You are viewing Tax system

LETTER: “Our current taxation is unfair for young people”

Phil Stone’s LAST Weekly Letter on National Insurance Increases to Pay More NHS and Social Care Costs was good (“Is NI Increase Fair ?, Postbag, September 23), but the current system is so out of balance.

Employees earning over £ 9,564 a year and up to £ 50,268 have to pay 12% of their income, then their employers contribute 13.8% more, only part of which is job related like sick pay .

Self-employed workers pay from a similar threshold a sum of £ 158 per year plus 9% of their income from profits.

When I was self-employed and reached retirement age at 65, I couldn’t believe my payments were stopping. Retirees therefore pay nothing.

READ MORE: LETTER: “Is the NI hike right?” No’
WANT TO WRITE? Click here to submit your letter

The purpose of national insurance is to pay the NHS, state benefits and pensions, but the retirement age dates back to the 1960s. At the time, most retirees did not have a pension. solid private pensions, gym memberships, motorhomes to tour Europe or did not have several houses to rent to young people in difficulty.

The three main political parties have been in power during this century and have continued to pay a very unfair share of insurance to young people who are most likely to have a job, facing high costs for housing and family education.

Young people need to take charge; they need to tell PAOs that they are using the National Health Service, that they are getting their vaccines first, and that they will likely need social care soon.

Covid 19 has now opened the door to retirees paying a larger share of their income above a similar income threshold, than the 1.5% health tax proposed for next year: on income at a time work and private pensions.


Source link

Sri Mulyani declares tax harmonization bill for a fair tax system

TEMPO.CO, JakartaFinance Minister Sri Mulyani Indrawati and the House of Representatives’ Finance Committee (DPR) ratified the Tax Harmonization Bill at the first level meeting on Wednesday, September 29. general provisions on taxation (RUU KUP).

“The government believes this bill will help create a fairer and more legal tax system,” Sri Sri said in an official statement on Thursday (September 30th).

According to Sri, several regulations have been agreed in this bill, ranging from the imposition of taxes on crops, provisions on the follow-up of mutual agreement procedure (MAP) decisions, to provisions for administrative sanctions in the process of settlement. objection and appeal. .

The previous bill had been included in the National Priority Legislation Program 2021 (Prolegnas). However, it had not been approved at the plenary meeting held by the DPR today.

The second level meeting or plenary meeting is scheduled in the coming days on the agenda for the ratification of the bill. “It will be next week,” she added.

Sri further reiterated that the bill should strengthen government-led tax administration reform, including the use of Identification Numbers (NIK) as Tax Identification Numbers (NPWP) for individual taxpayers. .

The bill was also supposed to support Indonesia’s position in international cooperation and produce provisions on the final rate of value added tax, as well as optimize the country’s income through base broadening. tax, Sri Mulyani said.

Read: Sri Mulyani talks about alternative minimum tax plan


Source link

Peers in Cumbria pressure government over ‘utterly absurd’ municipal tax system

CUMBRIAN peers continued to press the government to correct a ‘grossly unfair’ municipal tax system that sees some London mansions charged less than the average county house.

Former Cumbrian MP Dale Campbell-Savors is leading a campaign to reform the housing tax and has launched a debate in the House of Lords on the issue.

Lord Campbell-Savors has previously called the house tax system unfair, saying: “It is unfair, it penalizes part of the North and favors London, and it is now in urgent need of reform.”

Speaking during the Lords’ council tax debate, he said: “How can a C-Band house in Cumbria, with municipal taxes of over £ 1,600 a year, pay more than a £ 54million H-Band luxury home in Mayfair in London? Surely such discrepancies in the treatment of homes in the north only serve to further reveal how far the whole house tax system has become completely absurd. Isn’t the concept of a red wall defending the north more than a myth, confirmed by the government’s refusal to reform housing tax and its enormous inconsistencies? ”

Lord Clark of Windermere also spoke on the matter.

He said: “My lords, all over Cumbria, whether in Barrow, Carlisle, Kendal or in the many households in the middle villages, households feel aggrieved to be forced, because of the national framework, to pay more. housing tax than luxury homes in London.

