Washington, DC (PRWEB) December 11, 2012
HomeWork Solutions, Inc. (HWS) today announced its own Buffett Rule Initiative, aimed at raising as much as 100 billion in tax revenues in 10 years, twice the additional tax dollars generated by the Buffett Rule, but without requiring any debate or the passage of a single piece of legislation. HWS, the nations leading provider of payroll and tax services for household employers is urging all wealthy Americans who employ nannies, housekeepers, home health aides and other household workers to follow employment tax laws.
The vast majority of high-income Americans employ nannies, housekeepers, maids, home health aides and other household workers but unfortunately do not pay the required employment taxes Social Security, Medicare, and unemployment taxes on the wages they pay these workers, said HomeWork Solutions President Kathleen Webb. “We believe that many of these employers agree with Warren Buffett; wealthy Americans can and should contribute more in taxes and help avoid the fiscal cliff.
Brian Erard, a Ph.D. Economist and recognized authority on tax compliance, reports: Our preliminary statistical evidence suggests that tax compliance among household employers as a group was only about 25% in 2006. We believe the actual level of compliance is even worse, given the potential flaws in our data because employees have to self-report their earnings, something they might be reluctant to do if they are being paid under the table. A 2009 New York Times article Doing the Right Thing by Paying the Nanny Tax, estimates that 80-95% of household employers do not pay taxes on their employees. (http://www.nytimes.com/2009/01/24/your-money/taxes/24money.html?pagewanted=all&_r=0)
So what does that mean? In 2009, tax filers reported paying over $ 1 billion in household employment taxes. (http://www.irs.gov/pub/irs-soi/09inlinecount.pdf) Based on a conservative estimate of 25% compliance, over $ 4 billion in employment taxes should have been collected; using the New York Times estimates, the number could be close to $ 10 billion annually! If Americans step up now, and simply comply with existing tax law as it pertains to their household help, it could result in $ 50-$ 100 billion in tax revenue over the next 10 years.
Weve created a special program for any American who employs household workers making it easy for them to get started and reduce any late payment penalties, said Clare Sheridan, HWS VP of Marketing.
The Buffett Rule Initiative will help people who think they should contribute more to start doing so now – regardless of what Congress decides to do. The program- which runs from today until December 31, 2012 – is as follows: