Tomorrow morning, the Carteret County Commissioners will hold a special session beginning at 8:30am in the usual meeting room for the purpose of further deliberations on the Compensation Study done by the Springsted Corporation, and on Springsted’s recommendations for revising the County’s employee compensation policies.

At this point, there are four options before the Commissioners.  In the following options list, the term “SAFE Minimum Level” refers to the levels that are believed to be comparable to the compensation being paid in neighboring counties based on the Springsted survey.

1]  Moving the salary of most employees up to the SAFE Minimum Level, expected to cost the County about $1,007,952.  Employees who are already being paid above the minimum would be unaffected.

2]  Moving the salary of all employees up to the SAFE Minimum Level or to a level that is 2% above their current salary, whichever is greater, expected to cost the County about $1,158,071.

3]  Moving the salary of all employees up to the SAFE Minimum Level plus an additional one/half percent of their current salary for each year of service, expected to cost the County about $1,667,450.

4]  Moving the salary of all employees up to 110% of the SAFE Minimum Level plus an additional one/half percent of their current salary for each year of service, expected to cost the County about $3,389,367.

Over the weekend I read the Springsted report and several related documents, and some of my conclusions will be presented at the CCTPP meeting tonight.  If you are interested in this issue, please try to attend.

If time permits, we will also show the “Rocky Mountain Heist” video at tonight’s meeting.  For the trailer and more on this 45-minute video, click HERE.

Laura Leslie of WRAL news is reporting on some draft changes that the NC Senate’s Finance Committee has made to House Bill 1224, changes that may help the Carteret County Commissioners address the County’s need for options to deal with local dredging costs.

An excerpt:

The new version of House Bill 1224 would still cap local sales taxes at 2.5 percent.  But it deletes a proposal to force counties to choose between funding education or transit through additional taxes.  Most counties would have as much or more flexibility to raise sales taxes with voter approval under the new version as they do under current law.  It would allow counties to raise local sales taxes up to a quarter-percent for “general purposes,” rather than solely for education or transportation.

For the tax-and-spenders, however, the new flexibility was not enough.

Johanna Reese with the NC Association of County Commissioners thanked Senate leaders for removing the “either/or” sales tax funding restriction, but said the cap is still a concern for her group.

Erin Wynia with the N.C. League of Municipalities urged lawmakers again to study the proposal over the interim.  “We don’t believe this bill goes far enough in giving local communities the flexibility to decide what’s best for them,” she said.   

And, as to the crowdfunding provisions:

The new version of the bill also includes the crowdfunding provision that passed the House last year.  It would allow North Carolina companies to solicit up to $1 million a year in small investments – up to $2000 –  from state residents.  [NC Senate sponsor Rick Gunn, R-Alamance] said it would be “an appropriate tool” for the state to use to encourage start-ups, tech firms, and enterpreneurs.

The Senate Finance Committee is expected to vote on the changes later this week, after which, presumably, the House will be asked to concur.  For the full WRAL article, click HERE.

In an article by Bernie Becker on The Hill blog, he reveals that IRS officials have now confirmed, under oath, the assertions made about Lerner’s hard disk drive (HDD) by IRS Commissioner John Koskinen in his testimony before Congress last month.

Not much is new in the article, except for the fact that Lerner apparently never had a desktop computer at the IRS.  The HDD in question was in a laptop, which I never understood before now.  The drive crashed in 2011 and was deemed by the IRS tech crew to be unrecoverable, after which it was subjected to magnetic deguassing and then shredded.  For a typical consumer, this would constitute extreme overkill, but the IRS alleges that it is a routine procedure when a HDD may contain confidential taxpayer information.

The full article is HERE, but it does not address the more important issue of the e-mail servers to which Lerner’s laptop were connected.

Former President George Hiram Walker Bush (Bush-41) is being given a Profile In Courage Award by the JFK Presidential Library Foundation for his capitulation to the Democrats in the 1990 Congress, in which he agreed to raising tax rates as a part of that year’s budget deal.  There are at least two things about this that are of note:

1. The first is the irony of being given an award for raising taxes by the Presidential Library Foundation of the President that urged onto Congress the largest reduction in marginal income tax rates in the last half-century.
2. The second is that Bush-41’s son George W. Bush, who became President in his own right (Bush-43) has acknowledged his opinion, to many of his friends in private, that the single biggest factor in the failure of his father to win re-election against Bill Clinton in 1992 was his father’s betrayal of his “read my lips, no new taxes” pledge during the 1988 campaign, in which he won over Democratic candidate Michael Dukakis.

