Defending the Red Rabbit

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The Sacramento Metropolitan Arts Commission has provided some additional perspectives regarding the big red $800,000 rabbit housed in the new terminal at Sacramento International Airport.  The piece has received mixed reviews and perhaps they have felt the need to defend the poor thing.  Here are their explanations in a nutshell:

  • not typically what people think of when they think of Sacramento (perhaps trying to abolish the image of a cowbell?)
  • the commission believed it would create buzz for Sacramento (that it has certainly done)
  • iconic, fun, whimsical (“whimsical” is just a nice way of saying “arbitrary, pointless”)
The artist is Lawrence Argent, and he too is sticking up for his work:
  • red = Ferrari = speed (perhaps suggestive of the velocity by which passengers will depart the terminal when they catch sight of the artwork?)
  • many stories from different cultures are associated with the rabbit (more on this below)
  • playing around with the idea that something has come from the outside and leapt into the building
Maybe if we look at the famous rabbits we already know or the traits that rabbits have come to symbolize, we can come to understand “Leap” a little better.
Rabbits as Cultural Icons:
  • childhood, purity (i.e., Peter Rabbit)
  • sexuality (i.e., Playboy Bunnies)
  • fertility
  • mischief
Famous Rabbits:
  • Bugs Bunny
  • the March Hare
  • Br’er Rabbit
  • the Trix rabbit
  • Peter Rabbit
  • Roger Rabbit
  • Thumper
  • Duracell Bunny

World Series of Tax Reform

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On October 22, 1986, President Ronald Reagan signed into law the most sweeping tax reform in United States history.  At the conclusion of his speech he said:

I feel like we’ve just played the World Series of tax reform, and the American people won.

Its been 25 years, so maybe we’re due for another win.  The consensus these days is that the tax code is a mess and we need to start over again.  But there are nearly as many opinions as there are pages to the code.  Here are just a few.

California’s New and Improved “Top 250 List”

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Normally “first place” is a position that many aspire to.  Unless you occupy the first spot on California’s Top 250 Delinquent Taxpayers list.

California tax collectors (employees of the Franchise Tax Board) have a reputation for being, how shall we say this, . . . very zealous in their duties.  The FTB stops at nothing to collect overdue taxes, even rivaling the efforts and tactics of the IRS.  One of the ways California encourages tax compliance is by publishing its annual “Top 250 Delinquent Taxpayers” list on its website as a type of public shaming exercise.  Right now the winners are Halsey & Shannon Minor of Los Angeles who owe exactly $14,247,341.09 in personal income taxes.  Apparently nobody in the entire state of California owes more state taxes than they do.

But even if you’re at the bottom of the list, the consequences are the same.  And now, with the passage of AB 1421, it’s more than just the tax bill and the shame. Consequences now include having your drivers license, and possibly professional license, suspended.  Also, the list will be doubled so that it includes the top 500 worst offenders.  The author of the bill, Henry Perea, has strong words for California’s top 500:

Everyone on this list has had a chance to work with the state to resolve their tax issues but have chosen instead to bury their heads in the sand and continue to spend lavishly.

But I wonder how accurate that statement is.  According to the FTB website, the only criteria for inclusion on the list is that the taxpayer owes over $100,000 and falls into the top 250 (now 500).  The oldest tax liens were filed in 1996, but many of them were just filed last year.  At any rate, California has sent a clear message to the wealthiest taxpayers in the elite neighborhoods of LA and San Francisco.  Now they should try to get that message to the masses to make it really effective.

CA Medical Pot Crackdown: AG Gives Her Two Cents

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A few weeks ago, Washington bullies swept in on California’s medical marijuana playground, intent on shutting them down permanently.  Today in comes Big Sister to see if she can break up the fight a bit.  CA Attorney General, Kamala Harris, issued a statement warning the feds to show some restraint:

an overly broad federal enforcement campaign will make it more difficult for legitimate patients to access physician-recommended medicine in California

The question is whether a focused approach will be sufficient to curb the “proliferation of gangs and criminal enterprises that seek to exploit the medical marijuana law.”

IRS May have to Make Do with Less in 2012

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In difficult financial times, individuals are forced to take a good hard look at every single expense to make sure it is necessary.  And in the federal government, it’s no different.  Lawmakers are looking across the board at every service, program, committee, and agency.  Expenses that cannot be eliminated will be reduced as much as possible, . . . and rightly so.  Right?

What about expenses that generate revenue?  Should there be an exception?  IRS Commissioner Douglas Shulman believes that not all government expenses are created equal.  He believes that his agency should be treated differently.

The House Appropriations Committee has recently approved proposed legislation that would cut funding to the Internal Revenue Service by $600 million for fiscal year 2012 and Shulman is up in arms about it.  He has some bold words:

[T]hese budget cuts will result in a direct increase to the nation’s deficit.

~ Douglas Shulman, Commissioner of the IRS

Nice soundbite at least.  Here’s what he thinks will happen if we cut funding to the IRS.

