Friday, January 29, 2010

Tax credit for new jobs

Ok, one of the president's points the other night was to create a tax credit for companies that create new jobs. They can't lay people off and then rehire them, they can't eliminate one high paying job and hire two lower paying people, they have to be real jobs that are created (based on what I've heard - still haven't read all the details).

This sounds good. Someone said that this was tried in the 1970's and it didn't work. I remember a lot of things were tried in the 1970's that didn't work. Not sure why. Someone also said that companies need more business before they hire people. That's true. This tax credit would encourage businesses to speculate and invest ahead of new business.

Here's my problem with this idea. What has the current administration done to companies that were offered a bail-out, then were successful? Well, for GM, it was nationalized and handed to the unions. For banks that were given TARP money (which should never have happened), they paid back the loans WITH INTEREST and now they are being threatened with new taxes. Executives who put their jobs on the line are being threatened with large fees (when most of their "income" is in the form of long term stock options - not cash).

So let's play this out. Say Mom & Pops, LLC hires 4 new people and gets a $20,000 tax credit. Their business does well and they keep expanding. In 2011, the administration sees that they are successful and hits them with a "windfall profits" tax. After all, they got a bail-out credit, didn't they? Isn't it time they paid back?

I'm sorry, this administration has shown that they are willing to back-date decisions, I'm not sure this tax credit is safe.

Thursday, January 28, 2010

State of the Union and the Republican response

First, I have to admit I didn't watch the State of the Union or the Republican response. I haven't read either of them yet, I intend to read them both this weekend (while it's snowing outside). I heard about it on the radio some today and some on the news tonight.

I don't intend to comment on Pres. Obama's "dis" of the Supreme Court or Justice Alito's "Joe Wilson" moment. I don't intend to comment on anything the President said or Governor McDonnell's speech at all.

Instead I'll complain about the same thing I complained about last year. And the year before. Why must there be a "response"? It's written several days (or weeks) before the State of the Union, so it's not really a response. Instead it is just a way to complain about the president. This only serves to further polarize the general public,

My hat will be tipped for the first party that decides to raise the decorum by skipping the "response".

(For previous posts on this see here, here and here.)

Tuesday, January 26, 2010

The(se) United States of America

Recently, I read a book that asked the question is it 'THE' United States of America or "THESE" United States of America? On a lark, I asked the quetion on my Facebook page, with absolutely no introduction or explanation. An overwhelming majority of responders to my unscientific poll said "THE". One person picked up on the true meaning of the difference, while a couple debated semantics or grammar. (One person did question where the question was leading and guessed correctly in follow-up emails). One person waffled by saying it depends on who is saying it and one person simply said "these".

The statement hit me because I have been reading a lot about states' rights. Are we, as Americans, part of a larger nation - joined together over two centuries, or are we a collection of independent states, a loose confederation of individual geographies, brought together when it fits the current conversation? I've listened at Tea Parties as I tried to understand the movement (or group of movements). The movement reminds me of a feeling I had several years ago, a feeling that individual people count when it comes to the government, that we can make a difference.

As I mulled over this question, I looked at the Constitution. That document written by "We the people" is the foundation of our government and we should always refer to it when we have questions. That document clearly lays out what we should be doing. I discussed this with one person and reminded her that the Declaration of Independence was signed in 1776 and the Constitution wasn't written until 1786, ten years later. Now from my memory during the 10 year interim, Americans were governed by the Articles of Confederation. While it provided some unity, "each state retain(ed) its sovereignty, freedom, and independence, and every power, jurisdiction, and right."

After ten years, a group of people decided that the loose confederacy of states wasn't working. A new constitution was written to "provide for the common defence, (sic)  promote the general Welfare, and secure the Blessings of Liberty." The goal was simply to form a more perfect Union.

In a discussion with a self-proclaimed Liberal yesterday, she mentioned the 10th amendment in the same discussion as the tea parties. This amendment basically says that anything not covered in the Constitution is left up to the states. So what is a federal issue and what is a states' issue?

Well, it's clear that national defense is a federal issue. Supposed that after the attacks on the twin towers on 911, SC had decided not to send troops. After all, our state wasn't attacked. (I'm ignoring the issue that some people think we shouldn't have attacked Afghanistan or Iraq - if that bothers you think of Pearl Harbor and 12/7/1941). The problem comes in the general Welfare. Does that mean that some of us in SC have to prop up those on the left coast who may have made some silly laws?

I have to say that I come down on the side of states' rights and that the best thing the federal government can do is to stay out of the way. The current healthcare debate is one example. But I also believe that there are times where the federal government HAS to step in to help all of us.

What is most reassuring to me, is the knowledge that our generation is not the first to face this debate. Over 200 years ago, a group of very smart men gathered together and realized that they could not answer all of the questions in a way that would satisfy all people for all times. Maybe the smartest thing they did was to NOT try to solve all of the problems, to admit they didn't know it all.