The full story, from USA-Today, is HERE.

President Obama wants increased funding for the International Monetary Fund (IMF), and the Senate wants to give it to him.  And at first blush, it seems like a straightforward and uncomplicated proposition, as reflected in this excerpt from Thursday’s post at CNN’s Money blog:

The International Monetary Fund [IMF] has agreed to lend Ukraine up to $18 billion over the next two years as its new government tries to stave off economic collapse.  Kiev has been running dangerously low on cash to pay for imports and service its debts since the ousting of pro-Moscow former President Vitkor Yanukovych last month, which killed off a $15 billion financial lifeline from Russia.

and

“The IMF package should be sufficient to prevent the country falling into a full-blown balance of payments crisis, in which the hrvynia would drop sharply and output would collapse,” said William Jackson, emerging market economist at Capital Economics.  In return for the bailout, Ukraine will implement a program of unpopular reforms aimed at stabilizing the economy and creating the conditions for a return to sustained growth.  Central to the program are commitments by Ukraine to tackle corruption — a major concern of international lenders — and reforming the country’s energy market, including the gradual withdrawal of subsidies on natural gas.

But with 100,000 Russian troops poised at the border, things are getting more complicated.  On top of that, the House Republicans, who are reluctant to bless the IMF expansions that the President favors, want a quid pro quo.  They have agreed to pass the IMF funding bill, which will enable the IMF to prevent chaos in the Ukrainian monetary system, in return for the Obama administrations’s promise to back off on implementation of the new IRS regulations that would restrict the political activism of the many conservative organizations that fall under the IRS Section 501(c)(4) rules for non-profits.

So, does Boehner have a deal?  Nope, nada, no way, Jose.  As reported earlier this week by Eliana Johnson at the online National Review (with my slight editing for brevity):

In the ongoing negotiations over a bill to fund aid to Ukraine, Republicans in both chambers told Democrats privately that they would cede ground on the IMF provision — which gives more influence within the organization to developing countries and, Republicans say, diminishes that of the United States — if Democrats agreed to delay the proposed rules.

and

Democrats wanted approval for new IMF rules and more funding for the president’s pre-kindergarten program, among other things, but were unwilling to give in on the IRS regulations: Democrats and the administration rejected [the] offer to trade increased funding for the IMF for an amendment that would have delayed them.  “The spin is that Republicans are so petty, but the truth is that Democrats are willing to sacrifice everything, including the IMF reforms they wanted, to keep them,” says a senior Republican aide.

For more, check out THIS at CNN, and THIS at National Review.

My friend Warren is no longer with us, but in his years as an independent tax prepayer with Enrolled Agent status, he often regaled and horrified me with tales of the many Hispanic clients who would claim the refundable Earned Income Tax Credit (EITC) on the basis of having many children listed as dependents.  Now, Carolina Journal is reporting on a similar scheme brought to light by the confessions of a Hispanic tax prepayer who apparently has a conscience.

Read the full article, HERE.

The primary goal for the GOP in 2014 is to achieve electoral control of both houses of the United States Congress.  The primary goal of the Obama administration is to thwart that ambition, because they know that Republican control of the House and Senate would make President Obama the lamest of lame ducks.  Their tactics for the next nine months, therefore, will be to use the leverage of government toward their ends, and to raise continual political distractions in the hope of making right leaning voters and legislators lose their focus on ObamaCare, Benghazi, and the other issues that have the potential to move the electorate.

One of the ways in which the Obama administration is using the leverage of government is to loose the jackals at the IRS onto conservative political advocacy groups, in particular those organized as non-profits under IRS code Section 501(c)(4).  One of the more diligent watchdogs working to keep the conservative public informed about this danger is Cleta Mitchell, a partner in the Washington, DC law firm of Foley & Lardner.  Ms. Mitchell has represented Tea Party groups in a number of legal confrontations with the IRS in recent years, and she has fully explained the threat in a video.  The deadline for public comment to the IRS is February 27th, so please click the link below to view the video in order to fully appreciate the threat that this proposal poses to our liberty, then use the boilerplate text to copy and paste an e-mail to the IRS expressing your opposition.  Access the page by clicking HERE, or by navigating via the menu bar [ Issues & Education / IRS 501(c)(4) Rules ], above.  Please, do this soon.

Excerpts from the article on Loving versus IRS, HERE, authored by law professor Eugene Volokh of the Volokh Conspiracy:

In 2011, responding to concern about the performance of some paid tax-return preparers, the IRS issued new regulations.  Among other things, the new regulations require that paid tax-return preparers pass an initial certification exam, pay annual fees, and complete at least 15 hours of continuing education courses each year.  The IRS estimates that the new regulations will apply to between 600,000 and 700,000 tax-return preparers.

