Biodiesel Tax on Memorial Day Recess

In a voting frenzy prior to the Memorial Day recess, the U.S. House of Representatives has extended the $1 a gallon biodiesel tax credit that expired Dec. 31, despite indications even late that the vote would be delayed until June.

The extension, which was part of a package that includes, continued unemployment benefits and other tax breaks, would keep the biodiesel credit in place until the end of this year. The legislation still needs to be approved by the Senate, but that vote is not expected until after the recess.

On behalf of the state’s biodiesel plants, nearly half of which are idled or shuttered, the Iowa Biodiesel Board today applauded the U.S. House of Representatives for passing a bill that included extension of the federal biodiesel tax incentive.

The biodiesel industry desperately waited for Congress to act on H.R. 4213, The American Jobs and Closing Tax Loopholes Act of 2010, to reinstate the much needed $1 per gallon tax credit before the Memorial Day recess, but time for this to happen has run out essentially. The tax credit will be retroactive as written and the RFS2 volume requirements will go into effect on July 1 regardless of the tax credit’s status.

Oklahoma’s Tax Cut on Wireless Technology

Based on the theory that wireless companies operating in Oklahoma would invest more in bringing new technology, such as cell phone towers, to the state, the Oklahoma House approved a tax cut on wireless technology. However, opponents of the bill called it a tax cut, saying passage would hurt public schools and counties, which receive money from ad valorem taxes.

The property tax rate on new wireless technology infrastructure in the state would be nearly cut in half under a bill narrowly approved by the Oklahoma House. Supporters said Senate Bill 1589 would encourage wireless companies to build new towers and install electronic equipment in Oklahoma to improve the quality and range of cell phones. Opponents of the bill called it a tax cut, saying passage would hurt public schools and counties, which receive money from ad valorem taxes. The House passed SB 1589 by a vote of 53-43. It needed 51 votes to pass.

But telecommunications companies are among a handful of industries including gas and electric utilities, telephone companies and railroads that are centrally assessed on ad valorem taxes, which mostly fund local schools. Most companies are assessed locally in each of the state's 77 counties. Reducing the ad valorem assessment rate will result in less money for schools, Kiesel and others argued.

Tax Analysis of California and Maryland

Californians that claimed the mortgage interest rate deduction saved an average of almost $20,000 from their tax bill in 2008, according to a Tax Foundation analysis of new data from the Internal Revenue Service. Close behind were Hawaii and Nevada. The national average among the roughly one quarter of Americans who deducted mortgage interest from their taxes was $12,221.

But taxpayers in California benefited the most from taking advantage of the deduction. Californians who deducted mortgage interest saved an average of $18,876, several thousand dollars more than the typical Maryland homeowner who deducted mortgage interest on the 2008 federal income tax return. Folks who live in Maryland had the highest percent of tax returns claiming a mortgage interest deduction in 2008, according to fresh research from the Tax Foundation. Californians who deducted saved the most on their tax bill, an average deduction of nearly $20,000.

Overall, Maryland and California are the biggest winners. Maryland had the highest percentage of tax returns claiming the deduction, 37.9 percent, and average dollar amounts claimed were also high. It had the second-highest average deduction among all tax returns, $5,372, and counting only the tax returns that claim the mortgage interest deduction, the average Maryland tax return claimed $14,162 in mortgage interest. That is the fifth highest nationwide.

California had a lower percentage of tax returns claiming the deduction, but when Californians deduct mortgage interest, the amounts are high. Of California's 16.4 million tax returns, about three in ten deducted mortgage interest, 29.2 percent, 19th highest nationwide. But California ranked highest in average deduction among deducting returns, $18,876, and also highest among all returns, $5,520. Hawaii also ranked high, with its famously expensive homes, as did Nevada which has been growing so quickly that more of its home owners are in the early years of their mortgages when interest payments are high.

This analysis are a reminder of why the mortgage interest rate deduction, despite being assaulted by everyone from economists who say it distorts incentives in favor of home ownership to urban zealots who say it encourages sprawl, remains an untouchable tax break and a third rail of American politics.

