Tidbits
Quotations
To Accompany the March 30, 2011 edition of Tidbits
http://www.trinity.edu/rjensen/tidbits/2011/tidbits033011.htm
Bob Jensen
at Trinity University
Archive of Tidbits Quotations --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
Despite Obama's vilification of Bush for his
alleged unilateralism, "Obama's 'coalition of the willing,'" according to
foreign policy reporter Josh Rogin, "is smaller than any major multilateral
operation since the end of the Cold War." Obama's Libyan intervention is more
unilateral than Dubya's in another respect, as well: Obama has brazenly refused
even to consult Congress, much less seek its blessing.
David Limbaugh, Townhall,
March 29, 2011 ---
http://townhall.com/columnists/davidlimbaugh/2011/03/29/there_is_a_method_to_obamas_libya_madness
Dateline Video
China's ghost cities may be part of a real estate bubble ---
http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities
"Anti-Iraq War
Bush-Haters Squirm to Justify Libya," by Larry Elder, Townhall, March 24,
2011 ---
http://townhall.com/columnists/larryelder/2011/03/24/anti-iraq_war_bush-haters_squirm_to_justify_libya
It really has been bizarre
to see both Rachel Maddow and Ed Schultz do so much pro-Obama spinning to
support the war on Libya. Obama didn’t approach Congress? Great strategy! No
oval office address to the nation? He’s not a cowboy like George Bush! And you
just know that if a Republican president had done this, Maddow and Schultz would
be doing 180s to condemn the action. At least the anti-war Ralph Naders are
consistent, but many of them are quiet this time.
Libyan Hypocrisy ---
http://www.redstate.com/barrypopik/2011/03/24/msnbc-watch-dead-jews-are-not-news-libyan-hypocrisy-obamacare-anniversary-lies/
I was sure that Rachel Maddow would never discuss
yesterday’s bombing in Jerusalem. She didn’t discuss it. Ed Schultz didn’t
discuss it. Lawrence O’Donnell didn’t discuss it. Chris Matthews didn’t discuss
it. At MSNBC, dead Jews are not news.
Dead Jews are Not News ---
http://www.redstate.com/barrypopik/2011/03/24/msnbc-watch-dead-jews-are-not-news-libyan-hypocrisy-obamacare-anniversary-lies/
Just don't call them "madams"
"Pelosi, Boxer defend Obama's move on Libya," by Chris Maricucci, San
Francisco Chronicle, March 25, 2011 ---
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/24/BART1II30A.DTL&type=printable
Pelosi, Boxer defend Obama's move on Libya"This isn't America versus Libya," Boxer said. "This is an extraordinary achievement by the president and our secretary of state to get the world to come together" in a humanitarian crisis.
"Anyone who says (Obama) should have waited," she said, "doesn't feel the sense of urgency that many of us feel - that this man was about to destroy his own people."
Pelosi, a San Francisco Democrat, said Wednesday that Obama and the United States were acting upon the U.N. Security Council's resolution to use "all measures necessary" to protect the Libyan people.
Pelosi was one of the few leaders from both parties whom Obama informed of his decision on Friday. Political experts have said Obama's handling of the matter risks leaving him politically stranded.
Boxer's and Pelosi's comments put them at odds with other Bay Area members of Congress who this week issued blistering criticism of the president.
Continued in article
In the
United Kingdom
"State pension age 'rises' to 70 for anyone under 30: Anyone under the
age of 30 will not receive the state pension until they reach 70 years old under
Government plans to increase the retirement age," by Myra Butterworth By Myra
Butterworth, The Telegraph, March 24, 2011 ---
http://www.telegraph.co.uk/
"Mayberry OMG: Those false ads cost taxpayers $3.5 million,"
The Wall Street Journal, March 25, 2011 ---
|http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t
President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.
We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?
It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.
At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.
The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."
How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?
Enormous increases in worker compensation taxation in Illinois are especially
in contention
"Caterpillar CEO's letter talks of leaving Illinois," by Kurt Erickson,
Pantograph, March 25, 2011 ---
http://www.pantagraph.com/news/local/article_3c23590c-572a-11e0-afc0-001cc4c002e0.html
"Illinois Tax Increases Become Law," AccountingWeb, January 1,
2011 ---
http://www.accountingweb.com/blogs/brianstrahle/state-and-local-tax-360/illinois-tax-increases-become-law
Illinois Gov. Pat Quinn signed legislation (SB2505) last Thursday that temporarily raises Illinois income taxes by two-thirds.The personal income tax rate immediately rises to 5 percent, up from 3 percent. The corporate income tax rate rises immediately to 7 percent, up from 4.8 percent. The increases are at that level for four years and then are scheduled to decline (if you believe in the tooth fairy). For example, the personal tax rate drops to 3.75 percent in 2015 and eventually to 3.25 percent a decade after that.
The increases are retroactive to Jan. 1, 2011.
According to news reports, the state budget deficit was projected to hit $15 billion in the coming year, endangering government's ability to pay employees, provide money it owes to schools and local governments and reimburse the businesses and charities that work for the state. Quinn's office estimates the tax increase will generate about $6.8 billion a year, enough to balance the annual budget and begin chipping away at the state's backlog of about $8.5 billion in unpaid bills.
To view the actual bill, go to SB2505.
Jensen Comment
Perhaps in anticipation job losses from such a move and more outsourcing
overseas by Caterpillar, the UAW quietly renewed its labor contract with
Caterpillar without much fuss or bother to the company in spite of a strong 2010
profit showing for the company ---
http://www.uaw.org/articles/uaw-members-ratifiy-agreement-caterpillar-inc
However, this was not the case in 1992 when Caterpillar and workers endured one
of the longer and most contentious strikes in recent times during which
Caterpillar irreversibly shifted a great deal of production work out of
Illinois. At the time Caterpillar was on the verge of bankruptcy due to
declining revenues attributed greatly to foreign competition and lost contracts,
particularly in Russia ---
http://en.wikipedia.org/wiki/Caterpillar_Inc.
"Japanese
Earthquake Looters -- MIA," by Larry Elder, Townhall, March 17, 2011 ---
http://townhall.com/columnists/larryelder/2011/03/17/japanese_earthquake_looters_--_mia
"Why no video of looters in Japan?"
Japan's prime minister calls the 9.0 earthquake and the following tsunami the greatest crisis in Japan since World War II. Ten thousand people are feared dead. Millions are without power, and millions sleep outdoors in cold weather. But we haven't seen looting. So I posted this question on Facebook and Twitter.
"Race is not an issue," Mike replied. "Third World countries like Haiti loot due to poverty. Japan is like America, an economic superpower. Plain and simple."
