Taxing Thoughts

Not often that I will post a Sunday update on the free side of the site, preferring to devote all my energies to the Peoplenomics report for this week.  However, a number of people seem to be confused about the "Family Economic Stimulus Act of 2008" and the use of the term "rebate".

First, an email from a reader/CPA"

"George,

After reading the House bill attached, it looks like the rebates are an advance on a new credit for 2008. After reading through the government-speak, there is a new tax credit in 2008. Part of the credit is being given in advance based on 2006 income. For 2008 taxes, people will need to report what they received in advance. The rebate will be required to be paid back only if taxpayers are not eligible for the credit based on 2008 income.

Thanks for all your work!"  (reader/CPA, name withheld)

My in the Saturday post, was (and is) that what was sold to us taxpayers as a rebate is nothing of the sort.  It is a tax credit against 2008 taxes.  In other words, if you would owe $15,000 for the year, and you got an $800 "credit", then your adjusted tax bill less credit would be $14,200.

OK, here's the tricky part - and why I get so ticked as the weasel-wording double-talkers in CONgress.  There are two things you can take to the bank (as long as they're open):

1.  While you may get 'fronted" $800 (a couple, inside the qualifying window) as a "credit" one of the obvious intents of this is to incent as many people as possible into filing 2007 income tax returns.  While I certainly don't endorse non-filing, after all, it's a growing trend and one motivator behind this is to get more people to file.  But this is paper thinly disguised: file or no check.

 

2.  The second sure bet is that as soon as the elections are over this fall, and maybe before, the new CONgress will immediately pass a tax bill which will increase taxes by - hold onto this concept - an amount which will wipe out your supposed credit.

My point was - and remains - that this is not a rebate (*money back on something already paid). 

It's more akin to walking into a car dealership with 'dealer cash' of $1,000 which, quick, look surprised, is promptly gobbled up in the fine print as dealer add-ons (*clear coating, undercoating, and "Oh, you want a radio, too?") as you get closer to signing the deal.

There is no free lunch.  This is America.  The only free lunches are for the PowersThatBe.  Sorry.

You is lunch.

Saturday February 9, 2008

The "Revolution" Meme?  Angry Tax Payers

And so it begins.  The predictive linguistics which have been going to the idea of "revolution" and the "calls for early elections" later on (by late summer) are not just looking for how 'government blows response to natural disaster' (weeks off yet), but we are now finding out that the much touted 'tax rebate" (which implies an unencumbered return of some portion of tax paid) is nothing more than a bait and switch - an advance 'credit' on your 2008 taxes. 

So, to put it more simply: If you were going to get a refund a year from now when you do this year's taxes you'll instead be acknowledging that you already got part of it.

The idea that this didn't cost corpgov anything - nor did it impose additional restraints on spending - verges on fraud, as I see it.

Not like I'm the only one who sees it, either.

• You could have read it here...

• Or here...

• Or here...

But honestly, what amazed me was the arrogance of the politicos in the District of Corruption who think they can use a term like "rebate" (*which might mean they would rein in some of their pork projects to make ends meet) versus a "cash advance" on 2008 taxes paid.

The hell of it is, that their arrogance is likely well-placed.  Besides calling my CONgressperson Monday and Texas' two sinators to express my disapproval of such hi-jinx, there's not much I can do except maybe point out that all the front-running presidential wannabes had a hand in this (or a vote) and I don't hear any of them 'telling it like it is'.

When we finally do get around to selecting which of the corpgov put-ups will start (or continue) their own corptocracy, it's clear enough to me that scamming rich folks are not what we need more of.  Especially lawyers. Especially if they say one thing and vote another.  Especially if they use qualifiers (*depends what you mean by and such weasel-words). 

More of the same.  Guess we deserve it for being stupid, huh?  As the year goes on, the sleaziness comes more into the open as "secrets revealed" meme opens up more to daylight/inspection/review.  But for now, like the old Beatles song comes, "You say you want a revolution?"  Remember what started with an unjust tea tax....

At some point (*maybe around a protest of a veterans group in a few months) the meme will coalesce and become widely visible in the MSM....

Buying Government

If you really want an eye opener (on Saturday?  Bear with me...) put in "Lobbying Reform" in the Google news engine and see what you find.

A cynical sort might notice that the search returns are most about spending money getting to the 'right' places on the Hill...

• "Harris spent almost $1.6 million lobbying" reports AP/Forbes.

• "Millennium Pharma Spent $1.3M Lobbying" goes another headline.

• "Mortgage Brokers Group Lobbied on Reform"

When I read a story like "Manufacturing group sues over new lobbying disclosure rules" I think to myself "Gee, what chances does my $20 contribution to a candidate buy me?  Shucks, $20 bucks is not even a blip on the screen...

Buying governance is not what the Framers had in mind, I suspect.

Commodity Trading Report

Just an update, if you're interested in those 7-day oil options I mentioned yesterday that I bought Thursday morning for $170 each (3 of 'em,).  I sold one yesterday on the developing strength in oil late in the session, likely due to the increase tensions in the Middle East.  Sold (1) for $710.