“Even the government has to accept that this is grossly unfair.

“When do they plan to take a small step to alleviate the problem and help level up in Britain?”

The government whip, Viscount Younger de Leckie, replied: “Housing tax is well understood by taxpayers.

“The government has no plans to reform the housing tax, which would be complex and time-consuming to undertake and would create confusion for taxpayers.”

Source link

Former Democratic senator ‘warns’ Biden’s tax system

Former Democratic Senator Heidi Heitkamp, ​​one of the party’s key tax policy voices, has proposed that President Joe Biden tax assets valued at the time of his death on farms and family businesses. Said to damage the.

“I’m trying to sound an economic and political warning to Democrats that this is not the way to go,” she said in an interview with Squawk Box. “The turmoil this brings to small families and the wealth of farmers and families is not worth it. “

Biden proposed to tax assets valued at the time of death for income over $ 1 million. He also proposed raising the capital gains tax to the standard income tax rate. The plan will be discussed within the framework of a parliamentary regulation bill. In his proposal, individuals who inherit millions of private companies of value and real estate could face an immediate capital gains tax of more than 40% without having to sell them.

Now, in what is known as the “base increase”, an individual can inherit a valued asset without paying taxes, and the value is “upgraded” at the current valuation, to the benefit of individuals. interests of the tax deceased. Wipe off. For Biden and many progressive Democrats, the escalation is a huge loophole for the wealthy, with millionaires and millionaires giving their businesses and assets to their families for generations without paying capital gains taxes. They say it will be possible to pass.

Heitkamp, ​​who served in the Senate until 2019, chairs a new nonprofit called Save America’s Family Enterprises (SAFE). The nonprofit is campaigning against the proposal and running family ads. Neither the high camp nor the group revealed the donor.

“Unearned income should not be taxed at a much lower tax rate than income,” said Heitkamp, ​​supporting raising the capital gains tax to a tax rate normal. She also basically prefers to eliminate step-ups. Therefore, the asset does not reach the new valuation when inherited, but retains its original basis when sold.

She said her opposition to Biden’s plan was immediate imposition after death. She explained that families should only pay capital gains taxes when their assets are sold and the profits are made.

“What I find most annoying is that, for the first time, I am suddenly taxing unrealized capital gains,” she said. “My position has always been that you have to make capital gains. “

She gave the example of a truck driver named Sam, whose family has owned a cabin on a lake in Minnesota for generations and whose value has skyrocketed over time due to gentrification. The wealthy buyer next door buys land for $ 2 million and builds a mansion for $ 2 million. If both died, the wealthy landowner would give his property over to his family and could not pay taxes as they had a high current base. But Sam’s family could pay millions in taxes upon his death, even if the family didn’t sell the property.

She said the same applies to family businesses and farms.

“Family assets are more than a balance sheet,” she said. “Family assets are where we work, where we live and where we recreate ourselves. Given the taxation of unrealized capital gains, what you are doing is Pandora’s long-standing unclosed To open the box. “

The White House has said family farms and family businesses are exempt from taxes until the property is sold. Families also have up to 15 years to pay taxes to ease the pressure on them to sell immediately. According to a White House analysis, couples can be exempted up to $ 2.5 million if real estate is included, so only the richest 0.3% of taxpayers have to pay taxes.

Howard Grecman, a senior fellow of the Urban Brookings Tax Policy Center at the Urban Institute, said Biden’s plan to tax assessed assets on death is important to the overall plan to raise capital gains to income rates normal. I said it was a game. Instead of taxing assets assessed at the time of death, he said, wealthy families only hold assets indefinitely to avoid higher taxes on capital gains.