"Poverty equals crime" is the standard "plain and simple" explanation, especially to the left. The analysis contains holes big enough to drive a Hummer through.
In the "economic superpower" called America, we see widespread looting following natural disasters, as well as during power blackouts, "civil unrest" and basketball team victory celebrations. If we attribute this to American poverty, what about Japanese poverty?
"Japan Tries to Face Up to Growing Poverty Problem," read the headline of a 2010 New York Times article. Here are excerpts:
"After years of economic stagnation and widening income disparities, this once proudly egalitarian nation is belatedly waking up to the fact that it has a large and growing number of poor people. The Labor Ministry's disclosure in October that almost one in six Japanese, or 20 million people, lived in poverty in 2007 stunned the nation and ignited a debate over possible remedies that has raged ever since.
. . .
San Francisco's Chinatown in the 1960s became one of the most impoverished areas in California. Public policy professors James Q. Wilson and Richard Hernstein wrote: "One neighborhood in San Francisco had the lowest income, the highest unemployment rate, the highest proportion of families with incomes under $4,000 per year, the least educational attainment, the highest tuberculosis rate and the highest proportion of substandard housing. ... That neighborhood was called Chinatown. Yet, in 1965, there were only five persons of Chinese ancestry committed to prison in the entire state of California."
Two low-income areas outside of Boston -- South Boston and Roxbury -- were featured several years ago in U.S. News & World Report. They had similar socio-economic profiles: high levels of unemployment; the same percentage of children born to single-parent households; and the same percentage of people living in public housing. But the violent crime rate in Roxbury, predominately black, was four times higher than that of South Boston, predominately white.
Culture and values explain why some countries and some communities experience crime, while others do not. This explains why many students from Asian countries outperform equally "disadvantaged" black and brown students from the same "underperforming" inner-city government schools.
Culture and values explain a 2011 article headlined, "New Zealand Police 'Sickened' at Looting in Quake-Hit City": "New Zealand police said ... they were 'sickened' at a spate of looting, email scams and bogus appeals for charity in the wake of the deadly Christchurch earthquake. ... Lootings and burglaries, including one at the home of a woman feared dead in the disaster, have also been reported, while fraudulent emails soliciting charity donations were also doing the rounds." The Japanese earthquake was over 8,000 times more powerful than the New Zealand quake earlier this year.
Culture and values explain the fear in Egypt and Libya of looting from museums that house precious historical and cultural artifacts.
Culture and values explain why in Los Angeles, a city with a 46 percent Hispanic population and a 10 percentage Asian population, one sees no Latinos or Asians holding up "Will Work for Food" signs. When South Korea played for soccer's 2010 World Cup, the Los Angeles Korean community received permits to view games on big-screen monitors in the streets near Koreatown. The police said the streets were more trash-free after the games than before.
Culture and values are not set in stone. They can and do change for the better -- especially when we accept responsibility and stop blaming bad behavior on poverty. Plain and simple.
Continued in article
Jensen
Comment
One is tempted to place heavy credit on the stronger family culture among Asian
poor, especially when contrasted with black communities in urban ghettos. But
this theory breaks down somewhat in urban Hispanic communities where family
culture is relatively strong and crime rates are very high. Perhaps greater
blame should be placed on persistent drug and alcohol craziness in urban black
and Hispanic communities relative to Asian communities living in poverty. I
think legalizing drugs would go a long way toward reducing crime among blacks
and Hispanics.
"End the
Drug War, Save Black America," by John Stossel, Townhall, Marcch 16. 2011 ---
http://townhall.com/columnists/johnstossel/2011/03/16/end_the_drug_war,_save_black_america
One key to getting past the race issue in America is to end the war on drugs. John McWhorter says it's the most important thing we could do.
Cato's Letter features a lecture by McWhorter in which he calls for an end to the war on drugs. (It's really a war on certain people.) McWhorter, the former Berkeley linguistics professor and now senior fellow at the Manhattan Institute, specifically indicts the war on drugs for "destroying black America." McWhorter, by the way, is black.
The "main obstacle(s) to getting black America past the illusion that racism is still a defining factor in America" are, he says, "the strained relationship between young black men and police forces" and the "massive number of black men in prison."
And what accounts for this? Prohibition.
"Therefore, if the War on Drugs were terminated, the main factor keeping race-based resentment a core element in the American social fabric would no longer exist. America would be a better place for all."
McWhorter sees prohibition as the saboteur of black families. "It has become a norm for black children to grow up in single-parent homes, their fathers away in prison for long spells and barely knowing them. In poor and working-class black America, a man and a woman raising their children together is, of all things, an unusual sight. The War on Drugs plays a large part in this."
He also blames the black market created by prohibition for diverting young black men from the normal workforce. "Because the illegality of drugs keeps the prices high," he says, "there are high salaries to be made in selling them. This makes selling drugs a standing tempting alternative to seeking lower-paying legal employment."
This has devastating consequences. The attractive illegal livelihood relieves men of the need to develop skills that would provide stable legal incomes. To those who argue that there's a shortage of jobs for black men, he says that is refuted by the black immigrants who thrive in America. "It is often said that because immigrants have a unique initiative or 'pluck' in relocating to the United States in the first place, it is unfair to compare black Americans to them. However, the War on Drugs has made it impossible to see whether black Americans would exhibit such 'pluck' themselves if drug selling were not a tempting alternative."
Continued in article
"Jerry
Brown Shrinks From Real Reform: The governor blames his political rivals
for the budget impasse, but public-employee unions are the real obstacle,"
by John Fund, The Wall Street Journal, March 19, 2011 ---
http://online.wsj.com/article/SB10001424052748704608504576208470356264808.html?mod=djemEditorialPage_t
California has led the nation in so many ways, so it seems fitting that it is now showing the rest of us what the collapse of an overburdened welfare state looks like.
In January, Democrat Jerry Brown returned to the governor's office he left 28 years ago. He assured voters that as a seasoned government hand he wouldn't repeat the mistakes made by his novice predecessor, Republican Arnold Schwarzenegger. Mr. Brown had shown a pragmatic, pro-business streak during the two terms he served as mayor of Oakland from 1999 to 2007. Many Californians hoped that at age 72 Mr. Brown would be the first Golden State governor since before Ronald Reagan without his eye on the presidency—and thus could make tough decisions despite the opposition of entrenched special interests.
The state certainly needs bold action: It faces an immediate $26.6 billion deficit. David Crane, a financial expert who worked for Mr. Schwarzenegger, estimates that the state's public- pension obligations could be as high as half a trillion dollars. California's credit rating is the worst in the country, and it's unlikely to return to pre-recession employment levels until the end of this decade.
Mr. Brown has, at best, a mixed record so far. He won points for keeping a campaign promise and refusing to push for tax increases without having them approved by voters. But his plan to close this year's deficit—with a combination of spending restraint and extensions of temporary tax hikes on income, sales and vehicles—has faltered.
It looks as if the special election to pass this plan, currently scheduled for June 7, will either be delayed or not held at all due to inaction by the Democratic legislature. To get his plan on the ballot, Mr. Brown needs the votes of two Republicans in both the state Assembly and the Senate to satisfy the two-thirds requirement for tax increases. He's unlikely to get official cooperation from the GOP unless he gives on something significant, like pension and regulatory reform. Otherwise, he'll have to target individual Republicans with inducements.
Mr. Brown blames the current impasse on "subversive" Republicans who never met taxes they could support. "Some Republicans want government to break down," he told the Los Angeles Times this week. "They want to blow it up. They're radical. They're not in the mainstream."
But Republicans counter that it's California's bloated government that isn't in the mainstream. "We have 12% of the nation's people, but a third of the welfare case load," GOP Assemblyman Dan Logue tells me. "We have the highest taxes in the nation in many categories, and unemployment that's now higher than Michigan's."
Next month, Mr. Logue will hold a hearing in Texas to learn why so many California companies have relocated to the Lone Star State. He says Mr. Brown could be a hero if he breaks with the public-employee unions that helped elect him and forces them to accept structural reforms in exchange for new tax revenue.
The prospects aren't promising. A group of five Senate Republicans has been meeting with Mr. Brown for weeks. They have suggested the state adopt proposals by the Little Hoover Commission, a cost-saving advisory body, that California create a 401(k)-type defined-contribution pension plan to go along with paring back the defined-benefit plan that government workers currently enjoy.
A new statewide Field poll shows that even liberal voters recognize that pensions must be reined in. It found that two-thirds of Democrats want state and local employees to pitch in more toward their retirement, and a full 50% of Democrats back the Little Hoover Commission's proposal. Republican negotiators are also calling for a relaxation of onerous business regulations and a "hard spending cap" that would restrain future spending increases to inflation and population growth.
The talks stalled this week after Mr. Brown told the Republicans that while he might want to do more, public- employee unions and Democrats are adamantly opposed. Democratic Senate President Darrell Steinberg did say he might consider a temporary spending cap, but only one that lasts as long as the five years that any tax hikes are extended.
That would repeat a fatal error in California history. The state once had a hard spending cap, called the Gann Limit, passed by voters in 1979. It kept California's balance sheet stable for over a decade. In 1990, GOP Gov. George Deukmejian teamed up with unions to narrowly pass a measure that rewrote the spending formulas, effectively emasculating the limit. Had a real Gann limit been in place over the past two decades, California's budget would be balanced now.
Public unions seem dug in against fiscal reform, but Mr. Brown might still corral enough stray Republicans to get his budget package before voters this summer. Yet even with the proposed all-mail ballot he wants to use to gin up turnout, its prospects are iffy. In 2009, two-thirds of California voters turned down an extension of tax increases similar to what Mr. Brown is proposing. Last November, despite Democratic victories up and down the ballot, state voters approved a measure requiring a two-thirds majority for increasing fees, and they rejected a repeal of business tax incentives. Voters even turned down an $18 automobile fee to help keep state parks open.
Continued in article
"The
$6 Billion Scam: Jerry Brown’s plan to kill community “redevelopment” is
fiscally smart, morally right, and probably doomed," by Tim Cavanaugh,
Reason Magazine, April 2011 ---
http://reason.com/archives/2011/03/17/the-6-billion-scam
At what point does a public institution move beyond mere self-interest or ineffectuality and become actively evil? Two proposals in California Gov. Jerry Brown’s 2011–12 austerity budget provide a useful comparison.
With his plan to ax the state’s system of “enterprise zones” and related tax credits, Brown wants to do away with a program whose history of failure can be charitably blamed on bad luck or miscarried good intentions. But by trying to kill the state’s 425 redevelopment agencies (RDAs), the governor is taking on—and robustly criticizing—a gang of thugs whose activities closely resemble those of a criminal enterprise.
Brown has plenty of reason to cut both entities. The state faces a $25 billion deficit during the next two years, and both programs are enormous money losers. By eliminating enterprise zone tax breaks (which include hiring credits, interest deductions, special treatment for sales taxes paid, and a credit for employees who earn wages within a given area), the governor expects to make an additional $343 million available in the 2010–11 budget and $581 million in 2011–12. The savings to state and local governments from deep-sixing redevelopment funding are expected to be even greater: an estimated $5 billion to $6 billion during the same period.
That’s the budget-hawk reason for eliminating these programs. But the much more important reason, which Brown’s 2011–12 budget summary explains in surprising detail, is that both are manifest failures even on their own very forgiving terms.
Enterprise zones create few jobs and almost never increase hiring for the poor local residents they are supposed to help. The budget summary cites a 2005 legislative analyst’s finding that “EZs have little if any impact on the creation of new economic activity or employment.” In the kind of misallocation language you’d expect to find in a classical economics textbook rather than a government document, the summary also notes that the few increases in hiring or business “are not generally a result of new activity, but, instead, from the shift of activity into a zone that otherwise would have occurred elsewhere.” This anemic shifting of value comes at an enormous cost. A 2002 report from the W.E. Upjohn Institute for Employment Research found that enterprise zones cost state and local governments a whopping $60,000 for every job created in a given zone.
But while enterprise zones merely produce shoddy results, California’s redevelopment agencies actually destroy cities. Brown’s budget summary not only proposes eliminating all the state’s RDAs by July but spends several pages detailing their vices. “Most development in RDAs is shifted from elsewhere in the state,” the governor notes. “The private development that occurs in redevelopment project areas often would have occurred even if the RDAs were never established. There is little evidence that redevelopment projects attract business to the state.”
Because economic growth tends to happen in spite of public action, and because RDAs tend to be most active in those parts of town where members of the mainstream media don’t live, the abysmal record of redevelopment is not always clear. But the acres of south Los Angeles wasteland generated by the Community Redevelopment Agency of Los Angeles (CRA/LA), the state’s largest and wealthiest RDA, are a grim testament to failure. The agency’s Normandie 5 Redevelopment Project has generated zero development. Its 107-acre Watts Project area, which has been in effect since 1968, boasts nothing but a Food 4 Less that hardly required government help to come into being. The massive $163 million Marlton Square project has stagnated, unbuilt, for nearly 20 years as a shady developer with friends in City Hall looted taxpayer funds. The two-block project area at the corner of Vermont and Manchester Avenues is a vacant lot. So is the long-fallow Central/Slauson project, where the CRA used eminent domain to shut down a metal works that was the only functioning business in the area. You’d need to go back to the crew of the Enola Gay to find a group of Americans responsible for creating so much vacant urban space.
Continued in article
Question
What absurd government-subsidized "electric" heavy-weight car will go a "paltry"
25 miles before the low-mileage, premium-fuel big gas engine kicks in?
"Chevy Volt: The Car From Atlas Shrugged Motors," by Patrick
Michaels, Forbes, March 16, 2011 ---
http://www.forbes.com/2011/03/16/chevy-volt-ayn-rand-opinions-patrick-michaels.html
The Chevrolet Volt is beginning to look like it was manufactured by Atlas Shrugged Motors, where (according to Ayn Rand) the government mandates everything politically correct, rewards its cronies and produces junk steel.
This is the car that subsidies built. General Motors lobbied for a $7,500 tax refund for all buyers, under the shaky (if not false) promise that it was producing the first all-electric mass-production vehicle.
At least that's what we were once told. Sitting in a Volt that would not start at the 2010 Detroit Auto Show, a GM engineer swore to me that the internal combustion engine in the machine only served as a generator, kicking in when the overnight-charged lithium-ion batteries began to run down. GM has continually revised downward its estimates of how far the machine would go before the gas engine fired, and now says 25 to 50 miles.
It turns out that the premium-fuel fired engine does drive the wheels--when the battery is very low or when the vehicle is at most freeway speeds. So the Volt really isn't a pure electric car after all. I'm sure that the people who designed the car knew how it ran, and so did their managers.
Why then the need to keep this so quiet? It's doubtful that GM would have gotten such a subsidy if it had been revealed that the car would do much of its freeway cruising with a gas engine powering the wheels. While the Volt is more complicated than the Prius, and has a longer battery-only range, a hybrid is a hybrid, and the Prius no longer qualifies for a tax credit.
n other words, GM was desperate for customers for what they perceived would be an unpopular vehicle before one even hit the road. It had hoped to lure more if buyers subtracted the $7,500 from the $41,000 sticker price. Instead, as Consumer Reports found out, the car was very pricey. The version they tested cost $43,700 plus a $5,000 dealer markup ("Don't worry," I can hear the salesperson saying, "you'll get more than that back in your tax credit!"), or a whopping $48,700 minus the credit.
This is one reason that Volt sales are anemic: 326 in December, 321 in January, and 281 in February. GM announced a production run of 100,000 in the first two years. Who is going to buy all these cars?
Another reason they aren't exactly flying off the lots is because, well, they have some problems. In a telling attempt to preserve battery power, the heater is exceedingly weak. Consumer Reports averaged a paltry 25 miles of electric-only running, in part because it was testing in cold Connecticut. (My engineer at the Auto Show said cold weather would have little effect.)
It will be interesting to see what the range is on a hot, traffic-jammed summer day, when the air conditioner will really tax the batteries. When the gas engine came on, Consumer Reports got about 30 miles to the gallon of premium fuel; which, in terms of additional cost of high-test gas, drives the effective mileage closer to 27 mpg. A conventional Honda ( HMC - news - people ) Accord, which seats 5 (instead of the Volt's 4), gets 34 mpg on the highway, and costs less than half of what CR paid, even with the tax break.
Continued in article
Jensen Comment
Keep in mind that those 25 miles of all-electric driving are not free. In most
instances the expensive batteries are powered by polluting hydrocarbon electric
plants that don't charge electric cars for free. And in some instances, drivers
will have to take out second mortgages on their homes in order to replace the
expensive Volt batteries after five years of frustration filling their tanks at
gas stations.
From a Former Governor of Virginia
"State Bankruptcy: The Worst Idea Yet," by Jim Gilmore, Townhall,
March 19, 2011 ---
http://townhall.com/columnists/jimgilmore/2011/03/19/state_bankruptcy_the_worst_idea_yet
We are witnessing unprecedented clashes and escalating political rhetoric between cash-starved state governments and their public service unions.
The conflict has yielded the worst notion yet among an array of increasingly painful potential solutions – declaring state bankruptcy, among other reasons, to escape the onerous bonds of contracts and accumulated promises made by multiple generations of politicians of both parties.
As a former Virginia governor, my advice is to consign that particular idea to the cutting room floor. In harsh reality, bankruptcy would likely cost taxpayers more over time than tax hikes or unaffordable public union contracts. And it would put the final financial decision-making in the hands of a federal judge whose persuasions and ultimate directives would be entirely unknown.
In the real world of government and finance, well-rated state and municipal bonds are a safe harbor for retirees, the elderly and small investors who are desperate today for as much certainty as they can find.
In 2010, investors seeking that certainty invested more that $84 billion in state and municipal bond mutual funds. The creation and development of mechanisms for states to go bankrupt, and ask a federal judge for permission to default, could prompt painful and costly credit rating downgrades that hurt all classes of investors, including working men and women holding 401 (k) plans that have already been beaten down.
By being trustworthy, creditworthy borrowers, responsible states and municipalities promote certainty for people who need it. They promote assurance for managers overseeing the nation’s retirement funds, pensions, mutual funds and money market funds on behalf of individuals.
The fact is it would cost any state an exorbitant amount of money in the long term to default on its investors through tactical bankruptcy engineered to escape union contracts or creditors. Even if anybody were willing to lend anything at all in the future, the required interest rates would be astronomical. Eventually, draconian spending cuts or dramatically higher taxes would likely be needed to pay that debt. Penalties on state governments fresh off a tactical bankruptcy and the citizens they serve would be severe.
Some say we should simply keep on paying for unaffordable public union contracts and obligations to other creditors. That’s not viable. If gas prices continue to rise, burdens on mainstream wage earners would be magnified by tax increases. People of modest means, and even those in the middle class, would only be more pressured by a tax hike in a high-price energy environment. Our anemic economic recovery could very well turn into a double-dip recession with only deeper and more prolonged unemployment. In short, we don’t have the money.
There is only one viable path. And that is for political leaders who have now been elected across the country with the mandate to make tough choices to begin their hard work. Unfortunately, this will have to be done regardless of whether the public unions come to the negotiating table or a handful of legislators show up for a vote. Our country has promised too much, spent too much and borrowed too much. At any time, creditors could take these difficult decisions out of our hands and make those decisions even more painful for all.
So here’s some sound advice:
Public employee unions should lose the high-octane rhetoric. Put down the drums. Ditch the phony sick slips. Quickly let the sights and sounds of Madison, Wisconsin, recede from the public’s mind and consciousness. Approach negotiations in a serious, thoughtful spirit of shared sacrifice and a realistic, open-minded appraisal of the tough financial times faced by most taxpayers. Many will not be with you.
