Economic stimulus for old junkers

June 30, 2009

http://editorial.autos.msn.com/article.aspx?cp-documentid=1059746

Also see automobile post of March 13, 2009.  In the Automobile section it is the third article down.

Everyone should read this article.  It is about:

Can’t Get Rid of Your Old Junker?

And in the near future (probably after the week of the 13th to the 17th of July) you will see that there is a tax credit involved with getting rid of your old junker.  I will be keeping my ear open for tax credits from Congress.  What is rumored is that Congress will allow a $4500 tax credit for old junkers when you purchase a new car.  That was new not used also.  Keep looking for this topic in future postings.

End

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AIG – Congress needs to pony up Benefits

March 19, 2009

Just got back from lunch. Radio broadcasters were talking about AIG and employee bonus. But being in the tax field I am always thinking about tax and sometime this is unfortunately.

Back to AIG and Congress and relating the Congress as a shareholder and owner and the duties according to tax law and what this would entail.

The employees of AIG deserve the same medical insurance covereage as what Congress gets due to the tax laws which are in place based upon shareholder ownership percentages and anti-discrimination rules. If discrimination exists then the other party must pay income tax on the amount of the discrimination. In other words it is not tax-free for them. Same with pensions. The basic rules is that if one party or a related group of parties own a minimum of twenty percent of a company then the pension plan which the one owns must be the same offered as what the twenty percent party owns. Thus since the Congress is an owner then the pension plan which Congress has offered itself must be offered to all of the employees of AIG. What a concept. The government as a shareholder must be governed by all of our rules.

This amount of money will seem small in relationship to the AIG bonus payment. Also, to make things equal the government cannot lower the pension amount but must raise the pension to the higher level.

This is one of the reasons why some business acquisition deals do not go through. The selling company employee benefits are too costly and deplete the reason for the bailout or the purchase in the first place.

Good luck Congress in trying to get out of this one.


Consumer Protection Act

March 11, 2009

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

Consumer Protection Act

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

Under the Fair Trade Consumer Protection Act I am not seeing anything which punishes the casher of a bad check when the casher knows that the check is indeed bad.

Under different sections of the Protection Act a penalty of $1000 is enforced.

Quite commonly a PayDay Loan institution will get a prepaid check. If you then call the PayDay loan location and state that the check is not good they will then cash the check anyways. This would seem to indicate to me that the consumer could charge a $1000 fee as provided by the Act and since the amount of the loan would probably be less than $1000 have the entire amount of the PayDay Loan eliminated.

In other aspects of law I have seen that paying attention to the small details of how a law is written is paramount. But in practice things can be constructively different.

Being previously caught in this tight-rope I called the PayDay location and notified them that the check which they have did not have enough money on deposited for the check to clear. But in about a three day period of time I should have the funds in the bank account. Not only did I get an insufficient funds penalty from the PayDay loan company but a penalty fee from the bank.

If the Federal Government does not clarify this amount then the State should clarify this by instituting their own law. The federal government law at the bottom of the law only states that the States cannot have a tougher interpretation than the federal law with respect to the consumer. Since this may not have been clarified then the state should interpret this matter.

Notwithstanding the consumer loan business tramples on consumers when it comes to credit collection time. Perhaps now is the time for the consumer to trample on the creditor until they come back into compliance. Many debt collectors do not leave a phone number or if they do leave a phone number they do not leave an address where they can be written to.

What do you say.  What is your opinion.


2008 Economic Stimulus Payment

March 5, 2009
2008 Economic Stimulus Payment

From the http://www.IRS.gov it would seem difficult to find the basic calculator for the 2008 Economic Stimulus Payment amount. There is one on the IRS website but it can be sometimes hard to see.

First go to the http://www.irs.gov website.

From the HOME page you will see in the center a picture. Scroll to the page 1 of 5 page. Of course this might be the first one you see. It has a picture of the corner of a Form 1040 or the basic income tax form for individuals who are not non-resident aliens.

Click on the “Avoid Rebate Credit Confusion” line.

This will send you to another page. Scroll half way down until you reach the underlined and colored wording of

“How much was My Stimulus Payment”

Click on this sentence.

This will bring you to another page where you will see the same wording at the bottom. Click on this also.

This will bring you to the calculator for determining how much of the Economic Stimulus Payment from 2008 which you received or were credited for.

