Neil deMause: The Website

The “Geoffrey Loophole” is not only a way that big corporations get out of paying taxes that their small-business competitors have to, it’s also the only tax dodge named after a cartoon giraffe:

When the Massachusetts passed its much-delayed state budget last week, it included an obscure tax-law change that could be crucial for small-business owners concerned about unfair competition. By becoming the 22nd state to adopt “combined reporting” legislation, Massachusetts lawmakers are hoping to put a stop to a longstanding practice that, they say, gives large corporate chains an unfair advantage over their smaller competitors at tax time… [read more]

New York City is facing the prospect of bus and subway fare hikes again, but could there be another way to do this?

As if New Yorkers hadn’t been beset by enough bad news of late — foreclosures going through the roof, “The Real World” filming its next season in Brooklyn — last week the MTA chimed in with word that its latest round of budget woes would force it to “defer” planned service upgrades, possibly forever. With $500 million in red ink projected for next year, MTA chief Lee Sander declared, the authority needed to put off everything from renovating crumbling subway stations to buying new double-length buses - and still may consider another fare hike next year.

To blame is the MTA’s financing system, which draws roughly equally from fares and from a series of dedicated taxes… [read more]

In which I examine the business tax breaks in the final version of the economic stimulus bill signed by President Bush, and whether they’ll actually, you know, help stimulate the economy:

The economic stimulus bill signed into law by President Bush today included one tax break for small businesses added by the Senate, but lost another as Congressional leaders bowed to White House pressure to move quickly without adding too many amendments.

The key addition affecting small businesses is an expansion of “bonus depreciation,” which allows investments in tangible property, computer software, or improvements to leased property to be more speedily depreciated, adding to a business’ tax savings. Businesses of all sizes will be allowed to depreciate in this tax year 50% of the cost of an asset put into use in 2008.

The Senate Finance Committee estimates that this amendment will funnel $43.9 billion in federal tax savings to businesses over the next two years… [read more]

If you’ve been dying to know what Congress’ economic stimulus package means for your Section 179 deductions, your prayers have been answered:

The Senate version of an economic stimulus bill, which could come to a vote this week, contains several tax provisions intended to benefit small businesses, including some not present in the House bill passed last week.

First and foremost, the Senate bill, proposed by Senate Finance Committee chair Max Baucus (D-Mont.), would extend a helping hand to businesses facing large operating losses in either the 2006 or 2007 tax year, allowing them to write off those losses against gains as far as five years back, rather than the current two-year limit… [read more]