Archive for the ‘Tax’ Category

CNSnews.com
Dan Joseph
October 05, 2010

(CNSNews.com) – Almost 23 million American households have already had their federal taxes raised by an average of $3,900 this year, but they may not know it yet.

They could get a big surprise when they prepare their tax returns next year.

Among those subject to this already-in-place tax increase are some families making less than $50,000 per year, and virtually all married couples earning between $100,000 and $500,000 a year, according to data published by the Congressional Budget Office.

This insidious tax hike is contrary to President Barack Obama’s repeated promise not to increase taxes on any individual earning less than $200,000 a year or on any household earning less than $250,000.

This tax increase on almost 23 million people will happen if Congress does not quickly pass legislation that temporarily increases the amount of income exempt from the Alternative Minimum Tax.

The temporary reprieve passed by Congress for each of the past nine years expired on Dec. 31, 2009, and so far, Congress has not extended the AMT “fix” for 2010.

According to the CBO, an estimated 4.5 million American households were subject to the AMT in 2009, and 27.2 million are now liable to pay the AMT for the 2010 tax year unless Congress acts before Dec. 31. Under current law, at least 22.7 million American households that did not have to pay the AMT last year will have to pay it on the income they have been earning since Jan. 1 of this year.

Repealing the AMT completely and permanently would add $626 billion to the federal debt over the next ten years, according to CBO.

The AMT was enacted in 1969 and was intended to impose taxes on high-income individuals who used deductions and loopholes to reduce or eliminate their liability under the regular income tax. Because the tax has not been adjusted for inflation since then, additional families at progressively lower income levels become subject to the tax each year.

The tax especially hits married couples with children and mortgages because of the deductions and credits they are allowed under federal income tax laws. “Because of the particular tax preferences and exemptions disallowed under the AMT, that tax structure is more likely to affect married couples, large families, and taxpayers in states with high state and local taxes,” says CBO.

Past Congresses and presidents have chosen to enact protective one-year “patches” that temporarily increase the income threshold subject to the AMT thus protecting between 10 and 30 million Americans from the tax. So far this year, Congress, which adjourned last week, has failed to take action on the matter. If Congress fails to renew the “patch” before Dec. 31, according to CBO, the 27 million Americans subjected to the AMT this year will see their tax bills rise by an average of $3,900.

Of the households that will be hit with the AMT this year under current law, according to CBO, 3 percent are households making less than $50,000 a year, 35 percent are household making between $50,000 and $100,000 per years; 47 percent are households making between $100,000 and $200,000 per year; and 14 percent are households making between $200,000 and $500,000 per year.

As the law now stands, virtually all married couples in America earning between $100,000 and $500,000 will be hit with the AMT this year–on income they started earning ten months ago. “If nothing is changed this year, one in six taxpayers will be affected by the AMT, paying on average an additional $3,900 in tax, and nearly every married taxpayer with income between $100,000 and $500,000 will owe some alternative tax.”

Pete Sepp, executive vice president of the National Taxpayers Union, says that failure to renew the AMT patch would disproportionately hit middle-class families.

“Of the 20 to 30 million taxpayers who might get hit with AMT due to Congress’ inaction, the majority of them would be middle class,” Sepp told CNSNews.com. “The vast majority would consist of solidly middle-class taxpayers.”

Moreover, the increased tax bill would come at the worst possible time, Sepp said. “Families, especially, are experiencing low tax liabilities because they have lower incomes,” he said. “The AMT, ironically, would work in an almost contrary manner, because there would be, for example, households where one of the bread winners lost their job or had to reduce their hours, (and) would be reporting less hours, but they still may be taking the same number of exemptions and deductions for all their kids, for various other household property or operations — business that they may have. They might still be claiming the same number and types of deductions and credits, but on an even lower income.”

Jim Billimoria, spokesman for the Republican minority on the House Ways and Means Committee, told CNSNews.com that failure to renew the patch would amount to a broken promise by President Obama, who made a pledge not to raise taxes on the middle class.

“Raising taxes on millions of families during a recession with an unemployment rate stuck near 10 percent not only breaks President Obama’s tax pledge but is the wrong formula for economic growth,” Billimora said in an e-mail.

When questioned about why Congress is having such difficulty extending the AMT patch, Sepp pointed to the failure by many in the public and the media to grasp the severity of the situation.

“Why a policy that has so many horrendous implications for the middle class is allowed to bumble along like this until the final months of the year is unclear,” he told CNSNews.com. “This is something that we’ve had to do a lot of educational work on. Not only with the public, but with the media, because this is sort of being lumped in with the 2001 and 2003 tax rate extensions–and those affect the year 2011 for returns filed in 2012. The AMT affects 2010 returns filed next year, so in that sense it’s far more urgent and in fact the IRS probably won’t be able to retool its operations quickly enough to allow for a smooth filing season for people with AMT issues.”