Sunday, January 24, 2010

Haiti relief effort and Pat Robertson

Most of you have heard by now the radical thing said by TV evangelist Pat Robertson. In speaking about the earthquake, he said that the Haitians had, long ago, made a pact with the devil. I was curious what he was talking about, so I did a little research.

It turns out that this "legend" has been around for a long time. The Haitians revolted against the French in 1791 and, as the story goes, made a deal with the devil to get out from under French rule. Now while. Rev. Robertson is relatively old, I don't think he was around during those times, so it seems he's just passing along stories he's heard (isn't that gossip?) What's really sad is that the rest of his comments were overshadowed by this statement. After this incindeary statement, Roberson went on to say that "we need to pray for them (always a good idea) a great turning to God (good for everyone) and out of this tragedy I'm optimistic something good may come. (Wait - did he say something good?) But right now we are helping the suffering people (he's helping?) and the suffering is unimaginable."

That's right, Robertson's people started helping immediately after the quake.

I can't say I have ever watched an episode of the 700 Club (Robertson's show). I've probably watched parts of it, but I just couldn't handle his type of evangelism. I think he's wrong on a lot of accounts. Mainly, I think he needs to study Romans 14:19 and focus on edifying people instead of saying things that come out as hateful. I have no idea of the leaders in Haiti in 1791 signed a deal with the devil and frankly I don't care. Neither should Rev. Robertson.

Now, I have a question about the relief effort. There have been reports that there are people upset with how long it is taking to get supplies and relief into Haiti. Some have even gone so far as to draw analogies to Katrina, the Indian Tsunami in 2004. Why doesn't someone in power (special nod and wink to Pres. Obama) draft and publish a guideline of what a relief effort looks like along with a timeline. Sure, ever situation is unique, but if we know it takes 6-9 days to provide food to 10,000 people, then we can properly judge the response or lack of response.


Friday, January 22, 2010

VITA/TCE Certified

Ok, my long term readers are probably thinking, hey, I've read this post before. True, last year about this same time I did post an article with this same title (see here). They may remember that I volunteered (that's the "V") to provide Income Tax Assistance to low-middle income people as well as Tax Care for the Elderly (see how I snuck the acronym in there?). I reported last year (here) that I did taxes for about 100 people.

Well, I'm back at it this year. I passed the basic exam one day earlier this year (simple coincidence) and have decided to step up a notch and took the intermediate exam. I passed that one too, so I will be allowed to do slightly more complicated exams this year. We start doing taxes on January 30 and continue until that magic day in April (which my family knows the reason for the magic). I will do taxes on Friday and Saturday afternoons (assuming I get the slots I requested).

This year there are a few changes. There's a new $400 ($800 for joint taxpayers) credit called Making Work Pay. It requires a new form, but it's relatively simple. (Special note to my son - you don't get it because you're my dependent.) And of course there's the first time home-buyers credit, but few of my expected clients are likely to qualify for that (likewise the follow-up home-buyers credit). I'm prepared just in case as I helped out one tax payer after the tax crush last year with their form 5405 and I'm expecting to help another in May of this year.

As usual, one of the most complicated forms is for Earned Income Credit. Sadly, the people who need the credit the most are the least likely to understand. I never even try to explain Advanced EIC. And I spent a lot of time this year trying to make sure I understand the tuition tax credits. Did you know there are FOUR different ways to claim tuition credits? And the law has changed (for the positive) on what you can claim. This credit helps those who are in school (or paying for someone in school). I think it's great because in theory, this will result in a future big income and support for me when I'm collecting Social inSecurity.

I did my own taxes on paper for a number of years. For most people, it's not that hard. You don't have to go to some store-front tax location (that will be gone after 4/15) and pay a few hundred dollars to get your taxes done. If they are that complicated, it's worth paying a REAL professional to have it done. If you need help, look for a VITA site near you (search on VITA on the IRS website). Avoid those Refund Anticipation Loans (see here for another reason to avoid them).

I'll report back here in April with a final comment.

Thursday, January 21, 2010

I'm baa.aa.aa.aack

I couldn't stay away too long. I needed a break from every day blogging. I also stopped reading (as many) blogs.

Over the last year, I've changed my blog reading habits. I read less political blogs (it's better for my blood pressure) and more financial blogs (picked a few good tips too). I also read more "personal" blogs, just regular people commenting on life.

As I restart my blog, I've banned anonymous comments. Seems I was getting a lot of these, so it just made sense. If you're being kept from posting, please email me. You can click on "view my profile" (scroll down, on the right, under "about me") and get my email address. I'd love to hear from you.

Real blogging starts tomorrow!