America’s New Tax Changes

If you are an American homeowner, you know you're in trouble when the Communist Chinese are making more sense on taxes than your own state officials. In China, stocks have been bouncing up and down on rumors that the government will soon introduce a U.S.-style property tax. Whatever the wisdom of such a tax, Chinese officials at least appreciate that the effect would be to dampen their property market, which they fear is turning into a bubble.

Here in America, by contrast, most states and towns are dealing with depressed home prices and large budget gaps. Yet few are rethinking their property taxes. Two exceptions are Indiana and New Jersey, and if the candidates for governor are to be believed New York.

In Indiana, Republican Gov. Mitch Daniels has succeeded in lowering property taxes on homes to 1% of assessed value. In New Jersey, another Republican, Gov. Chris Christie, has introduced a reform package that would cap property tax increases to 2.5% each year. And in New York, Democrat Andrew Cuomo has just announced his candidacy for governor with a call for a 2% cap on property tax increases lower than the caps proposed by two of the state's leading candidates for the GOP nomination.

California has taxed corporations using a formula based on employment, property and sales in the state. When the new formula takes effect in 2011, it would allow a corporation to calculate its tax based on actual sales in the state, a move favored by California technology companies. The tax breaks are expected to cost the state $2 billion next year.

The New Jersey state has a projected $767 million shortfall over the next 13 months, raising the potential for even deeper budget cuts, according to new figures to be released. It’s not immediately clear why the income tax projections were off by so much whether the increased millionaire’s tax of 2009 did not bring in the desired amount of money, whether wealthy residents created a strategy to avoid paying the increase in that year, or whether it was just a worse year than expected for the average New Jersey resident.

Tax Proposed on Soda and Other Sweet Drinks

Makers and sellers of soda and other sweet drinks have intensified a fight against proposed taxes on their products, as a growing number of cities and states are weighing the measures to help fill depleted coffers.

A soft-drink bottler offered what it called a $10 million good will gesture donation for health and recreation programs in Philadelphia, as city officials there considered a proposal for an excise tax to help plug a budget hole and fight obesity. Politicians say the taxes will help curb rates of obesity and diabetes and can pay for health programs. But retailers and the beverage industry say the taxes are unpopular, unfair and simply won't work.

Industry officials are also considering trying to organize a referendum in Washington State to repeal a three-year excise tax on carbonated beverages of two cents on every 12 ounces. The moves come as officials in at least 20 cities and states have proposed new taxes or the removal of tax exemptions on non-alcoholic beverages so far this year. The beverage industry has spent millions of dollars since 2009 on lobbying and advertising against proposed taxes, including a federal tax initially proposed as part of the health-care reform bill.

So far, few such taxes have actually been imposed. The final federal health overhaul didn't include a soft-drink tax. And while several state and city legislators initially expressed enthusiasm for new soda taxes, only Washington State has approved a new excise tax on soda thus far, while Colorado removed a sales-tax exemption. Several other states have existing small taxes on soft drinks, but those stirring controversy are the proposals for new, larger taxes. Industry officials argue that taxes would penalize consumers at a time when people are already struggling and lead to lost jobs for bottlers and distributors.

Federal Income Tax Increases in Coming Years

The federal income tax increases over the next three years have led to lots of grumbling. But for all the back and forth about the percentages, something has been overlooked: what do these increases mean in real numbers? In other words, how much will wealthy people have left after they pay the higher taxes in the coming years?

What may surprise some people is that the various percentage point increases do not necessarily correspond with the reactions surrounding them. The 3.8 percent Health Care Act surcharge attracted much populist anger, but in many cases, it will result in a lower tax increase than the 0.9 percentage point rise in the Medicare tax. This is because of how and on what part of your income the taxes are applied.

By Summit’s calculations, that $250,000 tax increase would apply next year to a couple filing jointly with $5 million in annual income. The calculations also looked at people earning $500,000, $1 million and $3 million a year.