Bryan Ellis, tax policy director for Americans for Tax Reform, told CNSNews.com that there may be political motives behind the failure by the Democratic majority to enact a patch.

“If the Democrats wanted to get rid of the AMT and do so without having to worry about all of the tax increases or not worrying about PAYGO, and just get rid of it, that would get 400 votes in the House,” Ellis said. “It would get the votes of virtually every Republican and virtually every Democrat.”

But a Congress that simply voted to eliminate the AMT without making equivalent spending cuts would be adding to the $626 billion to the ten-year deficit that CBO estimates as the cost of such a move.

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Activist Post
August 31, 2010

Rights are Privileges (Freedom is Slavery): The primary duty of all public officials is to protect the rights of citizens as defined in the Constitution, where they shall not make or enforce any laws that violate those rights.  In fact, the “checks and balances” were put in place to assure that rights of citizens are not being trampled by one branch of the government. After 9-11, President Bush and other public officials proclaimed that their most important job was protecting the safety of the American people, which basically put an end to our rights coming first.

If the corporate-government fear campaign fails to scare the rights away from citizens, they try to convince the public that rights are now privileges and charge a fee or a tax for the “right” to engage in a certain activity.

Here are a few recent examples where rights are eroding into privileges:

  • Air travel has become a privilege since 9-11.  We must now forfeit all rights to our physical being by submitting to naked body scanners that emit unhealthy levels of radiation, or open-palm invasive frisking.  Everyone is assumed to be guilty until thoroughly cavity checked for explosives.
  • Free-speech Blogging on the Internet is now the target of taxes and licensing fees — the trial financial assault before free speech is ultimately killed with the end of net neutrality. Philadelphia is seeking a blog tax, while South Carolina has attempted to require all controversial speech groups to register, of course with a fee attached.
  • Food rights may be disappearing faster than any other rights.  Armed raids on raw milk producers and the proposed senate bill S.510 that seeks to essentially criminalize local food are the pinnacle of corporate-government tyranny.
  • Rights to use Rainwater is becoming illegal or being taxed by the overlords who control mother nature and the slaves who dare to use her resources.  Your basic right to nature’s sustenance is now a taxable privilege in the land of the free.
  • Gun rights are under continued pressure by the government and the media to make us believe it is a privilege to own guns.
  • Capital rights, or the freedom to spend or invest our own money, are now under assault with capital controls.
  • Property rights erode every time property taxes are jacked up because the Fed creates inflation.  We own less and less of our property each day the dollar devalues. Property rights also erode as more strict zoning regulations continually pass.

Future of the News

Posted: July 19, 2010 in Law, Politics, Tax, US News

American Thinker
Jeffrey Folks
July 16, 2010

It’s a frightening thought: government takeover of the media. But having tightened their grip on health care, financial services, and energy, it’s only logical that the Democrats should turn their attention to the media.

Discussions underway at the Federal Trade Commission and the Federal Communications Commission point toward a dangerous new effort to regulate what Americans read and hear. The takeover under discussion would apply across the board to print media, radio and television, and the internet. The result of proposed regulations would be nothing less than an end to free speech in America.

Under the proposed changes, government would have the right to impose taxes on selected media (including internet service providers and internet sites) and redistribute funds to traditional liberal news media. Government could impose a fairness doctrine on the internet as well as on radio — thus forcing conservative media to “balance” their programming by including liberal commentary. Government would also be granted a wide range of options for subsidizing liberal media, including perpetual grants of taxpayer money to left-leaning publications like the New York Times and to increase funding for “progressive” media such as National Public Radio and the Public Broadcasting System. No wonder the Nation magazine has lavished praise on the FTC and FCC proposals: Based on its longstanding liberal bias, the Nation might qualify for a generous handout.

In its recently published “staff discussion,” the FTC maintains that big-city newspapers and other traditional media (such as old-line network television) have seen their revenues declining and that, as a result, there have been “significant losses of news coverage.” Since news coverage serves a “public good,” it is up to the government to perpetuate these traditional media.

Nowhere in its extensive discussion does the FTC consider the possibility that old-line media are failing because they are simply out of touch with the American people. The mainstream television news outlets are clinging to a liberal ideology that is as irrelevant as Lyndon Baines Johnson, but they refuse to change. Who wants to hear Brian Williams’s endless reports on “Making a Difference” when those reports routinely bash capitalism in favor of community organizing? Who wants to listen to more of the media’s underhanded propaganda pieces carefully timed to support “progressive” legislation like Obamacare and cap and trade? Who wants to watch their biased exposés taking on religious leaders, big business, and the American military?

