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Rep. Charles Rangel (D-NY) has announced that he will not step down as chairman of the House Ways and Means Committee, despite an ethics investigation into his personal finances.
Instead, according to his lawyer, Rangel will hire a “nationally renowned forensic accounting firm” to review and report his finances. After the review, the report will be released publicly, along with 20 years of tax returns.
Rangel has admitted he did not report $75,000 in rental income for a property in the Dominican Republic but claims that he didn’t understand the tax consequences because of language and cultural barriers. “Every time I thought I was getting somewhere, they’d start speaking Spanish,” Mr. Rangel said.
Really, Congressman Rangel? That’s the best you can offer? Cause $75,000 would buy you one heck of a translator… You could even tap the population of your own district - where more than half of the residents speak Spanish. Someone, somewhere could help you say:
Tengo que pagar mis impuestos.
The tax issue is particularly embarrassing for Rangel since his job as Chair of the Ways and Means Committee is to help create tax law.
Unpaid taxes may just be the tip of the iceberg: investigators are also looking into allegations that Rangel used government letterhead to promote an educational center named after him (what other kind is ther?) and other questionable financial deals.
The GOP has called for Rangel’s resignation from the Committee, claiming that Rangel’s insistence on keeping his seat shows that Democrats have “officially abandoned their promise to run the most ethical Congress in history and instead embraced the politics of corruption with open arms.”
For more commentary on Rangel, check out this Oxford University Press blog.
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Do you remember “sporks”? Those plastic spoon-meets-fork utensils that you can get at fast food restaurants?
I remember seeing my first spork at a Kentucky Fried Chicken. I ordered the cole slaw (I have cole slaw issues, am slightly addicted) and got a plastic sealed package of salt, pepper, napkin and spork. It was, I thought, genius.
But now, I realize that it’s also quite wasteful (sorry, KFC) because it’s a lot of plastic and trash (I don’t even use salt and pepper - on coleslaw? Horrors!). And of course, I’m not the only one. Many consumers are trying to limit the amount of disposable items that they use at fast food restaurants and take aways. And at least one country is taking it a step further: France has declared war on the spork.
I’m not kidding. The French legislature has introduced a plan to charge a €.90 (before yesterday, that was roughly $1.26 - no telling what the dollar will be worth today after yesterday’s spectacular market plunge) surtax on all plastic utensils, including the infamous spork. The idea is to encourage the purchase of fewer plastic utensils and more environmentally friendly products.
Will the tax work? Perhaps. Imposing taxes and fees on plastic bags has yielded mixed results. Some critics hail it as a success in places like Ireland, while trade groups argue that the impact has been minimal.
Tax policy has often been used as a means to encourage or discourage certain behaviors. Weaning the public off of the convenience of disposable items may be tough - arguably, consumers may not even notice the additional tax on their bills as the costs of food increases… What do you think? Would the extra tax be enough for you to put away the spork?
Technorati Tags:
tax, picnic tax, France
Prince Alois has confirmed that Liechtenstein is taking steps to correct what has been regarded by much of the world as intentional loopholes in country’s banking system. The announcement did not come as much of a surprise. Despite earlier vows to do nothing in light of the scandal, Prime Minister Otmar Hasler (pictured left) had indicated that reforms had already begun.
No immediate details were provided but most tax professionals (including myself) suspect that the reform will include a provision for the country to provide tax information about foreign account holders. In order to protect the bank’s clients, there will likely be some concession from foreign governments to agree to lesser penalties in exchange for the information.
The changes which have been discussed over the past eight years, have been accelerated by world reaction to the tax evasion scandal which came to light earlier this year. Banking and financial services account for almost 1/3 of Liechtenstein’s gross domestic product.
Many banks and financial services companies have used the country’s banking secrecy laws to woo foreign clients seeking privacy. The spectre of change is controversial to those companies and Hasler realizes this. So, he has been progressing slowly, hoping to work both with the financial services companies and the heads of foreign countries like Darling and Merkel.
Prince Aloise was vague about the changes, saying:
In the future, we should offer all states comprehensive co-operation if they are willing to find sensible solutions with us for the client relationships we have built up, and if they are interested in fair and constructive co-operation for the future.
It will be interesting to see what happens moving forward. Clearly, Liechtenstein is facing pressure to be more transparent but some countries, like Switzerland, have traditionally not bowed much to the pressure. Politics or progress? We’ll see.