While the tax increase next year is substantial, another increase comes in 2013, when provisions to pay for the health care bill take effect. Following are some general estimates for people at the four different income levels. (By the way, these tax increases aim only at single people making more than $200,000 a year and couples with incomes above $250,000.) All the assumptions below were based on a married couple filing jointly and without considering the alternative minimum tax, a parallel tax system aimed at a certain slice of high earners that excludes many deductions.

According to Summit’s calculations, the couple earning $500,000 a year, with an assumed $75,000 in net investment income and an equal amount in itemized deductions, is looking at a tax increase of $20,327 in 2011, from 2010. That would bring their federal tax bill to $162,885.
A couple earning $1 million a year with $150,000 in investment income and the same amount in deductions would pay $48,427 more for a federal total of $363,235. Under the same assumption of investment income and deductions being equal, a couple earning $3 million a year could expect an increase of $145,627 in federal taxes, to $1,174,435, and one earning $5 million, an increase of $243,027 for a total of $1,975,835.

The Medicare increase would tax the first $250,000 for a couple at the existing 1.45 percent rate and anything above that at 2.35 percent. For the couple earning $500,000, this translates to an increase of $2,250, for a total Medicare tax of $9,500. In the $1 million situation, the tax would jump by $6,750, to $21, 250. For $3 million in income, it goes up $24,750, to $68,250. It rises $42,750, to $115,250, for the $5 million couple.

If the very wealthy couple had higher investment income, the tax could rise. But it is calculated by a formula that always compares the net investment income against the modified adjusted gross income and taxes the lower one.

Debate on Online Gambling in US

According to “independent.co.uk” United States are discussing the possibility to lift the restrictions of internet gambling. It is the first time since the Unlawful Internet Gambling Enforcement Act of 2006 passed that there is serious debate regarding this issue. The above mentioned law passed in an effort of the US government to minimize money laundry from the Web as they were not able to track down the true receivers of the wagers placed by online poker, online bingo or casino players. Back then, many opinions expressed in favor of the online banning act, including that the money from the US residents was used to fund terrorist attacks within US soil.

Almost four years passed since the law enforcement and now distinct members of the political world started a debate on Senate’s Ways and Means Committee as an effort to reverse the 2006 ban. Congressmen Barney Frank and Jim McDermott are leading the campaign which is based on three main points.

For permitting online gambling, the federal government and the states can receive over $42 billion by taxation within a 10 years period. The companies will have to pay 2% tax to the federal government and 6% to the state that issued the gambling license. Additionally, taxes will be applied to the players’ winnings who; as Jim McDermott stated: “We are sending a multi-billion dollar industry offshore and underground. As a result, we are making tax criminals of Americans who can’t declare their online winnings to the IRS”.

The committee meeting will be considering H.R. 4976, a bill that would tax online gambling in the United States, if a companion bill that legalizes online gambling were to pass. The bill is sponsored by Congressman Jim McDermott (D-Wash.), and would create a revenue stream for the U.S. government that currently does not exist. Revenue would go to the federal government, states and tribal governments. Some of the funds generated would also be earmarked to help foster-care systems.

The Committee will discuss the current tax laws and reporting requirements applicable to wagering in the United States. The Committee will consider tax and other proposals in the Committee’s jurisdiction related to legislation pending in the Congress to license and regulate Internet gambling activities.

any online gaming companies that were shut out of the US market eye the opportunity of a come back. London based Party Gaming and 888.com, two of the biggest companies in the world in the area of online gambling have already mobilized towards that opportunity. Party Gaming is in negotiations with brick and mortar casino operators in the US about possible joint ventures, should the laws be relaxed at a federal level or by individual states, and 888.com, too, is “staying close” to the American casino chain.

Senate’s Vote to Delay the Suspension of Tax Credit

Frustrated by their lack of involvement in budget negotiations, Senate Democrats of Oklahoma City voted to delay the suspension of two tax credit programs that would have saved the state about $23 million.

