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With obesity at 18.8% of the population and health care costs, Hungary has just implemented a ten forint (about $.50 tax) on fatty and sugary foods to cover health costs. So what exactly are Hungarians hungry for?
The dobostorta cake, a five-layer vanilla and chocolate buttercream dessert with a caramel-glazed top layer, is probably Hungary’s best-known treat — at least after goulash. The cake can be seen in the vitrines of coffee houses and bakery shops lining the streets of Budapest.
“Hungarians are really into desserts,” said Carolyn Banfalvi, co-founder of Taste Hungary. The tour company operator describes Hungarian food in general as “very fatty,” with traditional cooking ingredients that include pork and goose fat. “What they call bacon here is often pieces of pure lard,” she said.
The Hungarian government argues that this kind of diet is also leading to obesity and increased health problems, and that those who partake in indulgences like sweets should also pay a premium to help offset those costs. Enter the “fat tax.”
Other European nations are considering the same, despite the suggestion that education and/or subsidies for healthy fruits and veggies would be more effective. With about two-thirds of Americans being overweight or obese, should the United States follow suit?
There are 16 states that help with back-to-school shopping by declaring “tax-free weekends,” meaning no state sales tax on certain items during certain days. States running the program this weekend include Alabama, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Virginia, Iowa, Louisiana, and Arkansas, although exact dates vary.
Before you get too excited though, I should make note of the fact that most states place a dollar limit on what is tax-exempt. For example, Alabama’s tax holiday offers a tax break on any articles of clothing $100 or less. This means that a pair of jeans costing $125 would be taxed but a jacket for $99 would be tax-free, so be aware of any specific rules your state may have during tax holidays.
To help out, BargainJack has assembled a handy chart detailing the dates and limitations for each state, with links to government information. Link
Foodies may argue that the stuff you get from McDonald’s barely qualify as food, but we ask the question above because of the actions of the company itself.
You see, McDonald’s lawyers are arguing that the fast food chain should be classified as supermarkets rather than restaurants to avoid a huge tax bill:
In a legal battle that is likely to see dozens of other fast food chains in the world’s largest country following suit, McDonald’s successfully argued that it should be classified as a food retailer for tax purposes rather than as a restaurant since many of its products are pre-packaged and sold to customers in the style of a supermarket rather than a restaurant.
It is a decision that will allow McDonald’s in Russia to continue paying ten per cent tax on its profits rather than the eighteen per cent tax levied on restaurants.
Did you file your taxes yet? No? Got a good excuse – like being in space? Not good enough for the IRS: astronauts orbiting Earth in the International Space Station have to file taxes just like everybody else!
As it turns out, being 220 miles (354 kilometers) above the planet is no excuse to file late. Thankfully, Cady Coleman and Ron Garan, who are currently living and working aboard the orbiting outpost, most likely took care of that already.
"I’m not sure of their exact situations, but they could either file early, or if they have spouses, their spouses could file for them," NASA spokesperson Kylie Clem told SPACE.com.
U.S. income tax returns must be in the mail by Monday, but most people who did not have to pay more into the system have already filed. Many folks who expect refunds got the money faster by getting refund anticipation loans, or RALs. Mother Jones explains how refund anticipation loans work, by looking how John Hewitt, founder of Jackson-Hewitt, got into the loan business. The RAL was invented by Ross Longfield in 1987.
Ultimately, Longfield persuaded H&R Block to sign up. But no one was as smitten as John Hewitt—who understood that people earning $15,000 or $20,000 or $25,000 a year live in a perpetual state of financial turmoil. Hewitt began opening outposts in the inner cities, Rust Belt towns, depressed rural areas—anywhere the misery index was high. “That was the low-hanging fruit,” he says. “Going into lower-income areas and delivering refunds quicker was where the opportunity was.”
Customers wanting a RAL paid Jackson Hewitt a $24 application fee, a $25 processing fee, and a $2 electronic-filing fee, plus 4 percent of the loan amount. On a $2,000 refund, that meant $131 in charges—equivalent to an annual interest rate of about 170 percent—not to mention the few hundred bucks you might spend for tax preparation. “Essentially, they’re charging people triple-digit interest rates to borrow their own money,” says Chi Chi Wu, a staff attorney at the National Consumer Law Center.
A few hundred bucks for tax preparation? Really?
“These businesses are in this neighborhood for one reason: They see they can make a killing here,” says Ramon Dalmasi, an accountant with a front-row seat on the growth of the instant tax business. Dalmasi opened a bookkeeping business in the Bronx in 1997 and watched as chain after tax-prep chain popped up on commercial strips in his community. A few years ago, he relocated to Yonkers, an aging suburb just north of New York City, and found the same chains there as well. “They don’t see people struggling to put food on the table,” he says. “They just see people who can make them millions.” Even without a RAL, a working parent who qualifies for the EITC often pays $300 or more at a tax mill. Dalmasi, a CPA who teaches accounting at nearby Lehman College, charges that same client $75 or $100. “Why should I charge anything more than that,” he asks, “when it’s taking me 20 minutes?”
I have four different types of income from many small sources and a family of six, but my CPA only charges $100. The article points out how the poor are being taken advantage of, but as some have said elsewhere, this type of loan is still preferable to organized crime loans. Link -via Metafilter, where there’s a lively discussion on this article.
(Image credit: Joshua Lutz)
See also: Why Do People Fall For Payday Loans?
