The Tax Preparation Blog

Archive for the ‘Tax Adjustments’ Category

Today despite all the measures like banning cigarette advertising and setting purchase restrictions, the most effective way to preserve the health of the nation is raising the taxes and the price of a cigarette pack. Scientific researches show that the raising of the cigarette prizes results in lower overall cigarette consumption. The increasing of prices affects mostly minorities, low-income smokers, and most important the Youth. For example a 10% increase in price, reduces the overall cigarette consumption by 3% to 5%. So the governments try to solve the problem with smoking by raising the taxes on cigarette packs and this triggers another problem –smuggling.

Naturally when the prices are rising, the illegal importers get more and more possibilities every day. When the government is raising the price it is basically rising the tax, the price of a pack remains constant. In the United States this tax can vary from $0,7 to bout $4,0 in different states. So smuggling exists even between the states. But before we move on with this topic let us define the terms. Mostly people view smuggling as similar to illegal trade, but there is a difference. Legally the term is defined as following: smuggling is an international trade through ‘unauthorized route’ (A seaport, airport or land port which has not been authorized by the government for importation and exportation).

If we look through the recent headlines we will see that the number of disturbing cases that shows that Cigarette smuggling has increased in North America and Europe with the latest tax raises. On May, 16 the Royal Canadian Mounted Police (RCMP) seized around 1.75 million contraband cigarettes near Manitoba – Ontario border. On the same day across the border in the United States New York City Police Department (NYPD) also ceased 1.17 million cigarettes. Together it makes around 3 million in one day and the fact that one truckload of smuggled cigarettes can lead to a profit of $2 million dollar increases the motivation of smugglers.

The illegal smuggling of tobacco leads to thousands of dollars in lost tax revenue to governments. In Manitoba for example it is estimated that over $300,000 are lost in tax revenue from illegal cigarette sales. By the way the taxes collected from tobacco sales usually are frequently used to pay for tobacco use prevention programs. Canadian officers ceased not only illegal unmarked cigarettes but also the so called “discount” brand cigarettes.

These types of goods usually come from third world countries and are another way of smuggling tobacco. As for the other recent cases only on this week 90,000 contraband cigarettes were seized from Lithuanian travelers at the Dublin Ireland airport and in Ontario Provincial Police recovered 160,000 unmarked cigarettes from a man in Manitoba. As for the United States in April American officials discovered a warehouse containing illegal tobacco worth about $20 million dollars. So as you see the numbers are dramatically increasing and the more the governments tries to protect the health of the nation, the more losses it brings to them.

Hewitt on Europe

UK’s new policy on EU – co-operation, with limits

Everywhere I turn, I see, read and hear how capitalism has destroyed the American economy. The political Left blames capitalism outright, while the political Right claims capitalism is the American ideal. The elitists in banking, government, academia and the media give lip-service to the idea of a free market, when they, in fact, have no use for it. The real purpose of claiming that free markets are the American ideal is to give the collectivist a scapegoat to blame for all their nefarious wealth redistribution programs. Too many of today’s activists have fallen for this intentional misdirection.

Blaming free market capitalism for our economic problems is accusing a ghost. It has been dead for a long time. It was first stabbed in the back in 1913 when the U.S. Congress passed the Federal Reserve Act and the United States Revenue Act (creating the IRS).

The Federal Reserve Act gave a private cartel of international bankers control over the very essence of a free market; our medium of exchange, our money. This put the free market into a death spiral. Now factor in the Legal Tender Act which prohibits any form of lawful money except the Federal Reserve Note. It is this Legal Tender Law that gives the Federal Reserve bankers their money monopoly. Without this law, individual enterprise could offer alternative commodity-backed money and compete with the FRB head to head. But honest competition is not what the elitist central planners want. Well, at least our new federal money still had some value. It was backed by gold, but not for long.

The Federal Reserve can control interest rates by expanding or contracting the quantity of money. It can control the financial markets with its “Open Market Operations.” It can create new money to increase its member’s bank reserves at any time. It can negotiate with foreign banks on monetary policies without congressional approval or knowledge. And it can do all of this with virtually no oversight by any elected representative of the people. Even the Government Accounting Office responsible for auditing all government agencies, has no auditing authority over the Federal Reserve, a private corporation not a government agency.

Without the ability to judge the cost of capital by the true market value of interest rates, determined by the availability of savings for investing and future consumption, no free market can correctly judge its financial health. These false signals along with government regulations are what create booms and busts in our economy, not free market actions. The Federal Reserve and the government manipulate the appearance of economic prosperity for personal and political gain and then blame free market capitalism when the inevitable adjustments occur (busts).

By creating the Internal Revenue Service (collection arm of the Federal Reserve), government makes the claim that our individual production, property and privacy no longer, in any real sense, belongs to us. Congress can change the tax rates and rules at any time, favoring some at the expense of others, and is about to do so again. This privilege of the central planners has driven many a productive individual to send their manufacturing and creative endeavors elsewhere. This put American free market capitalism on life support, still breathing, but barely.

