December 2022
DECEMBER 2022 CLIENT NEWSLETTER
Breaking news from Sacramento: AB 156 Act was just passed to insure wage and hour law, equal pay, between sheep herders [AKA a shepherd] and goat herders {a goatherd}. No kidding. This came up at a recent California tax seminar. Equality for all is the motto.
A serious matter from Washington: The recently legislated American Rescue Plan [ARPA] requires 1099-K reporting of $600+ per year of credit card settlement with [TPSO] organizations such as PayPal, Venmo, etc. That means that all sales made beginning January 1, 2023, through these organizations and any others who collect funds from incidental sales and small business sales that clear through them, will be tracked for tax purposes. The ARP does not offer a rescue plan from their plan. The idea is to sweep more taxable hidden income to pay off the $31 TRILLION National Debt. Many gig workers will need a rescue plan when they get the form in the mail thirteen months from now.
The Good News: Is that a parallel bill for all banks or financial institutions to report total annual deposits of $600 or more directly to the IRS was defeated by the Senate this past year. Imagine everybody’s bank sending your bank statements to the IRS monthly for audit? No wonder they need 80,000 more auditors. Especially if they would try to reconcile all of them for us!
Escheat to the State: This is an English Feudal Law which devolves property to the Crown when there are no heirs to inherit. This has been modernized in California to become the Unclaimed Property Disclosure Program whereas any business domiciling unclaimed property which is over three years old is subject to horrendous fines and interest at 12% of the value. These are gift cards, deposits on items held for future purchase, and unredeemed prizes. Even unclaimed tax refunds [Calif] or estimates escheat to the State. And certainly, by default due to unclaimed heirs to the estates or tract houses.
The California Middle Class Tax Refund: Has arrived and been spent for the Holiday Season by most. There will be a 1099 form to follow because this one will be taxable on the Federal returns.
Another California Middle Class or Lesser Refund: Has been promised by our generous Governor, Newsome. He promised that his investigation of why California’s ruthless overcharging for fuel costs upset him and that massive excess profits fines for refiners and sellers will result. These monies will be refunded to Californians afterward. And gasoline will be reduced by $2 per gallon afterward, the same as the rest of the country. Hurrah! Normal gas prices at last and another great refund. Lock up all the gas stations and put their owners in jail! Then, with no fuel, people won’t be able to leave California.
Great News from the Green People: Green Hydrogen, the perfect fuel made from water or expensive natural gas, got a boost from Air Products Company which also produces the oxygen for acetylene in familiar green tanks, and other hospital and space rockets. They are building a four-billion-dollar plant in Texas to Manufacture hydrogen by hydrolysis for auto fuel and fertilizer. What will they do to make it? Build gigantic windmills and solar farms to generate the electricity to break down the water to produce it. You see, it takes more energy to produce it than it produces when burned in an engine or used as fertilizer. The basic cheapest production cost for Hydrogen gas is now $1 per kilogram [2.2 pounds]. The new production cost will be $5 per kilogram. A new Federal subsidy will pay Air Products the $5 per kilogram production costs. This will enable the company, and others, to operate the gigantic wind and solar plant for zero costs, enabling users to get it Scott-free without even the usual gas taxes at the pump! This will be even better than the mandatory green jet fuel quota the airlines use at $9 per gallon. The magic of government economics will prevail.
California Surplus News: The WSJ, reported this month that Federal tax receipts were off 20% in the past two months compared to the last year. They also predicted that California would go from a $100 billion surplus to a 25 billion deficit this year. Expect more tax increases all around. At least California is still second in the Country for highest taxes. New York is still number one.
Harvard University, the first in the nation, where a neighbor kid friend of mine turned his pigeons loose and went to school there to be an anthropologist, has announced that they now have 7,153 students but 7,024 administrators. One for each student. I wonder what they do for a living. This appears to be a bad pattern nationally as the Public-School administration has increased 88% in the last ten years while the population of both students and teachers has increased only 10%. Bigger is not better here.
Controversy over the trading of Russian prisoners: The Merchant of Death Victor Bout international arms smuggler traded for Brittney Grinder, a celebrity lesbian for committing a minor drug misdemeanor, who hates America has met a lot of controversy. Paul Whelan an ex-Marine in jail for years for doing nothing but being in Russia at the wrong time would have been a better choice. They should have left her there to rot, not to celebrate as a political heroine.
Well, the good news is that we will soon be over with the Christmas Holiday [official Government label is “Holiday Shopping Season”] and are looking forward to a bright new year. I truly hope it can be a better year for all my clients and we personally look forward to seeing you again.
Merry Christmas and a Happy New Year!!
Phil, Nette, and Jocelyn