“Biden’s proposal to raise the capital gains tax rate to the normal tax rate would have an unpleasant economic effect, with little income and somehow unrealized at the time of death,” he said. declared. “If you take it up a notch, you won’t be taxed until your heir sells it. It’s decades after the death of the original investor. Lockdown has been around for generations. Investment can get stuck in underperforming assets. ”

Source link

SC issues notice to government on new property tax system | Vijayawada News

Vijayawada: The High Court on Tuesday issued notices to the government in the filed petition challenging the state’s new property tax system. The taxpayers’ association has asked the High Court to challenge the new property tax regime in which tax is levied on the capital value of the property instead of annual rental income. The government recently released GO 198 to introduce the new property tax and vacant land tax regime in urban local communities.
Lawyer Sunkara Rajendra Prasad, arguing on behalf of the petitioners, told the judiciary headed by Chief Justice Arup Kumar Goswami and Judge Ninala Jayasurya that the amended Municipalities Act of Andhra Pradesh violated constitutional principles and democratic. He also supported the process of rolling out the new tax system without giving people the opportunity to submit their grievances.
While objections were called amid the Covid-19 pandemic, many people were reluctant to travel to municipalities to submit their grievances, he said, adding that although representations were made to provide of alternative platforms such as the online submission of objections, officials did not consider the requests.
Government litigator for municipal administration, G Shivaji, argued that the state government brought the amendment in line with the recommendations of the Union government, which proposed to have a uniform tax policy. across the country and has published guidelines on this. The state government only followed the recommendations, he said. Given all of the arguments, the High Court asked the state government to file cross-affidavits in the petition and released the case for a new hearing after eight weeks.
Lawyer Sunkara Rajendra Prasad, arguing on behalf of the petitioners, supported the process of rolling out the new tax regime without giving people the opportunity to submit their grievances.

Source link

Does America’s Tax System Willfully Favor the Rich?


Who’s cheating on Uncle Sam the most these days? Earlier this year, two IRS researchers joined economists from Carnegie Mellon, the London School of Economics and the University of California at Berkeley to explore this question.

According to these analysts, Americans at the top and bottom of the income scale do not report all of their income. But the level of non-reporting varies enormously. Among Americans belonging to the poorest 50% in the country, only 7% of income goes unreported. In the top 1%, it’s almost 20%.

What is happening here? Or is it just deeply but unintentionally flawed?

This is a complicated question. But as a tax lawyer, I firmly believe that the flaws are intentional. Let’s take a look at the evidence.

Most of us don’t have the ability to exclude income from our tax returns. Our employers report all of our wages and salaries on W-2 forms. Our financial institutions declare interest on our savings and dividends on our 1099 shares.

But the type of income that many comes up with at the top of our income scale – business income from partnerships and other special categories of business enterprises – usually doesn’t appear on any form that needs to be filed with the IRS. .

In other words, we have a tax system with a built-in loophole in reporting information. This certainly counts as a major flaw.

An intentional fault? Maybe, but it’s debatable. So let’s take a look at the recent dramatic drop in IRS audit rates on the nation’s wealthiest.

Audits on revenues over $ 1 million have fallen by 71% since 2010, says the Center on Budget and Policy Priorities. This drop reflects fairly substantial cuts to the IRS budget – a 19% hit since 2010 – and what could be more intentional than budget cuts?

Some might argue that the drop in auditing on high-income earners may simply reflect the inevitable complexity of their returns, which can include all kinds of business entities and trusts.

But if you keep digging, there is still compelling evidence that our tax system is rigged: Tax Code Section 6707A. Nothing in our tax code is more like rig by design.

Section 6707A of the tax code imposes a penalty for failing to disclose a “listed transaction,” essentially any transaction that the IRS identifies as an abusive measure to avoid taxes.

The sanction for violation of article 6707A? An amount equal to 75% of the tax that a taxpayer sought to avoid through the transaction, even if the transaction itself is considered legitimate. Failure to disclose also gives the IRS unlimited time to verify reports of listed transactions, not just the regular three years.

Sounds like a squeeze for shady declarers, doesn’t it? Those who engage in listed transactions may disclose their abusive transactions in their tax return, a decision that will almost certainly trigger an audit. Or they can omit disclosure and risk a huge penalty.

But there is a catch. Section 6707A carries a maximum penalty. No person who fails to disclose a listed transaction can be fined more than $ 100,000.

Think about it for a moment. For a person who engages in a listed transaction to avoid multi-million dollar income tax, the penalty limit in Section 6707A essentially imposes no deterrent to tax evasion.