In 1933, by Executive Order of the President (FDR), all Americans were required to surrender their gold to the government. This took away our right to trade in the most respected of all possible commodities used to secure value in our economic exchanges. Not only did government confiscate our gold, they also prohibited redemption of U.S. Dollars for gold by any American. Of course, the international bankers were still allowed to exchange dollars for gold. Now you know where our gold went. FDR pulled the plug on value-backed money for American enterprise, dooming free market capitalism to a slow and painful death.

In 1971, President Nixon reneged on the “Bretton Woods Accord” removing the international gold redemption for the U.S. dollar. Unfortunately, it was too late. It is probable that the international bankers already own most of what was our country’s gold. No longer would our dollars be backed by anything other than our central banker’s and government’s “Good Faith.” No free market can exist without the right to exchange productive value for productive value. In the years that followed, no longer constrained by a gold-backed dollar, big government warfare/welfare spending exploded.

What we have today is not free market capitalism, it is corporatism. Corporatism is a form of fascism, where big business and government work as partners at the expense of the productive class. We have the military/pharmaceutical/energy/media/industrial complex and the elitist central planners of big government ruling our country. We see a revolving door of big business CEO’s and bankers taking key government positions of power. They then move back into their private positions after accomplishing their goals of amassing great wealth for their friends and themselves. This is the outward signs of corporatism for everyone to see. But few are aware or care!

The change we were promised, if we would just vote for anyone except a Republican, is only a change in the national figurehead. Only in such an environment of big government and corporatism is greed truly rampant. Free market capitalism and the Rule of Law can not exist in the same society with either.

We who believe in free markets under the rule of law can not argue against a lie unless we expose it for the lie it is. The free market died when our money became nothing more than the confiscation of our production. Tell America to stop dragging around the corpse of free market capitalism as its whipping boy. We should all have the decency to give the dead some respect for what might have been.

Rest In Peace, Free Market Capitalism!

Honolulu’s rail costs put state at financial risk, governor says

HONOLULU — Honolulu should consider adjustments to its planned $5.3 billion elevated commuter rail line — including building a portion of it at street level — to save money and avoid putting more burden on taxpayers in a down economy, Gov. Linda Lingle said yesterday.

IRS Sends FBI to KILL Federal Tax Protestors

Question: tax accounting?

2.
Selling a ranch, adjusted basis equal $212,000 and a mortgage of $190,000. An amount realized on sale of a ranch consists of $110,000 cash given by a buyer, $190,000 (mortgage that the buyer take the title subject to), plus the buyer will pay $80,000 with 9 percent interest a year from the sale date. What is the realized and recognized gain?
Do we recognize any portion of the $80,000 and 9% in terest that will be received one year from the sale? The realized gain is $168,000, but the recognized gian is not the same.

Answer: (110+190+80)-212

Medicare Tax May Aid Health Compromise, Democrats Say

Jan. 5 (Bloomberg) — Two top Democrats said the U.S. House may accept a plan to increase Medicare payroll taxes on high-salary earners as a compromise to help get a health-care overhaul through Congress.

NEW! FOR 2008 (H.R. 5140 02-08-2008)

Question: If Obama wins in Nov.- do you think your Fed withholding taxes will go up?

Just for example: Say you have $300 beding deducted from your paycheck each payday from federal withholding, with a $7500 individual tax credit adjustment each year you file taxes, what do you think your net paycheck will look like next year and how much do you think you’ll see the tax credit be reduced to?

Remember, we need to fund billions into helping illegal immigrants, social services and fund a massive health care government system with 1000’s of new governemnt emoployees. The money will 100% come from your paychecks next year ( 2009), the question is guess how much you’ll as a single person will be paying for it all???????

Answer: The thing that must be taken into account is that Obama’s proposals are ignoring the effect that removing the 2001 tax reductions would have on the taxpayers.

If you factor in the across-the-board tax rate increases for _all_ taxpayers when the tax cuts expire then we all will be paying much more.

Another thing to consider is how little additional revenue will be produced by Obama’s tax increases on the “rich.” When you look at just how few people are in those super high tax brackets – the total government receipts will not be enough to cover the costs of his campaign promises.

Homebuilder Lennar records profit in fiscal 4th-quarter, boosted by a tax adjustment

MIAMI – Lennar Corp. says it posted a profit in its fiscal fourth-quarter earnings as the homebuilder benefited from an adjustment in its income taxes.

161 Federal Tax Charges, 0 Convictions

Zep Inc. Reports Strong First Quarter Results

ATLANTA—-Zep Inc. , a leading producer, marketer, and service provider of a wide range of cleaning and maintenance solutions, today announced financial results for the fiscal quarter ended November 30, 2009.

IRS Commissioner Dodges Income Tax Question – No Law!