Month: November 2012

Oh Yeah….Syria!

Benghazi has taken over the tube……….Iran is a mere memory (for now)…..and Syria is nothing more than a couple of 30 second spots in the news, if that…….we all feel that our troops should come home from Afghanistan and that Israel needs protecting, especially from itself………

ABORTION!………

That is injected into the post to see how many trolls are waiting in the wings……..

Now back to the main tilt of this post……..Syria!

While we were spending all our time condemning this person or that for the situation that happened in Libya………something else was being said…..

(Newser) – With the US election over and Syrian rebels seemingly gaining momentum, the Obama administration is taking a fresh look at its own potential involvement in the conflict, the New York Times reports. First, Washington must consider whether NATO should install surface-to-air missiles in Turkey, which some see as a deterrent to Syrian Air Force attacks near the border. Another possibility: Directly arming the rebel forces, instead of supplying weapons through countries like Qatar. Recent rebel successes have lent “a new urgency, and a new focus” to the debate in Washington, says an official.

What’s more, “the administration has figured out” that if it doesn’t get involved before the war ends, “they won’t have influence with the fighters, and the fighters will control the territory,” says a defense expert. In other Syria news:

  • If the rebels want Western support, they’ll need a transitional government, and quickly, notes the Christian Science Monitor, and yesterday saw the first meeting of Syria’s new opposition coalition. “The objective is to name a prime minister, or at least have a list of candidates ahead of the Friends of Syria meeting” that’s coming up, says a vice president. But the meeting was rife with disagreement.
  • Russia appears to be sneaking helicopters to Syrian forces, Time reports. Documents leaked by Anonymous show an apparent flight plan to deliver choppers via travel over Iran, Iraq, and Azerbaijan—thus avoiding countries that have a weapons embargo against Syria. “It’s getting to Syria by the back door,” says an expert.

Will Syria be our next trip into adventurism?  Will more American troop[s be put into the fray?  How will they (politicians) justify our intervention?

Poem #2–1969

I cannot recall the date of this poem…..it was while I sat in the airport waiting on the flight to be called out to return to Oakland Army Terminal, the jump off point for the military going to Asia…..

The Wait

As I sit here

During the long wait,

I think of Mary, my dear,

And listen for flight and gate.

This is not the usual wait,

As you might think,

But a wait into hate

of dirt and stink.

You may say you understand

This is hard to see.

How can you understand man?

That is the difference between you and me.

The wait is long

This is true

But all must be strong

And the wait unto you.

CHUQ                ?/?/1969

BTW, the reference to Mary….have NO idea who that was suppose to be…….

Song Remains The Same

Remember the day after the defeat of Mitt (BTW he got 47% of the popular vote….how’s that for a bit of irony?) and the movers and shakers of the GOP were backpedaling from Mitt on almost every issue….and an air of optimism began to settle on the political horizon that there would be a move to end all the partisan BS?  Future GOP candidates after candidate began talking smack about being a more all inclusive party if they are to survive.  Even some of thew bloggers that I follow on the Right were singing this song or should I say…were humming the tune?

Now about 3 weeks after the fact, the bloggers are back calling liberals socialists and poking a finger at the MSM for being too biased and then there is Washington DC……slowly but slowly the politicians are returning to the tone that was taken in early 2009.

All the political posturing is back……from Benghazi to debt to taxes to that fav of the MSM, the “fiscal cliff”……..I see the GOP is keeping to the record of a old white guy’s party….their new understanding about women has shown NO progress in their choices of committee chairmen or the need to reach out Latinos…..but I guess patting Rubio on the back at every occasion is change enough for this cycle…..

NOTHING and I mean nothing will change!  Some minor hand holding will be the best we can do as far as bi-partisanship goes….like the most recent situation…….

From the WaPo………

House Minority Leader Nancy Pelosi (D-Calif.) and House Speaker John Boehner (R-Ohio) don’t agree on much these days, but the two lawmakers released statements Tuesday supporting the measure. Boehner called O’Neill “a giant in the history of the House,” while Pelosi described him as “a legend in the Congress and a bona fide American hero.”

