Tax Lawyer's Blog

The second unscrupulous player in the tax resolution business has been forced to shut its doors as a result of thousands of consumer complaints and several government investigations.

Paul Caron has the story:

JK Harris Tax Resolution Firm Closes its Doors

Consumer Affairs, JK Harris Suspends Operations, Prepares to Liquidate: Tax-Preparation Firm Swamped by Consumer Complaints, Lawsuits:

Tax representation firm JK Harris & Co. has suspended operations,  sent its employees home and is reported to be preparing to liquidate  its assets.

The firm, the subject of hundreds of complaints to  ConsumerAffairs.com over the years, has been in Chapter 11 bankruptcy  proceedings since October but has reportedly been unable to raise enough  funding to continue operations.

“This is truly the most  devastating event I have been forced to deal with in my 58 years on this  earth,” CEO John K. Harris said in an email to employees as he  apparently prepared to file for a Chapter 7 liquidation.

The firm won’t be mourned by many of the consumers who turned to it in their time of need.

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• Taxmasters, Inc. (Chubby red-bearded guy on T.V.) Sued for Deceptive Trade Practices
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Timothy H. Tebow! If I have to listen to another pseudo-expert assert the patently obvious as if it were an epiphany, I think I’ll projectile vomit.

Here’s a quick synopsis of 300 plus hours of expert pre-game “analysis”:

• Turnovers are key
• Defense must put pressure on QB
• Game will be won in trenches
• Team that wants it most will win

The only prognostication the gridiron Einsteins could have have possibly made that is more obvious than these pearls of pigskin wisdom is this:

• The team that scores the most points will win the game.

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Michelle Malkin reports that the transparency President has done another one of his patented Friday afternoon document dumps,¹ this time with the voluminous and highly complex IRS rules for implementing the tax provisions of Obamacare: (footnote is mine).

If it’s Friday, it’s another White House dump day. Cue the dump truck horn: Doot! Doot! Doot!

While Obama sycophants are busy trumpeting deceptive jobs numbers, the administration is quietly moving forward with job-killing Obamacare regs and taxes. The IRS today released rules to impose the $20 billion Obamacare medical device tax scheduled to take effect next year.

At a time when the White House is touting its government initiatives to champion “innovation,” the Obamacare innovation tax on medical device/diagnostic manufacturers will kill an estimated 43,000 jobs.

The very job creators President Obama purports to support are balking at the tax regs and have called for repeal. The Advanced Medical Technology Association, America’s leading association for med tech manufacturers, blasts the new rules:

“[The proposed IRS regulations] highlights the need for prompt action by Congress and the Administration to repeal this anti-competitive, job-killing tax,” Stephen J. Ubl ² AdvaMed president and CEO said in a statement.

“Failure to repeal the device tax flies in the face of the President’s comments during the State of the Union about the need to reform our tax system to make our nation more competitive in the world market, a view shared by members of Congress from both parties,” Ubl went on to explain, adding that “the tax will create a number of complex administrative and technical burdens that must be addressed.”

I’ve reported before on how the medical device tax has already resulted in operational and job cutbacks in Massachusetts, home to many medical innovators.

Fewer jobs. Fewer entrepreneurs. Fewer medical advances.

Winning the future…by killing it.

Footnotes:

¹  The reason for dumping documents on Friday is twofold: 1) Congress is not in session during the weekend and, therefore, there are fewer members of the opposition to comment on the dumped documents; and 2) because Congress is not in session, there are fewer members of the press around to scrutinize the dumped documents.

²  Could it be that Obama killed the wrong UBL?

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If you wonder why conservatives are so concerned about Democrats stacking the court with liberals, read Eugene Volokh’s blog post reporting that Justice Ruth Bader Ginsburg appeared on Egyptian television and warned developing nations of the world not to use the U.S. Constitution as a model (emphasis is mine):

Liberty Counsel points to these these excerpts of an interview with Justice Ginsburg on Egyptian television, and argues:

In a recent interview with Egyptian television, Supreme Court Justice Ruth Bader Ginsburg insulted the U.S. Constitution and advised Egypt to look somewhere else when drafting its own constitution. Justice Ginsburg was asked to give insight on this crucial topic for the post-Mubarak government but focused more on liberal human rights, rather than traditional American freedom.