[snip]

… the Executive Branch never interpreted the statute to authorize regulation of tax-return preparers.  But in 2011, the IRS decided that the statute in fact did authorize regulation of tax-return preparers….  We agree with the District Court that the IRS’s statutory authority under Section 330 cannot be stretched so broadly as to encompass authority to regulate tax-return preparers.

[snip]

It might be that allowing the IRS to regulate tax-return preparers more stringently would be wise as a policy matter.  But that is a decision for Congress and the President to make if they wish by enacting new legislation….  The IRS may not unilaterally expand its authority through such an expansive, atextual, and ahistorical reading of [the relevant federal statute.]

In Scott Johnson’s PowerLine post of earlier today, William Hench, an attorney in the IRS Office of the General Counsel offers an indictment of the IRS unrelated to their disgraceful persecution of conservative groups.  An excerpt:

… I have personally witnessed improper giveaways of billions of dollars to taxpayers with inside access at the agency, bullying of elderly taxpayers, the cover-up of managerial embezzlement and misappropriation of thousands of dollars in government funds, and a retaliatory audit.  I have also heard credible accounts of, among other things, further improper giveaways, blatant sexual harassment, and anti-Semitism.  All of these matters have been swept under the rug.

Read the entire post, HERE.

In response to questioning from Representative McElraft and others at the Tuesday meeting of the Legislative Government Oversight Committee, the legislature’s chief economist estimated that the extra sales tax collections in North Carolina resulting from the new Amazon collection policy (effective February 1st) will amount to about $30 million dollars, and possibly as much as $43 million.

Although there has been no official announcement as to why Amazon has suddenly capitulated in the lengthy struggle with the North Carolina Department of Revenue, it is rumored that Amazon has recently established a warehouse and shipping hub within the State, possibly in Greensboro.  If so, this would trigger the applicability of the “nexus” criteria articulated by the US Supreme Court in their decision that prevented states from forcing online retailers to collect sales taxes from buyers in states within which the retailer had no physical presence.

Paul Caron, Pepperdine University Law Professor and purveyor of the TaxProfBlog site, is calling attention to THIS new wrinkle arising from the IRS position on changes to public pension systems that would allow municipalities to shift workers into new, less-expensive plans without losing any tax advantages they had under the old plan.  The situation originated in Orange County, California, but could be coming to a municipality near you.

From NC Civitas:

April 3, 2013

Tax reform is starting! Yesterday, Senator Bob Rucho (R-Mecklenburg) took the first step to reform the NC tax code. We’ll have to wait a bit longer for the real reforms, but this is a fine start. He introduced 2 bills – one of which signals much more to come… Here are the highlights: By 2016, the state personal income tax drops to 0% for married couples making up to $12,500 and singles up to $6,250; with a flat 4% rate for all income above that Authorizes a committee to study the possibility of personal income tax elimination By 2015, the corporate tax is reduced to 6% Repeals several corporate income tax credits As a first step, this is great news! Still, we have a long way to go before we can proclaim that North Carolina is “Open for Business”. I have good news for the new committee to study eliminating the income tax: “WE’VE DONE YOUR WORK FOR YOU! IT’S SITTING ON YOUR DESK!” On the off chance that you haven’t yet seen our work, here’s a quick update: We produced a study that shows the way forward on tax reform – here it is. We came up with a “Response to Critics” to combat the arguments from the left – here it is. And we have a growing petition movement to eliminate the income tax – here it is. The research is done and the groundwork has been laid for reform. And North Carolina is controlled by conservatives in every office that counts! I applaud the legislature and Sen. Rucho’s first step. But I need you to help me remind them that: The time for reform is now! The research is already done! And we’re tired of waiting for growth and opportunity in North Carolina – We have to make it happen! Sign our petition to Repeal the Income Tax here. I’m looking forward to more good news out of the legislature – and soon! Semper Fi, Francis X. De Luca Col. USMCR (Ret) President P.S. We haven’t gotten exactly what we wanted yet, but this is a good sign of what’s to come. I am going to continue to educate the legislature on tax reform and make sure they know the best way forward. I need your help to remind them how much we need this reform! Please go to www.noincometaxnc.org, and sign the petition to repeal the income tax, send this email around to your friends, and get them to sign it too. If the electorate shows it’s officials that it wants reform, we will get it!