Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined
Washington, DC (Mar 31, 2015)—Tax Freedom Day, the day when the nation as a whole has earned enough money to pay its federal, state, and local tax bill for year, will arrive 114 days into the year on April 24, according to the annual report released this morning by the nonpartisan Tax Foundation.
“Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Tax Foundation Economist Kyle Pomerleau. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost.”
While the national date arrives nine days after the tax filing deadline, each state’s total federal, state, and local tax burden varies greatly. Tax Freedom Day arrives earliest in Louisiana on April 2 and Mississippi on April 4. On May 13, Connecticut and New Jersey will be the last states to reach Tax Freedom Day this year.
Key takeaways from the report:
Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.
Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31.1 percent of the nation’s income.
If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later on May 8.
Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever Tax Freedom Day was May 1, 2000 – meaning that Americans paid 33% of their collective incomes towards taxes. A century earlier, in 1900, only 5.9% of national income was required to pay the tax bill, and Tax Freedom Day fell January 22.
(Bloomberg) — Everyone runs into death and taxes. New Jerseyans trundle on toward an afterlife in tax hell.
“I can afford to retire here,” said Susan Barbey, a 60-year-old resident of Ridgewood, about 20 miles (32 kilometers) from Manhattan. “I can’t afford to die here.” (Young/Bloomberg)
What the Domino’s CEO Would Change on Taxes, Obamacare
Stephen Moore / @StephenMoore / March 22, 2015
Here’s a question that has been puzzling Patrick Doyle, the CEO of Domino’s, for months, as he puts it: “How do we list the calorie content of our pizzas on a menu when we have 34 million different variations of pizza?” The new menu labeling law, a creation of the Affordable Care Act, could require his company to do just that.
It’s a textbook case of a mindless and arcane regulation, of Washington bureaucrats imposing on businesses costs that will have no effect on public health. “We’ve been voluntarily doing menu labeling for over a decade,” Doyle says. “We even have an online calorie calculator we call the ‘Calo-Meter’ for every possible pizza order, and it tells customers what happens if they substitute, say, sausage for mushrooms, because we strive to be very nutrition-conscious.”
That isn’t good enough for the feds. The Food and Drug Administration is now insisting that every one of the chain’s 5,000 stores post menu boards on the wall with calorie counts. “It’s crazy and it doesn’t help consumers,” Doyle says, because “90 percent of Domino’s orders arrive by phone or Internet and are for delivery, so fewer than one of 10 customers will ever see these signs.” The signs will cost about $2,000 at every store, and each change of menu will require new ones. That is about $10 million of extraneous costs nationwide for Domino’s. Thank you, Washington.
Other than that, Doyle is having a good day when I visit him at the Domino’s world-wide headquarters in Ann Arbor, Mich. And a very good year, with sales up 12 percent in the past quarter alone.
The headquarters are a few miles up the road from where the original Domino’s Pizza opened in 1960. Doyle, who is 51, is tall, stocky, affable and appropriately a Michigan man through and through, having grown up in Midland and earned a degree at the University of Michigan. In his five years as CEO, annual sales have climbed to $9 billion from about $2 billion. Some 250,000 workers wear a Domino’s uniform and sell roughly one billion pizzas each year. During the Super Bowl, Domino’s was taking a dizzying 1,400 orders a minute.
Making pizzas may not be the sexiest business—though it’s a $125 billion world-wide market. But while investors obsess over finding the next Facebook, the share price of Domino’s has soared from $13 in 2010 to just over $100 today. It has been among the top performing stocks in the Fortune 100.
Doyle has helped take the company global, with stores operating in 80 nations and expansion plans throughout Asia. In sales, Domino’s is now the No. 1 restaurant chain in India. Sub-Saharan Africa is also among the company’s fastest-growing markets, with a billion people and a growing middle class. “We’ve discovered Africans love pizza,” he says. “They order them on their mobile phones.”
Things weren’t always flying so high in Ann Arbor. Doyle became CEO after two of the company’s worst years, and sales were still sliding. One of his first decisions was to take an unorthodox approach: “We held a series of focus groups with consumers and we discovered that people hated the pizza. So we ran these TV ads featuring Americans complaining about how bad Domino’s pizza tasted.” Then Doyle appeared on screen with an apology and promise: “We hear you America. Sometimes you know you’ve got to make a change. Please give us another try.”