When describing the nature of a constitution, Justice Ginsburg did appropriately recognize the importance of a constitution and the duty of the citizens to defend it. Justice Ginsburg did not, unfortunately, take her own advice. She undermined insight of its crafters and stated, “I would not look to the US Constitution if I were drafting a Constitution in the year 2012.” Instead, Justice Ginsburg referred to the constitutions of more supposedly progressive countries, like South Africa, Canada, and the European Convention on Human Rights. She stated, “I can’t speak about what the Egyptian experience should be, because I’m operating under a rather old constitution.” This directly refutes the U.S. Constitution’s relevance today.

For a United States Supreme Court Justice, entrusted with the duty to interpret the Constitution, this type of statement is unacceptable. Justice Ginsburg failed to respect the authority of the document that it is her duty to protect. When given the opportunity to promote American liberty abroad, Justice Ginsburg did just the opposite and pointed Egypt in the direction of progressivism and the liberal agenda.

Mathew Staver, Founder and Chairman of Liberty Counsel and Dean of Liberty University School of Law, said, “For a sitting U.S. Supreme Court Justice to speak derisively about the Constitution she is sworn to uphold is distressing, to say the least. Justice Ginsburg’s comments about our Constitution undermine the Supreme Court as an institution dedicated to the rule of law, as well as our founding document.”

Amazingly, Volokh disagrees, not with Ginsburg, but with Staver and the folks at Liberty Counsel:

This criticism strikes me as quite misplaced. Justice Ginsburg swore an oath to uphold the U.S. Constitution, and I suspect she thinks that the U.S. Constitution, as interpreted by the U.S. Supreme Court and U.S. political practice, works pretty well in the U.S.  But why should she (or we) think that the 1787 constitutional text, coupled with the 27 amendments that have come in fits and spurts since then, would necessarily work well for a completely different country today?

Professor Volokh says “I suspect [Ginsburg] thinks the US Constitution… works pretty well in the US.” But on what does he base this conclusion? If you read the actual statements Justice Ginsburg made in the interview, you would have to conclude the very opposite: that if Ms. Ginsburg had the power to do so she would scrap our outdated Constitution and replace it with something more modern (and, no doubt, more progressive).

For some reason the usually observant Professor Volokh is unable to see the obvious: Ms. Ginsburg clearly thinks the U.S. Constitution is a stale document, so outdated, in fact, that she wouldn’t even advise a developing nation to use it as a starting point for the drafting of its own constitution. It is no stretch, then, to assume that Justice Ginsburg would, if she could, replace our Constitution with something more to her liking. Professor Volokh is wrong. Justice Ginsburg’s statements are an utter rejection of the very document she has sworn to honor and uphold.

Ms. Ginsburg is an exemplar of liberal thinking. For her, the Constitution, in spite of her oath to uphold it, is no more than an annoying obstacle to be overcome on the way to fulfilling a progressive agenda. She clearly wishes that she had another, better – meaning more progressive - document to interpret. She, of course, must appear to follow the one we have, but is there any doubt that whenever she can justify a progressive construction that is at odds with it, she will choose that construction and justify it on the grounds that our old, archaic document is “living and breathing?”

Justice Ginsburg’s statements belong to the Howard Zinn/Noam Chomsky school of progressives whose motto is “if it’s American, it sucks and needs to be changed.”

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The left would have you believe that 1 percenters like Warren Buffett and Mitt Romney are the poster boys for a tax system that favors the rich. Enter James Ross, a 1 percenter who paid 102% of his 201o taxable income in federal income, state income local taxes.

James Stewart of the Associated Press has the story:

Meet Mr. 102%.

James Ross, 58, is a founder and managing member of Rossrock, a Manhattan-based private investment firm that focuses on commercial real estate and distressed commercial mortgages. “I realize I am very fortunate, and in fact I am a member of the 1 percent,” Mr. Ross wrote in an e-mail. His résumé is studded with elite institutions: Yale, Columbia Law School and stints at the law firms Cravath, Swaine & Moore in New York and Holland & Hart in Denver. Since his company fits the category of private equity, he even has carried interest, the kind of incentive compensation that enabled Mitt Romney to pay such a low tax rate.