From here you will input your Social Security Number then your filing status from your originally filed 2007 income tax return. If you amended your return use the filing status and number of exemptions as indicated on your original return. If you did not file an income tax return for 2007 then your worksheet amount for the 2008 payment is zero.

Take the number which is calculated for you on the next page and include this number for the worksheet for your 2008 income tax return for determining the amount to include on Form 1040, line 70. Again, you will not be taxed on the amount which you received from the economic stimulus payment in 2008 so the number from the IRS.gov website will not be going directly onto your 2008 Form 1040, line 70. You will need to start from the worksheet for line 70 and after the worksheet calculates what if any additional amounts are still to come then from the bottom line of the worksheet the additional amount would be included on Form 1040, line 70.

Do not confuse the 2008 Economic Stimulus Payment with the new stimulus amount of $400 single and head of household or $800 for married filing jointly taxpayers. This is an amount which starts with a $13 per week reduction in your withholding requirements from your paystub and thus your check. My suggestion is if you want to not get the additional $13 adjustment on your paystub which is really just an advance on the 2009 stimulus payment that you change your w-4 with your employer. On the w-4 request an additional amount of $13 per week or equivalent to be taken out of your paystub for withholding. This will neutralize the other increase and then next years filing of your income tax you will get the full additional amount plus the stimulus amount on your tax return. The amount showing up on your tax return is obviously subject to not owing other types of debts which the IRS would be otherwise required to withhold for themselves or for third party debtors.

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ACLU suggestions adopted in new wording for I-1043

March 4, 2009

What the news release does not indicate is that part of the credit should be going to La Raza.   La Raza was also part of the law suite with the ACLU.  The stronger wording will enhance the Initiative. 

My thanks to the ACLU, La Raza, the Thurston County Judge and also the Washington State Attorney General for all of their continuing efforts.  A stronger initiative wording is a clearer initiative wording.

I-1043_rev_by_court_order.pdf 

******************************

Media Release

Contact:

Leon Donahue, Secretary Respect Washington
Phone: (206) 935-3505
E-Mail: info@respectWashington.us
PO Box 65488, University Place, WA 98464-1488

March 2, 2009

FOR IMMEDIATE RELEASE

ACLU suggestions adopted for New-Improved “Respect for Law” Ballot Title

Today the Washington State Secretary of State issued a revised Ballot Title for Initiative to the People No. 1043. (pdf of AG’s advisory to SS attached)

To improve understanding by petition signers and voters come the November 3rd General Election, the ACLU challenged the Attorney General’s original ballot title composition. The improved wording now reads:

BALLOT TITLE

Statement of Subject: Initiative Measure No. 1043 concerns public and private enforcement of immigration laws.

Concise Description: This measure would require state and local agencies to enforce federal immigration laws and verify immigration status to issue driver’s licenses and public benefits. All employers would have to “E-Verify” employees’ immigration status.

Should this measure be enacted into law? Yes [ ] No [ ]

BALLOT MEASURE SUMMARY

This measure requires state and local agencies to assist in enforcing federal immigration laws. All private and public employers would be required to “E-Verify” immigration status of employees, subject to loss of licenses and other penalties. It would require verification of immigration status of applicants for many public benefits. Nonprofit organizations would be prohibited from offering employment services without proof of immigration status. Issuance of driver’s licenses would be prohibited without proof of immigration status.

I-1043 legislation differs only slighty from that also filed by Respect Washington in 2008 as I-409.

Refinement from I-409 include the requirement that Department of Licensing allow the Tribal Identification Card as an acceptable form of photo ID in drivers license applications. Also, the expiry of the Washington State Drivers Licenses must occur no later than the expiry date of any alien VISA. The need for stricter care by DoL’s was brought to light after it was learned that many of the 9-11 bombers traveled on valid state-issued drivers licenses even after their VISA’s had expired.

The four major pillars of I-409 remain in I-1043:

1. Empowerment all public employees to cooperate with Federal immigration authorities despite obstructionist “sanctuary city” polices in some local jurisdictions.

2. Empowerment of all employers (public, private and union halls) to verify work authorization through the US Government’s E-Verify online program. Over 100,000 US employers now participate in E-verify as their protection against the presentation of false identification documents. Since the 1986 Simpson-Mazzoli Amnesty ALL employers have been required to collect this same information on paper Form I-9. (“E-verify” is a taxpayer-funded Social Security Number verification tool of the U.S. Citizenship and Immigration Services branch of the Department of Homeland Security which every employer is today encouraged to voluntarily use without charge. See www.uscis.gov)

3. Mandate to local government to verify legal presence through the Systematic Alien Verification for Entitlements (SAVE) program (similar to E-verify) prior to the gifting of taxpayer-funded benefits. Such public benefits would include tax rebates proposed by Governor Gregoire, lottery winnings and university education dollar grants to illegal aliens.

