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Friday, April 25, 2008

Voter-snitched elections

The race for Sam the Tram's seat on the Portland City Council has been pretty nasty at times. We've already covered the complaint that someone anonymously filed with the IRS against candidate Charles Lewis, claiming that he had misused for political purposes the nonprofit organization he heads. Now someone sends us a copy of what purports to be an IRS complaint against candidate John Branam, for allegedly failing to pay withholding and payroll taxes on amounts his campaign committee paid to his full-time (and then some, supposedly) campaign manager, Phil Busse.

The document, which we received in the mail yesterday, postmarked by a postage meter from Vancouver, Washington, is here. Unlike the complaint against Lewis, which was fairly vague, this one is quite specific. Who knows where it might lead?

Comments (13)

I'm glad we finally got the dirty money out of politics.

VOE is crisp and clean and no corruption.

Never had it; never will.


Regardless of the merits of the complaints, this tactic of ratting out to the IRS seems underhanded. You want to muck up someone's campaign? File an IRS complaint!

I hope the IRS views these 3949s suspiciously; if its not filed with a Form 211 (the reward application), motive seems to be a problem.

I didn't file the complaint, but I'm glad that somebody did. None of these paid campaign staffers meet the independent contractor test. Two years ago I did it right. It was a lot of extra work and expense but it was the right way to do it.

I hope the IRS views these 3949s suspiciously; if its not filed with a Form 211 (the reward application), motive seems to be a problem.

For whom? Are you parsing the "morality" of snitching to come up with the conclusion that ratting folks out because they broke the rules is somehow worse than doing it for the money?


Perhaps we differ in our view of people, but I think people tend to be self-interested rather than altruistic. I would agree I am "parsing the morality" to the extent that I believe that some of the people who aren't doing "for the money" are doing it for some other gain rather than out of respect for the rules. I will not argue that there are not people out there who would report this information as part of their 'civic duty' or a sense of fair-play, but I think that the more likely motivation is personal gain. Given my opinion about human nature, my assumption is that, if they're in it for the money (obvious motivation), they're likely in it for some other gain (such as seeing a political opponent come under investigation).

Of course, if they are motivated by true altruism and a sense of fair play, my hat is off to them as the example of how people should be; these people are the exception.

I don't think it matters. I've managed or owned a small business here for over twenty five years. You keep a straight set of books. You keep a lawful payroll. You write those checks to the state and the feds and maybe groan, but you pay the taxes, the payroll taxes, the unemployment taxes, the income taxes and the Tri Met taxes because that's what you have to do. I have no use for those who don't; they simply make the rest of us pay more than our fair share.

If a candidate for city council is cheating on taxes by paying someone as a contractor who is not a contractor, what does that say about their ability to hold office, fairly represent their constituents and make good decisions? Let alone their honesty?

What Dave said.

I've been paying those same withholding taxes for employees for 12 years and fair is fair.

The other issue is the inherent disrespect they show to us by doing it in plain sight.

Just for the heck of it, I worked the withholding numbers. Between FICA, Medicare, Tri Met, SWT, FWT, unemployment and workers benefit fund the taxes on Bussse's $20,000 come to $12,806.92.

Those who have the power to impose additional taxes and regulatory oversight on businesses (think spray paint regulations and county income taxes, signage rules, and real estate transfer taxes) should not be excused from complying with the already burdensome taxes and regulatory oversight that applies to private enterprise.

Numbers Guy-
Any way you could crunch the numbers on the other employees of the branam campaign? orestar has him down to 38k, if he gets hit with the taxes on busse he's down to 25k and thats before he gets hit with taxes on his other employees. needless to say with that little money it looks like the dude is gonna get steamrolled by fritz and lewis. hell, even a streetcar might run him over...

You can figure it up pretty easily.

Fica rate is 6.2% both sides. Usually 6.2% withheld from the employee and 6.2% matched by the employer. 12.4% total.

Medicare rate is 1.45%, also withheld and matched so that's another 2.9%.

Tri met is about .06%. State unemployment runs, for this application, about 2%. No matches on those, employer only. Workers benefit assessment is something like 28 cents per hour worked.

In my example above I used 28% for federal income tax withholding and 18% for state. That's probably high and you would have to figure it based on the employees W4... or in this case the lack thereof. You could probably cut those back to 20% and 12% and be okay.

Now here's where it gets interesting. Since the taxes were not withheld, the employees don't have to give it back unless the IRS says so. But the campaign will be on the hook for the total.

If I'm still figuring right, the FICA, Medicare, Tri Met and unemployment on the 38 grand comes to 6596.80. If you figure the fed and state income tax that should have been withheld at these lower rates, you get $12,160. Then there's the 28 cents per employee hour worked in the first quarter. Just for the sake of example, there are 520 hours in a normal quarter. Assuming three employees you would get another $436.80.

So now we are at $19,193.60.

If there are any CPA's reading this maybe they could chime in on what happens on the state and fed not withheld, as far as whether the employees have to cough it up or the employer (i.e. the campaign) because they failed to take it out.

Branam's campaign could still come clean on this, but they would have to get an EIN number from the feds and the state and file the payments and paperwork by April 30th.

Just like all of us adults have to do.

Ooops, I mis-read your question. I thought you said he had spent 38 grand on employees, not that he had 38 grand left. Just apply these tax rates to the total payments he's reported in ORESTAR to employees and you will get your figure.

I just read his sidebar ad on this page. It says "Portland needs someone we can trust". He he.

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