Tax Analysts®Tax Analysts®

My Subscriptions:

David Cay Johnston

Tax Analysts Columnist

 

All Posts by David Cay Johnston

July 18, 2013 - 1:31 PM EDT
More Tax Dollars There, Not Here
To paraphrase Mel Brooks, it's good to be a multinational corporation. American corporations increased their use of tax credits by a whopping 25 percent in 2010, helping drive down their effective tax rates to less than half the posted 35 percent rate. A Government Accountability Office study says... [Read More]
June 27, 2013 - 12:47 PM EDT
Revelations Show Lois Lerner Blew It
The revelation that the entire IRS “scandal” was a setup based on intentionally skewed information has another angle to it – one that adds to the reasons Lois G. Lerner should be fired posthaste since she refuses to resign. For those who may have missed the news, it turns out that the IRS Determ... [Read More]
May 17, 2013 - 11:31 AM EDT
Lois Lerner Must Resign
Why is Lois G. Lerner still on the taxpayer's payroll? Lerner is the director of exempt organizations whose failures are at the heart of the furor over indefensible criteria for selecting 501(c)(4) applicants for scrutiny. The Treasury Inspector General for Tax Administration's report makes her b... [Read More]
May 9, 2013 - 5:24 PM EDT
No Bang for the Buck
New York State spent $2.8 billion on state and local tax breaks for businesses in the five years 2007 through 2011, State Comptroller Thomas DiNapoli said Tuesday in a new report. DiNapoli says that money generated more than a million jobs at an average cost of about $2,700. That sounds like a pret... [Read More]
May 3, 2013 - 12:59 PM EDT
Subsidies – Good News and Not So Good
First, the good news, at least in New York state: Giveaways of state tax dollars to businesses, from retail Hollywood movies, are finally being challenged by a Republican politician. Seeing the party of business raise this issue is good news indeed. A new state law that took effect May 1 is suppose... [Read More]
April 25, 2013 - 4:04 PM EDT
Taxpayers Subsidize Rich Anti-Taxers
When it comes to picking taxpayer pockets, few organizations display as much chutzpah as the American Legislative Exchange Council. It is a rich person's anti-tax lobby, hating paying the price of civilization and in love with the idea of weak tax law enforcement. Now taxpayers, at least in South... [Read More]
April 19, 2013 - 2:10 PM EDT
IRS To Close for Five Days
The IRS told employees Friday that it will shut down entirely for five days because of the across-the-board spending cuts mandated by Congress. All IRS employees received an email Friday that cited five dates and said: All public-facing operations will be closed on these dates, including our toll-f... [Read More]
April 18, 2013 - 3:07 PM EDT
Focused Sunlight
The Sunlight Foundation did a real public service this week in an excellent series of posts focusing on who is lobbying Congress for tax favors. The most fascinating is an interactive visualization connecting 2,221 organizations that have spent $773 million lobbying for 1,454 bills, which you can s... [Read More]
April 11, 2013 - 12:00 PM EDT
Promises, Promises
It's hard to let go of a moneymaker, even a bad one. Think about the cigarette industry. Or the gun industry, whose sales spike after every school massacre. Or that abominable anti-family bloody nose the alternative minimum tax. In 2007 Senator Barack Obama, through a spokeswoman, called the AMT
April 4, 2013 - 6:27 PM EDT
Unkind to Charity
There's a new whipping boy on Capitol Hill and it's not the bankers who brought down the economy, the fossil fuel companies that are heating up the planet, or the gun lobby that has figured out how to increase sales every time there's a mass shooting of schoolchildren. The new black hats – dono... [Read More]
March 29, 2013 - 2:36 PM EDT
Spam and Taxes
Berkeley is famous for student protests against the war in Vietnam and the draft. There was the 1964 Free Speech Movement and, briefly, the filthy speech movement whose motto, drawing on the name of the University of California president, created an obscene acronym: Freedom Under Clark Kerr. Now th... [Read More]
March 21, 2013 - 1:14 PM EDT
Level Playing Fields Under Attack
Leveling the playing field is a tax principle that anyone who expects to have his or her views respected should always respect. Sadly, some of the people who make their living stirring up the ill-informed with economic and legal nonsense are out fighting to tilt the playing field in favor of their... [Read More]
March 7, 2013 - 3:04 PM EST
Intuit’s Unethical Pitch to Journalists
A marketing partner of Intuit, the maker of TurboTax software, is trying to lure journalists into unethical behavior. I'm surprised that Intuit approved this deal. It makes fine products that do not need promotion through sleazy and unethical marketing ploys. The first time that the marketing depa... [Read More]
February 28, 2013 - 1:38 PM EST
Good News for Investors and Taxpayers
Discerning what is in an annual report (10-k), proxy (14a) or a prospectus should not require learning a dialect that could properly be called American English obfuscata. Not just investors use those and other filings required by the Securities and Exchange Commission. Tax policy wonks, government... [Read More]
February 21, 2013 - 1:25 PM EST
What’s The Matter with New Jersey?