If you’re trying to avoid $ 50,000 in tax, the threat of a penalty of $ 37,500 on top of the tax owed will be intimidating. But if you’re trying to avoid $ 3,000,000 in taxes, that threat of a $ 100,000 penalty is insignificant. Without the possibility of a severe penalty, even the indefinite audit risk becomes much less threatening.

The bottom line: Section 6707A undoubtedly rigs our tax system in favor of the ultra-rich. What good policy could be served by intentionally limiting the exposure to penalties of very wealthy taxpayers and no one else? I can’t think of one.

Could the intentional rigging of the tax code in favor of the rich be limited to this one obscure sanction provision? Do you want to buy a bridge?

Bob Lord is a tax lawyer and associate researcher at the Institute for Policy Studies.

Source link

VAT controversy: Fayemi says Nigeria’s tax system is problematic

Fayemi said the forum believed the VAT controversy required political and legal action to be resolved.

“But our view is that the Supreme Court should expedite its decision so that we are clear on who should be responsible for value added tax (VAT), whether it is the Federal Inland Revenue Service or the states.

“The states that have gone to court clearly believe that this responsibility evolves, according to their own understanding, on what the Constitution says.

“The important thing is that our tax system is problematic, confusing and contradictory. We need to do a lot more to clarify things so that this can make way for more efficient and effective tax collection ”, said Fayemi.

The governor also stressed the need to channel the borrowed funds to regenerative businesses that would strengthen the country’s economy and generate more jobs for citizens.

He said there was nothing wrong with the president’s recent call Muhammadu Buhari for a downward revision of the nation’s debt portfolio, due to the current revenue challenges facing the country.

“President Buhari’s administration is to be commended for the use of the borrowed money. It used these funds more for infrastructure development than for consumption, which contributed to economic growth.

“Clearly, it would be nice not to borrow, but it would also be good to redirect the funds we have to the regenerative sectors of our economy.

“In reality, we have an income problem that has not allowed us to build an economy that meets the aspirations of Nigerians.

“I don’t think there is anything wrong with the president, as a major voice in international affairs, especially in Africa and the black world, calling for a review of management and arrangements debt”, he said.

The NGF chairman also called for a comprehensive approach that would complement the national security response strategy by addressing the lingering security challenges facing the nation.

The ultimate challenge, he said, was that we had to tackle insecurity not just state by state.

“Security is an ongoing issue on the agenda of our state and as governor. Ekiti is a state located on the outer border of northern and southern Nigeria, to the right of Kogi and Kwara states.

“Some of the things that are happening in the northern states impact our security in Ekiti state just like all the other states around us and clearly.

“I have argued in the past that there is an inexplicable link between the fallout from insurgency and banditry in the northeast and northwest and the kidnappings we are seeing in parts of the south.

“Our duty is to make sure that we protect the citizens under our watch and we have tried to do so consistently.

“We have set up joint security initiatives between traditional security institutions like the police and the military, as well as our own local security base.

“The fight against insecurity must go through a comprehensive approach that will complement the national security response strategy and reduce this scourge that we know in the country”, he said.

Lending his voice to the new Oil Industry Law, the NGF Chairman said: “We do not believe that the Ministry of Finance (incorporated) and the Ministry of Petroleum Resources should be the sole owners of the company. from the Petroleum Law. .

“We believe that the entire petroleum institution is the product of the federation and not just of the federal government.

“And, we have suggested that the only body that belongs to the federal, state and local governments be the Nigerian Sovereign Investment Authority of which we (the states) are all shareholders.

“And, if it’s held in trust by the AMF, then we’re much more comfortable seeing it as a federation business rather than a federal government business.

“The second concern we expressed concerns the exhaustion of the federation’s account by the various percentages that have been reserved for border states and communities receiving the petroleum product. Without prejudice to what the host communities deserve ”, he said.

In the general election of 2023, Fayemi predicted the victory of the APC.

He said: “conflicts will always happen. The APC is a big Party with different tendencies and there will be arguments for and against.

“We are very confident that this party will produce the next government of this country in 2023, but before we get there, we are focusing more on the country now.