  1. reduction in service
  2. reduction in revenue collected
  3. negative impact on voluntary compliance for years to come

As for a potential “reduction in service,” Shulman says that, in some instances (if the budget cuts are approved), it would take 5 months for the IRS to respond to taxpayers’ written inquiries and only half of those telephoning the agency would get through.  Resolution of back taxes would be slowed significantly.  I don’t know, maybe Shulman should welcome these cuts — it would allow his agency to continue providing low quality service, except now they would have a good excuse.  Read Shulman’s full letter here.

First Social Security COL Adjustment Since 2009

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The US Social Security Administration announced today that Social Security recipients will be getting a pay increase in 2012. Here is a link to the press release.  A cost of living adjustment is based on the Consumer Price Index, which did not increase in 2010 or 2011, so this is the first increase of its kind since 2009.

The 3.6 percent cost of living adjustment will benefit some 60 million social security beneficiaries across the nation.  However, by SSA’s own admission, some of these people will see no increase at all due to an increase in Medicare premiums.  So, no change really.

The SSA also announced that the maximum amount of earnings subject to the Social Security tax will increase from $106,800 to $110,100, affecting about 10 million taxpayers.  However, some of these people may be able to offset the tax increase by finding additional credits and deductions.  So, no change there either.

Even if you’re not one of the 10 million, you’re not out of the woods.  You’re not getting tax relief anytime soon either.  The temporary 2011 Social Security tax rate reduction (from 6.2% to 4.2%) — which affects all workers — will expire if nothing more is done to either revive it or further reduce it.

The Fake n’ Bake Tax

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I spent more than a few minutes searching for an appropriate visual aid to go along with this post. I wanted to make sure it was just right.  Okay, maybe I got a little sidetracked.

If you’re not familiar with the new tanning tax that went into effect last summer, maybe you’re the type that likes to soak up the natural sunlight which, by the way, probably causes cancer just the same, but it’s harder to regulate.  The legislation that went into effect on July 1, 2010 imposes a 10% excise tax on ultraviolet tanning services — paid by the burn victims and collected (and reported) by the burners.

TIGTA (IRS’s big brother) released a report today showing that the new tax is not generating near the amount of revenue it was expected to generate.  It was supposed to raise as much as $50 million in the 4th quarter of 2010 and $200 million this year. Instead it raised only $17.8 million in the 4th quarter of 2010 and $36.6 million during the first 6 months of 2011.  So why the poor results?  These are some possible reasons that TIGTA identified:

  • The tax was pushed through quickly and the tanning industry wasn’t prepared
  • Businesses aren’t paying and the IRS isn’t enforcing compliance like it should
  • IRS has incomplete / outdated records of applicable businesses

Read about a recent public hearing on the tanning tax here.

Read about California’s recent ban on indoor tanning for minors here.

Read about the metal umlaut here.

NJ No Longer “Film Friendly”

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Movie and television producers are going to realize, if they don’t know already, that they won’t find maximum tax relief by setting up shop in New Jersey.

You probably heard about New Jersey’s governor, Chris Christie’s denial of a $420,000 tax credit for MTV’s Jersey Shore earlier this year. Christie doesn’t approve of the show because it “perpetuates misconceptions about the state and its citizens.” It’s probably safe to say that most people from NJ would prefer out-of-staters soon forget the association with Jersey Shore.

However, democrats continue to push for passage of legislation that would grant tax credits for production companies that shoot films and TV shows in the Garden State. The democrats point to a 2008 study showing that movie maker tax credits are good for jobs and good for the local economy in general. The republicans point to a 2010 study showing that movie production incentives have no such effect.

The irony in all this is that New Jersey, specifically Fort Lee NJ, is known as the birthplace of the motion picture industry. The state suffered its first hit 100 years ago when most filmmakers moved their operations to California where they could film year-round with little threat of inclement weather. Could these tax issues be the second major setback for New Jersey’s film industry?

IRS Selects New ETAAC Members

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The Electronic Tax Administration Advisory Committee (ETAAC) is a 13-member panel that consults with and reports to the IRS on electronic tax administration issues. Their goal: increasing electronic interactions between tax professionals and the IRS. Past panels have consisted of professionals in the banking, technology, tax law, accounting, and tax preparation industries.

Introducing the new members:

  1. Timothy Blevins: big shot at CGI, a global business process services firm
  2. Cyrus Daftary: attorney at Burt, Staples & Maner, a Washington D.C. taxation law firm
  3. Yasmine Nolan: big shot at H&R Block
  4. Timur Taluy: CEO of FileYourTaxes.com
  5. Mark Steber: big shot at Jackson-Hewitt (selected as ETAAC Chairman for 2011-2012)

If you’re a big shot and feel you were overlooked, maybe you deserve a spot on this committee. It is too late this time around, but feel free to review the membership application for future reference. Applications are accepted each February. This is a volunteer 3-year position with a 150-hour time commitment. And they’re just looking for experience in a few key areas:

  • public policy development
  • formulating, developing, and presenting proposals for ETAAC consideration
  • e-file security experience
  • tax software experience
  • accuracy-related experience

Fee Increase for California Installment Agreements

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Starting October 26, the Franchise Tax Board will be raising the fees for installment agreements as follows:

Personal Income Tax Installment Agreements: $34 (previously $20)

Business Entity Installment Agreements: $50 (previously $35)

See the Installment Agreement information page for more information, but note that it has not been updated with the new amounts yet.

Fees are still subject to change (again) without notice.