Tax Rascal

Detroit Politico’s Five-Figure Five-Finger Tax Discount was a “Clerical Error”

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It’s happened to everyone: one day, your property taxes drop from $1400 a year to $50, and you, well, you figure it’s not a problem. Or if it is a problem, it’s somebody else’s problem.

Detroit City Council member JoAnn Watson has landed in hot water thanks to revalations that she saved a sweet $12,000 over the last nine years. A flurry of media attention forced her to explain exactly what was going on, and a thorough investigation (it lasted about a week). She didn’t exactly get a positive reception when she explained herself:

If anyone here in this circle received a bill and you’ve argued to pay more, just raise your hand.

That’s fine, but if I lived …

Vicious Cycle

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Coming soon: you can use your $8,000 new-home tax credit to make a down payment on your new home.

We’re now several years into a credit crisis caused by people buying homes they couldn’t really afford. And the response? Creating a new incentive to buy more homes — and to borrow money to do it. There is no way this will end up moving prices to an appropriate level, and no way it’s going to make the finance and housing industries change their behavior.

In fact, the main result is to make things even worse: in the past, the government just made borrowing cheaper (through the income tax deduction, which made interest cheaper than other kinds of interest, and … Read more...

Obama’s New Plan: Bring Our Money Home?

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Barack Obama has an exciting new plan to raise revenue: make companies pay taxes on the money they earn. Okay, so it’s not new, and it’s not that exciting. But it is a little more complicated than that.

Basically, the current plan is designed to tax income earned overseas, whether or not it’s returned to the US. Right now, if Apple sells an iPod in Italy, they pay Italian taxes on their Italian income. As long as they keep the money in Italy, they don’t have to pay US income taxes on it.

  • The case for the plan is that it closes a giant loophole in the current tax scheme. And it’s not as if companies will just stop


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