Why are states like California in dire budget crises nowadays? Sure, state expenditures have risen quite a bit, but according to Brad Williams, a former economic forecaster for the state of California, the root cause of all these budget woes is the states' reliance on taxing the rich.
Before you reach out for the metaphorical pitchfork, consider this:
Nearly half of California's income taxes before the recession came from the top 1% of earners: households that took in more than $490,000 a year. High earners, it turns out, have especially volatile incomes—their earnings fell by more than twice as much as the rest of the population's during the recession. When they crashed, they took California's finances down with them.
Mr. Williams, a former economic forecaster for the state, spent more than a decade warning state leaders about California's over-dependence on the rich. "We created a revenue cliff," he said. "We built a large part of our government on the state's most unstable income group."
New York, New Jersey, Connecticut and Illinois—states that are the most heavily reliant on the taxes of the wealthy—are now among those with the biggest budget holes. A large population of rich residents was a blessing during the boom, showering states with billions in tax revenue. But it became a curse as their incomes collapsed with financial markets.
Arriving at a time of greatly increased public spending, this reversal highlights the dependence of the states on the outsize incomes of the wealthy. The result for state finances and budgets has been extreme volatility.
Robert Frank of the Wall Streeet Journal explains: Link
Like many countries, Romania is in a recession so it’s doing whatever it can to raise revenue. This year, the Romanian government identified a new source of heretofore untaxed profession: witches!
Naturally, the witches aren’t taking this laying down:
Queen witch Bratara Buzea, 63, who was imprisoned in 1977 for witchcraft under Ceausescu’s repressive regime, is furious about the new law.
Sitting cross-legged in her villa in the lake resort of Mogosoaia, just north of Bucharest, she said Wednesday she planned to cast a spell using a particularly effective concoction of cat excrement and a dead dog, along with a chorus of witches.
"We do harm to those who harm us," she said. "They want to take the country out of this crisis using us? They should get us out of the crisis because they brought us into it.""My curses always work!" she cackled in a smoky voice. She sat next to her wood-burning stove, surrounded by potions, charms, holy water and ceramic pots.
Alison Mutler of the Associated Press wrote this story published on MSNBC: Link (Photo: Vadim Ghirda/AP) – via Boing Boing
Facing mounting federal deficit and an expensive health care reform bill, you
wouldn’t be blaming Congress for trying to squeeze a few billion dollars here and there to pay for it. But the cosmetic surgery industry is howling at the new proposed … "Botax"?!
Last week, the Senate began debate on an $848 billion health care reform bill that includes a 5% excise tax on elective cosmetic surgery, beginning Jan. 1, 2010. The provision would raise an estimated $5.8 billion in the next decade.
The cosmetic surgery industry has mounted a vigorous effort to convince lawmakers and the public that the tax wouldn’t be limited to wealthy people who are unhappy with the shape of their chins. Among their arguments:
The tax would unfairly target middle-class women. Eighty-six percent of cosmetic surgery patients are women, and 60% have an annual income of $30,000 to $90,000, according to the American Society of Plastic Surgeons. Women face much more pressure than men to maintain a youthful appearance, says Jill Filipovic, 26, a lawyer and blogger in New York. "It’s an easy choice for senators who are overwhelmingly male to tax something they probably aren’t going to use," she says.
While
it's chic to complain about the evil of taxes and government, there's
an implicit assumption that higher taxes translate to more government
services (the age old argument between liberals and conservatives generally
revolve around how much government services, and therefore government
size, is optimal.)
But do higher taxes actually bring about superior public goods? William Voegeli, in this op-ed piece in the Los Angeles Times, doesn't think so. He compared California (a high-benefit (supposedly)/high-tax state) to the low-tax state of Texas:
One way to assess how Americans feel about the different tax and benefit packages the states offer is by examining internal U.S. migration patterns. Between April 1, 2000, and June 30, 2007, an average of 3,247 more people moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas had a net weekly population increase of 1,544 as a result of people moving in from other states. During these years, more generally, 16 of the 17 states with the lowest tax levels had positive "net internal migration," in the Census Bureau's language, while 14 of the 17 states with the highest taxes had negative net internal migration.
These folks pulling up stakes and driving U-Haul trucks across state lines understand a reality the defenders of the high-benefit/high-tax model must confront: All things being equal, everyone would rather pay low taxes than high ones. The high-benefit/high-tax model can work only if things are demonstrably not equal -- if the public goods purchased by the high taxes far surpass the quality, quantity and impact of those available to people who live in states with low taxes.
Today's public benefits fail that test, as urban scholar Joel Kotkin of NewGeography.com and Chapman University told the Los Angeles Times in March: "Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California. Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California's government and the middle class is constantly being renegotiated to the disadvantage of the middle class."
As a long-time resident of California (whose paycheck got even smaller as the State forcibly imposed a higher withholding), I don't mind paying higher taxes if I got something out of it - so it's intriguing to find out that the reality may just be the opposite: Link
People have deducted swimming pools, breast implants, and body oil from their income for tax purposes -and the IRS allowed it! You can deduct anything if you can justify it as a legitimate business expense. Eleven people did just that in this article from Kiplinger.
1. Pet food. A couple who owned a junkyard were allowed to write off the cost of cat food they set out to attract wild cats. The feral felines did more than just eat. They also took care of snakes and rats on the property, making the place safer for customers. When the case reached the Tax Court, IRS lawyers conceded that the cost was deductible.
(image credit: Flickr user play4smee)
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