He adds with a laugh that the one thing in his career that impressed his children was when they were in a New York restaurant and comedian Amy Poehler spotted him and shouted, “Hey, you’re the pizza guy.”
In the three months following those ads, Domino’s had its fastest rise in sales in company history. “I think consumers really appreciated that we were direct and honest with them,” he explains. That ad campaign is now considered a textbook crisis-management story, with its lesson in honesty as a best commercial policy.
Domino’s is also riding the digital revolution. “In a lot of ways we’re really a technology company,” Doyle says. “We’ve adapted the art of pizza-making to the digital age. Globally, we’re already at a run rate of about $4 billion of digital sales.” He adds that digital drives sales by making ordering easier and more efficient, and saves money on bad orders because customers “take their own orders so they make fewer mistakes.”
His goal is to have every iPhone in the world equipped with a Domino’s app, and the company is working with Ford Motor Co. on a voice-activated technology that will let motorists order a large thin-crust pepperoni with onions while driving home from work.
The atmosphere at company headquarters feels more like Silicon Valley than a fast-food company. Most employees here are computer programmers and technicians monitoring in real time what people are ordering, how long it is taking to fill an order, and the online complaints and comments that stream in. Their mission is to streamline the pizza-making process from the time the order arrives to when the pie is handed off at the customer’s front door. If the goal is delivery in 30 minutes or less, every innovation that shaves 10 or 15 seconds is a major money saver when you’re selling a billion pies a year. Although the Domino’s menu also includes such things as sandwiches, pasta and chicken wings, 80 percent of its sales are pizzas.
Doyle is unconditionally bullish on the U.S. economy. “The big story since the recession is that American households and businesses have become lean and efficient and have paid down debts. Consumers finally have money and they are starting to spend it,” he says.
Meanwhile, as the head of one of the nation’s biggest employers, Doyle sees the effects of what he calls a “tightening of the labor market” firsthand. “Frankly, right now, it’s getting harder and harder to hire. We have shortages of truck drivers and delivery people.”
Such real-world experience makes Domino’s a barometer of sorts. “My take is that the official statistics are underestimating the strength of the labor market. Look, it has been a long, slow recovery. We’re now six years into it and we’ve finally reached the point where there seems to be more demand for labor than there is trained supply.” For job seekers “that is great news, right?”
As for those who fret that only the rich are getting richer and upward mobility isn’t possible, Doyle says they should pay more attention to what happens at Domino’s. “Over 90 percent of our 900 franchisees started as an hourly worker in the store,” he says. “Most of them started as delivery drivers at minimum wage. They work their way up. They become a manager. Then they come in, they apply to buy a store.” So from earning $7 or $8 an hour, they now earn $80,000 to $100,000 by operating a franchise. Many have become millionaires. “This is absolutely a story of upward mobility in America.
If he were economic adviser to the president, what reforms would he recommend to accelerate growth and hiring? Without hesitation he says: “Simplify the corporate tax. It’s a killer. We pay 38 percent at Domino’s.” He’s including state and local taxes, but that’s a huge burden, especially given that many large corporations pay below 10 percent. “Just get rid of all the loopholes—and make it fair with a broad base and lower rates.” Then he adds, only half-kidding: “No one in Washington ever woke up and said ‘let’s have a loophole for pizza makers.’” Sounds like he needs a lobbyi
One of Doyle’s biggest worries is that the Domino’s franchise-owner model—which is also used by thousands of other retail and restaurant stores—has come under assault from trial lawyers, unions and the National Labor Relations Board. These groups want to treat a Domino’s or Popeyes franchise store and the parent company as “joint employers.” This would mean a locally owned store with a few dozen staff would still have to comply with, for instance, the ObamaCare rules that only apply to firms with more than 50 workers. Seattle passed a minimum-wage law last year that treats franchise restaurants as big businesses that must pay a super-minimum-wage that phases up to $15 an hour.
“You’ve got 20 million people today employed in the franchise industry in the U.S. Part of why small business owners want to be in a franchise is because they’re getting support from each other, and they’re getting support and ideas from a company. Franchise stores have dramatically higher success rates than people who are just doing it all on their own,” Doyle says. “Why destroy a model that is almost uniquely American and has been a tremendous success for 50 or 60 years? This would be horribly detrimental.”
Doyle is optimistic about the world economy and how the digital revolution will continue to lift living standards for billions in the coming decade. Even in sub-Saharan Africa per capita incomes are growing at 5 percent annually. “I’m a free trader. I just believe in my core that free markets, technology, innovation, cheap energy and globalization will be triumphant and will make people better off.” They will also, not coincidentally, make people order more pizzas on their smartphones.
Bergen County’s property taxes among nation’s highest
MARCH 4, 2015 LAST UPDATED: WEDNESDAY, MARCH 4, 2015, 2:33 PM
BY KATHLEEN LYNN
STAFF WRITER |
THE RECORD
Bergen County homeowners had the fifth-highest average property tax bill in the nation, at $11,159, last year, according to a new survey by RealtyTrac, a California real estate information company. Passaic County’s single-family tax bill averaged $8,904, according to RealtyTrac.
Nationally, property tax rates average 1.3 percent of the property value, according to RealtyTrac.
Three New York counties — Westchester, Nassau and New York, or Manhattan — as well as Marin County in California had higher average property tax bills than Bergen, according to the survey.
The survey also confirms what Garden State homeowners have found out the hard way: New Jersey’s property taxes are among the highest in the nation, averaging more than 2 percent of a single-family home’s value each year. Passaic actually had a higher tax rate (2.98 percent) than Bergen (2.07 percent), apparently reflecting Passaic County’s lower property values.
Nationally, property tax rates average 1.3 percent of the property value, according to RealtyTrac.
Obama “Very Interested” In Raising Taxes Through Executive Action
Conn Carroll | Mar 02, 2015
White House Press Secretary Josh Earnest confirmed Monday that President Obama is “very interested” in the idea of raising taxes through unitlateral executive action.
“The president certainly has not indicated any reticence in using his executive authority to try and advance an agenda that benefits middle class Americans,” Earnest said in response to a question about Sen. Bernie Sanders (I-VT) calling on Obama to raise more than $100 billion in taxes through IRS executive action.
“Now I don’t want to leave you with the impression that there is some imminent announcement, there is not, at least that I know of,” Earnest continued. “But the president has asked his team to examine the array of executive authorities that are available to him to try to make progress on his goals. So I am not in a position to talk in any detail at this point, but the president is very interested in this avenue generally,” Earnest finished.
Sanders sent a letter to Treasury Secretary Jack Lew Friday identifying a number of executive actions he believes the IRS could take, without any input from Congress, that would close loopholes currently used by corporations. In the past, IRS lawyers have been hesitant to use executive actions to raise significant amounts of revenue, but that same calculation has change in other federal agencies since Obama became president.
Judge rules Christie’s $1.6 billion pension cut must be reversed
February 23, 2015, 4:13 PM Last updated: Monday, February 23, 2015, 4:36 PM
By MELISSA HAYES
State House Bureau |
The Record
A Superior Court judge has ruled that Governor Christie must reinstate a $1.6 billion cut he made to the state’s pension payments for the current fiscal year.
Mercer County Superior Court Assignment Judge Mary C. Jacobson issued her ruling Monday, one day before Governor Christie is set to deliver his budget for the next fiscal year, which begins July 1.
Jacobson said the state must also reimburse the public employee unions for legal costs.
“The word for me is not vindication, it’s hope that in fact hundreds of thousands of workers will not have their pensions taken away from them,” said Hetty Rosenstein, state director of the Communications Workers of America, one of the unions in the lawsuit.
The governor’s office did not immediately comment Monday.
FEBRUARY 17, 2015, 9:49 PM LAST UPDATED: TUESDAY, FEBRUARY 17, 2015, 9:49 PM
BY HUGH R. MORLEY
STAFF WRITER |
THE RECORD
As the state pours billions of dollars in business tax breaks into programs aimed at strengthening New Jersey’s struggling economy, it has put the brakes on another incentive program, leaving hundreds of companies without promised payments that could total in the hundreds of millions of dollars.
Seeking to balance the state budget over the last few years, the Christie administration and the Legislature have each slashed funding for the Business Employment Incentive Program, commonly referred to as BEIP, eliminating payments to companies that were promised annual income tax rebate checks in return for moving to New Jersey or expanding here.
The affected businesses range from HighRoad Press — a small printing company that was promised $345,000 over 10 years for its move from Manhattan to Moonachie — to retail giant Bed Bath & Beyond, which is owed $2.8 million for creating jobs in 2012 and 2013. Paying out the money from these awards — estimated at $650 million according to one state estimate — would seem out of reach without an unexpected massive boost in state revenues. The state stopped awarding new grants under the program in 2013.
