It is over! Another tax year has passed and it time to reflect on the part of government that most affects average everyday citizens. This year seemed to be an exceptionally good year for many people (which means an exceptionally painful one in regards to taxes.) Although it is a duty of every citizen to pay their fair share of tax, I do not believe that the founding fathers intended that American citizens need suffer the degree of intrusion that is inflicted in the name of civic duty. I don't advocate the positions of many crackpot organizations who believe that taxation isn't constitutional, or that the word "United States" is some covert "federal" corporation that is secretly profiting off of your tax dollars. I'm saying that the system is unfair and I contiue to hope that some day financing freedom can become a little less painful to American citizens. Taxes are necessary, for example, in wartime the government should have a right to require taxes of its citizens, as well as tax dollars for maintaining the national defense and enforcing the law through the Justice Department, and some educational support, are worthy of tax support. However the myriad of extracurricular federal progarms are severely burdening Americans.
To demonstrate how massive government has become financially let's consider the payroll of the IRS (the Federal Government's version of Guido) their workforce at last count I believe is 110,000 employees. Figuing the average salary at 40,000 (some are more and some are less) that would amount to at least 4,400,000,000 dollars in salaries per year alone. Not to mention the inflated salaries of our elected officials in Congress, at last count I remember the average pay per lawmaker was 162,000 dollars for a grand total of 87,156,000 dollars to people who for the most part independantly wealthy.
Our Federal government has strecthed far beyond the original intent of the founding fathers, while repealing taxation is rather unlikely (damn near impossible) there are many things that could make the tax system fairer. In my Utopia the IRS would pay interest on all excess refundable withholdings, the social security tax that is withheld would go into retirement focused investment accounts, and the first 50,000 dollars of income would be exempt. Otherwise, I'd like to see the income tax structure abandoned for a national sales tax, a flat tax (with a 50,000 dollar exemption), or tariffs on imported goods. The most important change to make the income tax structure fair would be to illiminate estate taxes.
Regardless the IRS and state governments will continue to intrude and we taxpayers will continue to pay the price affixed to freedom. This past year a couple of my clients made some very profound observations. The first came from a client who was alittle unprepared for the bad news that he would owe, he said the most sensitive nerves in the human body are the nerves that extend from the heart to the pocket book. The second came from a client who has been facing some severe actions from the IRS for noncompliance, he said, "200+ years ago there was a revolution because of unfair taxation, how many generations until our children have to do the same." May our lawmakers consider more efficient means of financing freedom so that its citizens can breath a little easier in an ever more competitive world.
Saturday, April 15, 2006
Tuesday, April 04, 2006
Interesting ...... Utah State Tax Commission Economist Retires......
...because of a memo sent by Palmer Depaulis, Utah tax commissioner. The article in the DesNews quoted the memo as saying, "To avoid any misunderstandings, the staff should only give clear, unbiased and objective data and information while representing the Tax Commission in a public meeting, and that information should be given without subjective nuance or argumentative tone. Therefore, when staff is representing the Tax Commission or acting as an agent of the Tax Commission they are not free to express their own positions, opinions and views. . . . In the future, if this guidance is not followed, disciplinary action may be taken." Palmer Depaulis claims that the letter was not a gag order and had nothing to with the personal income tax reform issue. The economist, Doug MacDonald, had 27 years with the commission and was often called upon my the Legislature to testify regarding tax matters. MacDonald was quoted as his reasoning for retiring as "threats of taking disciplinary action against me for answering" lawmakers' questions combined with HB213, a post-retirement health-care law that took effect Friday, were reasons enough to leave."
My problem with this issue is that in an issue as important as this (one I have written about ad nauseum) should encourage dissenting viewpoints and opinions. My second problem is that the language of the letter almost would forbid this economist fromtestifyingg to the legislature, because the legislature is asking for an opinion to be given. The governor and his "brain trust" are claiming that the reforms into a flatter tax will result in tax cuts almost universally for all Utahn's and those that see increases will see increases of "10 to 20 dollars". That seems incredulous with the information (lacking as it is) while most other evidence leans toward the flat tax resulting in higher taxes. Therefore all expert opinions should be given unimpeded, and valued.
I don't believe that their is any conspiracy to pass the flatter tax, however that memo (especially if it was targeted at this economist as the article leads one to believe) was agrievouss mistake regarding an issue as critical as totally overhauling the state's income tax structure.
My problem with this issue is that in an issue as important as this (one I have written about ad nauseum) should encourage dissenting viewpoints and opinions. My second problem is that the language of the letter almost would forbid this economist fromtestifyingg to the legislature, because the legislature is asking for an opinion to be given. The governor and his "brain trust" are claiming that the reforms into a flatter tax will result in tax cuts almost universally for all Utahn's and those that see increases will see increases of "10 to 20 dollars". That seems incredulous with the information (lacking as it is) while most other evidence leans toward the flat tax resulting in higher taxes. Therefore all expert opinions should be given unimpeded, and valued.
I don't believe that their is any conspiracy to pass the flatter tax, however that memo (especially if it was targeted at this economist as the article leads one to believe) was agrievouss mistake regarding an issue as critical as totally overhauling the state's income tax structure.
Saturday, April 01, 2006
Democrats Trying to Require Mandatory Retirement Plans from Employers
This came from a professional journal I read that does not allow links to the online version so I have quoted a major portion of the text from the EAJournal :
"Baucus introduces retirement savings bill
Senator Max Baucus (D-MT) last week introduced S. 2431, the Savings Competitiveness Act of 2006, which seeks to increase personal retirement savings through a number of different tax provisions. The bill would require employers who do not sponsor retirement plans to set up a payroll deduction system for employees to make automatic deposits into individual retirement accounts (IRAs). Companies with fewer than 25 employees would be eligible for a tax credit up to $250 to offset the costs of starting such a program and would be eligible for the credit for another two years if employees were automatically enrolled in the program. The bill would redesign the saver's credit, making it refundable, and providing for its direct payment into a taxpayer's Roth IRA. Taxpayers would also be able to direct the IRS to deposit their tax refunds straight into their IRAs. Further, the bill would encourage low-income workers to save by prohibiting the inclusion of retirement savings in means testing for federal assistance programs."
