Rain Tax

There has been much in the news following the end of the 2013 General Assembly session about Gov. Martin O’Malley’s “Rain Tax.”

This law was actually passed in 2012, and at the time I called it the worst bill passed that year. It forces Maryland’s “metro” counties to enact a tax on the amount of impervious surface people have on their property. The statewide amount of the tax could reach into the billions.

The reason it catapulted into the news in recent weeks was a failed attempt to pass legislation delaying the implementation of this tax for two years.

On that bill was an amendment to exempt Carroll County. Our present and past commissioner boards have consistently fully funded storm-water runoff mitigation. Carroll County’s storm-water management program meets all the EPA requirements.

The rain tax is part of an ongoing effort by Gov. O’Malley’s administration to have the state micro-manage and control what counties do in traditionally local operations.

By forcing Carroll County and others to create a tax on every homeowner, the important principle of local control is taken away.

The scariest part is that the idea of a rain tax seems perfectly reasonable to the extremely liberal Democrats who run Annapolis.

I support sensible environmental protections and actions that will actually clean up the Chesapeake Bay.

But I do not support using environmental protection as a cover for an agenda of government confiscation and control.

Our county commissioners are looking for ways to keep this from hitting taxpayer wallets, either by making the fee minuscule or charging a fee and then giving a credit on property taxes. They’ve joined me and other Carroll legislators in speaking out strongly against this.

If the idea of a tax on rain upsets you, understand that these kind of extreme policies are the direct result of one-party rule here in Maryland.

As a person who tries to be an independent-thinker, I’ve been disappointed by the lack of understanding in Annapolis about what working people are going through in our communities. I’ve tried to find common ground where I can, with some success.

But when one side believes the government should always spend more, tax more, and have a hand in every choice people make, common ground is difficult.

To really change things, we must take action statewide in 2014.

Del. Justin Ready, Republican

District 5A, Carroll County

Obamacare Tax changes

  • A new Surtax on Investment Income impacts individuals making more than $200,000 a year or couples with $250,000 or more.  They must pay a new 3.8% levy on income from investments, possibly including profits from the sale of a home.
  • A new Medicare Tax adds to ObamaCare’s pain.  These same high-earners must pay an additional .9% Medicare payroll tax on wages above $200,000 for individuals and $250,000 for couples.  This means the current 2.9% Medicare payroll tax will be increased to a total of 3.8% — a big hit especially for the self-employed.
  • The new Flexible Spending Account Tax limits the amount of money that workers can set aside tax-free for medical costs.  ObamaCare sets the cap at $2,500 in order to collect another $13 billion from taxpayers.  (Previously there was no cap; however some employers limited the amount worker could set aside.)
  • Beginning January 1, ObamaCare also tightens the screws on Itemized Medical Deductions.   The law raises the threshold for allowed deductions from 7.5% of adjusted gross income to 10%, further burdening those with the largest medical expenses by limiting how much of these costs they can deduct on their taxes.  Hit to these taxpayers:  $19 billion.

Looking at you friend

Soon after, Phileas Fogg, Francis Cromarty, and Passepartout, installed in a carriage with Aouda, who had the best seat, were whirling at full speed towards Benares. It was a run of eighty miles, and was accomplished in two hours. During the journey, the young woman fully recovered her senses. What was her astonishment to find herself in this carriage, on the railway, dressed in European habiliments, and with travellers who were quite strangers to her! Her companions first set about fully reviving her with a little liquor, and then Sir Francis narrated to her what had passed, dwelling upon the courage with which Phileas Fogg had not hesitated to risk his life to save her, and recounting the happy sequel of the venture, the result of Passepartout’s rash idea. Mr. Fogg said nothing; while Passepartout, abashed, kept repeating that “it wasn’t worth telling.”

Aouda pathetically thanked her deliverers, rather with tears than words; her fine eyes interpreted her gratitude better than her lips. Then, as her thoughts strayed back to the scene of the sacrifice, and recalled the dangers which still menaced her, she shuddered with terror.

Phileas Fogg understood what was passing in Aouda’s mind, and offered, in order to reassure her, to escort her to Hong Kong, where she might remain safely until the affair was hushed up—an offer which she eagerly and gratefully accepted. She had, it seems, a Parsee relation, who was one of the principal merchants of Hong Kong, which is wholly an English city, though on an island on the Chinese coast.

S-Corporation Health Insurance

This letter is to advise you of the tax benefits available to certain S corporation shareholders for health insurance costs.  Heath and accident insurance premiums paid on behalf of the more than 2% S corporation shareholders are included in the recipient’s Form W-2 as taxable wage income and the S corporation takes a compensation deduction.  The S corporation cannot take the deduction as a direct health insurance expense for the more than 2% shareholders.  These benefits are not subject to Social Security or Medicare (FICA) or Unemployment (FUTA) taxes. The additional compensation is included in Box 1 (Wages) of the Form W-2, issued to the shareholder, but would not be included in Boxes 3 and 5 of Form W-2.  Payments of the health and accident insurance premiums on behalf of the shareholder may be further identified in Box 14 (Other) of the Form W-2.

A more than 2% shareholder is eligible for a deduction on their personal income tax return for the amounts paid during the year for medical care premiums if the medical care coverage is established by the S corporation and the shareholder meets the other self-employed medical insurance deduction requirements.  If, however, the shareholder or the shareholder’s spouse is eligible to participate in any subsidized health care plan then the shareholder is not entitled to the deduction.

The bottom line is that in order for a shareholder to claim the deduction, the health insurance premiums had to be paid by the S corporation and had to be included in the shareholder’s W-2.

If you should have any questions regarding this, please do not hesitate to contact our office.