Technorati Tags:
tax, tax evasion, Liechtenstein, banking
You only have to a take a peek at the Olympic coverage on NBC to confirm what tourists already know: China has a smog problem.
On the opening day of the Olympic games in Beijing, video and photos showed shots such as the one above, of the National Stadium, shrouded in smog. And of course, the US cycling team caused quite a stir when they arrived in Beijing wearing respiratory masks, ostensibly to protect them from the poor air quality.
How smoggy is China? No one knows for sure. The Chinese government has released figures as low as 88 Air Pollution Index (API), which they feel is extremely safe, though the World Health Organization does not like to see API levels above 50. A team of scientists from the UK had been monitoring the air quality in Beijing but were asked to cease their activities; an email noting the stoppage said, “I am very sorry to have to let you know that at the request of our Chinese partners in this project we are unable to provide public access to the Beijing Air Quality forecasts during the Olympic Games period.”
Despite the lack of detailed information, one thing is certain: China’s air quality needs improvement. And the Chinese government is clearly aware of this problem. The issue is not whether to reduce pollution but how.
The Chinese may be taking a page from their European counterpart’s playbook on their efforts to control pollution: discourage ownership of vehicles that pollute by raising taxes.
The Chines government is raising the sales tax on cars with engines larger than four liters to a whopping 40%. For cars with engine capacities from three to four liters, the tax will be raised to 25%. And small cars? The sales tax rates on those cars will be lowered to 1%. The new rates are effective September 1.
The Ministry of Finance and the State Administration of Taxation made the announcement on yesterday. The Ministry said that the purpose of the increase was to “help restrain the production and sales of high-emission vehicles while promoting the production and sales of low-emission cars.” Some analysts place the blame for poor air pollution in Chinese urban areas like Beijing on car emissions - claiming that as much as 80% of the pollution in those areas are linked to cars.
I would love to see the comparisons of air pollution change in urban areas in the US, the UK and China after these taxes are in place for a significant period of time. While countries like the UK and China are taking punitive measures to discourage pollution, the US is taking the opposite tact by incentivizing conservation. Opposing strategies to hopefully achieve the same end: which do you think will work best?
It turns out that while the US has been facing record budget deficits, Iraq has been doing pretty well. US auditors have predicted a budget surplus of $80 billion in Iraq: 94% of that revenue comes from oil.
It’s not surprising. Oil revenues are at their highest point in years while the costs to Iraq are fairly small: the US is, of course, paying the costs of the infrastructure and other countries have forgiven the Iraqi debt. Good news for the wealthiest Iraqis, perhaps, but bad news for our Congressional officials. US taxpayers are understandably ticked off about the latest news - especially as oil prices in this country remain high.
Senator Carl Levin (D-MI), the Chair of the Senate Armed Services Committee, shares this outrage:
We should not be paying for Iraqi projects while Iraqi oil revenues continue to pile up in the bank, including outrageous profits from $4-a-gallon gas prices in the US. We should require that U.S. taxpayers be reimbursed for the cost of large projects.
A nice thought, but it won’t happen. In fact, I predict the opposite: US tax dollars will continue to pour into Baghdad despite the fact that Iraq has shown a surplus for the last four years.
And how much of that is due to US taxpayers? Not counting costs directly associated with the military, taxpayers have paid $48 billion in reconstruction costs since 2003 invasion of Iraq. Approximately half of those costs were spent on the oil and electricity industries, water systems and security. Iraq ponied up a scant $3.9 billion for those costs, despite Bush’s pre-war assurances that Iraqi oil money would pay for reconstruction. In fact, in 2003, then-Deputy Secretary of Defense Paul Wolfowitz told Congress: “We’re dealing with a country that can really finance its own reconstruction, and relatively soon.”
Hmm. Really?
Here’s more about iPods and taxes… from a Canadian perspective… also from a puppet. Funky format to be sure. But really interesting points. Check it out!
[youtube=http://www.youtube.com/watch?v=DyWjnis9MVk&hl=en&fs=1&rel=0&color1=0x006699&color2=0x54abd6&border=1]
A court in London has ruled that Pringles, the iconic snacks in the ubiquitous red tube, are not potato chips.
Really.
Apparently, there are not enough potatos in Pringles to have them legally qualify as “potato chips” or “potato crisps.” That matters to the tax office because in the UK, most food is exempt from a steep 17.5% sales tax. The taxing authorities, however, claimed that Pringles fell under an exception for potato chips, sticks or puffs and “similar products made from the potato, or from potato flour, or from potato starch.”
Procter & Gamble, Pringles parent company, said no. The company claimed that Pringles are not made like potato chips since they are cooked from baked dough and not slices of potato; in fact, Pringles are just 42% potato. Additionally, Pringles have a shelf life of 15 months, versus four months for potato crisps - chew on that for a bit.
The company further argued that potato chips “give a sharply crunchy sensation under the tooth and have to be broken down into jagged pieces when chewed,” while Pringles are “designed to melt down on the tongue.”
The courts agreed: Pringles is not made largely from potatoes, does not look, feel or taste like a potato chip and is therefore, tax-exempt.
I’m not quite sure what kind of victory that is, really. Pringles “wins” because it proved that it’s not the product that it markets itself as… Or does it? On the Pringles web site, Pringles is consistently referred to as a snack - and not as potato chips. And now, legally, a Pringles chip has been ruled as something (I’m not sure what) other than a potato chip. My four year old, however, begs to differ: just this morning, she declared them “potato chips.” I think I just discovered the secret to the UK Tax Office’s appeal…
(Hat Tip: TaxProf Blog)
The Department of Justice issued a press release on Monday advising that it has filed court papers to allow the IRS access to request information from UBS AG about US taxpayers who may be using Swiss bank accounts to evade federal income taxes.
The Times had previously reported that UBS might reveal up to 20,000 names in light of the investigation into its banking practices. That has apparently yet to happen. So, the IRS is hoping to serve what is known as a “John Doe” summons on UBS; a John Doe summons is used to obtain information when the exact identities of persons are unknown.
The results could be huge. Last month, former UBS banker Bradley Birkenfeld pleaded guilty to conspiring to defraud the IRS by assisting clients in avoiding US reporting requirements. Birkenfeld claimed that UBS employees assisted wealthy US taxpayers by creating sham entities and then filing IRS forms falsely claiming that the entities were the owners of the accounts. The total of assets at UBS held in this manner - and thus not reported for tax reasons - is said to be close to $20 billion.
What would this information mean to the IRS? Penalties for willful failure to report a foreign account can result in a penalty of up to 50% of the amount in the account. So yeah, the IRS is seeking to recover up to $10 billion in penalties alone.
The results of this case could prove to be big with respect to enforcement of other offshore assets. Similar investigations in other countries, such as Germany, in light of the Liechtenstein scandal, yielded the names of several high profile celebs, sports figures and business people. Who knows what will turn up in Switzerland?
Image details: Royal - Final Round Of French Presidential Elections served by picapp.com
President Nicolas Sarkozy of France has introduced a proposal to ban advertising from state-owned television channels.
In the US, there are usually limitations on advertising on public television. Most public television in the US is financed through a mix of corporate and government contributions and donations of private individuals.
However, in a number of countries in Europe, state broadcasters are funded through a mix of advertising and public money. Sarkozy now wants to phase out ads from France’s public TV stations. To make up the difference in funding, he wants to institute new taxes on private broadcasters, such as TF1 SA, and telecom operators, such as France Télécom SA. TF1 is France’s most-watched television, with its popular mix of gameshows, reality TV programs and American prime-time series such as House and Grey’s Anatomy dubbed in French.
As you can imagine, France’s private TV companies are not happy with this new tax. They claim that the new tax forces them to subsidize state-backed competitors.
Likewise, the European Commission is “not enthusiastic” about the French plans. “For the European Commission, it is important to increase citizens’ purchasing power and growth in Europe. It is not in favour of a new tax on sectors that are drivers of growth,” said commission spokesman Martin Selmayr.
Nonetheless, Sarkowsky plans to move ahead with the move as of January 2009.
Stay tuned to see what happens!
Taxpayer asks:
I am a US Citizen, living in Canada but commuting to the U.S. to work.
I filed a 1040 for 2007. I’ve read that I am eligible for the Tax Rebate, however, I have not received either notification letter. In addition, according to the last 2 digits of my SS# my check should’ve been mailed on May 23rd. The IRS website has no info on the status of my check. My accountant mailed my return on April 15th. Is it possible that it’s still being processed?
Thanks
Taxgirl says:
I think so. From what you’ve reported - assuming that you are income eligible - you should receive a rebate. I would guess that it’s very likely that it is still being processed.
You may want to call the toll-free Rebate Hotline at 1-866-234-2942. You can also visit your local Taxpayer Assistance Center.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl!
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