This idea sounds vaguely familiar, hmmm kind of like .... SOCIAL SECURITY!!!!! The solution offered by Democrat icon FDR to provide retirement and death benefit security to American citizens -- the one that Democrats in Washington vehemitly deny being broken. Employers are already forced to contribute to a Democrat created "retirement" plan, so why should employers have to be forced to pay into another mandatory retirement plan unless the Democratic party is (underhandedly) admitting that Social Security has gone the way of every other government social plans -- into bureaucracy and abuse.
Social Security private accounts is best solution offered so far, and one of the few really good ideas that GW has come up with. Your Social Security taxes would go into individual accounts (like IRAs) which would be invested in the private market offering a POSITIVE return on your taxes -- currently Soc. Sec. goes into the general fund and pays benefits for current retirees and other government social programs. With private accounts the money that is forcibly paid by you and for you could be properly invested. For example, the average wage earner makes 40,000 dollars a year at a combined employee and employer contribution rate of 12.4% for a combined contribution of 5,000 dollars for one citizen. If that 5,000 dollars (excluding the fact that the same amount would be contributed a year) were placed in a regular bank savings account earning 3% interest annually that original sum would grow to 5,800 dollars in 5 years.
I'm guessing that most Americans would rather that their "retirement" money be invested in a manner that would offer even meager returns. However, here we are Congress refusing to take logical steps to ensure better retirements for Americans opting instead to create more bureaucracy that will make doing business in America less and less affordable and attractive.
"Baucus introduces retirement savings bill
Senator Max Baucus (D-MT) last week introduced S. 2431, the Savings Competitiveness Act of 2006, which seeks to increase personal retirement savings through a number of different tax provisions. The bill would require employers who do not sponsor retirement plans to set up a payroll deduction system for employees to make automatic deposits into individual retirement accounts (IRAs). Companies with fewer than 25 employees would be eligible for a tax credit up to $250 to offset the costs of starting such a program and would be eligible for the credit for another two years if employees were automatically enrolled in the program. The bill would redesign the saver's credit, making it refundable, and providing for its direct payment into a taxpayer's Roth IRA. Taxpayers would also be able to direct the IRS to deposit their tax refunds straight into their IRAs. Further, the bill would encourage low-income workers to save by prohibiting the inclusion of retirement savings in means testing for federal assistance programs."
This idea sounds vaguely familiar, hmmm kind of like .... SOCIAL SECURITY!!!!! The solution offered by Democrat icon FDR to provide retirement and death benefit security to American citizens -- the one that Democrats in Washington vehemitly deny being broken. Employers are already forced to contribute to a Democrat created "retirement" plan, so why should employers have to be forced to pay into another mandatory retirement plan unless the Democratic party is (underhandedly) admitting that Social Security has gone the way of every other government social plans -- into bureaucracy and abuse.
Social Security private accounts is best solution offered so far, and one of the few really good ideas that GW has come up with. Your Social Security taxes would go into individual accounts (like IRAs) which would be invested in the private market offering a POSITIVE return on your taxes -- currently Soc. Sec. goes into the general fund and pays benefits for current retirees and other government social programs. With private accounts the money that is forcibly paid by you and for you could be properly invested. For example, the average wage earner makes 40,000 dollars a year at a combined employee and employer contribution rate of 12.4% for a combined contribution of 5,000 dollars for one citizen. If that 5,000 dollars (excluding the fact that the same amount would be contributed a year) were placed in a regular bank savings account earning 3% interest annually that original sum would grow to 5,800 dollars in 5 years.
I'm guessing that most Americans would rather that their "retirement" money be invested in a manner that would offer even meager returns. However, here we are Congress refusing to take logical steps to ensure better retirements for Americans opting instead to create more bureaucracy that will make doing business in America less and less affordable and attractive.
Friday, March 24, 2006
Larry H. Miller -- Apparently Uof U Students Don't Want to Take Your Money.
University of Utah students, professors, and community activists signed a petition last week demanding that the University cancel a keynote address to be given by Larry H Miller. "As of Thursday, almost 1,400 people had signed the online petition asking the university to "rescind this thoughtless invitation and issue a formal statement of apology" to the community" the article stated. Kt Farley, a U student who started the petition had this to say, "By yanking the movie from his screens, Miller showed he is not open-minded and doesn't value academic freedom..... I wouldn't object to Miller speaking at the university, as long as the subject was not higher education. They should get him to talk about his political stands or why he canceled the movie" U of U student once again are showing us the light as to the true meaning of diversity. "Anything you do that offends us, makes you a racist and a closed-minded ideological Nazi"
First, this is America and I thought if a movie house owner finds something offensive with a movie depicting homosexuality, he has the right to do so. I must concede he may not have proved himself wholly pure on the morality issue with some of the other films he showed at the time, but that aside it is his right to show what he will at his theatre.
Second, it is rather hypocritical of the students and professors of the U to throw out the battle cry "Diversity!" because the man had the courage to stand by his convictions regarding a moral issue (homosexuality is a MORAL issue !!! Even if there is a gay gene it doesn't make homosexuals into a race, there are genes that have been proven to cause criminal behavior -- I don't see anyone fighting for the rights of criminals to commit crimes). Larry H. Miller has stood up for diversity, he stood up for his beliefs. Apparently diversity training hasn't prepared U students for someone not agreeing with popular college campus opinion.
Dear Larry. . . apparently U students don't want your donations. I know of institutions in Southern Utah that are in dire need of additional funding -- it sounds like you can channel money wasted at the U down here.
First, this is America and I thought if a movie house owner finds something offensive with a movie depicting homosexuality, he has the right to do so. I must concede he may not have proved himself wholly pure on the morality issue with some of the other films he showed at the time, but that aside it is his right to show what he will at his theatre.
Second, it is rather hypocritical of the students and professors of the U to throw out the battle cry "Diversity!" because the man had the courage to stand by his convictions regarding a moral issue (homosexuality is a MORAL issue !!! Even if there is a gay gene it doesn't make homosexuals into a race, there are genes that have been proven to cause criminal behavior -- I don't see anyone fighting for the rights of criminals to commit crimes). Larry H. Miller has stood up for diversity, he stood up for his beliefs. Apparently diversity training hasn't prepared U students for someone not agreeing with popular college campus opinion.