In a straight party-line vote, minority Democrats opposed putting the tax credit programs on hold. Although the bill passed 26-22, the emergency clause on the measure did not get the two-thirds vote needed for passage delaying the effective date of the bill for three months.

The move could reduce the amount of money the state saves from a moratorium on the two programs as leaders try to plug an estimated $1.2 billion hole in the state budget. Democrats have vowed to oppose any spending plan that does not include funding for senior nutrition and rural programs, a new hospital provider fee and an assessment on insurance claims.

Senates are not feel comfortable to vote because they are all don’t no what the overall budget agreement?

The tax credits involve certain investments in rural business ventures and investments by qualified small business capital companies. During debate on the bill, some rural Democrats questioned why Republican leaders planned to target tax credits that could help locate businesses in economically depressed sections of the state.

Senate President Pro Tem Glenn Coffee, R-Oklahoma City, said the Democrats' move to delay the suspension of the tax credits could ultimately reduce the amount of revenue available to close the budget gap.

Houston Area Home Sales Tax Credit

The federal tax credit fueled Houston-area home sales in April, marking the second consecutive month of increased activity. Realtors sold 5,321 single-family homes in the area last month, according to a monthly report from the Houston Association of Realtors. That's up 26.7 percent from the same period last year.

Realtors point to the federal home buying tax credit, which expired April 30, as well as the start of the spring buying season. Now that the support of the credit is gone, however, coming months could see flatter or lower sales numbers.

The spring buying season, will likely help support the market as families try to move before the start of a new school year. Though homebuyers hoping to take advantage of the credit had until April 30 to have contracts in place, they don't have to close until June 30.That means some sales through the early summer will still have benefited from the tax credit.

Still, the number of pending sales during the first week of May has already taken a dip, indicating the tax credit's positive effects may already be dwindling. Pending sales dropped 16.7 percent to 975 from the same week last year, according to preliminary data collected in the association's latest weekly market report.

In April, activity was up in every price segment except for the lowest end of the market, where homes were priced below $80,000 remained flat. The number of homes that sold for $500,000 or more was up 53.4 percent in April, according to the association, which tracks homes sold through the Multiple Listing Service in Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties.

Boosted by high-end activity, the median sales price for single-family houses in April also increased for the 12th consecutive month on a year-over-year basis, climbing 2.4 percent to $153,500 from the same month last year. Houses were also selling faster than this time last year. Homes stayed on the market an average 73 days, down from 88 days a year ago.

Small Businesses Health-Care Tax Credit for Dental and Vision

Small businesses will be able to claim a new federal health-care tax credit for dental and vision benefits in addition to health insurance premiums, a Treasury Department official announced. The Treasury released technical guidance explaining what kinds of expenses are eligible and how small firms should calculate their credit amount. The credit will offset employer health-care premiums paid on and after Jan. 1, 2010, under health-care legislation signed in March by President Barack Obama.

Firms may claim state health tax credits and other subsidies without having their federal health-care tax credit reduced, said Treasury Assistant Secretary for Tax Policy Michael Mundaca in a conference call with reporters. Some small-business advocates criticized the tax credit Monday as too limited in scope. Bill Rys, tax counsel for the National Federation of Independent Business, said more than two-thirds of small firms will be excluded because they are too large or don't currently offer health insurance.

Eligibility for the credit is limited to firms with fewer than 25 full-time workers, or the equivalent, and average wages of less than $50,000. To qualify, firms must pay at least 50% of worker health-insurance premiums. The credit is worth up to 35% of the employer's premium costs for the smallest firms. That percentage is reduced for firms with between 10 and 25 employees, and to the extent that average wages exceed $25,000.

The Internal Revenue Service earlier this year notified four million small businesses that they may be eligible to claim the credit this year. Mundaca said the Treasury doesn't have estimates yet on how many will actually claim it. Small firms will claim the credit next year when they file their 2010 tax returns. But they already may be able to benefit in the second half of this year by having quarterly estimated tax payments reduced to reflect the credit.