“The Party is more interested in the stability and security of Nigeria. What’s going on internally is something we’ll be fixing internally,” he said.

Source link

Nigeria’s problematic, confusing tax system – Govs

• Said NGF awaiting the decision of the Supreme Court

GOVERNOR Kayode Fayemi of Ekiti State said yesterday that the Nigerian Governors Forum, NGF, is awaiting the Supreme Court ruling on value added tax, VAT and collection.

Fayemi, who is also the chairman of the NGF, said Nigeria’s tax system was not only problematic, but also confusing and needed special attention.

Speaking in an interview with Arise Television yesterday, Fayemi said governors are awaiting the outcome of the case instituted by some state governors.

He said the Governors’ Forum is currently reviewing the issues and consulting on the implications of the fundraising for state governments.

The governor said: “For us at NGF this is an issue that we are looking at both legally and politically. We ask our experts to help us consider the implications for states.

“Our point of view is that the Supreme Court should expedite the decision on this matter, so that we are clear on who should be in charge of VAT – whether it is FIRS or the States. We will wait for the Supreme Court to rule on this.

“The important thing is that our tax system is problematic, confusing and contradictory, and we need to do a lot more to start clarifying things, so that we can have more efficient ways of collecting taxes.”

Regarding President Muhammadu Buhari’s calls for debt cancellation at the United Nations General Assembly, Fayemi said the federal government borrowing was for reasons and was for specific loans.

He said: “Nigeria borrows for specific reasons. Most of what we borrow is specific. If you look at what we borrow, you will see that these are specific and very attractive loans.

Noting that the borrowing was in line with World Bank and IMF standards, the NGF chairman said, “On the other hand, you have the Chinese infrastructure loans.

We can now ask ourselves if we should be using 97% of the debt service. It is a debate that we can have.

“The problem is, why are you borrowing. Do you borrow for consumption or for infrastructure development? Buhari is to be commended for this.

“The question is, we have income problems… borrowing is a win-win situation for our country and our economy.”

Recall that the Southern Governors Forum had supported the collection of VAT by the states, and not by the Federal Inland Revenue Service, FIRS.

Recall also that the states of Rivers and Lagos had promulgated laws for the collection of VAT, as the Court of Appeal had ordered that the states maintain the status quo, pending the decision of an appeal filed by the FIRS.

The Rivers State government also asked the Supreme Court to overturn the Court of Appeal’s order to allow states to continue to collect the tax, known as consumption tax.

Breaking News Nigeria

Source link

Ken Henry denounces the “unsuitable” tax system

“All the other tax bases of the federation are not reliable from the tax point of view,” he declared.

He said the GST base is eroding, fuel excise taxes are threatened due to the electrification of the vehicle fleet, stamp duties are volatile, and the collection of fuel taxes is under threat. Corporate tax depends on the price of iron ore.


He wants the government to rely less on traditionally levied bases by the Commonwealth, such as income tax, and focus more on royalties typically levied by the state on consumption, road use, land. and other natural resources.

“In many ways, we find ourselves where we were in the decades following World War II. It was a period characterized by unruly, partially funded, public spending with heavy reliance on fiscal brakes that punished innovation, enterprise, and effort, distorted the savings model, and rewarded tax avoidance and evasion, ”said Dr Henry.

“Counting on the tax brake to do its magic in the face of a mountain of public debt is understandable, but we must also understand that it is dangerous.

Failure to engage in reform would hurt economic growth, deprive people of opportunities, reduce available services and continue to generate intergenerational inequalities, he said.

Australian Banking Association chief executive and former Queensland Premier Anna Bligh, who was also speaking at the event, warned that there were difficult political realities to overcome for reform to be achieved.

“You are always going to have (…) a prime minister or a prime minister or several who have very little political capital even if they are far from an election,” Ms. Bligh said. “Their willingness to embark on something big or brave will always be limited. “

She said it was essential to consider mechanisms to remove it from political cycles and also urged to reconsider extending the federal government’s three-year term to four years. It would require a referendum. “If you want long-term thinking, even an extra 12 months helps,” she said.


Deputy Treasury Secretary Maryanne Mrakovcic said successive governments have understood the problems of the fiscal restraint and acted to reduce the burden on workers.