Democrats seek relief from health law penalties
By RICARDO ALONSO-ZALDIVAR, Associated Press
WASHINGTON (AP) — The official sign-up season for President Barack Obama’s health care law may be over, but leading congressional Democrats say millions of Americans facing new tax penalties deserve a second chance.
Three senior House members told The Associated Press that they plan to strongly urge the administration to grant a special sign-up opportunity for uninsured taxpayers who will be facing fines under the law for the first time this year.
The three are Michigan’s Sander Levin, the ranking Democrat on the Ways and Means Committee, and Democratic Reps. Jim McDermott of Washington, and Lloyd Doggett of Texas. All worked to help steer Obama’s law through rancorous congressional debates from 2009-2010.
The lawmakers say they are concerned that many of their constituents will find out about the penalties after it’s already too late for them to sign up for coverage, since open enrollment ended Sunday.
That means they could wind up uninsured for another year, only to owe substantially higher fines in 2016. The fines are collected through the income tax system.
This year is the first time ordinary Americans will experience the complicated interactions between the health care law and taxes. Based on congressional analysis, tax preparation giant H&R Block says roughly 4 million uninsured people will pay penalties.
The IRS has warned that health-care related issues will make its job harder this filing season and taxpayers should be prepared for long call-center hold times, particularly since the GOP-led Congress has been loath to approve more money for the agency.
“Open enrollment period ended before many Americans filed their taxes,” the three lawmakers said in a statement. “Without a special enrollment period, many people (who will be paying fines) will not have another opportunity to get health coverage this year.
“A special enrollment period will not only help many Americans avoid making an even larger payment next year, but, more importantly, it will help them gain quality health insurance for 2015,” the lawmakers added.
So far, administration officials have deflected questions about whether an extension will be granted. Health and Human Services Secretary Sylvia M. Burwell has authority to grant special enrollment periods under certain circumstances.
Time to Grow Up Most Readers Supportive of the Garrett Measure to Change in the Drinking Age
This proposed measure by Garrett, even if it is not signed into law, is quite instructive in terms of what changes might be made to roll back the tide of Mother Government, and what can be done to encourage the governments of the several states to reconnect with their residents and resume many of the roles they have been steadily shedding, for good or ill, since the early part of the 20th century.
Many 13-18 year olds I know have me and most of my age cohort beaten by a wide margin in terms of the maturity we displayed at that age and our awareness at that time of what real life is and what it requires from a citizen of the United States. With my three children I believe a change back to 18 in the drinking age would improve my ability to relate to them as adults at a critical time (newly voting, newly eligible for draft, finally emerging from the K-12 cocoon) when they are exposing themselves to the standards and expectations of the wider world and learning first hand how they measure up.
Pretty much the entire world has a drinking age of 18. It’s the age of adulthood. If nothing else, lowering the age to 18 might go a long way to accepting that our 18 year old’s are adults, and not the perpetual children that we treat them as. It’s no wonder our homes are full of 20-30 year old’s with their failure-to-launch issues.
I’m not saying that drinking will somehow change things for the better, but for God’s sake, let start having them act as the adults.
Congressman Scott Garrett’s tax plan would be a real gas for Jersey drivers: Mulshine
In the New York Times the other day a panel of experts debated the wisdom of lowering the drinking age. Those in favor of doing so pointed out that current law encourages younger people to binge on hard liquor in private instead of drinking beer or wine at a bar.
The article was sent to me by Assemblyman Mike Carroll of Morris County. Carroll, who is a father of five or six or some such number, said he supports lowering the drinking age to the voting age, which is 18.
“If you’re not capable of making a determination to drink a beer, are you capable of making a determination that Barack Obama should be president of the United States?” asked Carroll.
As you might deduce from that remark, Carroll is a conservative Republican. But there are liberal Democrats who also support lowering the drinking age. It all makes for a high-toned and illuminating debate and it might have great meaning – if this were a free country.
Unfortunately it’s not. Americans love to yammer on about their love for freedom, but they love pushing other people around even more. That’s how we ended up with such draconian regulations as a national 55-mph speed limit and a national drinking age of 21.
Scott Garrett has an idea that would end all that over-regulation – and free up a lot of money for transportation as well. Garrett, a conservative Republican who represents the northwest corner of the state, is sponsoring a bill that would accomplish both those ends through the simple expedient of turning the federal gas tax into a state tax.
