Tax Law

U.S. Sen. Frank Lautenberg (D., N.J.) has asked the IRS to investigate whether the $8.71 million paid last year to William Marino, chief executive officer of Horizon Blue Cross Blue Shield of New Jersey, the state's largest health insurer, qualifies as "reasonable" under the tax law regarding nonprofits. Marino's salary jumped 59 percent, though the insurer has said that was because a change in law prompted him to collect money that would have been paid in later years. In a letter to IRS Commissioner Douglas Shulman, Lautenberg called the pay "exorbitant" and said he was "particularly troubled" that the company had been boosting executives' pay while raising premiums.

"If he was a king, he would deliver that, but he's not king. " - Dallas Salisbury, of the Employee Benefit Research Institute, on President Obama's promise that his health-care plan will let people keep existing coverage "We don't know what he's got, but what he's got is going to be ours. " - HealthSouth Corp. chief executive officer Jay Grinney, on the company's former CEO, Richard Scrushy, being found liable to pay shareholders over a massive accounting fraud "They're under attack, they're ramping up their operations, and they've got money to spend.

NEW YORK - It can be tempting for small business owners, once their income tax returns are filed, to put the whole issue of taxes behind them. Resist that urge. Owners who don't grasp the idea that a company's tax planning - in reality, overall business and financial planning - is a year-round process may be setting their businesses up for an even tougher time in this difficult economy. They might also miss out on some tax law changes that are designed to help small businesses get through the recession.

Tickets to plays, musicals, symphonies, and operas in Philadelphia would be taxed at the 5 percent rate charged for sporting events, concerts, and movies under a proposal introduced in City Council yesterday. Councilman Darrell L. Clarke's bill to eliminate a long-standing exemption to the city's amusement tax hit a sour note with the performing-arts community. "The theater industry of Philadelphia is very concerned about the proposed legislation, and it will have a devastating impact on our ability to continue driving economic recovery in Philadelphia," said Margie Salvante, executive director of the Theatre Alliance of Greater Philadelphia, whose 120 organizations include 71 that perform mainly in Philadelphia.

The fellow who writes tax law for the entire country can't even get his personal tax returns right. That's why Speaker Nancy E. Pelosi (D., Calif.) should remove Rep. Charles Rangel (D., N.Y.) as chairman of the House Ways and Means Committee. The post requires Rangel to be above reproach, and he has not met that high standard. Rangel admitted that he owes the IRS as much as $5,000 for failing to report income from a beachfront villa he owns in the Dominican Republic. He will end up owing New York state and New York City another $5,000 or so. This is the guy who plays a powerful role in deciding the winners and losers in every new tax law approved by Congress.

Senate Democrats are caving to a well-financed lobbying blitz aimed at stopping them from imposing a new tax on the super-wealthy. Senate Majority Leader Harry Reid (D., Nev.) has quietly squelched plans in Congress to increase taxes on some of the richest wage-earners in the land: private equity managers. These wealthy individuals often earn hundreds of millions of dollars per year, which should subject them to an income tax rate of 35 percent. But because of a wrinkle in federal tax law, private equity managers pay only a capital gains tax rate of 15 percent on most of their income.

The summer lineup at the public library in this high-end Jersey Shore town reads like a Kimmel Center glossy: "Ballroom Dancing Class for Children - Ages 7 and Up" "Author - Sara Paretsky" "The Bay-Atlantic Symphony Beethoven Bash Concert" The dry-mounted, foam-backed event posters alone cost more than library director Norman Gluckman ever spent on literacy tutors at his old gig in down-on-its-luck Millville, 40 miles inland....

Despite the likelihood of paying higher property taxes, voters in many South Jersey towns yesterday approved local school budgets for the 2007-08 school year. Voters in several districts, however, were less inclined. Budgets in several of the region's largest districts, including Washington Township in Gloucester County, Kingsway Regional, Delsea Regional and Lenape, were rejected. In preliminary unofficial late returns, voters in at least 50 of the 104 districts in Burlington, Camden and Burlington Counties approved proposed budgets.

In what U.S. Attorney Patrick L. Meehan called one of the largest corporate tax cases to reach federal court in Philadelphia, a New Jersey firm was charged yesterday with willfully failing to pay taxes on $99 million worth of employee bonuses. E-Star Inc. of Somerset, which makes computer parts, has agreed to plead guilty and pay $32 million in fines, interest and penalties. The company admitted that it paid bonuses to U.S. employees in stock issued by its parent company in Taiwan - stock traded there - but failed to withhold income, Social Security or Medicare taxes.

During the next week, New Jersey legislators will consider whether to vote into law their proposals for overhauling the nation's highest property taxes. Special-interest groups are prepared for war - and that's on bills that others contend are so minor or watered-down that they would never result in lower taxes. Three of the major proposals - a 20 percent cut for families earning $100,000 or less, a new funding formula for schools, and a cap on property tax increases - are still in the mix but likely won't be dealt with until January, said Assembly Speaker Joseph Roberts (D., Camden)