“This is why over the past 30 years, as taxes have risen as a percentage of GDP due to rising average tax rates, successive governments have returned the tax burden to Australians in the form of tax cuts. ‘taxes.

“And this is a political practice pursued by the government through its recent personal income tax plan.”

The Morning Edition newsletter is our guide to the most important and interesting stories, analysis and ideas of the day. Register here.

Source link

To build back better, we need a tax system where everyone pays their fair share

Democrats in Congress craft details of investments in American families and businesses that will make America more competitive, grow the economy, raise American families and communities left behind for too long, and tackle the crisis of climate change.

One of the key questions at the heart of negotiations is how to pay them. The president presented a sensible tax reform proposal that not only pays for these investments, but also corrects the excesses of Trump’s tax cuts and brings our tax code in line with American values ​​- a tax system that rewards hard work, not just wealth and ensures that those at the top and the companies pay their fair share.

With these reforms on the table, corporate lobbyists have started to proliferate. They fill the airwaves – and the ears of my former colleagues – with lies.

I urge my colleagues to see lobbying for what it is and apply a few simple tests:

First, do you want a tax system where the super rich don’t pay their fair share and never have to pay tax on their immense wealth?

Second, do you want a tax system that allows companies to hide their profits offshore and pay lower effective rates than middle-class Americans?

Third, do you want a tax system that allows the rich and businesses to avoid paying the taxes they owe?

The answer to each of these questions should be simple: no.

President BidenJoe Biden Biden Announces Arts and Humanities Endowment Appointments Biden and Xi Agree to Honor Taiwan On The Money Agreement – Presented by NRHC – Democrats Break Rubicon Debt Ceiling PLUS proposed common sense measures that fit the brand and fund these key investments in America’s future – and without raising taxes by a single dime on anyone who earns less than $ 400,000 a year and Americans were agree with him.

It is time to close the tax loopholes that allow the richest Americans to avoid taxes. It finally means ending the deferred interest loophole. It means closing the loophole that allows some of this country’s greatest fortunes to escape taxes entirely, and it can be done while fully protecting the wealth accumulated in small businesses.

This is where you can see Washington’s cynicism making its way. There are those who say you can’t tax the wealthiest Americans without hurting family farms. It’s just insane. We can get millionaires and billionaires to pay their fair share and fully protect real family farms. The richest Americans must not be allowed to hide behind family farms that are fully protected by these reforms.

When it comes to corporate tax, we can raise the rate – and we still have the lowest corporate tax rate this country has seen since WWII and until President TrumpDonald Trump Biden Announces On The Money Arts & Humanities Endowment Nominations – Presented By NRHC – Democrats Break Debt Ceiling Rubicon Trump Backs Diehl For Massachusetts Governor, Slams ‘RINO’ Baker MOREgiant corporate gift. And we can reform the tax code so that it no longer encourages our biggest companies to shift their profits and jobs overseas. Once again, lobbyists will complain. After all, it will require their corporate clients to contribute more.

But let’s be clear: these reforms and investments will make the United States more competitive, not less. He will address the climate change crisis where so many business leaders have spoken.

Opposition from lobbyists only puts short-term corporate profit ahead of the long-term economic health of this country.

Finally, when it comes to law enforcement, President Biden strives to secure the resources and information he needs from the IRS to ensure fair application of the law. Typical workers pay what they owe under the law. There is a 99% compliance rate on salaries. Ninety-nine percent. The same is not true for the super rich and the biggest corporations. It is much easier for the wealthy to hide their income, and at this time the IRS cannot keep up. The president is fighting to give the IRS the resources to take on the armies of lawyers and accountants who are helping businesses and the wealthy avoid paying the taxes they owe. My former colleagues should ignore the lobbyists who will try to argue that simply getting the rich to pay the taxes they owe will hurt typical Americans who already follow the law.

In order to truly build back better, we need a tax system where businesses and the rich pay their fair share. It’s that simple.

Harry reidHarry Mason Reid Biden’s agenda looms large in Virginia governor’s race is the former majority leader in the Senate.

Source link