Continued in article
"Hoosiers
on the Lam Indiana: Democrats flee to block more charter schools,"
The Wall Street Journal, March 23, 2011 ---
http://online.wsj.com/article/SB10001424052748703858404576214641510326306.html#mod=djemEditorialPage_t
What is it about Illinois anyway? First Wisconsin Democrats flee to the Land of Tax Increases to avoid their political duty, and now Indiana Democrats are holed up there to block reforms in their state. Democrats so treasure the right to vote that they won't exercise it.
Unlike in Wisconsin where only budget legislation requires a quorum, all bills in Indiana require a quorum to pass. So even though Republicans outnumber Democrats 60-40 in the state house and 37-13 in the senate, Republicans can't change state law without Democrats present to vote nay.
Last month 39 Democrats fled to beautiful ...
Continued in article
"Corporate
Welfare," by John Stossel, Townhall, March 23, 2011 ---
http://townhall.com/columnists/johnstossel/2011/03/23/corporate_welfare
In America today, the biggest recipients of handouts are not poor people. They're corporations.
General Electric CEO Jeffrey R. Immelt is super-close to President Obama. The president named Immelt chairman of his Council on Jobs and Competitiveness. Before that, Immelt was on Obama's Economic Recovery Advisory Board. He's a regular companion when Obama travels abroad to hawk American exports. (Why does business need government to do that?)
"Jeff Immelt is perhaps the CEO who is most cozy with President Obama," says journalist Tim Carney. "General Electric is structuring their business around where government is going ... high-speed rail, solar, wind. GE is lining up to get what government is handing out."
Businesses love to have government as their partner. There's safety in it. Why take chances in a marketplace full of fickle consumers and investors, when you can get secure money and favors from the taxpayers? It's an old story, and free-market advocates as far back as Adam Smith warned against it. Unfortunately, too many people think "free market" means pro-business. It doesn't. Free market means laissez faire -- prohibit force and fraud, but otherwise leave the marketplace alone. No subsidies, no privileges, no arbitrary regulations. Competition is the most effective regulator.
Left-wingers criticize corporate welfare until it's for something they like -- for example, "green technology."
"The government's going to invest in certain companies to pioneer new technologies. That, I think, is not corporate welfare," says Tamara Draut of the Progressive think-tank Demos.
I asked her if business is too dumb to pioneer without government direction.
"The private sector will only invest if they know for sure that there is a commercial marketplace."
But if everyone wants these products, that should be an incentive for greedy businesses to make them.
"Not always," she replied. "But the free market does not know anything unless we all collect our interests and say: This is of national import to us."
This is nonsense. How did Apple know we would want iPods, iPhones and iPads? It didn't know with certainty. It took a risk with its own and investors' money.
But for some reason, other products and services are different, according to people like Obama and Draut.
"We desperately need high-speed rail in this country," she says, meaning the taxpayers must be forced to finance it.
The government gives companies billions of dollars to develop new trains. Guess who receives some of that money.
GE.
One out of every four rows of corn picked in the U.S. is burned up in car and truck engines because of Federal laws, subsidies, and enormous tariffs on more efficient sugar cane ethanol that can be imported cheaply
"Ethanol
Blamed for Record Food Prices: A more flexible policy could ease the
impact of ethanol mandates on worldwide markets," by Kevin Bullis, MIT's
Technology Review, March 23, 2011 ---
http://www.technologyreview.com/energy/37019/?nlid=4264&a=f
Federal ethanol mandates, which have led to a steady increase in the production of ethanol made from corn, are a major reason why food prices worldwide have reached record levels in the past several months, according to some economists.
Earlier this month, the United Nation's Food and Agriculture Organization reported that global food prices had risen for eight consecutive months, reaching the highest levels since the agency started tracking prices in 1990. The prices are high in large part because of steadily growing worldwide demand for food, and because of natural disasters that have hurt harvests, but they're also affected by government policies.
Federal ethanol mandates in the United States have played an important role in the increase in corn prices, which are approaching $7 a bushel, up from historical norms of $2 to $3. The mandates—called the renewable fuel standard—require fuel distributors to use a certain amount of ethanol each year, with the amount increasing each year. In 2005, when the mandates were first introduced (legislation signed by President Bush in 2007 subsequently expanded the federal mandates), ethanol production accounted for only 5 to 10 percent of the demand for corn in the United States, says C. Ford Runge, professor of applied economics and law at the University of Minnesota. Now it's up to roughly 40 percent, he says. (The standard calls for 13.95 billion gallons of renewable fuel, almost all of which will come from corn-based ethanol.)
The increased production of ethanol has a large impact on corn prices, not only because it's a major source of demand, but also because the demand is fixed. In a free market, if the price of corn goes up, demand will go down, moderating corn prices. But the federal mandate requires the same amount of ethanol no matter how expensive corn is.
Continued in article
"NPR's
Ridiculous Denials," by Brent Bozell, Townhall, March 16, 2011 ---
http://townhall.com/columnists/brentbozell/2011/03/16/nprs_ridiculous_denials
In the public policy conversation today, there is nothing funnier than hearing the leadership of National Public Radio deny there's a liberal bias at play over there.
Even when the Daily Caller posted sting video of their top fundraiser Ron Schiller describing America as remarkably undereducated and the Republicans as ruined by racist, gun-toting, phony Christians, NPR's reaction was repeating Sentence One: Who, us, biased?
Schiller resigned, and then the NPR Board ousted CEO Vivian Schiller (no relation), who hired him. She was only a sacrificial lamb. Nothing has changed, policy-wise. The new interim CEO, Joyce Slocum, picked up exactly where the last boss left off.
"I think if anyone believes that NPR's coverage is biased in one direction or another," she suggests, "all they need to do to correct that misperception is turn on their radio or log onto their computer and listen or read for an hour or two."
This is some serious denial -- like arguing that if anyone doubts that Japan is a terrific spring vacation spot right now, they should just observe the TV news and see how wonderful it looks.
This anti-NPR sting video reveals an NPR fundraising drive that's clearly focusing on financiers that are hostile to conservatives. Last year, leftist philanthropist and hedge-fund billionaire George Soros announced a $1.8 million donation to NPR and days later, Juan Williams was canned for offending liberals by appearing on the Fox News Channel.
The same week that NPR unveiled that donation, Soros announced another million-dollar contribution to the censorious left-wing thugs at Media Matters for America, to "more widely publicize the challenge Fox News poses to civil and informed discourse." Their campaign slogan to advertisers and cable companies is "DROP FOX." (Am I the only one who finds it curious that the "Open Society" folks want Fox closed?)
The reporters at NPR are in even more denial than the executives. NPR rushed to interview Susan Stamberg, hailed as a "founding mother" of NPR, who insisted that executives have caused some "terrible, terrible hits," but the "news" product is superb: "The work that we do has been so consistently extraordinary, the strongest news organization in electronic broadcasting, and that has been untarnished."
