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This site is a member of WebRing. To browse visit here. Wednesday, November 10, 2004 How to manage money President Bush recently signed into law the American Jobs Creation Act of 2004. Some of its provisions didn't get much publicity, in the greater glare of the campaign, which was probably intended. One of them is described in a press release from Jackson Hewitt, the tax people, through PRNewsWire. Prior to the enactment of the American Jobs Creation Act (AJCA) of 2004, taxpayers generally could deduct only income, real estate, and certain personal property taxes imposed by their state or locality as an itemized deduction on Schedule A. With AJCA, taxpayers once again have the option to deduct their state and local general sales and use tax as an itemized deduction on their 2004 and 2005 returns. This is good news for taxpayers, especially those living in a state without a state income tax or with low income tax, such as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Taxpayers living in the other states also benefit because they too can elect to deduct their state and local sales tax in lieu of their state and local income tax . . .But here's the stinger: . . . IF this election provides them with a greater benefit.(Emphasis mine).In other words, if you don't live in a no-income-tax state (most of which are "Red" states) or you didn't accrue a large enough total of sales tax expense (through the purchase of expensive consumer goods), this provision of the AJCA does you no good whatever. Jackson Hewitt suggests that, "this new provision just might spur some end of year spending to take advantage of this tax benefit on one's 2004 tax return." Indeed. Consumers who can purchase high-ticket items such as luxury vehicles, boats, jewelry, airplanes, and designer furniture and clothing get to deduct the entire amount of the sales tax from their income if they are living in one of the no-income-tax states, or if the total sales tax is larger than their itemized deductible. The average American living in a no-income-tax state will also benefit. But that large segment of people with middle-class incomes living in income-tax states will have to make do with their present standard or itemized deductible if they can't afford to buy expensive goodies. And for most people, there won't be any advantage in itemizing their deductibles because the standard deductible will be greater. So again, it is mostly higher income-earners who get the tax break. But it's worse than that, in the long run. Calls for a flat federal income tax (or a federal sales tax in place of the income tax) have met with little enthusiasm. This change in the tax code is an end run, I believe, around tax reform measures that might run into roadblocks on the federal level. Or perhaps it is a fallback measure in case major tax reform is proposed, and fails to win approval. In either case, what is being done is to hide tax reform in a less controversial location, the states, and in a way which can be done incrementally, state by state, with whatever incentive best suits each state. Objections to reducing state income taxes will surely be that these states depend on the tax for their budget obligations. But if states switch to an increased sales tax instead, consumers can deduct those increased taxes from their federally-taxed income, and thereby reduce their federal tax obligation. Remember that the theocrats' long-term intention is to eliminate the federal government, and to shift civil government to the state, and ultimately the local, level. Eliminating the federal income tax is a concurrent goal. The federal tax changes in AJCA are a first step. posted by Liz @ 8:35 PM | The template is set to display 10 posts. To see all the posts for this month, click on the month name in the Archive section RSS Feed PERSONAL Send email toliz at life-as-a-spectator-sport.com Home I'm a mother, grandmother, a computer professional, Democrat, Christian. I welcome politely worded comments and email, my spam filter throws the rest away, so don't bother to flame me WHY 'LIFE AS A SPECTATOR SPORT' "If you're lucky not to live in the gutters of a slum, but still can't afford to take vacations in the Alps, you're part of that enormous middle class who lives life through the medium of the television, further separated from "real" life by air conditioner, by automobile, by dishwasher, microwave and ice-in-the-door refrigerator, by automatic washer and dryer, and all the other appliances and conveniences that make it possible for America to live life at second hand. I'm not sure why Americans decided that televised drama was better than the real thing, that cardboard microwave food containers were an adequate substitute for real dishes, and their contents for real food, or that cooking, dishwashing and face-to-face conversation wasn't worth the effort and time it required. Someone fed this nation a plastic crate of out-of-season tomatoes and told us it was life and we took them at their word, and we're so much the poorer for it that it's hard to know where to start to list the shortcomings." I wrote this a couple of years ago, but I have to admit it's much less amusing than I thought it would be to see the artifical construct falling apart. THE NON-ELECTRIC HOME Cleaning, 1 Cleaning, 2 Cleaning, 3 KNITTING BLOGS Extravayarnza Knitting Heretic Mind of Winter Pie Knits Persistent Illusion See Eunny Knit The Keyboard Biologist Taleweaver's Ramblings TECHnitting Wendy Knits FINISHED PROJECTS -------FINISHED IN 2006------- Peruvian Cap Tutti-Frutti Socks Shelley's Socks Carol's Socks -------FINISHED IN 2007------- Chain Link Socks Baby Surprise Jacket Valerie & Friend Baby Bonnet Rainbow Baby Socks Girls Pixie Hood Mitred Square Heart Red & White Socks Coffee Cup Pot Holder Nubbins Dishcloth Garterlac Dishcloth Suede Booties Kate's Socks Norwegian Sweet Baby Cap Half Thumbless Mittens Red Mittens for Akkol -------FINISHED IN 2008------- SELF-RELIANCE AND THE FUTURE -- Blogs and websites -- Causubon's Book Club Orlov Food Storage Made Easy From the Wilderness In the Wake Listening to Katrina Survival Topics The Modern Homestead The Oil Drum Notes from a Hillside Farm -- Mailing Lists -- 12vdc Power Living on the Land Rainwater Refrigeration Alternatives Old Ways of Living POLITICAL BLOGS and SITES The political sites have moved BOOKS I'M READING How to Grow More Vegetables, etc. Small Scale Grain Raising ARCHIVES February 2009 January 2009 December 2008 November 2008 October 2008 August 2008 July 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 June 2004 May 2004 April 2004 March 2004 February 2004 January 2004 December 2003 November 2003 October 2003 September 2003 August 2003 July 2003 June 2003 May 2003 April 2003 March 2003 February 2003 January 2003 December 2002 November 2002 October 2002 September 2002 August 2002 July 2002 June 2002 May 2002 April 2002 March 2002 February 2002 Feedjit Live Blog Stats
