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- It’s Not There Yet… But the New COVID Relief Could Mean to You - December 23, 2020
Every so often, I post current events in tax or finance that are interesting and/or useful. Here are this week’s events:
- Who are paying the taxes in this country? Latest IRS statistics show that the top 1% of all filers paid about 38% of all federal income taxes. This is up 3% from last year. The top 5% paid 58.9% of all federal income taxes. Conversely the bottom 50% of all filers paid a paltry 2.8% of the total tax revenue. This is why a flat tax won’t work. if we reduce the tax bite of the top 5%, who pays the difference?
- I guess good news is that more states have legalized marijuana for medical use. Oregon, Alaska and even the District of Columbia have legalized it, and more states are likely to pass similar measures. HOWEVER, this has no effect on medical tax deductions because purchasing marijuana for medical purposes isn’t deductible! The reason is that federal law doesn’t sanction its usage.
- Expect more hassles filing tax returns: IRS commissioner, John Koskinan, has notified IRS employees that the 2015 filing season will be a very “complex one.” The Commissioner noted that the 2015 IRS budget is comparable to the 1998 budget after factoring in inflation. However, the IRS now receives more than 27 million individual returns than in 1998 and three million more business returns. Even worse that IRS’s mandate has expanded to things that didn’t occur in 1998 such as enforcing the Affordable Healthcare Act and addressing the increasing amount of ID theft.
What this means to you: Refunds will take longer, much longer hold times when calling the IRS, much lower enforcement for many issues, such as ID theft than IRS would like and probably less audits and less revenue generated by the IRS for the government. We truly do have a very stupid bunch of Congressmen who allowed this situation.
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