Since NPR lives in a bubble of their own arrogance, their media reporter David Folkenflik sought no opposing view. (He didn't even fish through NPR ombudsman Alicia Shepard's box of listener complaints, such as NPR's recent erroneous on-air declaration that Rep. Gabrielle Giffords was dead.)
Continued in article
NPR
Would Not Touch This With a 10-Foot Pole
Monday on Fox news reported that the staffers of Congress family members are
exempt from having to pay back student loans . This will get national attention
if other news networks will broadcast it, but they won't.
Members of Congress retire at full pay even if they only serve one term.
Teachers unions in California negotiated teacher retirements after age 50 at 90% if full pay plus medical benefits.
Where did we go wrong?
"R.I.P., New-Home Sales," by Floyd Norris, The New York Times,
March 23, 2011 ---
http://norris.blogs.nytimes.com/2011/03/23/r-i-p-new-home-sales/
The new-home sales numbers for February came out today, and they are horrible.
The government estimates that 19,000 new single-family homes were sold during the month. That is the lowest figure for any month since the figures began to be compiled in 1963. At a seasonally adjusted annual rate, that works out to an annual pace of 250,000. That, too, is the lowest ever.
February can, of course, be explained away by bad weather. But this is also the lowest 12 months ever, with sales of 349,000 new homes.
Sales of existing homes are not robust, but they have stabilized. Mortgages are more available now than they were a year ago, particularly for so-called “conforming mortgages.” But there is an oversupply of housing in many areas, and the home construction business seems unlikely to recover for a long time.
Continued in article
"I Found My Thrill Blowing Up McGill," by Mike Adams, Townhall,
March 22, 2011 ---
http://townhall.com/columnists/mikeadams/2011/03/22/i_found_my_thrill_blowing_up_mcgill
The irony is never ending in higher education these days. College administrators are so steeped in the ideology of political correctness that they fail to miss an opportunity to help make their opponents’ argument for them. Such was the case after a Jihadist recently Tweeted death threats at a campus screening of Indoctrinate-U. Students at McGill University in Montreal are outraged at the politically correct response of Morton J. Mendelson - the Deputy Provost of Student Life & Learning at McGill. And they should be outraged by his cowardice.
For those who aren’t aware, Indoctrinate-U. is a documentary by my old friend Evan Coyne Maloney. The film exposes the liberal bias and politically correct nature of universities. During its showing, a Muslim student in the audience produced a series of violent messages on Twitter. Here are some examples:
“I should have brought an M16.”
“I’m watching a Zionist/Conservative propaganda film at a secret Zionist convention, in case anyone’s confused.”
“This experience has hardened me into a soldier for freedom and truth. These savages will not rule me. They will not win.”
“My blood is boiling. I want to shoot everyone in this room.”
Ok f---k it, I’m going to destroy the Jew-WASP consortium.”
(Note to Media: I have screen shots of all of these Tweets if anyone is interested).
In typical Muslim Jihadist fashion, Haaris Khan, the author of the Jihadist Tweets is retreating from his statements. He has since apologized and said that his Tweets were “taken out of context.” He says he owns no weapons and has never fired a gun. He also said his sister-in-law is Jewish. He stopped short of saying that when he needs a good doctor he always looks for one with a Jewish name.
Earlier in the year, Haaris Khan published a bizarre opinion piece condemning a newly founded student newspaper with conservative leanings called the Prince Arthur Herald. Quite naturally, he published the condemnation in the traditionally liberal leaning McGill Daily. In the piece, he makes it clear that he supported the paper when it was initially proposed. But, then, after reading a few issues he withdrew that support because the paper had proven to be “pro-Israel.”
In the piece, he lectures the conservative paper saying “Being provocative is one thing – being thuggish is another.” He goes on to say that journalists need to “stick to principles of fairness, justice, responsibility, and prudence.”
Continued in article
Bob Jensen's threads on political correctness are at
http://www.trinity.edu/rjensen/HigherEdControversies.htm#PoliticalCorrectness
"Somebody Missed the 'Nobody Messes With Joe' Memo," by Ken Blackwell,
Townhall, March 22, 2011 ---
http://townhall.com/columnists/kenblackwell/2011/03/21/somebody_missed_the_nobody_messes_with_joe_memo
If it weren’t so sad, this story from the Washington Times would be too funny. It seems that money from President Obama’s $862,000,000,000 “stimulus” bill of two years ago has been spent to upgrade the Wilmington, Del., AMTRAK station. Vice President Biden lobbied personally, we read, to get the funding for the station he has famously used ever since he was elected to the U.S. Senate in 1972. Now, AMTRAK, grateful for his support, has all on its own initiative decided to name the spruced-up station the Joseph Robinette Biden, Jr. AMTRAK station.
Well, we all wanted to know who would replace the late, beloved Robert Byrd of West Virginia as the king of pork. Now we know. Washington legend has it that Sen. Byrd modestly turned down all attempts to re-named the Mountaineer State for him. It seems the name “Byrdland” was already taken.
Now, where might this newly famous Delaware train station be located? You’ll remember the old English rhyme—“Send a Fool to Dover/He’ll come back a Fool all over.” Wrong. Joe Biden is no fool. He travels to Wilmington. So that’s where the station got named for him. He bragged that he has logged some 7,000 round trips between Wilmington and Washington.
And he travels in style. We all recall how President Obama named Biden as his “sheriff” for the gusher of stimulus spending. He memorably said Joe Biden would watch over the expenditures to make sure no funds were misspent. That’s because, the president said: “Nobody messes with Joe!”
But the president neglected to tell us what would happen if we caught Joe messing. “
We would not be spending a penny on it today without the Recovery Act,” Mr. Biden said. “We have no time to wait. We cannot wait. That’s what the Recovery Act is about.”
So we didn’t wait. Why, if we waited, the unemployment could go as high as eight percent, Joe warned us. Currently, the jobless rate is closer to nine percent.
The Washington Times reports that the refurbishing of this particular railroad station went over budget by some $5,700,000. Leslie Paige of Citizens Against Government Waste seems not to have gotten President Obama’s order not to mess with Joe, especially while Joe was messing with our national debt. She told the Times.
“It’s an absolutely perfect monument to a guy whose entire history has been overspending and overpromising,” she said. “It would make sense [Mr. Biden‘s] name would be slapped on a bloated, over-budget train station in Wilmington.”