Trenton (still) refuses to tackle the onerous fee that’s really an insidious tax
Posted by Joe Sinagra On February 11, 2015 2 Comments
By Joe Sinagra | The Save Jersey Blog
The Realty Transfer Fee (RTF) was established in 1968 to offset the costs of tracking real estate transactions. It may be called a fee, Save Jerseyans, but in reality it’s another insidious stealth tax place upon New Jersey home owners. Sometimes this tax is referred to as an “exit tax.”
How does it work? The New Jersey Division of Taxation states that the Realty Transfer Fee is calculated based on the amount of consideration recited in the deed or, in certain instances, the assessed valuation of the property.
Why? This tax started out as a $350 flat fee paid to help support the recording of real-estate transactions such as the upkeep of books, records and maps keeping them up to date.
And what does the size or value of your property have to do with how much tax the seller pays? I would think in this day and age, with all the technology we have, that all of this record keeping should not be as involved as it once was. If the county clerk’s office where all these transactions get recorded, supposedly became more modern and efficient, why have the costs escalated other than being an easy money grab for the state as a guaranteed source of revenue.
This is just another one of those things that unfairly impact Bergen County because of property values
TRENTON, N.J. — No state in the nation levies taxes when people die as aggressively as New Jersey.
Most states charge nothing. New Jersey is one of only two states with both an estate tax on the assets of the person who died and an inheritance tax charged to some people who are bequeathed money or assets. Moreover, of the states with an estate tax, New Jersey exempts the fewest from having to pay.
State legislators around the country have introduced more than 200 bills aiming to nullify regulations and laws coming out of Washington, D.C., as they look to rein in the federal government.
The legislative onslaught, which includes bills targeting federal restrictions on firearms, experimental treatments and hemp, reflects growing discord between the states and Washington, state officials say.
“You have a choice,” said Kentucky state Rep. Diane St. Onge (R). “To sit back and not do anything or say anything and let overregulation continue — or you have the alternative choice to speak up about it and say, ‘We know what you are doing or intend to do and we do not think that it is constitutional and we as a state are not going to stand for it.’ ”
Last month, St. Onge introduced H.B. 13 to nullify federal gun control laws within Kentucky state lines. Similar legislation has been introduced in seven other states.
“This law is saying the sheriff and those under him do not have to follow federal regulations,” she said.
Fraud outbreak hits TurboTax
By: Matt Krantz February 6, 2015 11:23 am
TurboTax has turned off the ability of its software to e-file state tax returns Thursday after the company found “an increase in suspicious filings,” the company said today.
The tax-preparation software company has found an increase in criminal activity where stolen personal data is used to file fake state returns with state authorities. This illegal act allows fraudsters to claim tax refunds from state governments.
An internal TurboTax investigation has found the breaches are not due to a problem with its own systems, but criminals digging up the personal information elsewhere. The company said the investigation is ongoing. Intuit says it’s working with state tax officials to get the e-filing security back to where it needs to be to turn it back on. TurboTax customers who already e-filed their state returns don’t have to do anything. The returns will be transmitted again when the problem is resolved, TurboTax says.
The e-filing halt only affect state returns. Federal tax returns can still be filed electronically.
N.J. property tax bills increased by more than 2 percent last year, now top $8,000
FEBRUARY 2, 2015, 9:50 PM LAST UPDATED: TUESDAY, FEBRUARY 3, 2015, 7:04 PM
BY JOHN REITMEYER
STATE HO– USE BUREAU |
THE RECORD
The cap Governor Christie and lawmakers placed on local property tax increases in 2010 seemed to be working. Average property tax bills in New Jersey had grown since that cap went into effect, but the rate of growth was declining.
That all changed last year when, according to new numbers released by the state, the average property tax bill grew by 2.16 percent, beating both the prior year’s growth rate and exceeding the 2 percent limit for the first time since it was put in place in 2010.
The result was property tax bills — long a top complaint of New Jersey residents — went above $8,000 on average for the first time ever in New Jersey. And in some places the bills were much higher last year.
In Bergen County, average property bills increased to $10,826. Passaic County property tax bills rose to $9,572.
To be fair, property taxes have grown by much larger clips in the past. Just a decade ago, the rate of growth from 2004 to 2005 was over 7 percent.
But last year’s increases also came at a time when Christie, due to state budget problems, delayed property tax relief that comes from Trenton via the state’s popular Homestead tax-credit program. The result of that delay meant no one who qualifies for that property tax relief saw a dime last year even as their bills went up on average by $173 to $8,161.