The FTC seems to believe that serious news reporting cannot exist without government subsidies. Why is it that Fox News and the Wall Street Journal have flourished while traditional networks and the New York Times have fallen off a cliff? Fox News and the Journal are doing just fine — as are thousands of conservative websites and radio stations — without government intervention. Government’s contention that news reporting is in decline is simply preposterous: Americans are more engaged and better-informed than ever before. Perhaps that is what worries Obama’s regulators.

Now Obama is out to force the public to listen to outfits like MSNBC, whether they want to or not. The FTC and FCC proposals are convoluted and numerous, but the net effect is to subsidize liberal news while taxing and restricting conservative media. This dangerous censorship is disguised as a well-intentioned program to “save the news.” In fact, it is little different from the sort of limitation of free speech that is practiced in every totalitarian dictatorship.

Those who fear a government takeover of the media need only recall the name of Joseph Paul Goebbels. As Joachim C. Fest’s 1973 biography of Adolf Hitler attests, it was Goebbels’s manipulation of media that brought Hitler to power and secured his control over Germany right up to the end of the regime. It was Goebbels who organized the candlelight processions, mass meetings, national radio broadcasts (over the objection of independent station owners), and eventual seizure of all print and electronic media.

Like the proposals coming out of staff discussions at the FTC and FCC, Hitler’s seizure of the media was carried out on the assumption that the news is a “public good.” At the center of the Nazi appeal, Fest points out, was a “perverted moral energy” (Fest 391), and at every step, Hitler presented himself as a moral leader. Hitler did not impose his rule on Germany; rather, a majority of the German people willingly embraced fascism because it promised national revitalization. Following Germany’s humiliating defeat in WWI and its punishment under the Versailles Treaty, Hitler portrayed national socialism as a moral imperative demanding the allegiance of every right-thinking citizen. Those who opposed his plans for “fixing” Germany were attacked as obstructionists.

A crucial aspect of Hitler’s rise to power was control of the media. During the run-up to the March 5, 1933 elections — the last truly legitimate elections to be held until after the war — Goebbels employed every means of propaganda to ensure Hitler’s success. Mass meetings, prominently reported in the print media and dramatically broadcast on radio, were planned for maximum impact. As Fest writes: “The country was inundated with appeals, slogans, parades, displays of banners” (Fest 409). Goebbels also employed his own party newspaper — Der Angriff [“The Attack”] — to full effect.

I am not suggesting that Barack Obama is Adolf Hitler. I am suggesting that like Hitler — and like Castro, Chávez, and many other radicals with grandiose ambitions — Obama intends to exert control over the media to secure his own political power. Obama is out of touch with the public, yet determined to impose his brand of socialism on the country. To succeed in this evil and undemocratic program, he must silence his opponents. And to silence his opponents, he must control the media. Thus the process now underway at the FTC and FCC.

The Dollar Vigilante
Jeff Berwick

“Bond Vigilante” – Definition: “A bond vigilante is a bond market investor who protests monetary or fiscal policies they consider inflationary by selling bonds, thus increasing yields.” – Wikipedia

“Dollar Vigilante” – New Term: ”A dollar vigilante is a free market individual who protests the government monopoly on money and financial policies such as fractional reserve banking and un-backed fiat currencies by selling those same fiat currencies in favor of other assets, often including gold and precious metals.”

Many people today don’t even realize it because anyone alive today has always lived under an artificial, non-free market financial system. No one even questions the fact that every country has a “central bank” and that every country outlaws any use of currency except for the one it produces.

But, in essence, this highly manipulated, centrally planned/communist system of world finance really began with the creation of America’s third central bank (the first two had previously collapsed or were outlawed) called The Federal Reserve on December 23, 1913. To this day many don’t realize it but the Federal Reserve is not a part of the American government. It is a privately owned, secretive banking cartel. We should note, however, that whether it is publicly or privately owned isn’t the crux of the problem. The problem is that ALL attempts to centralize banking are non-free market and will always result in a steady corruption of the system until it finally reaches collapse.

Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s stated, “Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.”

In fact, the President of the US at the time of enactment of the Federal Reserve, Woodrow Wilson stated the following in regard to the Federal Reserve being created under his watch, “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”

The scourge of a central bank was well known even in the days of the creation of the United States as Thomas Jefferson opined, “The central bank is an institution of the most deadly hostility existing against the principles and form of our Constitution. I am an enemy to all banks discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”

And, guess what Mr. Jefferson, the people of the US are now waking up to realize your prophecy has come true. For the first time in US history banks own a greater share of residential housing net worth in the United States than all individual Americans put together!

