Don’t Quit Your Day Job – Personal Finance, Economics and Investing

Here’s something you can really sink your teeth into – a calculator from the Tax Foundation which will let you input your tax data. What does it output? Well, your tax burden under the ‘Bush’ tax cuts (passed in 2003), your tax burden if the plan expires, and your tax burden if the changes in President Obama’s budget are enacted. Now that you have this data, you can cut through the noise and choose which one you like the best by simply figuring out under which plan you owe the least! Joy!

You knew it was only a matter of time – once it was revealed that Treasury Secretary Timothy Geithner blamed his personal tax problems on a misuse of the tax software TurboTax – that someone would try to blame their own tax problems on the software in Tax Court. Well, your wishes came true, and the first tax case was decided on the 19th concerning the “Geithner Defense”!

The “VAT”, the so-called value-added tax, has received some attention here before at Don’t Quit Your Day Job. Unfortunately for everyone, it probably will receive a bunch more in the future. Fresh off Paul Volker’s comments to the New York Historical Society putting the VAT in play, the United States could be getting a VAT of its own. As pointed out in this very good article at Super-Economy, the US is the only county in the OECD that doesn’t have a Value-Added Tax.

Recently we’ve been giving you lots of information on that most popular of topics- the income tax! We here at DQYDJ see no need to tone down our articles on taxes at this point… something about this date (maybe it has something to do with the April 15 tax deadline?) makes tax articles popular. Anyway, thanks to the Tax Foundation, we have an interesting measurement of tax – the number of days you have to work to be free and clear of the burden of tax, otherwise known as Tax Freedom Day!

How often do you see articles from the Associated Press which talk about tax inequalities from the ‘other’ direction… namely the number of people who don’t pay any income taxes. In fact, you may be surprised to find out that nearly half of American households don’t have to pay a single cent in Federal Income taxes. A full 47% of households will pay no 2009 income tax.

CNN recently weighed in with a helpful article for you tax-procrastinators out there. Did you know that in many cases, the IRS doesn’t mind if you file your taxes late? Yes, you guessed it… file late if you are owed money by the Government… most likely you won’t be penalized!

What would you say if someone offered you money to report your tax-evading friends? If you are staring at the screen incredulously, allow me to introduce you to Uncle Sam, who wants to make it worth your while to report on your loose-moraled tax cheat friends (and acquaintances!). If you know someone who is particularly dastardly, you could even make bank- the IRS will reward you 15% of the underpaid amount, up to a whopping $10 million!

For today, here’s a link to an article about the tax-exempt status of the United States Olympic Committee. Fresh off the American medal count win from the 2010 Winter Olympics (I’ll follow up with some numbers this week!), this is sure to cause some controversy – as the laws granting tax-exempt status are supposed to apply to amateur athletic organizations. The Olympics have become anything but an amateur event; witness the big team sports like basketball and hockey which field players from leagues like the National Basketball League and the National Hockey League. All of this might be under the spotlight soon if the USOC starts to ask the government for direct support.

Since yesterday I compared the health plan taxes in Congress to the Alternative Minimum Tax, I suppose it’s only right if today I discuss that tax itself. The infamous tax was enacted to target upper class taxpayers who paid less than ‘their fair share’ of taxes. It went into effect in 1970.

California increased its income and sales taxes recently, in the midst of a recession. That measure was intended to be a temporary increase. Coupled with an increase in the yearly car registration fee, it appeared that plenty of funds would be raised by the new levies. Well, the summer showed that California hadn’t yet left budget crisis mode. As part of a deal to close a $26 billion budget deficit, California is resorting to a dirty trick- taking a no interest loan from its constituents.