You might think that voters hate big spenders and love tax cutters, especially if you get your news from Fox News Channel or its sister, the Wall Street Journal or listen to the latest sound bytes from Speaker John Boehner. Spending is the No. 1 problem, according to Capitol Hill Republican leaders... [Read More]
February 14, 2013 - 11:59 AM EST
“Particularly Devastating”
Imagine that just before Thanksgiving a major retailer, say Nordstrom or Wal-Mart, announced it would furlough 10 percent of its sales, collections and accounts payable staffs. The stock would tank. Indeed, it is hard to imagine the CEO or the board of directors keeping their jobs as customers swit... [Read More]
February 7, 2013 - 2:04 PM EST
Eroding the Fisc
Bristol-Myers Squibb, Pfizer, Astra Zeneca and other multinational drug companies have been bragging to stock market touts – who call themselves analysts -- about using “legal restructurings” to reduce their corporate income taxes. Transcripts of the latest quarterly chats in which CEOs and CFOs... [Read More]
January 31, 2013 - 1:25 PM EST
Tax To Defend a Tax Haven
Mounting worldwide criticism of its parasitic behavior and the damage it causes, is prompting one of the planet's oldest tax havens to take action. The response is not to develop a real economy and eschew tax fraud parasitism, however. Instead, taxpayers on the Isle of Jersey will be forced to giv... [Read More]
January 24, 2013 - 1:24 PM EST
Missing Half the Cash
The front page of Wednesday's Wall Street Journal carried a tax story rich with promise, but like so much of what appears in the mainstream media these days short on reporting. For starters, there were serious factual problems with the lede: There's a funny thing about the estimated $1.7 trillion... [Read More]
January 17, 2013 - 1:40 PM EST
Foundering Tax Avoidance
What motivated Royal Dutch Shell to risk 40-foot Alaskan winter seas in towing a giant white circular drilling rig named the Kulluk south toward Washington last month? Tax avoidance. The Kulluk broke loose after the tow ship's engine failed and ran aground, filled with 150,000 gallons of diesel fu... [Read More]
June 28, 2011 - 2:48 PM EDT
Tax.com Helps Win One for Taxpayers
Taxpayers just won an important round against the monopolists in California, defeating a scheme to impose a fake tax on captive customers. A lot of hard work by lawyers brought forth the real issues in this scheme, but in the end it was readers of Tax Analysts journalism who made the difference, ju... [Read More]
June 22, 2011 - 5:41 PM EDT
Lawsuit Applies Brakes to $250 Million Tax Giveaway
The planned $250 million giveaway over ten years to a British billionaire for an annual Formula One race in Texas is being done through a host of actions that violate state law, a lawsuit filed June 22 in Travis County District Court asserts. The lawsuit says its purpose is to "prevent the unlawful... [Read More]
June 20, 2011 - 10:48 AM EDT
Close Encounters of the Tax Myth Kind
Two men approached me in the hotel hallway at a Florida convention the other day, eager to talk tax policy. The difference in their approaches to the issues highlights a crucial aspect of our national tax policy debate. So, too, do a conversation that a former IRS auditor had the same day with a fo... [Read More]
June 6, 2011 - 10:47 AM EDT
Dedicated Taxes, Deceptions, and Driving Fast
One of the most curious themes in tax policy is the steady attack on the best-funded and most stable government programs while taxpayer funds are diverted to risky commercial ventures unlikely to succeed. These troubling developments are related. They reveal how we have lost faith in the future and... [Read More]
May 9, 2011 - 9:31 AM EDT
Ryan's $34 Trillion Tax Folly
If repairing your car cost 18 percent of your income, would you buy a new car? Of course you would. Now imagine that your mechanic tried to persuade you to keep the jalopy with a clever tax argument: The costs of your annual car tax and registration would decline over time, saving you money. Keep t... [Read More]
April 25, 2011 - 11:02 AM EDT
Return to Sherwood Forest
Thank goodness for House Budget Committee Chair Paul Ryan, R-Wis. Because of the budget plan put forward by the Wisconsin Republican, we are finally going to have a tax policy debate that everyday Americans can understand. Unlike all those wonky details in most proposals that make millions of eyes... [Read More]
April 13, 2011 - 11:05 AM EDT
Taxes and Supply Side Economics, an Utter Failure
Today about 40 alternative newspapers are running my piece on nine tax facts hardly anyone knows, some of them with charts and graphics. Here is a link to the site of the lead paper that commissioned this project.... [Read More]
April 11, 2011 - 10:15 AM EDT
Two for Uncle Sam, One for Shareholders: The 71% NYTimes Co. Tax Rate
Just as the individual income tax falls more heavily on the affluent than the super-rich, so too does the corporate income tax. The giants of American business pay at lower effective cash rates than much smaller corporations. That regressivity is an important aspect of the general trend in U.S. tax... [Read More]
March 31, 2011 - 10:36 AM EDT
Oregon Lottery Pays Big, Corporate Tax Not So Much
The long-running drive in America to push the burden of taxes down the income ladder has reached a new milestone in Oregon, which sends a troubling message for where our country's public finances are headed. Oregon now gets substantially more revenue from state-sponsored gambling than from its corp... [Read More]