The proposed “Thomas P. O’Neill, Jr. Federal Building,” which sits vacant on 2nd Street SW between C and D Streets SW, previously housed agencies of the U.S. Food and Drug Administration. A mix of executive and legislative branch employees will occupy the building when the building reopens in late 2013, following a full-scale renovation that is taking place.

All the hopes for some sort of bi-partisanship is just that……a hope that will not be realized.  Why?  The political song remains the same.

Rates Or Reform? Part Three

This is the last of the series on the popular misconception that there will be some major tax reform of the code and the closing of loopholes….and this will add to the revenue of the country to get us out of the trouble we are in on the fiscal side of governing……that is right Batman, I said….MISCONCEPTION!

I have covered the taxes on individuals and those are safe…..part two was the taxes of the small businesses, the engine that drives our economy, at least that is the slogan of the day, and these deductions should be safe from tamper…….that leaves the larger corporations……let us now look at their major deductions and who they benefit……..

We will start with the 10 top deductions……..in descending order……

10) Graduated Corporate Income
This policy places the first $50,000 of a corporation’s profit at a 15 percent tax rate, with higher profit levels garnering higher tax rates, until it tops out at 35 percent for taxable corporate income exceeding $335,000. The result is that an owner of a small corporation pays only 15 percent in taxes on the first $50,000 of profit, leaving more left over potentially for reinvestment and growth.
5-yr Cost to Government (2011-2015): $16.4 billion
Who benefits: Individuals that own small corporations.
9) Inventory Property Sales
Foreign income of American companies is taxed in the country in which it is generated, and the U.S. gives a tax credit for that amount in order to avoid double taxation. Some companies have accumulated a glut of such tax credits (the “inventory”), and in order to use them up, they artificially boost foreign income through a “title passage rule” that allows companies to allocate 50 percent of income from U.S. production sold in another country as income generated by that foreign country (the “property sales”).
5-yr Cost to Government: $16.7 billion
Who benefits: Multinationals with operations in high-tax foreign countries.
8) Research and Experimentation Tax Credit
Intended to spur research and development within companies, in its simplest form this break allows for a 20 percent tax credit for “qualified research expenses.” There are more complex applications, as well. Detractors complain that it is paying corporations to do research they would have done anyway.
5-yr Cost to Government: $29.8 billion
Who benefits: Pharmaceutical companies, high tech companies, engineers, agriculture conglomerates.

7) Deferred Taxes for Financial Firms on Certain Income Earned Overseas
Because most financial firms conduct their foreign operations as branches rather than as subsidiaries, as most companies in other industries do, they do not benefit from the tax breaks afforded to foreign subsidiaries. To compensate, this loophole enables financial firms to treat income from their foreign branches as if they were subsidiaries, along with all of the attendant tax benefits.
5-yr Cost to Government: $29.9 billion
Who benefits:Any financial firm with foreign operations.
6) Alcohol Fuel Credit
This is a tax credit for the production of alcohol-based fuel, most commonly ethanol, which is made from corn. The credit ranges from $0.39 to $0.60 per gallon. In theory, the credit is meant to encourage alternative forms of energy to imported oil. It is largely responsible for propping up the price of corn, and is extremely popular in corn-producing states like Iowa and Illinois.
5-yr Cost to Government: $32 billion
Who benefits:Food and agricultural conglomerates in the Midwest.