Ah, but Leslie Paige, you don’t appreciate the historic nature of this particular AMTRAK station. Grove City College Professor Paul Kengor found this gem while sifting through ash heap of former Sen. Warren Rudman’s memoirs:
Continued in article
Capitalism is a strange and complicated economic system. In the 1930s the New Deal was a virtual failure in economic recovery and job creation (there was still over a 14% unemployment rate in 1940s in the wake of the New Deal). What spurred enormous economic recovery from The Great Depression and created millions of new jobs was a disaster called World War II.
Now the Harvard Business Review is trying to make a case that the legendary earthquake in Japan will spur enormous economic recovery for that stalled economy and create millions of new jobs. Go figure!
"The Disaster That Could Save Japan," by Richard Hornik, Harvard
Business Review Blog, March 16, 2011 ---
Click Here
http://blogs.hbr.org/hbr/hbreditors/2011/03/the_disaster_that_could_save_j.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date
Does the U.S. need an even more massive disaster?
Economic Risks of Zero Interest Rates and Zimbabwe Economics of the Fed
"Mega-Banks and the Next Financial Crisis: Hedge-fund manager Paul
Singer recognized the risks of subprime mortgages and bet against them. Now he
warns that monetary policy could cripple American banks again," by James
Freeman, The Wall Street Journal, March 19, 2011 ---
http://online.wsj.com/article/SB10001424052748703899704576204594093772576.html?mod=djemEditorialPage_t
At the height of the housing bubble, hedge-fund manager Paul Singer was shorting subprime mortgages. By the spring of 2007, he was warning regulators on both sides of the Atlantic that the world was facing a major financial crisis.
They ignored him. Now the founder of Elliott Management says the biggest banks are headed for another credit meltdown. Among the likely triggers for the next crisis, Mr. Singer sees one leading candidate: Monetary policy "is extremely risky," he says, "the risk being massive inflation."
In some areas gas prices have reached $4 per gallon, and now Americans must brace themselves for higher grocery bills. This week the Labor Department reported that February wholesale food prices posted their sharpest increase since 1974. News like that has driven Mr. Singer to the history books: He treats visitors to his 5th Avenue office to a copy of a 1931 treatise on German currency debasement, Constantino Bresciani-Turroni's "The Economics of Inflation."
Mr. Singer—who launched Elliott in 1977 and has delivered a 14.3% compound annual return (compared to the S&P 500's 10.9%)—is not comparing today's Federal Reserve to the Reichsbank of the early 1920s. Rather, he's once again warning financial regulators. This time the message is: Don't take for granted investor faith in a major currency.
While at Harvard Law School, Mr. Singer turned down a research job with his intellectual hero, Daniel Patrick Moynihan, to pursue a career in finance. Today, he's still looking for heroes among the stewards of the major currencies. Central bankers, particularly at the Fed but also in Europe, "seem to be acting as if they have unlimited flexibility to ease monetary policy," he says.
He specifically targets the Fed's "unprecedented" policy of sustaining near-zero interest rates and its exercise in money-printing, "Quantitative Easing 2," that has it buying medium- and longer-term securities from the Treasury. "In effect they're treating confidence in fiat money—in paper money—as inexhaustible, that it's a tool that's able to be used not just in the throes of crisis," but also as "a virtually complete substitute for sound fiscal, regulatory and taxing policy."
Fed officials, he adds, "really seem to think that inflation is something they can deal with very easily and very quickly. I don't believe they're right." He notes that, in the late 1970s, inflation was only in the high single digits yet curing it required interest rates of 20% and a collapse of the bond market.
Mr. Singer further warns that investors shouldn't misinterpret apparently bullish signals from a rising market. "Of course printing money is going to support asset prices," but "it's very dangerous" and is not a substitute for trade, tax and regulatory reforms that make America an attractive place for job creation.
"What would a loss of confidence in the dollar actually look like? Gold going absolutely nuts," adds Mr. Singer, who is also a major donor to conservative intellectual causes and think tanks such as the Manhattan Institute. He observes that prices for many commodities are already near all-time highs, even with "kind of a soft recovery" in the U.S. and Europe, and robust growth in Asia. "Imagine if hoarding, speculation, investment positions in [hard assets] accumulate to cause commodities and gold to go rocketing up. Wages, prices will follow," he says.
As destructive as raging inflation would be, why would it hurt the big financial institutions? It could wreak havoc on the ability of big banks' corporate customers to make good on their obligations, Mr. Singer believes—and financial reform did little to reduce risks.
"Dodd-Frank has made the system more brittle and has shaped the next crisis in a very negative way," he warns. "The opacity of financial institution financial statements has not been addressed or changed at all. . . . We have a very large analytical research effort here and we have not found anybody that can parse" the sensitivity of big banks to changes in interest rates, asset prices and the like. "You can't do it."
Continued in article
Bob Jensen's threads on the bank bailout mess ---
http://www.trinity.edu/rjensen/2008Bailout.htm
So the question one obviously asks if one has the
background after reading that paragraph is: how is the New York Fed going to
make a $1.5 billion profit on that portfolio, by unloading it on the federal
government?
Adrienne Gonzalaz, The Jr. Deputy Accountant
"The Fed Debates Giving Up Those AIG Crap Assets," by Adrienne Gonzalaz,
Jr. Deputy Accountant, March 2011 ---
http://www.jrdeputyaccountant.com/2011/03/fed-debates-giving-up-those-aig-crap.html
When I
was in college at Iowa State University in 1957 Ronald Reagen was an activist
who gave a speech for the Democratic Party on campus.
The finest and most predictive speech ever given by Ronald Reagen was in 1964
when he explained why he was bolting from the Democratic Party ---
http://www.youtube.com/watch?
But in reality, Republicans were almost as
much at fault as Democrats for deficit spending.. George W. Bush was one of the
worst offenders in history while he was President of the United States. Unlike
President Reagen, President Bush did not use his veto pen to challenge wild
deficit spending.
"More Americans Dropping Out of the Labor Force," by Catherine Rampell,
The New York Times (Economix), March 23, 2011 ---
http://economix.blogs.nytimes.com/2011/03/23/more-americans-dropping-out-of-the-labor-force/
Teaching Case on the E-Filing Big Brother
Why the IRS stopped mailing out 1040 forms and instructions in 2011
Read that: Why the IRS stopped helping taxpayers who have no computers
and/or Web connections and forced them to pay for tax preparation help
No more mailed forms and instructions: A revenue booster for accounting
firms
Did the AICPA and H&R Block lobby for this?