March 28, 2011 - 11:27 AM EDT
Tax Revenues: Awful, Any Way You Look at the Numbers
When society is in the midst of major economic and policy changes, the alligators in the swamp keep us focused on the immediate, so we don't notice as the water slowly rises or drains away. But we now have so much evidence showing the trend in tax revenues, and the incomes on which they rely, that... [Read More]
March 17, 2011 - 12:47 PM EDT
Tax Minutia Gone Crazy, Chapter 1099
Be careful on merchant discounts, they may cost you in higher income taxes. That is the implicit message in a new notice that TD Bank (the American subsidiary of Toronto Dominion) sent its customers today. The bank seems to have gone overboard in interpreting a regulation and even if their conclusi... [Read More]
March 7, 2011 - 1:20 PM EST
More on Taxpayer Burdens and Public Employee Pay
I have reviewed a study by the Center for Governmental Research, which runs the NYS Data Center, a Census Bureau designated affiliate that is the primary repository of economic and demographic data on New York State. The study is not online, though many others are. The study shows that public secto... [Read More]
March 3, 2011 - 8:43 AM EST
Breaking News: Tax Revenues Plummeted
We take you now to the official data for important news. Federal tax revenues in 2010 were much smaller than in 2000. Total individual income tax receipts fell 30 percent in real terms. Because the population kept growing, income taxes per capita plummeted. Individual income taxes came to just $2,9... [Read More]
March 1, 2011 - 8:08 PM EST
Warren Buffett Wants Your Taxes
Legendary Omaha investor Warren Buffett loves stuffing tax dollars into his pockets, which means that money never gets to schools, police, and libraries. Now it looks as if he is about to defeat an Oregon law intended to ensure taxes go for public purposes, not private gain. Events transpiring in S... [Read More]
February 24, 2011 - 12:16 PM EST
Really Bad Reporting in Wisconsin: Who 'Contributes' to Public Workers' Pensions?
When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees' fight over collective bargaining. Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the p... [Read More]
February 14, 2011 - 11:57 AM EST
Obama and the GOP: United Against the Working Poor
Who says bipartisanship is dead? On Capitol Hill, the Democrats and Republicans may no longer play cards and drink together, but that does not seem to stop them from working together to shift tax burdens down the income ladder even when it violates their promises on the campaign trail. Grover Norqu... [Read More]
February 10, 2011 - 9:04 AM EST
Reel Bad Tax Subsidy Policy
As states fire school teachers, nurses, home health aides and freeze or cut the pay of those still working, Oregon has taken a different tack under its emergency room doc turned governor, John Kitzhaber. As he begins his third, nonconsecutive term, the governor wants to increase giveaways to Hollyw... [Read More]
January 31, 2011 - 9:23 AM EST
Tax Refunds: More for Taxpayers, Less for Bankers
January 13 was an unusual day for tax policy in America, one of the few times that the poor, the desperate, and the innumerate won a victory over the increasingly powerful forces of corporate socialism in Washington. Only time -- and politics -- will tell whether this unusual victory is real or ill... [Read More]
January 17, 2011 - 9:32 AM EST
Making Tax Simple
Nina Olson, the national taxpayer advocate, told Congress in her annual report this year that we need fundamental tax reform, from cutting down on paperwork that absorbs 6.1 billion hours of work per year to upgrading collection systems that are hopelessly out of date. That 9 out of 10 individual t... [Read More]
January 15, 2011 - 4:37 PM EST
Ringing Up Taxpayer Savings
Governor Jerry Brown has ordered California state employees to turn in 48,000 cell phones in a symbolic move that has much more significance than is immediately evident. Brown's office says 40 percent of state employees have cell phones, 96,000 of them. His office says they cost taxpayers on averag... [Read More]
January 4, 2011 - 2:04 PM EST
On the Dole, Corporate Style
Imagine that Congress or your state legislature passed a law tomorrow saying everybody except you got a tax break because the politicians in both parties disliked your business. Even if the loser were Julian Assange's WikiLeaks, that law would be struck down by the courts on any number of grounds,... [Read More]
December 20, 2010 - 11:57 AM EST
Reasons, Rule and Riots: Our Societal Panic
On the surface, what's going on with tax policy in Washington right now seems crazy. A Democratic president whose enemies call him a socialist makes a deal with Republicans that sells out both his party and the very tax promises that won him the election, while Republicans leaders who say that debt... [Read More]
December 7, 2010 - 10:35 AM EST
An Imaginary Tax Californians May Be Forced to Pay
If Timothy Alan Simon has his way, California consumers will soon get nicked for a nonexistent tax, paying millions of dollars each year for a tax that will go not to finance government, but to enrich a monopoly. Simon is a securities lawyer whom Gov. Arnold Schwarzenegger (R) appointed to the Cali... [Read More]
December 6, 2010 - 6:28 AM EST
Can Loopholes Blow the Whistle on Whistleblowers?
Two court actions in Wisconsin, one of them now before the Seventh Circuit, open a rare window into corporate tax compliance. These actions raise questions about IRS competence in audits and reveal big holes in federal laws to encourage and protect whistleblowers. In an unusual move the day before... [Read More]
November 22, 2010 - 5:12 AM EST
Call Their Bluff, Mr. President
Will President Obama cave on yet another of his campaign promises, this time by giving in to Republican demands to extend all of the temporary Bush tax cuts? The president signaled this on his Asia trip when he said his principal concern was retaining the middle-income tax rates. Republican congres... [Read More]
November 2, 2010 - 9:23 AM EDT
Scary Wage Data II -- Social Security Changes Its Numbers
The Social Security Administration revised its 2009 wage data on Nov.1, resulting in new data showing smaller total compensation, a smaller average and a dramatic decline in wages paid to those whose salary and bonus totaled more than $50 million. The agency originally reported Oct. 15 that the 74... [Read More]
October 25, 2010 - 4:35 AM EDT
Scary New Wage Data
Now for some really scary breaking news, from the latest payroll tax data. Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very to... [Read More]
October 20, 2010 - 12:13 PM EDT
Measuring the Public Benefits From Taxes
Who benefits from the taxes we pay seldom gets examined, but two reports on the redistributive effects of taxes and transfers shed some revealing light on this issue. One report deals with the United States and the other with Canada. In America, taxes and transfers have a significant impact on inco... [Read More]
October 12, 2010 - 9:47 PM EDT
United In Our Delusion
Before reading on, please get out a pen or pencil so you can write down the answer to this question: What percentage of wealth in America is owned by the poorest 40 percent? Wealth, or net worth, means all property of value, from cash to art to stocks and bonds to homes, minus debts. Answer: I esti... [Read More]
September 30, 2010 - 12:50 PM EDT
Tax Rates for Top 400 Earners Fall as Income Soars
The incomes of the top 400 American households soared to a new record high in dollars and as a share of all income in 2007, while the income tax rates they paid fell to a record low, newly disclosed tax data show. In 2007 the top 400 taxpayers had an average income of $344.8 million, up 31 percent... [Read More]
September 24, 2010 - 8:02 PM EDT
So How Did the Bush Tax Cuts Work Out for the Economy?
The 2008 income tax data are now in, so we can assess the fulfillment of the Republican promise that tax cuts would produce widespread prosperity by looking at all the years of the George W. Bush presidency. Just as they did in 2000, the Republicans are running this year on an economic platform of... [Read More]
September 7, 2010 - 12:44 PM EDT
Ominous Signs in Latest California Property Assessments
The total real property assessment rolls fell this year in 13 of California's 15 most populous counties, new data show, as two trends merged with ominous long-term implications for the Golden State's ability to finance education and local government without major permanent cuts in services, new tax... [Read More]
August 30, 2010 - 9:12 AM EDT
Nanny Tax Evasion Grows Bigger and Bigger
The new healthcare law's requirement that companies report payments to vendors of $600 or more has become the latest weapon in the fight against tax complexity. Never mind that payments to individuals of this amount must be reported or that the information is already in accounting records. This is... [Read More]
July 19, 2010 - 9:30 AM EDT
U.S. Tax Rates: A Bargain Hunter's Dream?
To get a fresh look at the tax and deficit debates of 2010, let us recall for a moment 1979, the year when Saddam Hussein became dictator in Iraq, the Russians foolishly invaded Afghanistan, and our ally the Shah of Iran was overthrown in favor of the Ayatollah Khomeini. The most popular movie was... [Read More]
June 21, 2010 - 10:40 AM EDT
Master Limited Partnerships: Paying Other People's Taxes
Wouldn't it be fantastic if someone else paid your income taxes for you? Imagine all that extra money in your bank account. You could pay off your debts, save, and even splurge. Of course, for the person who paid your income taxes it would be awful. They would have to pay their own income taxes and... [Read More]