5) Credit for Low-Income Housing Investments
As you might expect, this one gives tax breaks to companies that develop low-income housing. It’s the rule that’s responsible for so many larger new developments setting aside 20 percent or 40 percent of their units for people whose income is well below the area’s median gross income.
5-yr Cost to Government: $34.5 billion
Who benefits: Real estate developers.
4) Accelerated Depreciation of Machinery and Equipment
This one allows companies to deduct for all of the depreciation of a piece of equipment at once (as opposed to over the, say, 20 years it actually takes the item to depreciate). This is the equivalent of the U.S. government giving the company an up-front, interest free loan. Congress recently made this expenditure temporarily even larger for 2011, to encourage investment in equipment.
5-yr Cost to Government: $51.7 billion
Who benefits: Airlines and manufacturers using large equipment that lasts many years.
3) Deduction for Domestic Manufacturing
This loophole enables a tax deduction for manufacturing activities conducted by American companies within the United States. It covers conventional manufacturers, but also extends to industries like software development and film production. The intent is to keep manufacturing from being outsourced.
5-yr Cost to Government: $58 billion
Who benefits: Any U.S. company that produces a product within U.S. borders.

2) Exclusion of Interest on State and Local Bonds
Companies (and individuals) do not pay federal income tax on interest from their investments in state and municipal bonds. What’s more, private companies can in some cases issue tax-free bonds of their own for projects that benefit the public, such as construction of an airport, stadium or hospital.
5-yr Cost to Government: $59.8 billion
Who benefits: High-income investors and corporations.
1) Deferral of Income from Controlled Foreign Corporations
Multinational companies can defer paying U.S. income taxes until they transfer overseas profits back to the United States, under this law. In practice, many companies leave much of their profits overseas indefinitely, thus paying only the tax in the relevant foreign country, which is likely far lower than the U.S. rate, and avoiding U.S. taxes permanently. The list of corporations enlisting this loophole is seemingly endless.
5-yr Cost to Government: $172.1 billion
Who benefits:Every multinational company.

There you have the top 10 deductions for large corporations…….now which of those do you truly see on the chopping block for reform?
I have covered the tax deductions for the three sectors of the economy that would be included in any tax reform of the code……if these are sacred and safe just where will all the cash they promise the country could get with a logical reform of the tax code?
 I ask again….just where will this $1.6 trillion come from that is promised with the reform?  Does anyone see this as simple as the MSM would have us believe?

Rates Or Reform? Part Two

Yesterday’s post we saw that the reforming of the tax code will be the most logical answer in the search for revenue….and that the deductions and loopholes that apply to the individual will most likely not be part of the solution…….if not them, then whom?

The next sector to look at are the small businesses for answers to the reform questions.  Let’s look at the major deductions that are within the tax code…….

Allowable deductions include:

  • Employee wages and most employee benefits
  • Rent or lease payments
  • Interest on business loans
  • Real estate taxes on business property
  • State, local and foreign income taxes assessed to your business
  • Business insurance
  • Advertising and promotion costs
  • Employee education and training
  • Education to maintain or improve your own required business skills
  • Legal and professional fees
  • Utilities
  • Telephone costs
  • Office repairs

1. Start-up Cost Deductions

You can deduct up to $5,000 in start-up and $5,000 in organizational costs for the first year of business. These deductions apply to expenses paid or incurred after Oct. 22, 2004. The rules differ for expenses before that date or if your costs exceed $50,000. Expenses that are not deducted can be amortized over a 180-month period, which begins when you open your business. You can write off or amortize market research, advertising, employee training, business-related travel, legal advising and other costs.

2. Education Deductions

The IRS has strict guidelines for deducting educational expenses, so be sure to read Publication 970, “Business Deductions for Work-Related Education,” thoroughly. Generally, employers can deduct employee educational expenses if the courses maintain or improve job-related skills, or if employees need the education to continue in their current jobs. If you are self-employed, you can also write off some educational expenses. Transportation to and from the classes may be deductible. You can’t write off any educational expenses that train you in a new field, however.

3. Vehicle Deductions

Auto deductions are clearly delineated under IRS rules and tend to be among the more scrutinized items, so meticulous record-keeping is critical. You can deduct vehicle expenses either by the mile (for tax year 2006, the IRS allowed a deduction of 44.5 cents per mile driven for business purposes) or for actual expenses such as gasoline and maintenance. If you use your personal vehicle on the job, keep careful records about where you went and the nature of your business. You also can write off a newly purchased vehicle (even if it’s bought second-hand) in one deduction or through depreciation, which lets you write off parts of business equipment costs over several years.