4. Mandate to Wash. St. Dept. of Licensing to verify legal presence through SAVE prior to driver’s license issuance. (After the Democrat-controlled Oregon Legislature and Governor outlawed issuance to undocumented aliens in 2008, Washington State remains one of the few states that still abets the presence of illegal aliens be issuing them drivers licenses.)

I-1043’s citizen sponsor is Mr. Wendell Hannigan who is a leader in the effort to restore law and order on the Yakama Reservation. In recent years Yakama Nation lands have become plagued with crime surrounding the drug trade. Mr. Hannigan expressed relief that, as of today, citizens of Washington State have a weapon in the I-1043 signature petition to fight the growing corruption.

“A combination of corrupt, willfully-ignorant and unwitting employment of illegal aliens has ballooned the population of illegal aliens inside the United States to a level where corruption has become institutionalized for pure profit and political power.”

“If we are a nation without laws, then we are a nation in chaos. Under the current chaos all future generations will suffer an environment of Third World corruption as is now murdering thousands annually in Mexico.”
Respect Washington’s goals for I-1043 are:

1. Reduce political party and government corruption now exploding under a racist spoils system.

2. Reduce the Washington State Budget Deficit by over $600 Million now taken from law-abidding taxpayers annually to subsidize that illegal presence of aliens and employers who prey upon their slave labor.

3. Protect the jobs of lawfully-present American workers.

4. Reduce mounting gang and drug violence that flourishes in partnership with human smuggling.

5. Improve educational opportunities for all citizens and lawfully-present aliens enrolled in Washington State public schools.

6. Improve the social safety net for all citizens and lawfully-present aliens.

To earn a place on the statewide November ballot I-1043 supporters must collect 241,153 signatures by July 3rd, 2009.

Signature petitions may be downloaded from or ordered through www.RespectWashington.us

####


Washington State Balanced Budget

March 2, 2009

Mr. Brad Klippert
 
I know you are extremely interested in balancing the budget.

My idea is if something is changed with the senior citizens and nursing home care provided by the state then with some other ideas the state budget can be balanced. 
 
1)  Pass I-1043 Illegal immigrants initiative to the people.  Judge just signed off with the attorneys on the final wording on Friday.  Savings is $1 Billion for the biennium.
 
2)  Cut the aide to children for medical insurance in half.  This aide has increased in recent years from $2 Billion to around over $4 Billion.  This increase is mainly from increasing the parents level of income for qualifying a child for acceptance into the program.  Cutting this number in half will save $2 Billion for the biennium.  Savings now total is $3 Billion.
 
3)  Implement all of Brian Sonntag’s, State Auditor Performance Audits.  I do not see the exact number now on the State Auditor’s website but this should be a little bit over or around $3 Billion.   Although savings may not be fully achieved until later years it is the start of the process.  The Port of Seattle has implemented some of the savings and the employee morale has increase substantially at the same time.  Total savings of around $6 Billion.
 
4)  Senior citizens pay for their own Nursing Home care.  If the senior citizens pay $2.5 Billion for nursing home care paid out of their social security checks in the amount of $150 per month starting at age 65 then this could balance the budget.  This is the area of the numbers which I am trying to gather together at the present time.  Total savings of around $8.5 Billion for the biennium. 

Oh, this balances the budget with a little bit of change.

 
Actually the idea is to help in the process to balance the budget and also start to get the state out of the business of providing free nursing home care.  The state should not be in the business of providing welfare medical coverage.  The CFP and present legal method is to have individuals who can pay to not have senior nursing home insurance but to have the money come out of current earnings.  Edward Jones security advisors say this is with an equity of $3.5 million or more for an individual.  But previously about 15 years ago I was informed that one with $300,000 to $650,000 in assets would not be able to be on the state without draining their bank accounts and assets nor be able to self finance.  This was when the high end of nursing home care was $55,000 per year.  The amount is about $8-9,000 per month at the present time.  Below this level the state would provide coverage.  The strategy for the two lower levels was to get your assets over to an irrevocable trust within 35 months of entering a nursing home or to pay for nursing home insurance for a better quality of life and nursing home care.  My idea would be to get people to pay 15% of their social security income starting at age 65.  The senior citizen recipient could opt out of the state system by paying for their own nursing home insurance.  Notifications would go out at around age 60 and once per year until age 65 to the senior citizens.  Eventually virtually no one except for the very low income senior citizen would be on state assistance.  
 