Dear Larry. . . apparently U students don't want your donations. I know of institutions in Southern Utah that are in dire need of additional funding -- it sounds like you can channel money wasted at the U down here.
Sunday, March 19, 2006
Polygamist Riding Gay Coattails -- Maybe or Maybe Not
The DesNews had an article regarding gay marriage and a possible external result of the gay marriage battle. If gay marriage is ultimately upheld, as I suspect it will, other seemingly reprehensible exceptions such as polygamy or polyandry will have to be allowed also despite arguements made by gay & lesbian rights coalitions that there aren't similarities between the two issues. However for tax reasons polygamist stand to lose substantial amounts of tax refund money if polygamy becomes a recognized and defined form of marriage.
For example, you have one polyg man and his original wife filing joint with income of 30k with 3 kids, he has a tiny amount of tax, all which would be swallowed by child tax credits, any remaining child tax credit and earned earned income credit (welfare for the working poor) is refunded to him. 2 to 3 thousand dollars in money the family never paid in -- free money. Then you have wives 1,2,3 .... etc each with 2 to 3 children from polyg man. The extra wives likely make around 15k to 20k per woman thereby maximizing the earned income credit for total family refunds of 11k to 20k in free government money. If the polygamist family group had to file taxes on only one return, all those refundable credits we be limited and diminished as the extra wives income is mingled with married couple number 1's income in one return.
Polygamist make alot of money (your tax dollars) off of their oppressed circumstances. I see a fair number of polygamist and they usually walk out of my office with refunds of 3-6 thousand dollars in refunds per return most of which is refundable tax credits.
For example, you have one polyg man and his original wife filing joint with income of 30k with 3 kids, he has a tiny amount of tax, all which would be swallowed by child tax credits, any remaining child tax credit and earned earned income credit (welfare for the working poor) is refunded to him. 2 to 3 thousand dollars in money the family never paid in -- free money. Then you have wives 1,2,3 .... etc each with 2 to 3 children from polyg man. The extra wives likely make around 15k to 20k per woman thereby maximizing the earned income credit for total family refunds of 11k to 20k in free government money. If the polygamist family group had to file taxes on only one return, all those refundable credits we be limited and diminished as the extra wives income is mingled with married couple number 1's income in one return.
Polygamist make alot of money (your tax dollars) off of their oppressed circumstances. I see a fair number of polygamist and they usually walk out of my office with refunds of 3-6 thousand dollars in refunds per return most of which is refundable tax credits.
Wednesday, March 15, 2006
LDS letter gives hope to Democrats that the LDS Church may be Willing to Endorse Both Parties .... Don't be so Sure!
DesNews and other local and state news agencies have noted a letter that the LDS church does not endorse any candidate or party, as proof that Mormon church feels that Mormonism can be compatible with liberalism. However the optimism may be a little overstated. First, this letter is read every year over pulpits to LDS members who have often been accused of ostracizing those with liberal views. Second, there is a major tax law issue involved in this that better explains the Church's reason for issuing the letter.
The Church of Jesus Christ of Latter Day Saints is a 501(c)(3) tax exempt organization. Under Internal Revenue Code such an organization would and could lose tax exempt status if they are caught openly endorsing parties or campaigns. So the letter is more of a disclaimer rather than an endorsement of both parties platforms. By disclaiming any endorsements of a party or candidates the church is kept safe from possible accusations that the church is engaging in politics. This matter is one that the IRS watches very diligently and accusations are investigated regularly. If there was so much as a campaign poster seen on church property there would be consequences.
I have never heard leaders push candidates from the pulpit, however many Dem or liberal views (gay marriage, abortion, etc..) are expressly opposed by church doctrine. As a whole, (this may be my own ideological views) the church is far more supportive of the Republican-conservative agenda. For Dems or Republicans to be cheered by this as some kind of endorsement is a little naive. Look at official church statements regarding social issues overall to judge the church's politics which must be kept openly neutral.
The Church of Jesus Christ of Latter Day Saints is a 501(c)(3) tax exempt organization. Under Internal Revenue Code such an organization would and could lose tax exempt status if they are caught openly endorsing parties or campaigns. So the letter is more of a disclaimer rather than an endorsement of both parties platforms. By disclaiming any endorsements of a party or candidates the church is kept safe from possible accusations that the church is engaging in politics. This matter is one that the IRS watches very diligently and accusations are investigated regularly. If there was so much as a campaign poster seen on church property there would be consequences.
I have never heard leaders push candidates from the pulpit, however many Dem or liberal views (gay marriage, abortion, etc..) are expressly opposed by church doctrine. As a whole, (this may be my own ideological views) the church is far more supportive of the Republican-conservative agenda. For Dems or Republicans to be cheered by this as some kind of endorsement is a little naive. Look at official church statements regarding social issues overall to judge the church's politics which must be kept openly neutral.
Thursday, February 02, 2006
Hybrids are great for tax breaks in Utah .... except the Toyota Prius
I have many clients to whom I have suggested that purchasing a hybrid vehicle would generate a nice Federal deduction and a State of Utah tax credit. The Federal deduction is working as it should. The State of Utah however has written the credit so that only one car on the market is excluded -- a Toyota Prius. It just so happens that a client of mine went out and bought a Prius based partly on my advice regarding hybrid vehicles, and because somehow the legislature specifically excluded that one vehicle (for no possible logical reason other that making a trap regarding this credit) my client will only get half the tax benefit he was counting on.
Steve Urquhart, if you are out there could you tell me why has this credit included such a ridiculous provision as excluding a vehicle based solely on the fact that the manfacturer didn't choose to make a non-hybrid version. It is highly discriminatory to disallow a tax benefit to a taxpayer that would otherwise qualify, based solely on the type of vehicle. This loophole is like disallowing the child tax credit because the childs first name starts with the letter P.
I guess this situation would argue in favor of the flat tax. The state can't insert nonsensical provisions into its tax code that hurt taxpayers that get caught in their web.
I must admit that I deserve the blame -- a little more research would have saved me from this situation
To my other readers, hybrid vehicles are great for tax write-off's I just hope you avoided the Prius.
Steve Urquhart, if you are out there could you tell me why has this credit included such a ridiculous provision as excluding a vehicle based solely on the fact that the manfacturer didn't choose to make a non-hybrid version. It is highly discriminatory to disallow a tax benefit to a taxpayer that would otherwise qualify, based solely on the type of vehicle. This loophole is like disallowing the child tax credit because the childs first name starts with the letter P.