The IRS stipulates that personal auto use cannot be written off as a business-related expense, so be sure to follow the guidelines in Publication 463. If your employees are using a business car for personal use, the IRS wants you to record the value in their W-2 forms or wages. For credits, keep an eye out for environmentally friendly IRS initiatives: You could receive up to $3,150 from the government if you have purchased a hybrid for your business since 2005. Check out Form 8910 for more details.

4. Equipment Deductions

Small businesses can take a single deduction of up to $108,000 for equipment purchased in 2006. The deduction falls under Section 179 of the tax code and is reduced if those equipment purchases exceeded $430,000. The deduction in prior years was only about $25,000; in 2007, it will rise to $112,000. As of now, however, the higher deductions are only good through 2009.The equipment doesn’t have to be new, as long as it’s newly purchased and will be used at least half of the time for your business. Equipment includes computers, machines, furniture, cars and a host of other necessities. Movable equipment generally counts; property does not. You will need to fill out Form 4562 to take the deduction. Businesses that choose not to take the immediate deduction can write off portions of their equipment purchases over several years through depreciation.

5. Entertainment Deductions

The IRS doesn’t mind your mixing business with pleasure – within reason. You can deduct up to 50 percent of entertainment expenses for unreimbursed business meetings. The entertainment must be within a “clear business setting” (such as at a conference) or should immediately precede or follow a business meeting. If you are self-employed, the 50 percent deduction limit does not apply.

6. Travel Deductions

Unreimbursed travel expenses are tax-deductible. The IRS recommends keeping a log of your expenses and receipts. Transportation, (such as airfare) lodging and even dry cleaning can be deducted, and half of any business meals. You also can deduct expenses for business associates traveling with you. You can’t write off expenses for family members or friends if they accompany you, unless they are employees and are professionally involved in the business end of the trip, but it is fine to deduct your part of the trip if it is for business.

7. Software Deductions

Software normally must be written off over three years because it will serve your business for more than one year. Section 179, however, allows small businesses to fully deduct off-the-shelf software the year it is purchased, as long as it is used the same year.

8. Charitable Deductions

Partnerships, S corporations and limited liability companies all require that their members file the company’s taxes on their personal forms, including charitable donations. Donations are “passed through” members, like the organization’s income. C corporations are entitled to corporate deductions.

Individuals can deduct between 30 percent and 50 percent of their adjusted gross income to qualifying 501(c)(3)charities and foundations. Corporations can deduct up to 10 percent of their taxable income, according to the Better Business Bureau’s Wise Giving Alliance. If you want to contribute $250 or more and receive a deduction, you must have a letter from the organization verifying your donation.

If your business makes a non-cash donation, such as giving a car or a computer, figure out how much you can deduct. The deduction will decrease if you’ve already received a tax break for the donated property or if it has lost significant value. Check both Publication 551 and the Section 179 deduction.

9. Advertising Deductions

Advertising and promotions directly related to your business are deductible as miscellaneous expenses. See Publication 535 to write off advertising and other costs.

10. Legal and Professional Fee Deductions

Accountant and attorney fees are deductible as business expenses, but you cannot deduct professional fees for purchasing business assets such as equipment. Those charges are included as costs of the purchase. Sole proprietors can write off fees from tax professionals on Schedule C or Schedule C-EZ. For sole proprietors, any additional expenses can be deducted on Schedule A of your 1040.

Now there is a whole other post on who is a small business……..the official definition is any company with 500 or less employees……..will these be asked to close their business loopholes?

Hell, NO!  Dems will try to protect the “Mom and Pop” business and the Repubs will protect the larger ones……so these entities will be protecting from any loss of deductions……

Now we have eliminated the individual and his/her deductions and the small businesses that everyone believes is the engine of the economy, at least that is the slogan they want us to latch onto…….so…..who is left?

Part three will be tomorrow and will look at the large corporations and their loopholes…….