I was in your office on the Tuesday of the start of the full day the legislature with Craig Keller and Albert Pong.  You put the I-409/I-1043 information in a box of ideas to balance the budget.  How about $8.5 Billion savings for balancing the budget.  
 
**********************************************************
 
I have one idea which if put together with other ideas I have will balance the State budget.  But I need a little bit more information in order to see if my idea will be viable.  It would require changing the law though.
 
The idea which I am exploring will lessen the stress on the families of the senior citizens.
 
What I am trying to find out now is how many senior citizens there are in Washington State at or over 65 years of age.  My initial findings from the www.ssa.gov website indicate there are 34 million.  91% are receiving social security benefits.  This means that 9% are waiting to the age 70 1/2 to start withdrawing SS benefits.
 
 
While studying for the financial planner, I noticed some drastic financial mutations which have to be gone through for the retirement planning process.  I also realize the State is in a financial crisis.  Mixing my ideas together like a pencil with an eraser I have come up with another idea and one which might help in solving the budget deficit.
 
1)  How many senior citizens are there in Washington State.
2)  How much does each one receive in social security benefits on average. The ssa.gov website says $2715 per month but this number does not connect with what I have been seeing on tax returns.  For Washington State.
3)  How many senior citizens are on full state nursing home care which is subsidized by the state.
4)  How many total senior citizens are in Washington and on nursing home care.
5)  Same last two questions but related to in-home care.
6)  How much is the average cost of nursing home care for senior citizens.
7)  What is the average cost of nursing home care by the state for senior citizens.
8)  What is the average duration of care for state recipients and other private pay recipients.
9) What is the average age of the starting of nursing home care for senior citizens in Washington State. This would be for Washington State recipients and private pay recipients counted separately.
 
Thanking you in advance for your prompt and courteous response to the email.
 
Sincerely
 
Keith Ljunghammar, EA

keithlj.wordpress.com


Senate Bill 5104 income tax vs sales tax comparison

February 15, 2009

 Senate Bill 5104

 Senate Bill 5104 will cost almost everyone more money. So a supposedly regressive sales tax is actually a progressive tax compared to a sales tax couple with an income tax. Below are some of my findings.

I used the federal sales tax tables from Pub 600 to help in the calculations of the sales tax. The Washington States

 Sales Tax Tables in the IRS publication starts at 6.5% so I had to use a numerator of 6.00 and a denominator of 6.5 and multiply this quantity by the equivalent sales tax table amount.

 I used an income of $40,000, $35,000, $30,000 and $25,000. My filing status criteria was Single with no additional dependents, married filing jointly with the taxpayer and spouse each claiming an exemption and also maried filing jointly with the taxpayer and spouse each claiming an exemption for a retired couple with no earned income and a head of household with one dependent so claiming two exemption.

 Here are my findings:

                 income tax       present sales tax      difference

Single with

 40,000         1358.25           839.00                    519.25

$35,000         1109.25          727.00                    382.25

$30,000         971.20            727.00                    244.20

$25,000         774.20           590.00                    184.20

 

Head of Household with one dependent or two exemptions

$40,000          1229.40         947.00                    282.40

$35,000          1035.40         821.00                    214.40

$30,000           925.40          821.00                   104.40

$25,000           717.90          674.00                   43.90

 

Married Filing Jointly Two exemptions Adequate Earned income.

$40,000           1163.40        947.00                 216.40

$35,000           969.40         821.00                 148.40

$30,000            859.40         821.00                38.40

$25,000           651.90         674.00                 -22.60

Married Filing Jointly Two exemptions but no Earned Income/Retired

$40,000            1383.40       947.00                436.40

$35,000            1189.40       821.00                368.40

$30,000            1079.40       821.00                258.40

$25,000            871.90         674.00                197.90

 And as you can see the only negative is with a $25,000 married filing jointly couple claiming themselves. The differnce is $22.60 at a $25,000 income which would not pay for the difference in the tax preparation charges.

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