Small Business Health Tax Credit Companies with 10 employees or less may get a tax credit of up to 35 percent of the employer premium costs (25 percent for tax exempt small employers), but only if they pay their workers $25,000 or less and provided the employer contribution is at least 50 percent of the premium costs. Credit is reduced on a sliding scale per employee for companies with 11-25 employees, and is reduced as the average wage increases from $25,000 to $50,000. Companies with more than 25 employees, or that pay their employees on average over $50,000, are not eligible. This tax credit is only available for a maximum of five years, and only two years once the Health Insurance Exchanges are up and running in 2014.

Business Tax Comes Shortly in Texas

The Texas business tax comes again, and no one's suggesting it will yield anywhere near the approximately $6 billion it was initially forecast to produce annually.

It yielded $4.5 billion when first collected in 2008, based on the previous year's business activity. Last year, collections dipped to $4.3 billion. State Comptroller Susan Combs predicts the same amount will be collected this year.

Texas Comptroller Susan Combs sent tax-allocation checks totaling $6.3 million to the county’s sales-taxing cities Friday, almost $70,000 less than the amount they received at the same time last year. The total was almost 1.1 percent less than last year’s May figure and underperformed the Texas average allocation for the month.

Altogether, state cities received $385.2 million, 5 percent more than they did a year ago, to end a 14-month run of declining figures. The allocations came from sales taxes collected by monthly tax filers during March and by quarterly filers during January, February and March. Throughout the county, only Texas City, Friendswood and Hitchcock received more this year than in May 2009, with the latter’s figure a mere 0.6 percent higher than 12 months previously.
Experts cite several reasons the tax has failed to live up to expectations, including the fact that it is unique to Texas and, thus, difficult to forecast. The lagging economy also has factored in the lower-than-anticipated tax collection.

White House Announced Tax Increase for Oil Companies

President Obama is giving his support to legislation that would raise taxes on oil companies and increase the liability they face in the event of an oil spill. The White House asked Congress Wednesday to raise limits on BP's liability for the Gulf oil spill, approve new spending on everything from food stamps to seafood inspections and increase taxes on oil companies for an emergency cleanup fund.

The legislation would increase the 8-cent per barrel tax on oil companies to 9 cents immediately. "While we are asking for additional funds, in some cases, the federal government will not relent in pursuing full compensation for the expenses it has occurred and damage caused by the spill," White House energy adviser Carol Browner said in a conference.

Administration officials said they couldn't forecast total costs from the cleanup of the massive spill and a multitude of economic damages to the Gulf region, but the changes they're seeking in the legislative package unveiled Wednesday suggest a multibillion dollar response.

The administration wants to increase from $1 billion to $1.5 billion the amount that could be spent from an emergency cleanup fund paid with industry fees, and raise a $75 million liability limit BP would bear for costs not directly connected to cleaning up the spill, such as lost wages and tourism.

California Teachers Association’s Tax Breaks

The California Teachers Association announced on May-12 that an initiative to repeal nearly $2 billion in corporate tax breaks has garnered enough signatures to go to the November state ballot.

It was "Day of the Teacher" in California, but many of them had little to celebrate because of budget cuts and potential layoffs. In Oakland, teachers packed a school board meeting early Wednesday evening to make their concerns clear. There were rallies in other parts of the Bay Area to show support for teachers. In addition, the teachers union made two major announcements.

The Repeal Corporate Tax Loopholes Act would make the state stop giving tax breaks to large corporations, which the California Teachers Association says would help the state's budget crisis at a time when funding for schools has been slashed by billions of dollars in the past two years.

The teachers' union has invested $2 million to collect more than 800,000 signatures to qualify a measure for the November ballot to repeal a trio of corporate tax breaks approved in the last two years during state budget negotiations.

The union estimates the business tax breaks will cost the state's general fund roughly $2 billion per year. Democrats are expected to try to postpone the start date of the tax breaks, which have yet to go into effect, during the summer budget talks.

Pfizer pharmaceutical company plans for Tax break

Pfizer, the world’s largest pharmaceutical company, plans to lay-off or relocate up to 1,400 New York City employees, seven years after receiving millions of dollars in tax breaks to create jobs in the city.

The company, which has already scrapped about 2,000 positions, also put its office tower at 685 Third Avenue up for sale. Pfizer officials said the company’s world headquarters would remain in the office tower at 235 East 42nd Street, near Grand Central Terminal. The company, which has been based in New York City since its founding in 1849, has about 4,400 employees here.

But the company’s decision is a remarkable turnabout in Pfizer’s once robust expansion plans for New York and an embarrassment for Mayor Michael R. Bloomberg and state officials who had provided the drug-maker with the tax breaks in 2003.

Government officials often give the breaks, or what critics call corporate welfare, to companies that forgo plans to leave the city, or that invest in new equipment and jobs. But some economists argue that those scarce resources could be better spent on transportation, education and other things that create a better environment for all employers. Major companies don’t make location decisions based on tax breaks.

The Bloomberg administration has been far stingier than Mayor Rudolph W. Giuliani’s was in granting tax breaks to corporations threatening to leave New York. It has also worked to strengthen the penalties for companies that violate job-retention agreements.

Under the terms of its deal with Pfizer, the city will seek to recover double the $12 million in tax breaks that the company ultimately used if Pfizer eliminates more than 450 jobs. Pfizer bought another major pharmaceutical firm, Wyeth, last year in a $68 billion deal. Pfizer reported better than expected earnings in the first quarter of the year.

Parents can get a Tax Break for their Children's Health Insurance

Parents can get a tax break for adding children under 26 to their employer provided health insurance as part of the U.S. overhaul.

Under U.S. government regulations issued today, workers who pay to add children to their insurance can deduct the cost from their taxes if the money used to pay the premium isn’t already set aside as pretax cash.

While the rules letting children stay on their parents’ coverage don’t go into effect until Sept. 23, 65 insurers have agreed not to drop young adults graduating from college this spring. WellPoint Inc., the largest insurer by enrollment, Cigna Corp., UnitedHealth Group Inc. and Humana Inc. are among those that are part of the agreement.

“For years, getting a diploma also meant losing your health insurance,” said Kathleen Sebelius, the U.S. secretary of health and human services, in a statement. “Over the last few weeks, we’ve reached out to insurance companies and asked them to make this change immediately. And to their credit, we’ve gotten a terrific response.”

The regulations issued today require companies to set aside a 30-day enrollment period for parents to sign up eligible children. While a company can choose to allow sign-ups before Sept. 23, it must offer a 30-day enrollment period that starts by the beginning of its plan’s New Year. The rules say the tax break is retroactive to March 30.

The U.S. administration estimates there are 6.6 million uninsured adults ages 19 to 25 in the U.S., 2.4 million of who will potentially benefit under the new regulations. The administration estimated that between 190,000 and 1.6 million young adults will actually sign up for the coverage by 2011.

Health insurance premiums will increase because of the cost of adding young adults to their parents’ plans. The administration estimates that group insurance premiums will increase 0.7 percent between 2011 and 2012 because of the change.

Shutting Down Tax Credit to Lure Businesses and Create Jobs

Some state governments seeking to plug yawning budget holes are shutting down tax credit and incentive programs that are supposed to lure businesses and create jobs.

The main driver behind the cutbacks and those in the works is the budget crunch, but such programs have also come under fire from critics who say special tax policies have little bearing on businesses hiring or investment decisions.

In New York, Gov. David Paterson, a Democrat, has proposed deferring dozens of business tax credits for three years, while Missouri Gov. Jay Nixon, a Democrat, wants to reduce the amount of tax credits developers get for restoring historic buildings. A new Oregon law scales back credits given to certain renewable-energy projects. Iowa Gov. Chet Culver, a Democrat, signed a new law that halts tax credits to filmmakers and reduces other economic development lures.