I guess this situation would argue in favor of the flat tax. The state can't insert nonsensical provisions into its tax code that hurt taxpayers that get caught in their web.
I must admit that I deserve the blame -- a little more research would have saved me from this situation
To my other readers, hybrid vehicles are great for tax write-off's I just hope you avoided the Prius.
Friday, January 27, 2006
Kris Lounsbury for Congress
An acquaitance has thrown his hat in the ring for Utah's 2nd congressional district. Kris Lounsbury is a regular hard working American and he is an example of the American political process at its finest. Every American, well connected or not, has the right to say, "I see a problem with the way that the government is run and I want to stand up and help implement changes in our society." This is what the process should be about. I appreciate people like Kris that stand up and offer thermselves as servants to our country without motives for fame, fortune, and power.
Wednesday, January 11, 2006
Judge Alito is a Blogger
I was on State of the Beehive, and I noticed a post by Judge Alito. He has been blogging throughout the hearings. It is a fun read.
Tuesday, January 03, 2006
Main Street Plaza -- 7 years later it is finally over.
Today the deadline for the ACLU to appeal the Main Street Plaza decision runs out. The DesNews published a story recalling the issue and the divide it seemed to create among residents of the state at that time. Although the issue is one that irritated me, being an oversensitive Mormon, I have to admit Rocky Anderson may have been roasted more than he deserved over the issue. It seemed (and many felt screwed) that the city was dealing unfairly with the church, however Deedee Corradini and the LDS Church could have, and likely should have included the easement with the original purchase. Anti-Mormon or not, Rocky Anderson likely just saw (and took advantage) an opportunity to get more out of a poorly executed transaction. After all he is a lawyer.
One interesting thought came from Dani Eyer, executive director of the ACLU's Utah chapter. Eyer said, " 'I guess the question I have at the end of it is, did this exacerbate the religious divide or was it an interesting civic dialogue?" Eyer said. "Instead of talking about basketball, people talked about the meaning of the Constitution and the value of the First Amendment (and) whether there is value in protecting a majority from criticism. I said it over the years, but I still maintain that this community conversation was healthy.' " Okay I'll bite. It is good that people talk about the constitution and think about the meaning of the rights therein. However, it seems rather petty for the ACLU to rear its ugly head in a case where the intent of both parties was rather obvious. The Church bought the land with the intent to make it into a solemn place near a sacred site of the religion, it was clear that the Church's control of behavior on the plaza was an important issue in the deal. The city sold the property, and the ACLU rears its head in a lawsuit where the ACLU showed once again its constitutional philosophy that freedom of speech trumps freedom OF (not from) religion.
Are debates about constitutional freedoms necessary? Yes. However long protracted court battles are hardly the most effective places to have these debates. Fine, we had the discussion, everything said and done the original intent of the deal between the city and the church stands -- except from more land became involved. However, the original deal's cost increased by several thousands of dollars in legal fees for the city and the LDS church, shouldn't the ACLU be required to repay the city and the church their legal fees. I'd argue, everything said and done, this was a frivolous suit (like many the ACLU files) maybe if the ACLU had to repay legal fees of defendants they would be less likely to file lawsuits against 501(c)(3) charities.
One interesting thought came from Dani Eyer, executive director of the ACLU's Utah chapter. Eyer said, " 'I guess the question I have at the end of it is, did this exacerbate the religious divide or was it an interesting civic dialogue?" Eyer said. "Instead of talking about basketball, people talked about the meaning of the Constitution and the value of the First Amendment (and) whether there is value in protecting a majority from criticism. I said it over the years, but I still maintain that this community conversation was healthy.' " Okay I'll bite. It is good that people talk about the constitution and think about the meaning of the rights therein. However, it seems rather petty for the ACLU to rear its ugly head in a case where the intent of both parties was rather obvious. The Church bought the land with the intent to make it into a solemn place near a sacred site of the religion, it was clear that the Church's control of behavior on the plaza was an important issue in the deal. The city sold the property, and the ACLU rears its head in a lawsuit where the ACLU showed once again its constitutional philosophy that freedom of speech trumps freedom OF (not from) religion.
Are debates about constitutional freedoms necessary? Yes. However long protracted court battles are hardly the most effective places to have these debates. Fine, we had the discussion, everything said and done the original intent of the deal between the city and the church stands -- except from more land became involved. However, the original deal's cost increased by several thousands of dollars in legal fees for the city and the LDS church, shouldn't the ACLU be required to repay the city and the church their legal fees. I'd argue, everything said and done, this was a frivolous suit (like many the ACLU files) maybe if the ACLU had to repay legal fees of defendants they would be less likely to file lawsuits against 501(c)(3) charities.
Saturday, December 31, 2005
Mom, 13, is ruled a sex crime offender
I was shocked when I read this. I nearly choked on a Pepsi.
It appears that this 13 year old infant who became pregnant by a twelve year old is now a child sex offender for having intercouse with the afore mentioned infant. I don't know what to make of it. It is incredibly ridiculous to me that children this young are engaging in sexual activity, and even more ridiculous is that the government is actually holding one of these children out as being a perpetrator.
If the courts were to charge anyone of a crime it should be the children's parents -- charge them with being incredibly lousy parents. My heavens, 12- 13 year olds should still be playing with dolls and avoiding the other sexes cooties.
This is one of those cases that make me long for the past. Kids could be kids for more than 11 years.
It appears that this 13 year old infant who became pregnant by a twelve year old is now a child sex offender for having intercouse with the afore mentioned infant. I don't know what to make of it. It is incredibly ridiculous to me that children this young are engaging in sexual activity, and even more ridiculous is that the government is actually holding one of these children out as being a perpetrator.
If the courts were to charge anyone of a crime it should be the children's parents -- charge them with being incredibly lousy parents. My heavens, 12- 13 year olds should still be playing with dolls and avoiding the other sexes cooties.
This is one of those cases that make me long for the past. Kids could be kids for more than 11 years.
Thursday, December 29, 2005
2006 Filing Season
It's that time of year again, New Years is about here and soon the tax filing season will be in full swing. During, this time of year my wife & children are pretty much orphaned and my blog will likely fall in that category. However, I'd like to give my business website address that is under construction and will be fully operational in a few weeks.
