Tax and Spend Tuesday is a roundup of news, views and policy proposals affecting your paycheck and pocketbook!
The election: It’s going to be a while before today’s election ballots are tallied and results are official. There will be a president, but the tax and spending plans, of course, depend on whether the president is a Democrat or a Republican. It’s like the old joke: “I told my friend that my brother is having a baby and he is asked if I knew whether I was going to be an aunt or an uncle.” Except it’s not so funny when our paychecks depend on politics and not our hard work. (Our friends at the Tax Foundation analyzed the tax plans of the presidential candidates.)
A penny here, a penny there: Cobb, Newton and Oconee counties were jurisdictions voting today on a special-purpose local option sales tax, or SPLOST. The penny sales tax funds capital projects. It was implemented in 12 counties when it was established in 1985. The next year, it was in 15 counties. Today, the tax is imposed in all counties except DeKalb, Fulton, Johnson, Muscogee and Ware, according to the state Department of Revenue. And, as a 2017 Foundation commentary pointed out, “the SPLOST is sorely in need of some updates.” The tax, which can last up to six years, is routinely renewed; in Cobb County, for example, it has been in effect continuously except for 2001-2005. The proposed SPLOST will take effect January 1, 2022, the day after the current tax ends. It is expected to raise $750 million over six years, with $213 million dedicated to county road resurfacing. Unfortunately, as the Foundation commentary noted, “SPLOST has evolved into a mechanism enabling local governments to propose a few desired major projects and intermingling those with politicians’ boondoggle projects.” Habersham had a transportation SPLOST (TSPLOST), while Gwinnett, Haralson, Morgan and Putnam counties had education SPLOST (E-SPLOST) votes on the ballot.
Ex-pats: About 9 million Americans live abroad, and that number stands to grow after this election season as online searches on expat life surge 300% above the average, Accounting Today reports. It cites rising coronavirus numbers, combined with the new flexibility offered by remote work. Tax implications can follow you, however: States like California and New York “make it very challenging to break state residency when you’re moving abroad,” so many American taxpayers choose to move to a no-income tax state before moving out of the country, according to CPA Katelyn Minott, a managing partner of Bright!Tax and currently a resident of Rio de Janeiro.
“Accounting gimmicks that allow elected officials to claim balanced budgets while their state sinks further into debt include: inflating revenue assumptions; counting borrowed money as income; understating the true costs of overhead; delaying payment of current bills until the next fiscal year; and, hiding a large portion of employee compensation from the budgeting process.” – Toni Boucher, former Connecticut state legislator
Compiled by Benita Dodd