Northeast Philadelphia Tax Preparation Services Newsletters - Summer 2011

U.S. Encouraged to Move to Value-Added Tax

IRS GIVES UP ON TWO-YEAR  LIMIT FOR MANY INNOCENT  SPOUSE REQUESTS

The corporate CFOs testifying before Congress also commented that the U.S. should consider adopting a value-added or VAT tax. A value-added tax is a type of consumption tax that is added to a product at each stage of the manufacturing process. When a product is finally sold at the retail level, there is an embedded tax representing the accumulated taxes added at each stage of development. The U.S. is one of the few countries in the world that does not have a VAT tax. Because of this, the U.S. has to rely more on corporate and individual income taxes to fund government spending. This is why corporate leaders are open to the imposition of a VAT in the U.S.

Outlook: While corporate tax reform has momentum in Congress, it can only happen if the House Republicans and Senate Democrats can agree on a comprehensive plan. Given the contentious relations and the looming 2012 campaign season, it is unlikely that Congress will be able to make a bold move to solve the corporate tax problem in the United States.  

Did You Know…  IRS estimates that every dollar it receives in funding yields nearly five dollars in increased tax revenues. IRS Commissioner Shulman told this to Congress in making his agency’s budget request this year.

In preparing your small business tax return for your Northeast Philadelphia Small Business, please do not hesitate in contacting your Northeast Philadelphia Tax Accountants at 215-667-8839. We proudly provide accounting and tax preparation to small businesses in Northeast Philadelphia.