Tax credits are an easy target for governors and legislators looking to close ongoing budget gaps caused by falling sales, income and other taxes. Eliminating or reducing such credits can boost a state's coffers without creating new taxes or raising them on broad swaths of the population.
But hurdles remain to passing these rules as critics, such as business organizations and economic-development officials, say that removing targeted tax credits will crimp hiring and investment at a time when the economy needs both.

States collected $686 billion in tax revenue in 2009, down 11.4% from the year earlier. Their costs, meantime, are skyrocketing: Investment losses have forced many states to make added contributions to pension funds, while the recession and recovery has increased demand for social services such as food stamps and health care.

To plug their budget gaps, states have cut employees, benefits and in many cases raised taxes. Amid that backdrop, a more-skeptical eye toward tax breaks was inevitable. Indeed, some states are going the other direction. Minnesota's governor recently signed a bill with various tax credits, including a break for so-called angel investors who put money in young companies. Meantime, the move to curtail tax credits and other economic-development programs has opened a window for critics who say such programs are largely ineffective.

B.C.'s Softwood Lumber has no Export Taxes

Due to strong lumber prices, effective June 1, B.C.'s softwood lumber producers will no longer pay any tax on their shipments to the U.S., Forests and Range Minister Pat Bell announced.

Under the 2006 Softwood Lumber Agreement, companies exporting softwood lumber to the United States are required to pay an export tax on their shipments. The formula for determining the tax is based on the average price over a four-week period 21 days before the start of the month. The higher the average lumber price is, the lower the export tax.

In this case, since the four-week average lumber price, as given by the Random Lengths Framing Composite Price Index, is now $US361 per thousand board feet, the export tax rate that will be in effect June 1, will be zero. If lumber prices decrease again, the export tax will be re-applied.

The tax will be reinstated if prices fall again. The U.S. is B.C.'s largest market for softwood lumber, followed by China and Japan. The rise in lumber prices means British Columbia's lumber producers will not have to pay export taxes under the Canada/U.S.

Australian Mining Industry's Profits Based Resources Tax

Representatives from the Western Australian mining industry have weighed into the debate on the federal government’s proposed resource super profits tax, claiming it will have a significant impact on all Australians, not just mining companies. Fortescue Metals Group Ltd founder and chief executive Andrew Forrest said the federal government had misled the Australian people, and the new tax was just a nationalization of 40 per cent of the mining industry, and it should be scrapped.

The Government, in response to the tax review, wants to slug mining companies with a 40 per cent tax. Mr Swan (Treasury Minister of Australia) said “the Federal Government was replacing an inefficient royalty regime which penalized mines, miners and shareholders, the regime we are talking about putting in place is a profits-based tax and of course when companies are much more profitable the return to the Australian people is higher. But when profits are lower this is a tax which encourages many of those mines that have been punished and penalised by an archaic and unfair royalty’s regime.”

Mining industry bosses, including Fortescue Metals Group chief Andrew Forrest have banded together to oppose the tax, saying it will not only harm mining but will harm Australian families. Mr Forrest said today all Australian mining projects which required substantial capital, including Fortescue, would be under review. Queensland based mining magnate Clive Palmer has also been openly critical of the tax.

The council was quick to label the resources tax a revenue grab rather than taxation reform. Never forget to the council itself that made a submission to the independent tax inquiry suggesting the resources tax be replaced with a profits-based tax.

In small businesses, retail and non-residential building continue to struggle, stating that some resources are picking up faster while the other sections are at a slow pace.

California Water Resources Bond Expands

A $2 billion bond sale by California's Department of Water Resources saw strong demand from individual investors looking for additional yield in a market starved for new deals.

Almost half the issue $966 million had been sold to retail investors. Backed by rates revenue and with solid credit ratings, the bonds are seen as safer than the state's general-obligation bonds. Extraordinarily strong investor demand for highly-rated California Department of Water Resources bonds enabled the agency Wednesday to expand the offering by $970 million to $2.97 billion.

