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[N221]New Tax On Cigarettes

by Tom Wheelwright, Tom

Create an alternative tax that is optional (not mandatory like the AMT). The alternative tax would be a flat tax, with two tax rates, a generous standard deduction, and nothing else. Taxpayers would have the choice of filing under the regular tax system or the alternative system.

This solves many problems without creating the remarkable complexity that comes from a consumption tax (e.g., national sales tax) or other "flat tax" proposals. Because you have a choice, you would be able to take the complex route of the regular tax, using a firm like ProVision to handle your tax filing. If, on the other hand, simplicity is most important to you, you can simply use the flat tax and file a postcard-type return.

What I like about this proposal is that it should eliminate many of the complainers about the current system being too complex. They would have the opportunity to use the simple form. At the same time, it's not a massive overhaul of the current system and so is politically doable, as no one loses. It should allow the IRS to reduce it's audit staff (especially office audits). Finally, it allows the government to continue using the tax system to encourage investment in real estate and business. (Personally, I'm not sure I care whether the government uses the tax system for economic, social and energy policy. The government sure seems to like it, though.)

The only downside I can see is that it would take the pressure off the government to do a massive overhaul of the current system. At this point in history, though, it seems almost impossible to undo decades of complicating the tax system. The tax system is woven throughout our entire economy. So I think that Mr. McCain's proposal is a very good step in the right direction.

One other aspect of John McCain's proposal that I really like. With a flat tax, any time the government wanted to raise or lower taxes, it would be very obvious, since it would have to include a rate change or a change to the standard deduction. It couldn't be hidden like the haircuts we have on Schedule A (itemized deductions) or the income limits on certain tax benefits or the alternative minimum tax.

There are still many issues that would have to be ironed out, such as which income is taxable, but let's give Mr. McCain a round of applause for coming up with a reasonable step in the right direction towards tax filing simplicity for the average, middle-class American.

Warmest regards,

Tom

Federal, state and local groups and agencies are celebrating a landmark victory this week with a ruling by the California State Board of Equalization to tax so-called "alcopop" drinks as distilled spirits, rather than at the lower beer rate. The reason for the celebration is not about increased state tax revenues, but because higher prices mean fewer kids will buy the drinks. It's all about helping to reduce the numbers of underage drinkers who could wind up needing alcohol detox later in life.

Alcopop producers have been saying all along that their drinks are "brewed malt" categorized in most states as beer. But according to the California Youth and Alcopops Coalition, up to 90 percent of the alcohol contained in the soft-drink-like beverages is derived from distilled spirits. California agreed, and state law says a beverage with any detectable amount of distilled alcohol is not a beer product. California taxes beer at 20 cents per gallon, while distilled spirits are taxed at $3.30 per gallon. The result will be at least a 25% increase in the price of the drinks. Similar legislation is being considered in most other states.

Alcopops are sweetened alcoholic beverages that are often bubbly and fruit-flavored like soda or other soft drinks, with a proven appeal to underage drinkers – especially teenage girls. We've seen these drinks on the shelves, and mistaken them many times for soft drinks. According to the Marin Institute, which lobbied hard for the tax increase, alcopops are sweet, flashy and with fruity flavors and names like Razzberry and Pomegranate Twist, it's no wonder they're popular with young teens and middle schoolers. But teenagers gleefully downing alcopops don't realize that these fun fizzy drinks can lead them into alcohol dependence and alcohol detox.

In several European countries as well as the US, studies show that the retail price of alcoholic beverages impacts sales – especially sales to minors, who have a more limited budget than working adults. Wherever prices have been lowered, such as in Scandinavia and the UK, alcohol abuse statistics have worsened. Where prices have been raised, alcohol-related problems and subsequent alcohol detox and treatment statistics have improved. That's the hope in California.

Meanwhile, brewers and distillers still insist their alcopop products are aimed at legal-age drinkers. Oh please! If that were actually true, then their marketing campaigns would be way off the mark – and they're plenty smart enough to know when that happens. These marketers are letting the profit motive drive unknown numbers of young people into a bleak future of alcohol dependence, interrupted or ruined lives and alcohol detox as their only salvation.

For example, in the UK, advertising for at least two alcopops has already been banned for appealing directly to underage drinkers. Here in the US, a survey by the Center for Applied Research Solutions for the California Department of Alcohol and Drug Programs showed that youths are definitely attracted to the colorful, hip packaging of alcopops, that kids underestimate their alcohol content, and that these drinks are, in fact, very popular with teens. Yet another report on underage drinking by the Center on Alcohol Marketing and Youth found that teenage girls are now binge drinking more than boys. And finally, the American Medical Association's “Girlie Drinks” survey released last year concluded that alcopops are the alcoholic beverage most frequently consumed by most teenage girls, and the least-favored by adult women. And recent statistics show that alcohol-dependent females are an increasing alcohol detox and rehab statistic – just look at the news, and see the girls' names as often as the guys. That's a
recent and significant change. If nothing is done to stop the trend, it is certain that more people than ever will wind up in alcohol detox.

California's tax increase may help reduce teenage alcohol consumption and the estimated $7.5 billion a year costs in medical care, work loss, pain and suffering that stem from alcohol-related violence, traffic accidents, property crime and injuries. Since similar figures can reasonably be inferred for the rest of the country, we can only hope that other states will soon follow California's lead, and help keep our young men, and especially our women, from winding up as candidates for alcohol detox.

Article Source : Self Employed Tax Deductions

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Both Tom Wheelwright & Rod Mactaggart are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Tom Wheelwright has sinced written about articles on various topics from Legal Matters, Finances and Management. Tom Wheelwright is not only the founder and CEO of Provision, but he is the creative force behind Provision Wealth Strategists. In addition to his management responsibilities, Tom likes to coach clients on wealth, business, and tax strategies. Along with. Tom Wheelwright's top article generates over 8100 views. to your Favourites.

Rod Mactaggart has sinced written about articles on various topics from Addictions, Alcohol Treatment and Keyboard Synthesizer. . Rod Mactaggart's top article generates over 135000 views. to your Favourites.