As a reminder I'd like to offer a few last minute tips to lower your tax bill. If you are wondering if your withholdings are insufficient you can submit a new W-4 before your last paycheck for the year is issued, the IRS has an excellent calculator on its website to determine your withholding allowances. You can also make extra contributions to your 401k. Purchasing a hybrid vehicle is an excellent last minute tax saving move if you can get your hands on one, the deductions are available to individuals as well as businesses and the state of Utah has a substantial tax credit in connection to the purchase of that vehicle. If you anticipate extraordinarily high income from a business, you may be able to reduce your liability by making purchases of business assets. You can write off as much as 100,000 dollars of asset purchases made before year end 2005, there are restrictions and issues that apply so contact your tax professional for details.
Thanks for your readership, and plan on regular posts after 4/15/2006 .
As a reminder I'd like to offer a few last minute tips to lower your tax bill. If you are wondering if your withholdings are insufficient you can submit a new W-4 before your last paycheck for the year is issued, the IRS has an excellent calculator on its website to determine your withholding allowances. You can also make extra contributions to your 401k. Purchasing a hybrid vehicle is an excellent last minute tax saving move if you can get your hands on one, the deductions are available to individuals as well as businesses and the state of Utah has a substantial tax credit in connection to the purchase of that vehicle. If you anticipate extraordinarily high income from a business, you may be able to reduce your liability by making purchases of business assets. You can write off as much as 100,000 dollars of asset purchases made before year end 2005, there are restrictions and issues that apply so contact your tax professional for details.
Thanks for your readership, and plan on regular posts after 4/15/2006 .
Thursday, December 22, 2005
Homesteading: An Interesting Solution to Skyrocketing Housing Cost
Steve U suggested an interesting idea to solve the out of control housing prices (this maybe a little more applicable to So. Utah than the rest of the state). If by chance the state could finally get land the Federal government has been promising to give back to Utah, offering developments to "homesteaders".
Its an interesting idea that I really like, although I'm sure it would be several years before anything would likely come of it.
Its an interesting idea that I really like, although I'm sure it would be several years before anything would likely come of it.
Wednesday, December 21, 2005
Bob Schultz -- "We The People"
On Steve U's blog there was a commenter on the budget post that kept refering to a Bob Schultz and We the People. The commenter had a high opinion of this man and asked Steve Urquhart to render an opinion of Mr. Schultz's arguements about the legality of the income tax. It is apparent that Steve didn't feel the need to bother with this (Steve's a smart man thats why he gets elected) likely because of the lunacy of the arguements.
Concerned Citizen -- Quatloos (an organization devoted to uncovering financial fraud schemes) has rendered an excellent opinion of Bob Schultz. I suggest anyone who has been approached about such schemes and scammers pay a visits the the above mentioned website.
I do appreciate the dramatics that Mr. Schultz likes to resort to, some of his antics have included threatening the IRS to arrest him (this was predictably toned down after Lynne Meredith, fellow scamer, was indicted) and even going on a hunger strike to draw attention to himself. He's just another swindler selling lies to eager listeners like Concerned Citizen.
Update: this is a recent decision involving a WTP disciple.
Concerned Citizen -- Quatloos (an organization devoted to uncovering financial fraud schemes) has rendered an excellent opinion of Bob Schultz. I suggest anyone who has been approached about such schemes and scammers pay a visits the the above mentioned website.
I do appreciate the dramatics that Mr. Schultz likes to resort to, some of his antics have included threatening the IRS to arrest him (this was predictably toned down after Lynne Meredith, fellow scamer, was indicted) and even going on a hunger strike to draw attention to himself. He's just another swindler selling lies to eager listeners like Concerned Citizen.
Update: this is a recent decision involving a WTP disciple.
Monday, December 19, 2005
UTAH QUARTER: Mormon symbol doesn't belong on coin
Ah yes the Salt Lake Tribune editorial board.... They published an editorial this weekend that seems fairly ridiculous to me. I guess they think that everything about Utah must be politically incorrect. The article states, "The beehive is a beloved and enduring symbol of Mormon culture. The federal guidelines for the U.S. Mint's popular 50 State Quarters Program prohibit depictions that are specific to one religious organization. If you know anything about Utah history and the symbols of The Church of Jesus Christ of Latter-day Saints, you know immediately that the beehive should be disqualified. " Nevermind the fact that the beehive is on the state flag, nevermind the fact that Utah's nickname has always been the "Beehive state", and nevermind the fact that the Mormon church has always avoided symbols as items of worship. As Charley Foster so aptly points out in his blog today, "by the Tribs logic the atheist's lawsuit against the Highway should have been based on the fact the beehive is on the crosses, and not the cross itself."
First, if you know anything about the Mormon Church, there are no symbols. I'll grant you the angel Moroni is the closest (the statue on top of all temples). I don't know why the church keeps the beehive on the pulpit of the conference center, but I assure all of my readers that Mormons don't see the beehive as a symbol of worship or reverence. The beehive was intended (as far as I understand) as a symbol of being industrious, of self-sufficiency -- all traits that are desirable to a society.
Second, why shouldn't a symbol that has been an intricate part of the state's history be excluded from the commemorative quarter. It's not like the beehive is a swastika, or the confederate flag of the old south. If they wanted the Angel Moroni on it, than I could see the religious offense. It just seems like the same old ACLU/Cliff Lyon/Rocky Anderson BS. If there is anything Mormon-esque it must be opposed and taunted all in the name of protecting the delicate feelings of oppressed non-LDS people residing in the State of Utah.
I guess someone should probably sue to get rid of the seagull as the state bird. After all the seagull has its roots with Mormon pioneers. Actually everything in regards to the state except national parks and skiing is likely offensive by SLTrib standards.
First, if you know anything about the Mormon Church, there are no symbols. I'll grant you the angel Moroni is the closest (the statue on top of all temples). I don't know why the church keeps the beehive on the pulpit of the conference center, but I assure all of my readers that Mormons don't see the beehive as a symbol of worship or reverence. The beehive was intended (as far as I understand) as a symbol of being industrious, of self-sufficiency -- all traits that are desirable to a society.