With commissions and everything, the trade puts me up somewhere north of $100 - but the bonus is that I now have two "free rides" until next Wednesday night, and any move over $93.50 by oil between now and then goes into the kitty here.

I also sold one of my July wheat call options for $3,100 Friday.  My entry price for that one was $475 (*not including commissions and fees).  If you're paying attention here, means I have pocketed a handsome profit on the two wheat calls and after selling one, I still have one July wheat, which, oh joy of joys, is also playing with House Money, too.  I do love it when a plan comes together.

Best part: No paper work.  Unlike a stock account where I have to fill out line after line of transaction detail on the 1040, the brokerage account folks just 1099 me and that's that.  Simple.

All up, the return since my first trade in July of last year is 473.8% while the gain is a much more modest 373.8%.  Shucks, darn.  I will try to do better going forward. And I will keep you posted as I do.

Still, remember that I can (and very likely might) lose all, or a big chunk of this, any old time so commodity trading is not for the weak of heart.  It is a lot more efficient than blowing 2-3 days to go over to the gambling casinos at Bossier City, though.

Rights Left Department

The right of the American public to own guns is under fire (yes, a poorly formed pun) in DC as the government to trying to rewrite the unambiguous Second Amendment.  There's some hope that pressure from lawmakers will cause the Supreme Court to sign with gun owners, but as we have seen all-too-often, in an election year, politicians will say damn near anything.

(Remember the 90 days and we're out plan of the democorps when they we on the campaign trail?) 

The old saying that drifts through the back of my mind is "in times of universal deceit, telling the truth is a revolutionary act".  George Orwell was just 23-years off in his timeline.  Or, as Mark Twain put it "If you don't read the newspaper, you are uninformed; if you do read the newspaper, you are misinformed." Yup...

Don't Question the Paradigm Department

Even though the Archbishop of Canterbury was only using Islamic Sharia as an example of business with a conscience, there's a growing call for him to resign.

Worst-Ever Tornado Season?

Maybe: A NOAA chart has us wondering about those linguistics.  Check it out:

As the gouging winds meme develops, bookmark this page for the coming months.

New And Improved War Department

"Putin, in speech, Assumes U.S. of setting off "New Arms Race".

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But wait!  I can't swallow that whole without holding it up to a little "reasonableness testing".  Any headlines about that it's really Prince Vlad the Bad who's pushing things along, too?

How about these?

• Japan says Russian military plane violates its airspace.

• Russian military base in Tajikistan to remain functioning.

• Russia is opening military missions in seven countries this year.

• Russia has been putting on a show of Air and Naval forces in the Arctic.

• Tone it down and tell us of flights NATO is telling Russia.

While it may be figured that most of these are 'holding' rather than expansion of the cold war, the showing off of the mobile version of the MARV'ed/MIRV'ed Topol M at the May 9th parade at the Kremlin is close enough to saber rattling for us to wonder about the sincerity of Putin.

Road To War: Reacters to Reactors

Our Saturday morning review of Middle East tension finds that Iran has started a second atomic power plant - at least according to a report. 

Then there are all those undersea cable cuts.  Here's a story about how an "Abandoned Anchor Cut Gulf Internet Cable."  Now, that may be a good cover story and all, but I've done my share of sailing and 11-thousand pound anchors don't just get up and walk around cutting cables...

Morals?  No Thanks...

We see that overseas 'sovereign wealth funds' are resisting calls  for a Code of Conduct.

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Zoom out with me now to the Big Picture:  The Anglo-West goes on a binge of issuing Liar's Paper all over the globe.  Then, holding the financial bag, the sovereign wealth funds want to take what Anglo-Western dollars they have and buy producing assets (*Western business and infrastructure).  So now, there's a discussion about a Code of Ethics.

Ain't that rich?  Sort of like telling a drunk that you've just pour half a bottle of rum into, that he shouldn't drink so much.

The only thing morals and money have in common is the 'm' and the 'o'.

Picture This

Polaroid is closing its film operations.  And at Eastman Kodak, the WSJ says the digital revolution in picture taking has cost 27,000 jobs.

Numbered

I don't know why this headline game me a smile: "Fifth Third sues First Horizon over dead deal."

One wonders what's forthcoming, too....  Have I really had that much coffee this morning? Yike!  (I reckon a yike is a singular word when you don't have enough surprise for a full plural "Yikes!")

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Coping: Greedy or Needy

"A Credit Card You'll Want to Toss" is the headline about a B of A credit card you won't want to use.  Even those of us with good credit and are never late will be subjected to rates as high as 28%.

High Mileage Cars

While the debate continues about when the exactly moment of Peak Oil was, we note that the Mexican super field Cantrell is expected to accelerate its output declines...

The coping hint here?  Park the ego and buy mileage not style when you go car shopping.

Reading List

"A Bubble That Broke The World" By Garet Garrett.  Summary is here.  Nice job by Generational Dynamics.

If have more time, the whole book is online here.

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