Written by: Tina Powell, CPA
According to Allan Koltin, CPA in a recent article in the June 2013 Journal of Accountancy, there are
10 C’s of Great Leaders.
Written by: Annette Clark, CPA
Having just returned from Israel and in particular Bethlehem, I have a new sense of freedom and respect for our country and the privileges we have. I can get in my car and drive most anywhere I want. A policeman I may see on the road, but only if I am speeding do I think twice. In Israel you see military presence in most areas. I saw the most in Bethlehem, which is a town of about 6 square miles, enclosed by a 2 story cement wall with one guarded gate restricting/regulating entrance and exit. Americans with a valid passport are allowed to come in and spend their money, but they still can stop you to make sure you aren’t smuggling out someone when you leave. If you are one of the lucky residents you can pass through with only the inconvenience of waiting your turn. If you are a Christian you aren’t allowed to leave those walls. Imagine spending your whole life in that limited space with someone watching over you.
We can complain, and we do, about our government, taxes, our job, our neighbors, the traffic, etc., without any thought of being reprimanded. Let me suggest that next time you start to complain, think of those in other countries that can’t, without the thought of imprisonment. Then do something constructive about the situation in question and be grateful that you can do both, complain and act.
Seasons Greetings from our family to yours! May you have a blessed holiday season!
Dear Clients, Colleagues and Friends:
I just returned from the Schwab Impact Conference in Chicago. This annual conference of over 3,000 RIA attendees is known for its powerful speakers and thought provoking topics. This year’s conference continued that trend.
The most impactful and moving messages were delivered by former Secretary of Defense Robert Gates, as well as co-chairmen of the Simpson-Bowles National Commission on Fiscal Responsibility and Reform, Alan Simpson and Erskine Bowles
As you have seen post-election, the financial markets are very concerned about the fast approaching fiscal cliff. And they should be. If these provisions go into play, the impact on our country will be dire. We spend more money on interest for our debt than we spend on the Departments of Commerce, Education, Energy, Homeland Security, Interior, Justice and State combined. Politicians have been kicking the can to December 31, 2012. Unfortunately, the “can” cannot be kicked any further.
Both Robert Gates and Former Chairman of the Joint Chiefs of Staff Admiral Mike Mullen agree that our national debt is our biggest national security threat.
Together, we must face the challenges of tax and spending reform. This is not politics or ideology, it is simple math. We are at the tipping point where our fiscal health is not just endangering our future, it is endangering our present.
Regardless of your political affiliation, we must insist that politicians put the country first – not their political agenda. We have less than 40 days until the end of the year. Congress is only scheduled to be in session for 12 of them. Please add your voice to the growing chorus demanding a responsible solution.
Please visit www.fixthedebt.org to sign the petition or contact your representative directly.
Written by: Michael E. Harter, CPA/PFS, CFP®
More often than not you hear talk about inflation in our business news. However, deflation is a real possibility in today’s economy. Deflation is a decrease in the general price level of goods and services.
The federal reserve policy of late is to produce inflation by printing more and more money for circulation. However, they are running up against demographics. History has shown that deflation occurred following debt bubbles in 1873-1874 and 1929-1932. Demographics studies have shown that household spending peaks at age 46. Who is in that category? The biggest generation in history – the Baby Boomers.
Consumer spending makes up 2/3 of our gross domestic product. So if a large percentage of our population is past their spending cycle, consumption will not return to its peaks and thus have an impact on our economic growth. The private sector is deleveraging as fast as they can.
The results can be devastating. Japan’s real estate market has been stuck for over 20 years. This could occur in the United States.
This cycle does come back around when lots of young people enter the job market. That does not appear to be the current times we are living in.
Written by: Keith Frame, CPA
Are capital gains tax rates a give-away to the rich? It seems I continue to hear this argument in the super-hyped partisan atmosphere we live in these days.
Perhaps low long term capital gains rates do spur economic activity that is beneficial to the economy as a whole – I would argue that they do.
But lost in all the politics is a basic economic fact as to why long term capital gain rates should be lower than tax rates on other income.
Let’s say for example you purchase a capital asset such as a stock and hold it for ten years. You paid $10,000 for it in year one and sell it for $20,000 in year ten. Inflation during this period of time is 3% per year.
Tax law says your taxable gain is $10,000 even though $3,439 of that gain is attributable to inflation alone. This is the basic economic argument for lower rates on long term capital gains – it’s only fair! A lower rate is just a simpler way of adjusting for the effects of inflation in tax law.
Tax law previously allowed us to exclude a portion of capital gains from taxation. This provision was eliminated during the Reagan tax reform years when all tax rates were brought down substantially. The lower capital gain rate was reinstated as tax rates drifted back up during the 1990’s.
Subjecting long term capital gain income to the same tax rates as all other income is an inherently unfair scheme that taxes income that doesn’t exist.
Written by: Gene G. Smith, CPA
There are several factors that need to be considered when choosing a professional to give you business and tax advice.
Once you pull all your information together contact no more than three firms and begin your due diligence. Armed with a few proposals and evaluations, your informed decision should be an easy one. Best of luck, and above all call us first!
The 2012 Food & Health Survey: Consumer Attitudes toward Food Safety, Nutrion and Health found some interesting facts. More than half of americans (52%) believe it is easier to figure out their taxes than to figure out what they should and shouldn’t eat to be healthier. And even through nearly 1 in 3 adults are considered obese, the survey showed that a majority of adults consider their health either excellent or very good.
The good thing about taxes is that it is easy to hire a tax professional to take care of these items. Unfortunately, trying to read and figure out nutrition labels can be more complicated than the Tax Code.
Just some food for thought!
Written by: Michael E. Harter, CPA/PFS, CFP®
Making consistent money in the financial markets has been challenging to say the least since the 2008 meltdown.
Interest rates returns continue to plummet as rates remain at historical lows in an effort to revive the economy. New money from maturing CD’s and bonds are met with nearly non-existent returns. The stock market looks to build momentum as companies are showing stronger balance sheets, amble cash and leaner cost structures. However events such as the European debt crisis and our own debt ceiling showdown this past summer keep pushing the markets down. Now the gas prices have taken center stage to wear down consumer confidence.
Instead of becoming outraged about current events, we accept what is given to us and say “Well at least I did not lose any money”? Since when did we become so passive or accepting of mediocrity?
We should be engaged in dialogue with policy makers and regulators to get out of the way and stop putting in gimmicks and artificial barriers that prolong the natural process. We have fiddled with the fundamentals of our capitalistic systems to the point that they can not operate properly and efficiently. Sure, maybe the intentions had merit, but the unintended consequences need to be examined as in many cases they outweigh the short term benefits.
Too many cooks spoil the broth!
What say you?