President Bush recently signed into law the American Jobs Creation Act of 2004. Some of its provisions didn't get much publicity, in the greater glare of the campaign, which was probably intended. One of them is described in a press release from Jackson Hewitt, the tax people, through PRNewsWire. Prior to the enactment of the American Jobs Creation Act (AJCA) of 2004, taxpayers generally could deduct only income, real estate, and certain personal property taxes imposed by their state or locality as an itemized deduction on Schedule A. With AJCA, taxpayers once again have the option to deduct their state and local general sales and use tax as an itemized deduction on their 2004 and 2005 returns. This is good news for taxpayers, especially those living in a state without a state income tax or with low income tax, such as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Taxpayers living in the other states also benefit because they too can elect to deduct their state and local sales tax in lieu of their state and local income tax . . .But here's the stinger: . . . IF this election provides them with a greater benefit.(Emphasis mine).In other words, if you don't live in a no-income-tax state (most of which are "Red" states) or you didn't accrue a large enough total of sales tax expense (through the purchase of expensive consumer goods), this provision of the AJCA does you no good whatever. Jackson Hewitt suggests that, "this new provision just might spur some end of year spending to take advantage of this tax benefit on one's 2004 tax return." Indeed. Consumers who can purchase high-ticket items such as luxury vehicles, boats, jewelry, airplanes, and designer furniture and clothing get to deduct the entire amount of the sales tax from their income if they are living in one of the no-income-tax states, or if the total sales tax is larger than their itemized deductible. The average American living in a no-income-tax state will also benefit. But that large segment of people with middle-class incomes living in income-tax states will have to make do with their present standard or itemized deductible if they can't afford to buy expensive goodies. And for most people, there won't be any advantage in itemizing their deductibles because the standard deductible will be greater. So again, it is mostly higher income-earners who get the tax break. But it's worse than that, in the long run. Calls for a flat federal income tax (or a federal sales tax in place of the income tax) have met with little enthusiasm. This change in the tax code is an end run, I believe, around tax reform measures that might run into roadblocks on the federal level. Or perhaps it is a fallback measure in case major tax reform is proposed, and fails to win approval. In either case, what is being done is to hide tax reform in a less controversial location, the states, and in a way which can be done incrementally, state by state, with whatever incentive best suits each state. Objections to reducing state income taxes will surely be that these states depend on the tax for their budget obligations. But if states switch to an increased sales tax instead, consumers can deduct those increased taxes from their federally-taxed income, and thereby reduce their federal tax obligation. Remember that the theocrats' long-term intention is to eliminate the federal government, and to shift civil government to the state, and ultimately the local, level. Eliminating the federal income tax is a concurrent goal. The federal tax changes in AJCA are a first step.
Prior to the enactment of the American Jobs Creation Act (AJCA) of 2004, taxpayers generally could deduct only income, real estate, and certain personal property taxes imposed by their state or locality as an itemized deduction on Schedule A. With AJCA, taxpayers once again have the option to deduct their state and local general sales and use tax as an itemized deduction on their 2004 and 2005 returns. This is good news for taxpayers, especially those living in a state without a state income tax or with low income tax, such as Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Taxpayers living in the other states also benefit because they too can elect to deduct their state and local sales tax in lieu of their state and local income tax . . .
. . . IF this election provides them with a greater benefit.(Emphasis mine).
The template is set to display 10 posts. To see all the posts for this month, click on the month name in the Archive section
RSS Feed
PERSONAL
WHY 'LIFE AS A SPECTATOR SPORT'
"If you're lucky not to live in the gutters of a slum, but still can't afford to take vacations in the Alps, you're part of that enormous middle class who lives life through the medium of the television, further separated from "real" life by air conditioner, by automobile, by dishwasher, microwave and ice-in-the-door refrigerator, by automatic washer and dryer, and all the other appliances and conveniences that make it possible for America to live life at second hand. I'm not sure why Americans decided that televised drama was better than the real thing, that cardboard microwave food containers were an adequate substitute for real dishes, and their contents for real food, or that cooking, dishwashing and face-to-face conversation wasn't worth the effort and time it required. Someone fed this nation a plastic crate of out-of-season tomatoes and told us it was life and we took them at their word, and we're so much the poorer for it that it's hard to know where to start to list the shortcomings." I wrote this a couple of years ago, but I have to admit it's much less amusing than I thought it would be to see the artifical construct falling apart.
THE NON-ELECTRIC HOME
Cleaning, 1 Cleaning, 2 Cleaning, 3
KNITTING BLOGS
Extravayarnza Knitting Heretic Mind of Winter Pie Knits Persistent Illusion See Eunny Knit The Keyboard Biologist Taleweaver's Ramblings TECHnitting Wendy Knits
FINISHED PROJECTS
SELF-RELIANCE AND THE FUTURE
POLITICAL BLOGS and SITES
BOOKS I'M READING
How to Grow More Vegetables, etc. Small Scale Grain Raising
ARCHIVES
February 2009 January 2009 December 2008 November 2008 October 2008 August 2008 July 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 June 2004 May 2004 April 2004 March 2004 February 2004 January 2004 December 2003 November 2003 October 2003 September 2003 August 2003 July 2003 June 2003 May 2003 April 2003 March 2003 February 2003 January 2003 December 2002 November 2002 October 2002 September 2002 August 2002 July 2002 June 2002 May 2002 April 2002 March 2002 February 2002
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