Second, why shouldn't a symbol that has been an intricate part of the state's history be excluded from the commemorative quarter. It's not like the beehive is a swastika, or the confederate flag of the old south. If they wanted the Angel Moroni on it, than I could see the religious offense. It just seems like the same old ACLU/Cliff Lyon/Rocky Anderson BS. If there is anything Mormon-esque it must be opposed and taunted all in the name of protecting the delicate feelings of oppressed non-LDS people residing in the State of Utah.
I guess someone should probably sue to get rid of the seagull as the state bird. After all the seagull has its roots with Mormon pioneers. Actually everything in regards to the state except national parks and skiing is likely offensive by SLTrib standards.
Friday, December 16, 2005
More Buttars !!! Outlaw Gay Clubs.
Buttars wants to pass a bill to outlaw gay clubs in public schools. This issue was answered pretty strongly when in 1995, a group of East High students asked to form a gay-straight alliance, resulting in a firestorm of debate over homosexuality. The issue made it into a lawsuit and eventually East High and other districts in Salt Lake County relented allowing such clubs to exist. I was unaware that these clubs are all over Salt Lake Valley. McCoy of the ACLU called Buttars timing curious, " 'I suppose it has to do with the Provo (High alliance and) being an election year.' It is not unusual for some Republicans to introduce conservative, moral legislation in an election year, and if Democratic lawmakers vote against the bills then GOP challengers have an issue to take after the Democratic incumbents. "
I appreciate what Buttars wants, however I disagree with him. Buttars used this reasoning when he announced the bill. " I'm concerned about gay clubs. In my mind, if you are in the chess club, what do you talk about? Chess. If you are in the dance club, what do you talk about? Dance. If you are in a gay club, what do you talk about? I just don't believe members of sexual orientation clubs should be sanctioned by the public schools what they are talking about even a part of the public schools. They should not be allowed to have that on school property at all. It's just wrong." Give me a break! How does he view these clubs -- some kind of gay brothel in public schools. However we live in the real world where there are kids that struggle with these issues. Although I believe homosexuality is immoral, I can't dismiss the clubs as septic pools of immorality. These kids have to deal with depressionn, low self-esteem, and persecution from other students they deserve the right to assemble for support.
Senator Buttars, I don't know what kind of sterile bubble you live in. I don't know if West Jordan is that kind of town. People have different back grounds, opinions, and ideas. Your "more holiness give me" approach to life may be a great way to live and perfect ideal to preach in church, but as a voter your desire to eliminate any opposing ideas is a turnoff -- its almost Hitler-esque.
I appreciate what Buttars wants, however I disagree with him. Buttars used this reasoning when he announced the bill. " I'm concerned about gay clubs. In my mind, if you are in the chess club, what do you talk about? Chess. If you are in the dance club, what do you talk about? Dance. If you are in a gay club, what do you talk about? I just don't believe members of sexual orientation clubs should be sanctioned by the public schools what they are talking about even a part of the public schools. They should not be allowed to have that on school property at all. It's just wrong." Give me a break! How does he view these clubs -- some kind of gay brothel in public schools. However we live in the real world where there are kids that struggle with these issues. Although I believe homosexuality is immoral, I can't dismiss the clubs as septic pools of immorality. These kids have to deal with depressionn, low self-esteem, and persecution from other students they deserve the right to assemble for support.
Senator Buttars, I don't know what kind of sterile bubble you live in. I don't know if West Jordan is that kind of town. People have different back grounds, opinions, and ideas. Your "more holiness give me" approach to life may be a great way to live and perfect ideal to preach in church, but as a voter your desire to eliminate any opposing ideas is a turnoff -- its almost Hitler-esque.
Wednesday, December 14, 2005
Year-end tax planning
It is the year end and many people are calling asking about how they can lower there tax bill. Here is my top ten list.
1. Own your home -- Home Mortgage is fully deductible on both the state of Utah tax return (at the moment) and on the Federal Return.
2. Pay a full 10% Donation to your religion of choice -- Normally charitable deductions of more than 2% would trigger an audit. However, living in Utah you have the advantage of living amongst a religious majority that is required to give a full 10% and everyone can take advantage of this.
3. Donate to Katrina related charities -- The charitable deduction limitations are lifted on all Katrina related donations.
4. Contribute 4,000 dollars to your traditional IRA -- If you aren't covered by an employer sponsored retirement plan you are eligible for a full 100 % page one deduction.
5. Purchase a Hybrid vehicle -- They are expensive, but there is a sweet page one deduction on your Federal return, and an even better credit from the state of Utah.
6. Use your car to run errands that are business related -- If you own a business you are eligible to deduct during the last few months of '05 48.5 cents per mile (44.5 cents for 2006) of all business related miles. If you can run errands as an employee you are eligible for the same milage rates, however the deduction is limited to 2% of gross income. Documentation needs to be kept to substantiate the claim.
7. Start a small business -- If you have a hobby that you are talented at, try going into business. Your business expenses are 100% deductible, and you would be eligible to depreciate your assets.
8. Set up a small business corporation -- As a sole proprietor, you are eligible for many great deductions. However, there is a 15.3% tax on the net income of your business on top of the income tax. As a corporation you may be able to limit the amount of SE tax involved.
9. Purchase Assets -- Whether or not you are in business, there substantial deductions available in connection with the purchase of assets. The IRS allows a deduction of estimated sales tax paid for the year with additional large ticket sales tax added on top of the IRS estimated sales tax. Buy purchasing a car or a boat you may be able to have larger deduction than your state income tax paid would have provided, and when you use the state sales tax deduction your state tax refund isn't taxable. If you are in business you are able to deduct as much as 102,000 dollars of 100% business use property costs (limitations apply use a professional)
10. Have a family -- When you get married and have children you are entitled to many tax credits that for many families zero out federal tax liabilities. The child tax credit is 1,000 dollars per child up to three children, and a portion of the credit left over can possibly be refunded. The exemption is 3,200 dollars per person. A family of 5 has 16,000 dollars of write off available in exemptions alone.
The first day of E-File is 1/15/2006.
I hope everyone has a good year.
1. Own your home -- Home Mortgage is fully deductible on both the state of Utah tax return (at the moment) and on the Federal Return.
