operating in Alabama: CSX Corp. of Jacksonville, Fla., and BNSF Railway Co. of Fort Worth, Texas. Those cases had been put on hold pending a ruling from the 11th Circuit in the Norfolk Southern case.

According to court records, Norfolk Southern has about one-third of the railroad market in Alabama and pays the state about $4.5 million annually in sales and use taxes on fuel. The tax revenue is set aside for public schools and colleges, which are already dealing with budget cuts due to declining state tax collections.

“It’s a pretty big deal that we won,” McNeill said.
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At a time when the economy is driving more people to do their own taxes to save money, the companies that make software to help you with that task are fighting for your business.

In an increasingly competitive business for the 42 million U.S. taxpayers who file their own taxes through Internet or home computer programs, the two major software providers are adding features to their desktop software to impress customers.

“It is a very competitive industry and it’s imperative that we make sure our offerings remain competitive and that we acquire and retain as many customers as possible,” said Julie Miller, a spokeswoman for California-based Intuit Inc., the maker of industry leader TurboTax.

Intuit said Thursday it is including free electronic filing with federal returns prepared with its TurboTax Deluxe boxed software available at retailers. TurboTax Deluxe customers also can e-file up to five federal tax returns and prepare and print unlimited returns at a recommended $59.95 price.

The move comes two days after competitor H&R Block Inc. launched an offensive campaign for its premium TaxCut desktop software, an attempt to capture market share from Intuit, an industry analyst said.

Kansas City, Mo.-based H&R Block’s announcement said it now includes free electronic filing of federal tax returns in its software versions, allowing up to five federal e-filed returns at no additional cost to the recommended $49.95 price on its premium product.

The changes are an acknowledgment to consumers of the tough economy and an effort help offer more value.

“We wanted to give back and said we won’t sacrifice quality for price. We’ll include the things we always have and give a little more in value adds,” said spokeswoman Denise Sposato. “We’re looking at long-term relationships rather than just the one year.”

Both companies offer various versions of software, each with different features. They also offer Internet-based versions of their software at different price points.

About 140 million people file their taxes with the Internal Revenue Service each year. Of those, about 14 million use the traditional pencil and paper method and about 84 million go to a professional tax preparer.

The number of people using their computer for online or boxed programs is at about 42 million and growing.

It is the fastest growing segment of the tax preparation business, Miller said.

Intuit, the industry leader sold about 6.5 million copies of its boxed TurboTax software last year, which represented about 80 percent of the market for federal tax return software sold at retailers, Miller said.
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The Wisconsin District Attorneys Association wants to raise the state’s beer and liquor taxes — something that hasn’t happened in nearly 40 years — to pay for more prosecutors.

Wisconsin’s beer tax, third lowest in the nation, hasn’t gone up since 1969. The liquor tax, which is among the lowest nationwide, hasn’t increased since 1981 other than when a new tax on hard cider was added in 1997.

To increase prosecutors’ salaries and hire 121 new assistant district attorneys, the combined beer and liquor tax would have to go up 20 percent.

In 2005-2006, the taxes brought in about $50 million a year. The cost of the prosecutors’ proposal is between $10 million and $15 million annually, said Ralph Uttke, the Langlade County District Attorney and president of the association.

He called the increase proposed Monday “moderate.” Wisconsin’s 6.5 cent tax per gallon of beer is two or three times less than what neighboring states charge. The tax is 14.8 cents in Minnesota, 18.5 cents in Illinois, 19 cents in Iowa and 20.3 cents in Michigan.

The Legislature, along with Gov. Jim Doyle, would have to approve any increase.

A proposal introduced in the Wisconsin Assembly in 2007 to raise the beer tax the equivalent of 2.4 cents per bottle ran into opposition from the Tavern League, which represents bars, the beer industry, and Democratic and Republican lawmakers. The bill went nowhere.

It doesn’t make sense to raise the beer tax and earmark that increase for a specific budget item, Tavern League lobbyist Scott Stenger said Monday.

“That’s not the way state government works,” he said. “We think it’s a bad precedent, and if there’s going to be a discussion on taxes, it needs to be much more global.”

Uttke acknowledged that raising alcohol taxes will not be easy, as shown by Wisconsin’s legislative history.
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During the campaign, President-elect Barack Obama promised to stick it to Big Oil with a windfall profits tax. At the time, reason explained why such a tax was a bad idea:

Sen. Barack Obama (D-Ill.) is also calling for a windfall profits tax on oil companies. But will it work?

The last time the United States imposed a windfall profits tax on oil companies was in 1980 and it lasted until 1988. The result, according to a 1990 Congressional Research Service analysis, was that the tax on oil company profits decreased domestic production by 3 percent to 6 percent and increased dependence on foreign oil by 8 percent to 16 percent. Keep in mind that the big private oil companies actually control only about 6 percent of the world’s known oil reserves—the rest are owned by gigantic foreign national oil companies. And just where do private oil companies get the billions they invest in projects to increase supplies? That’s right; their profits.

Obama has now quietly dropped the idea:

President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov.

Activists are dismayed:

With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan. The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League (ASBL) questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration.

Hooray for economic sanity.

Source: The Wall Street Journal

No, there is not a space missing between Fair and Tax. FairTax is how Rep. John Linder (R-Georgia, 7th), sponsor of the Fair Tax Act of 2003 has chosen to market his innovative tax reform legislation.

“Momentum behind the FairTax continues to build,” said Linder. “Not only do my colleagues recognize the harm done to the American people by the overly intrusive and burdensome income tax code, their constituents recognize it every April 15th.”

To Rep. Linder, “momentum” means his Fair Tax Act has gained the support of several other lawmakers — now including powerful House Majority Leader Tom DeLay (R-Texas, 22nd).

“The bill now has 21 co-sponsors – more than any other fundamental tax reform legislation in the House – and they represent a bipartisan coalition of members from across the nation,” said Linder.
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Steve Bennett, president and CEO of Intuit, the maker of the TurboTax software program, reports this one:

A client gave away his house to a local fire department to burn up in a training exercise. So far, so good. It appears to be a legitimate, allowable charitable contribution that was made to an appropriate organization.

But here’s the kicker: The value of the property actually went up once the house was removed.

Because the value increased, sorry, there could be no deduction.

More on this story.

What a bummer, huh? Find a Tax Lawyer at the tax law directory.

One of the more entrenched issues in international taxation over the last thirty years has been how to define and respond appropriately to harmful tax competition among nations, especially competition from offshore financial centers.

This paper provides an introduction to the debate over the regulation of international tax competition, beginning with an overview of the essential architecture of international taxation and the way that its structure creates problems for developed countries and opportunities for OFCs, and continuing with an assessment of the arguments asserted in favor of, and against, regulating tax competition. The paper then examines how developed countries, through the OECD and EU, have defined international tax competition, and the efforts made by both organizations to regulate such competition.

Finally, the paper draws on the way the OECD and EU dealt specifically with the twin touchstones of virtually all definitions of tax havens-low or no income taxation and bank secrecy-to suggest the direction that regulation of tax competition is likely to take in the future.
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