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Congress is in recess. The Daily Deduction will return to its regular schedule on Monday, September 8. Until then: We’ll see you every Monday morning.
Abroad and online: One country brings a knife to a gunfight. Spain has passed a new law: Websites that link to Spanish newspaper association stories will pay a tax for a story link and a “meaningful description” of the story. It’s not clear yet how much the tax would be or what “meaningful description” means. If Spain hopes to collect some revenue from Google, it is taking on quite a challenge. When Germany tried to tax Google’s links to smaller German outlets, the firm stopped offering those “meaningful descriptions,” and links where taxes are due. Note to Spanish tax authorities: buena suerte.
Meanwhile, Australian citizens may pay extra in order for the federal government to have access to their online data. The federal government may require telecommunications companies to store customer data for over two years in order to combat terrorism. It could cost the telecommunications industry AU$500 million to AU$700 million a year. That cost would be passed on to consumers in what the telecomm industry calls a “surveillance tax” of up to AU$100 a year, though the government would receive not revenue, but access to the data. Stored “metadata” could include land line and online telephone records, internet access, the time, location, sender and receiver of communications, and perhaps URLs and IP addresses. Privacy concerns abound, though social media may know more about users. Of course, social media are free.
Here at home: The Internet Tax Freedom Act is on deck after the August recess. Congress is still trying to combine this measure to extend the ban on state and local internet access taxes with the Marketplace Fairness Act, which would allow states to collect sales taxes from online retailers with no brick-and-mortar locations in their state. Senate Finance Committee Chair Ron Wyden will continue his effort to keep the bills separate.
Also on the Hill in September: Protecting taxpayer refunds and identities. The Tax Refund Theft Prevention Act will be on the Senate Finance Committee’s agenda. The bill would provide enhanced protection for taxpayers against fraudulent refund claims made under stolen taxpayer identities. Victims of this identity theft would receive new assistance and the IRS would be required to establish a new security feature to help individuals protect their tax filings.
And for taxpayers planning for a long life after retirement: There’s a new way to invest for old age, though TPC’s Howard Gleckman wonders how many consumers will do it. The Treasury now allows people to shift up to 25 percent of their 401(k)s or IRAs into a tax-deferred annuity. The annuities would provide a guaranteed stream of income starting when many retirees really need it, say at age 80. Until now, retirement funds must make mandatory annual distributions starting at age 70 1/2. The annuity feature makes it less likely that retirees will outlive their assets and will make money available in very old age for long-term care and other costs. The rules allow consumers to buy riders that permit a refund of money that has not yet been paid out, and designate a beneficiary to receive payments after the buyer’s death.
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