2. Pay a full 10% Donation to your religion of choice -- Normally charitable deductions of more than 2% would trigger an audit. However, living in Utah you have the advantage of living amongst a religious majority that is required to give a full 10% and everyone can take advantage of this.
3. Donate to Katrina related charities -- The charitable deduction limitations are lifted on all Katrina related donations.
4. Contribute 4,000 dollars to your traditional IRA -- If you aren't covered by an employer sponsored retirement plan you are eligible for a full 100 % page one deduction.
5. Purchase a Hybrid vehicle -- They are expensive, but there is a sweet page one deduction on your Federal return, and an even better credit from the state of Utah.
6. Use your car to run errands that are business related -- If you own a business you are eligible to deduct during the last few months of '05 48.5 cents per mile (44.5 cents for 2006) of all business related miles. If you can run errands as an employee you are eligible for the same milage rates, however the deduction is limited to 2% of gross income. Documentation needs to be kept to substantiate the claim.
7. Start a small business -- If you have a hobby that you are talented at, try going into business. Your business expenses are 100% deductible, and you would be eligible to depreciate your assets.
8. Set up a small business corporation -- As a sole proprietor, you are eligible for many great deductions. However, there is a 15.3% tax on the net income of your business on top of the income tax. As a corporation you may be able to limit the amount of SE tax involved.
9. Purchase Assets -- Whether or not you are in business, there substantial deductions available in connection with the purchase of assets. The IRS allows a deduction of estimated sales tax paid for the year with additional large ticket sales tax added on top of the IRS estimated sales tax. Buy purchasing a car or a boat you may be able to have larger deduction than your state income tax paid would have provided, and when you use the state sales tax deduction your state tax refund isn't taxable. If you are in business you are able to deduct as much as 102,000 dollars of 100% business use property costs (limitations apply use a professional)
10. Have a family -- When you get married and have children you are entitled to many tax credits that for many families zero out federal tax liabilities. The child tax credit is 1,000 dollars per child up to three children, and a portion of the credit left over can possibly be refunded. The exemption is 3,200 dollars per person. A family of 5 has 16,000 dollars of write off available in exemptions alone.
The first day of E-File is 1/15/2006.
I hope everyone has a good year.
Saturday, December 10, 2005
The "flatter" tax appears to be the plan.
The governor released his proposed budget on Friday. "This budget is a lot more Santa than Scrooge," Huntsman said. The budget includes a much needed pay hike for state workers (my mother works for the state and the last time they saw a cost of living raise was in the 1990's) a raise for teachers, and a raise for law enforcement. There was also a sum of 176 million dollars set aside for Medicaid, an initiative the governer has set forth to make get all Utahns insured. All of these spending increases paired with the record 60 million dollar tax "cut" (I'm still sceptical about the "flatter" tax) is giving the governor a jolly Ole' Saint Nick attitude about the state.
I appreciate the removal of the tax cut on food greatly, it is a truely repressive tax. However, I'm very hesitant to embrace a system that on the surface appears to be of benefit to the wealthy first and foremost. As I demonstrated in a previous post, the flat tax will be a hike to a great deal of people. Unless the proposed credits are far more substantial that the original proposal demonsrated (a flash calculator on the Gov.'s website when the governor originally announced the flat tax that I can't find anymore), I doubt that this will be a cut to the average wage earner. If anyone has seen a concrete explanation of the proposed credits, I'd like to hear about it before I can give the flat tax a strong vote of confidence.
Other than my rant about the flat tax, Bravo Mr Huntsman! The pay increases for state law enforcement/general employees, and the raises for public and college educators is very much needed. The other spending will be beneficial as well, I'm sure.
I appreciate the removal of the tax cut on food greatly, it is a truely repressive tax. However, I'm very hesitant to embrace a system that on the surface appears to be of benefit to the wealthy first and foremost. As I demonstrated in a previous post, the flat tax will be a hike to a great deal of people. Unless the proposed credits are far more substantial that the original proposal demonsrated (a flash calculator on the Gov.'s website when the governor originally announced the flat tax that I can't find anymore), I doubt that this will be a cut to the average wage earner. If anyone has seen a concrete explanation of the proposed credits, I'd like to hear about it before I can give the flat tax a strong vote of confidence.
Other than my rant about the flat tax, Bravo Mr Huntsman! The pay increases for state law enforcement/general employees, and the raises for public and college educators is very much needed. The other spending will be beneficial as well, I'm sure.
Friday, December 02, 2005
St. George among top 5 U.S. cities in home value appreciation
In the DesNews this morning it was announced that housing prices are soaring, with my home, St. George leading the pack. "With an appreciation rate of 31.57 percent, St. George earned a No. 4 spot among 265 U.S. cities and was the only Utah city to break the top 20." St. George apparently beat out Orlando FL. The article interviewed the owner of REmax in SG and he attributed the price increase to out of state investors. "They are buying everything." El-Bakri said, "but you've also got 38 million baby boomers that are getting ready to retire. Today, I'm driving down the street and my car says it's 61 degrees, and it's December. I actually played golf yesterday. This is the lifestyle that people want." Although the weather may be good in St. George, it sure is cold if you aren't in a home here now.
The driver of this housing market, I suspect, is almost purely speculative. On average I have at least one client call me a week about building spec. homes, and all of the new business clients I see are new construction start-up businesses or realtors. This growth can't be sustained without a starter home market, and soon the starter home market will be totally out of reach for the start-up families. It is frustrating to me to see a market in this town (void of industry other than construction, and medicine) where the only housing BARELY under 150k is a home on wheels.
Forgive my coming rant.
The prices in St. George are ridiculous. From the city's website, the average salary in St. George is $1,351 dollars a month, the median family income is 40k, and a neighbor in my last neighborhood just sold a 1100 sq. foot townhome (no yard) for 205k. Judging from my memory of a personal finance class I took as a freshman in college, generally a family or individual should only take on, and banks are likely hesitant to give a loan at payments more than 30% of their income. Given that, for the average wage earner owning a home is an impossibility, at 40k a year even owning a small townhome is pretty much out of reach, so how can this market be sustained?
Something has to break here. Without an influx of major industry to St. George the house values will either fall drastically, or other communities (Cedar City, Mesquite, or Kanab) will have to serve as a home for many middle class families. As supply is (I believe) starting to outweigh demand, I feel that many people will suffer the disappointment of seeing meager returns on their home equity. However realtors argue and historically land prices don't drop drastically, therefore I think that many middle-class families (like mine) will have to leave St. George to live in rural surrounding communities and commute to SG, or leave the area all together, in order to obtain the American dream.