Lead book running underwriter for the huge deal Morgan Stanley & Co said the bonds had been verbally awarded at yields that ranged out to 3.80% for debt maturing in 2022. Benchmark 10-year bonds offered a 3.61% return. That's more than a 10-year Treasury bond that traded Wednesday morning at about 3.54%.

"To a California investor, the tax equivalent yield, taking into account both federal and state taxes, is pretty attractive for an intermediate bond," said Dan Solender, Director of Municipal Bond Management at Jersey City-based Lord Abbett.

The hike in amount was the day's second after a report by State Treasurer Bill Lockyer's office that individual investors Monday and Tuesday had signed on for $1.27 billion, or 63.5%, of the original $2 billion. When offered to institutional investors, demand just as intense, and the offering was lifted to $2.74 billion and then to $2.97 billion. Yields were left mostly the same as earlier, ranging from 0.92% in 2012 to 3.80% in 2022. A 2012 maturity, at 0.92%, offered three basis points less than earlier in the day. A 2011 maturity wasn't reoffered publicly.

The power revenue bond issue now becomes the largest tax-exempt bond sold this year, replacing a previously top-ranked $2.5 billion issue by the state of California itself. The Golden State is far and away the largest seller of bonds among states. The bonds will refinance debt sold in 2001 and 2002 during California's energy crisis, when the water department borrowed to finance the purchase of electricity for hard-pressed publicly listed utilities.

Tax Relief Allocations in Pennsylvania

Homeowners in the Pennsylvania suburbs due property-tax relief provided by slot-machine revenue will get anywhere from $72 to $632 next school year, down slightly for most from last year, according to figures released by the state.

In Philadelphia, that aid comes in the form of a cut in the wage tax. Those who pay it will get about the same amount of relief as they did last year. The tax relief, which comes from the state's share of gaming revenue under the 2006 Act One, is not given directly to households or individuals. In the suburbs it is entered as a credit on tax bills; in the city, it is used to lower the wage-tax percentage.

Suburban property owners must register to get the benefit by Dec. 31 of the previous year; sign-up information is available at local school districts. The amount of tax relief each homeowner gets depends on a variety of factors, including the wealth of the school district, how highly taxed it is, and how many homeowners have applied for the credit.

The total amount of property-tax relief will be up slightly for next school year, but in many school districts, the rebate to each homeowner will be down somewhat. That's because more people have applied for the tax credit, spreading it thinner. Shifts in relative school district wealth and tax burden between 2009-10 and 2010-11 also changed the amounts doled out in each district.

Residents of the 63 suburban districts will get about $142.3 million in property-tax relief, up from about $139 million last year. But the per-household payment fell by a few dollars in close to two-thirds of districts. About 606,000 households applied for the tax credit, up about 3,000 from last year.

The average property-tax credit in the Pennsylvania suburbs is $251, up from $247 last year. The estimated tax-credit reductions in those area districts whose per-household allocation dropped were relatively small - less than $10 in most cases while in a few cases, increases in the tax credits were larger. For example, homeowners will get an estimated $95 more in tax relief next school year in Jenkintown, and those in Octorara will get $62 more. The amount of wage-tax relief going to Philadelphia employees and commuters who work in the city is about $86.3 million this year, only a few thousand dollars more than last year.

An additional $21.5 million in Act One gaming revenue will reimburse Philadelphia area school districts whose residents do not pay local earned income taxes because they work in Philadelphia and are charged the Philadelphia wage tax. This year, the city wage tax is 3.93 percent for residents and 3.50 percent for nonresidents.

Statewide, Act One, enacted as a companion to the legislation legalizing slot machines, is providing $616.5 million in tax relief next school year, up from $613.2 million last year. Under Act One, gaming money was also used to expand the senior citizen Property Tax and Rent Rebate program, so the total amount of tax relief from gaming revenues will total about $772.5 million, up slightly from last year. This is the third year of tax relief allocations from Act One.