However, because America used to be such a bastion of free markets and even today still is partially-free it quickly became the most powerful and wealthy country in the world DESPITE having the Federal Reserve at the heart of their financial system.

That is, until August 15, 1971, when the issuing of debt money by the Federal Reserve had effectively bankrupted the US and then President Nixon was forced to announce that even foreign governments and central banks could no longer redeem their US dollars for gold.

And that was the beginning of the end and is, in fact, the reason why we are on the verge of a complete global financial implosion. What was started in 1913 with the creation of the Federal Reserve and the income tax managed to hobble along until it finally collapsed in 1971 with the end of the Bretton Woods system.

With that collapse, in 1971, every country in the world went off the gold exchange standard. This meant that all currencies were backed by nothing. Currencies that used to be directly convertible into gold at the request of the holder, at least at the central bank level, were finally just pieces of paper with pictures of famous dead people drawn on them.

Some may say that this system “worked” because it produced all of the amazing advances of the last century. However, it is much more precise to say that the system managed to work for that long precisely because the 20th century was the most amazing century in the history of human evolution and the countless technological advances enabled this fraudulent system to appear to work for a time.

But that time is nearly running out. After four decades of unbacked fiat currencies nearly every country in the world is now so indebted that it isn’t possible to ever pay back their debts. These debts were all enabled by this fiat currency system which enabled governments to print more and more money, which enabled more and more debt over time. As we said above, it appeared to work, until they all reached a point where even the interest payments on the debt will soon overtake the entire budgets of some countries, even including the United States.

The US government itself, in its official 2009 Financial Report (http://www.gao.gov/financial/fy2009/09frusg.pdf) states, “Absent a change in policy, the interest costs on the growing debt together with spending on major entitlement programs could absorb 92 cents of every dollar of federal revenue in 2019.”

You read that correctly, the US government itself has stated that by 2019 almost EVERY penny collected in taxes will go towards paying ONLY the interest on the debt and spending on the major entitlement programs (Social Security, Medicare etc).

And here is the worst part, this is a prediction by the US government who is always wrong and incessantly understates how bad things will get. It is our prediction, at The Dollar Vigilante (TDV), that the US will reach this state by no later than 2015 – even as soon as 2012. Our reasoning is that the US government predicts that tax revenues will continue to stay at the same level or grow over time. However, we believe that as soon as 2011 the US will be in the midst of such a great depression that tax revenues will basically collapse.

In fact, they are already in collapse. After the first big hit to the US economy in 2008, tax receipts in 2009 plunged. On a year-over-year basis, by the summer of 2009, individual tax receipts were down 22% from 2008 and corporate income taxes imploded by 57%.

The government managed to temporarily stave off complete collapse by creating an array of four-letter bailouts and guarantees tallying up to more than $12 trillion to date! But even this gargantuan printing of money, mostly enacted in 2008 and 2009 have provided next-to-no recovery and we will soon be entering the next stage of collapse – at which point the US government will see its income tax receipts not even meet its interest and entitlement obligations.

All this would be bad enough, but here is where it gets worse. Way worse.

Nearly every other western country in the world is at similar levels of debt and are all rocketing towards outright bankruptcy.

Greece was the first big one but nearly every other country in Europe, the UK, the US and Japan are all right behind them. Just look at this table below from the OECD. It shows debt as a percentage of GDP for various OECD countries. The official debts, the ones in red, are in and of themselves massive and unpayable. Yet total debts (the grey bars) which include unfunded liabilities such as pensions and health care dwarf even the official debts.

june 2010

It is already a foregone conclusion that Greece is insolvent yet the US itself is nearly in the same financial situation. As are the rest of the countries listed. And countless others, not even bothering to comment on individual states in the US like California and New York, which are also all insolvent.

So now it is just a matter of time and circumstance for each and every one of these countries to do one of the following: A) Declare bankruptcy and have their currency collapse or B) Hyperinflate their money supply so that all past debts become worth very little in today’s money – also something that will destroy their currency.

Some think this may occur over a decade or two. Here, at TDV, we think this will happen over the next few years.

Which brings us to our purpose and point in writing TDV: to help protect you from the coming world financial collapse with most of your assets in tact because the great majority of people will be wiped out by what is coming.