Damn it I need a raise!
The driver of this housing market, I suspect, is almost purely speculative. On average I have at least one client call me a week about building spec. homes, and all of the new business clients I see are new construction start-up businesses or realtors. This growth can't be sustained without a starter home market, and soon the starter home market will be totally out of reach for the start-up families. It is frustrating to me to see a market in this town (void of industry other than construction, and medicine) where the only housing BARELY under 150k is a home on wheels.
Forgive my coming rant.
The prices in St. George are ridiculous. From the city's website, the average salary in St. George is $1,351 dollars a month, the median family income is 40k, and a neighbor in my last neighborhood just sold a 1100 sq. foot townhome (no yard) for 205k. Judging from my memory of a personal finance class I took as a freshman in college, generally a family or individual should only take on, and banks are likely hesitant to give a loan at payments more than 30% of their income. Given that, for the average wage earner owning a home is an impossibility, at 40k a year even owning a small townhome is pretty much out of reach, so how can this market be sustained?
Something has to break here. Without an influx of major industry to St. George the house values will either fall drastically, or other communities (Cedar City, Mesquite, or Kanab) will have to serve as a home for many middle class families. As supply is (I believe) starting to outweigh demand, I feel that many people will suffer the disappointment of seeing meager returns on their home equity. However realtors argue and historically land prices don't drop drastically, therefore I think that many middle-class families (like mine) will have to leave St. George to live in rural surrounding communities and commute to SG, or leave the area all together, in order to obtain the American dream.
Damn it I need a raise!
Tuesday, November 29, 2005
5% flat tax urged for Utah..... sort of.
The Utah Tax Reform Tax Force, although unable to solidly come up with a specific recommendation urged that the state go with a 5% flat tax along with a 50% credit for mortgage interest, and a 50% credit for charitable contributions, according to DesNews. One specific recommendation task force made was for the removal of the sales tax on food. Upsetting to some members of the task force was that they were unable to agree on one specific recommendation and passed along several options. Rep. Roz McGee, D-Salt Lake, a longtime proponent of removing the sales tax, was also disappointed the task force only passed a "concept" and did not support a specific proposal. "Voting things out as a concept is an abdication of the responsibility we had as a task force," she said. "We've worked for seven months. . . . To vote things out that are concepts is a disservice to our fellow legislators and to the public." Bramble defended the task force "the deep review of the state tax system was commendable and is already successful. " The Chair of the task force says their are many things that can be done, keeping our existing system may be best.
Here is my basic take on the flat tax:
(This isn't fully representative of the states proposal, it is a generic representation)
Average citizens -- Using current state sytem
AGI 50,000
Itemized 20,000
Exemptions (6)14,100
Taxable Income 15,900
Tax (7%) 1,113
Average citizen -- Flat Tax
AGI 50,000
Tax (5%) 2,500*
(Proposed credits not accounted for, because I don't know how they are proposed to work)
Tax increase 1,387
Rich Citizens -- Using simplified current state system
AGI 1,000,000
Itemized 70,000 (limited)
Exemptions completely phased out
Taxable Income 930,000
Tax (7%) 65,100
Rich Citzens -- Flat tax
AGI 1,000,000
Tax (5%) 50,000 *
Tax Decrease 15,100
The flat tax is the biggest joke to me because it is clearly a tax cut for the wealthy. I thouroughly believe that the task force found that there was no way to reform the tax system using the flat tax that would not negatively effect the middle class, however being in a Republican stronghold they couldn't fully dismiss it. The current system is pretty darn equitable, even though it seems to be a hassle, the average joe will pay less in taxes under the system of deductions and credits than under a flat percentage tax. I'd have to suggest the state offer a child tax credit, and I would have very few complaints about the states tax code. The state currently has very few tax credits that positively effect families, which seems pretty schizoid in a majorly religious conservative stronghold.
I'm very happy that they made the recommendation that the sales tax on food be eliminated. Steve U posts that the cities are going to fight removing the sales tax on food tooth and nail. Steve wrote,"This seems a bit strident, especially since the cities will receive significant inflationary and expansionary increases in their revenues this year, not to mention significant increases from franchise fees they place on top of escalating energy costs." If there was ever a tax that hurt the poor it is this one, good job Task Force. I hope the legislature follows through with this suggestion.
Here is my basic take on the flat tax:
(This isn't fully representative of the states proposal, it is a generic representation)
Average citizens -- Using current state sytem
AGI 50,000
Itemized 20,000
Exemptions (6)14,100
Taxable Income 15,900
Tax (7%) 1,113
Average citizen -- Flat Tax
AGI 50,000
Tax (5%) 2,500*
(Proposed credits not accounted for, because I don't know how they are proposed to work)
Tax increase 1,387
Rich Citizens -- Using simplified current state system
AGI 1,000,000
Itemized 70,000 (limited)
Exemptions completely phased out
Taxable Income 930,000
Tax (7%) 65,100
Rich Citzens -- Flat tax
AGI 1,000,000
Tax (5%) 50,000 *
Tax Decrease 15,100
The flat tax is the biggest joke to me because it is clearly a tax cut for the wealthy. I thouroughly believe that the task force found that there was no way to reform the tax system using the flat tax that would not negatively effect the middle class, however being in a Republican stronghold they couldn't fully dismiss it. The current system is pretty darn equitable, even though it seems to be a hassle, the average joe will pay less in taxes under the system of deductions and credits than under a flat percentage tax. I'd have to suggest the state offer a child tax credit, and I would have very few complaints about the states tax code. The state currently has very few tax credits that positively effect families, which seems pretty schizoid in a majorly religious conservative stronghold.
I'm very happy that they made the recommendation that the sales tax on food be eliminated. Steve U posts that the cities are going to fight removing the sales tax on food tooth and nail. Steve wrote,"This seems a bit strident, especially since the cities will receive significant inflationary and expansionary increases in their revenues this year, not to mention significant increases from franchise fees they place on top of escalating energy costs." If there was ever a tax that hurt the poor it is this one, good job Task Force. I hope the legislature follows through with this suggestion.
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