Tax News & Views Hitting Up the Wealthy Roundup

March 22, 2021

Biden Determined to Tax Rich After Windfalls During Crisis - Nancy Cook, Bloomberg

"President Joe Biden’s economic team at the White House is determined to make good on his campaign pledge to raise taxes on the rich, emboldened by mounting data showing how well America’s wealthy did financially during the pandemic."

Uber Driver Tax Reporting - Lee Shepard, Tax Notes

"It’s easier to ask forgiveness than permission. That was the motto of Uber as it cut a swath through regulated taxi services worldwide, with its unregulated, cheap, and appealing service that is heavily subsidized by long-suffering investors. Politicians who were used to protecting the interests of incumbents had to respond to the wishes of enthusiastic customers. But now the tables have turned. Instead of laws being applied as written, new rules are being made that put drivers and other gig workers in a gray zone between employment and service provision."

Reviving Estate Tax Rules Gives Opening to Take Aim at the Rich - Allyson Versprille, Bloomberg

Estate planners are keeping a close eye on the Treasury Department’s agenda, anticipating the possible revival of several regulatory projects shelved by the Trump administration.

New Mexico Tax Department Extends Tax Filing, Payment Deadline - Tax Notes

The New Mexico Taxation and Revenue Department announced that the deadline for filing and paying 2020 state personal income taxes has been extended to May 17 to match the extension for federal taxes; taxpayers who have already filed their returns may need to file amended state and federal returns to utilize the unemployment exclusion included in the recently enacted American Rescue Plan Act of 2021 (P.L. 117-2); the department will soon publish a bulletin providing further guidance.

The Time for Financial Transaction Taxes Is Now - James Henry, David Hillman, Nicholas Shaxson, Tax Notes ($)

New battles with global finance are brewing, as a range of countries, states, and coalitions now push to enact new financial transaction taxes (FTTs), an old, honorable, effective, and progressive kind of tax that is fast regaining popularity around the world as governments scramble to pay for the costs of the COVID pandemic. Powerful new initiatives in the United States and the European Union show rising momentum for new FTTs.

High-Income Tax Avoidance Far Larger Than Thought, New Paper Estimates - Rich Rubin, Wall Street Journal

"The top sliver of high-income Americans dodge significantly more in income taxes than the Internal Revenue Service’s methods had previously assumed, according to forthcoming estimates from IRS researchers and academic economists. Overall, the paper estimates that the top 1% of households fail to report about 21% of their income, with 6 percentage points of that due to sophisticated strategies that random audits don’t detect. For the top 0.1%, unreported income may be nearly twice as large as conventional IRS methodologies would suggest, the researchers wrote."

IRS Small Business Division Head Retiring - Nathan Richman, Tax Notes ($)

IRS Small Business/Self-Employed Division Commissioner Eric Hylton will be retiring on March 26, according to an announcement from the agency’s Executive Resources Board.

On this day in 1765 the British government approved the Stamp Act on American colonies to pay off debts and defend the colonies won from the French in the Seven Years’ War (1756-1763).

"The legislation levied a direct tax on all materials printed for commercial and legal use in the colonies, from newspapers and pamphlets to playing cards and dice."

The Act angered the colonists and they drafted the “Declaration of Rights and Grievances,” that railed against the repressive policies of the British empire. The Act was more costly to enforce than repeal so the British government rescinded the law the following year.  

Lastly, only eight states so far have not followed IRS's lead in extending tax deadline.

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