Yet Mr. Ross told me that he paid 102 percent of his taxable income in federal, state and local taxes for 2010. “My entire taxable income, plus some, went to the payment of taxes,” Mr. Ross said. “This does not include real estate taxes, sales taxes and other taxes I paid for 2010.” When he told friends and family, they were “astounded,” he said.

In the midst of a national debate over tax rates and tax policy, I lifted the veil last week on my income tax rates for 2010, a year in which I paid 37 percent of my adjusted gross income in federal, state and city income taxes and 74 percent of my taxable income. (Adjusted gross income — your total income minus retirement plan contributions, tax-exempt interest and other specified exclusions — is usually higher than taxable income, which is adjusted gross income minus your personal exemptions and itemized deductions. So taxes as a percentage of taxable income are almost always higher.)

This story illustrates why in evaluating whether or not our tax system is tilted in favor of the very rich we must take the 1% as a whole rather than pluck out a few members of the group whose tax rates confirm our bias. Deep down progressives understand this. But because the facts don’t support their tired (and politically necessary) argument that the rich are not paying their fair share of taxes, they dishonestly point to isolated instances of very rich people paying very low tax rates and trust that the masses will extrapolate the isolated undertaxation to the entire 1%.

The truth the left is so desperate to avoid is that the very system it insists unfairly favors the rich results in the top 1 percent paying 37% of federal income taxes and the bottom 50% paying less than 3% of federal income taxes.

Courtesy of the IRS, here are the numbers the left either suppresses or outrightly lies about:

Who Pays Income Taxes and How Much?

Tax Year 2009

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A fellow named Charles Sykes has written a new book titled A Nation of Takers: America’s Addiction to Getting Something for Nothing. In the first pages of his book Sykes presents a few scenes from what he calls “Moocher Nation.” Here’s my favorite scene:

Q.  Why are you here?

A.  To get some money

Q.  What kind of money?

A.  Obama money

Q.  Where is it coming from?

A.  Obama

Q,  Where did Obama get it?

A.  I don’t know, his stash… I don’t know. I don’t know where he got it from. But he’s giving it to us. We love him. That’s why we voted for him.

- Detroit, October 7, 2009, where thousands of residents turned out for free government money. According to the Associated Press, they were supposed to apply for federal anti-homelessness grants, but many were under the impression they were registering for $3,000 checks from the Obama administration.

Of course, class warrior progressives don’t consider scenes like this to be indicative of a sickness in America. That’s because the people who star in them are the very people progressives count on to keep them in office.

Be sure to watch Glenn Reynold’s (Instapundit) interview with Sykes over at PJTV.

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The AP’s Sean Murphy reports that Oklahoma Republicans want to abolish their state income tax:

A year after Republicans swept into office across the country, many have trained their sights on what has long been a fiscal conservative’s dream: the steep reduction or even outright elimination of state income taxes.

The idea has circulated among academics and think-tank researchers for years. But it’s moving quietly into mainstream political discourse, despite the fact that such sweeping changes would almost certainly mean a total rewiring of tax systems at a time when most states are still struggling in the aftermath of the recession.

“I think there’s going to be more action that way,” especially as Republican governors release their budget plans, said Kim Rueben, an expert on state taxation at the Brookings Urban Tax Policy Center.

Last year, GOP lawmakers in many states quickly went to work on a new conservative agenda: restricting abortion, cracking down on illegal immigration, expanding gun rights and taking aim at public-employee unions.

Emboldened by that success, the party has launched income tax efforts in Idaho, Kansas, Maine, Missouri, Ohio, Oklahoma and South Carolina. But it’s not clear how all those states would make up for the lost revenue, and Rueben said she’s not aware of any state in modern history that has eliminated an income tax.

Nine states already get by without an income tax, mostly by tapping other sources of revenue. Nevada and Florida rely on sales taxes that target the tourism industry. Alaska has taxes on natural resources, and Texas imposes substantial property taxes. The other five states are: New Hampshire, South Dakota, Tennessee, Washington and Wyoming.

But in the rest of the country, income taxes pay for bedrock government services, including roads and bridges and schools and prison systems.

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