In coming issues we will go further in depth into what we expect to occur but, at the very least, we expect many western countries to enact currency controls which will make it so you will not be able to move your money out of the country. The governments will then do everything they can to stay afloat including cutting most entitlements including pensions which will leave countless elderly people in poverty – look forward to Granny and Grandpa moving back in with you! As well, any savings in banks will likely be taken over by the governments and forced into “buying” government debt. As this happens there will be a complete collapse of the western economies and will be great social unrest, which has already begun in places such as Greece.

There will be many ways to protect yourself – and this will be the main thrust of this newsletter – but time is running out on all of them. Transferring significant portions of your wealth from cash into precious metals is a high priority. As well, diversifying your wealth outside of your home country and the hands of your ravaging government and into a few different regions is also important. It is even highly recommendable to those who live in the countries in the worst financial condition (US, most of Europe, Japan) and who have the capability to prepare to leave your home country and head for some of the countries which may be least affected by the coming strife.

As well, investing into gold mining companies and even learning how to invest in private placements in these companies – something we will discuss in depth regularly here – will create a lot of wealth for those of you who may not yet have the assets or capability to expatriate and diversify your assets.

We will have thoughts, analysis and ideas on all of these strategies on an ongoing basis at TDV.

In closing, almost invariably, when faced with this information, many people respond with either disbelief or a desire to not think about the repercussions because it hurts too much. However, we don’t necessarily see the financial system collapse as being a bad thing. Not many people realize how many lives this system has destroyed and how much wealth and resources it has wasted. It was an artificial system of theft and deceit and was doomed since its inception but once it is gone we will see a time of rebirth for the world.

There will certainly be some interesting times between now and a rebuilding of the world’s financial system and TDV hopes to stay with you through the collapse, chaos and then into the brave new world that will soon be forged.

Pittsburgh Tribune-Review
Andrew Conte
July 7, 2010

After nearly a decade of federal tax cuts, Americans could awaken New Year’s Day with a whopper of a hangover.

Breaks covering everything from child tax credits to the death tax are set to expire that day, less than six months from now, bringing higher payments for nearly every American who pays taxes.

“We’ve never in history seen anything quite like this, where such a major portion of the tax code is set to expire on a single date and affect so many Americans all at once,” said Scott Hodge, president of The Tax Foundation, a Washington nonprofit that tracks tax policies.

Enacted in 2001 and 2003, the cuts run out unless Congress votes to extend them. President Obama proposed extending some tax breaks, for couples earning less than $250,000 a year, but lawmakers could let them all expire.

If that happens, according to The Tax Foundation’s analysis, everyone would pay more from bottom to top: Taxes for a couple with two children and a $50,000 income would more than triple to $2,825 a year, while a couple with no children earning $1 million would pay $44,000 a year more in taxes, for a total bill of $298,510.

“In that first paycheck in 2011, everyone will see a chunk missing. There will be a significant impact,” said Curtis Dubay, senior tax policy analyst for The Heritage Foundation, a conservative Washington policy group.

Congress might choose to extend some benefits and let those for top earners expire, said Ryan Ellis, tax policy director of Americans for Tax Reform, a Washington tax policy nonprofit group.

But if lawmakers choose to do nothing, the changes would include:

• Across-the-board income tax increases of 3 percent to 5 percent for every bracket;

• The so-called death tax on estates would return after a one-year hiatus, at 55 percent on estates over $1 million;

• Capital gains tax would rise to 20 percent from 15 percent, and dividends tax would rise to 39.6 percent from 15 percent;

• The child tax credit would be cut in half to $500 per child.

Rob Malone, 32, of Beechview didn’t expect this.

“I’m surprised,” Malone said. “Obama’s plan was not to raise taxes. He’s said many things and done the opposite.”

Lee Heckman, 51, who owns Custom Framing & Gallery on Beverly Road in Mt. Lebanon, said he’s worried about tax increases for small businesses. Two-thirds of small businesses are taxed at the top rate, which would increase to 39.6 percent from 35 percent, Americans for Tax Reform said.

“We’re already overwhelmingly overtaxed,” Heckman said.

Many of those concerned about higher taxes worry about the government’s deficit spending. The government plans to spend $1 trillion more than it brings in this year.

Tax breaks are not the problem and should be frozen in place, said Glen Meakem, managing director of Meakem Becker Venture Capital in Sewickley.

“The rate of spending today is out of control,” he said. “It’s unsustainable and … it’s going to bankrupt the country.”

One problem is that Americans don’t know how much they will have to pay — even if the news is bad, said Allan Meltzer, a political economist at Carnegie Mellon University.

Without knowing whether they’ll pay higher taxes in 2011, businesses and investors are uncertain about how to spend their money, he said.

“Someone needs to announce where we’re going and how we’re going to get there,” Meltzer said. “People won’t like to hear it, but they’re better off hearing it rather than speculating.”