From The Wall Street Journal Accounting Weekly Review on March 25, 2011
E-File or Else: What's New for Tax Season
by: Laura Saunders
Mar 19, 2011
Click here to view the full article on WSJ.com
TOPICS: Accounting, E-Filing, Individual Income Taxation, Tax, Tax Return Filing
SUMMARY: Tax season is in full swing. But something is missing: the forms the Internal Revenue Service sends out in the mail every year. It isn't a mistake. As part of a push to have more taxpayers file electronically, this year the IRS ended its decades-long practice of mailing paper packages to taxpayers. In 2009 it cost the IRS only 19 cents to process an e-filed return, compared with $3.29 for one on paper. There are other important tax-code changes to be aware of as well, many of them a result of December's sweeping tax legislation. They affect health insurance for the self-employed, charitable IRA rollovers, sales taxes and other items.
CLASSROOM APPLICATION: This article presents a good overview of some of the tax issues facing individuals this season. It offers an interesting reasoning for the government's push for e-filing.
QUESTIONS:
1. (Introductory) Why is the government pushing taxpayers to e-file their returns? Who can still file by paper? Who must e-file returns? Do you think this is a good policy? Why or why not?
2. (Advanced) What are the benefits of e-filing for taxpayers and for the government? What are the disadvantages? Do you e-file your returns? How has your views changed after reading this article?
3. (Advanced) What are each of the changes in tax law detailed in this article? Why have each of these changes been enacted?
4. (Advanced) How often does the tax law change? Why so frequently? How does this frequency impact planning for individuals and for businesses? What are the reasons for frequent changes?
Reviewed By: Linda Christiansen, Indiana University Southeast
RELATED ARTICLES:
Taking On Tax Breaks
by Emily Maltby
Mar 17, 2011
Online Exclusive
"E-File or Else: What's New for Tax Season," byLaura Saunders, The Wall
Street Journal, March 19, 2011 ---
http://online.wsj.com/article/SB10001424052748704396504576204522429318798.html?mod=djem_jiewr_AC_domainid
Tax season is in full swing. But something is missing: the forms the Internal Revenue Service sends out in the mail every year.
It isn't a mistake. As part of a push to have more taxpayers file electronically, this year the IRS ended its decades-long practice of mailing paper packages to taxpayers. In 2009 it cost the IRS only 19 cents to process an e-filed return, compared with $3.29 for one on paper.
There are other important tax-code changes to be aware of as well, many of them a result of December's sweeping tax legislation. They affect health insurance for the self-employed, charitable IRA rollovers, sales taxes and other items.
Yet the "e-filing" push will be the biggest and most jarring change for many. Although e-filing has caught on over the past decade—nearly 70% of 142 million individual returns were e-filed last year, up from 23% a decade ago—it has been least popular among wealthier taxpayers. To promote e-filing, the IRS this year stopped mailing forms to people's homes automatically and mandated that preparers of more than 100 returns e-file them. Next year, that figure drops to 11.
The upshot: "This is the first time many higher-income taxpayers with complex returns will have to decide whether to e-file," says Benson Goldstein, an official with the American Institute of Certified Public Accountants.
The IRS's effort includes new rules some see as heavy-handed. This year preparers who are required to e-file are prohibited from taking clients' paper returns to the post office, as many have long done. And clients have to sign a waiver saying no one dissuaded them from filing electronically. "This is a real pain and nobody likes it," says Janet Hagy, a CPA with her own firm in Austin, Texas, "but I don't want to get fined."
Taxpayers still may opt to file paper returns, of course. But there are early signs the IRS's campaign, which was ordered by Congress, is working. Lawrence Best, a New York CPA who figures he has prepared more than 30,000 returns in his 31 years of practice, says he was an "old dog who didn't want to learn new tricks" until forced to e-file this year. Now, he says, "I recommend it, and clients do it."
While e-filing may be good for the IRS, taxpayers should make their own decisions. There are important reasons why some people should stick with paper. Here is what you need to know, plus more on this season's other important changes: The Benefits of E-Filing
For most taxpayers, the biggest advantage of e-filing is that it is easy and can be free (if you don't count having to buy a computer and learn how to use it "free"). "I e-filed my own return free through the IRS website without a hitch," says Melissa Labant, a tax expert with the American Institute of CPAs, who is relieved she didn't have to go to the post office.
E-filing also is less prone to human error, both by the IRS and taxpayers. Electronic returns don't have to be entered into the system by hand, and the IRS's computers reject any returns with incorrect basic information such as Social Security numbers, birth dates (even of a child) and married names (they must match what is in Social Security records). This hair-trigger sensitivity is frustrating in the short run but prevents problems later.
Continued in article
Jensen Comment
This is good news and bad news for the government apart from the ease of
processing E-Filed returns. The good news is that taxpayers are making fewer
mistakes on their returns. The bad news is that many of those mistakes in past
years were in the favor of the government, e.g., taxpayers are now reminded by
consultants or software of many obscure deductions and tax credits such as the
various types of home energy credits and earned income credits.
There are of course volunteers helping the poor and elderly E-File their returns. Many of these volunteers are college faculty, college students, and church volunteers.
In reality the annual mailed booklet was in many ways more of a bother than a help. The tax rules and regulations are such a twisted caldron of spaghetti and meatballs that they made me, as a CPA and former tax accountant, confused to a point of paying for current tax software each year. I can't imagine that Granny got much of anything from reading the mailed tax booklet while sitting on the edge of her bed in a nursing home. It might've helped the GOP to get her to vote Republican in the next election, especially the appeal of GOP initiatives for a simple flat tax.
Bob Jensen's tax helpers are at
http://www.trinity.edu/rjensen/BookBob1.htm#010304Taxation
I am for socialism, disarmament, and, ultimately, for
abolishing the state itself... I seek the social ownership of property, the
abolition of the propertied class, and the sole control of those who produce
wealth. Communism is the goal.
Alex Baldwin, Founder of the ACLU
Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm
Return to
the Tidbits Archives ---
http://www.trinity.edu/rjensen/tidbitsdirectory.htm
Shielding
Against Validity Challenges in Plato's Cave ---
http://www.trinity.edu/rjensen/TheoryTAR.htm
· With a Rejoinder from the 2010 Senior Editor of The Accounting Review (TAR), Steven J. Kachelmeier
· With Replies in Appendix 4 to Professor Kachemeier by Professors Jagdish Gangolly and Paul Williams
· With Added Conjectures in Appendix 1 as to Why the Profession of Accountancy Ignores TAR
· With Suggestions in Appendix 2 for Incorporating Accounting Research into Undergraduate Accounting Courses
Shielding
Against Validity Challenges in Plato's Cave ---
http://www.trinity.edu/rjensen/TheoryTAR.htm
By Bob Jensen
What went
wrong in accounting/accountics research? ---
http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong
The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most
Accountants ---
http://www.trinity.edu/rjensen/theory01.htm#DoctoralPrograms
AN ANALYSIS OF THE EVOLUTION OF RESEARCH CONTRIBUTIONS BY THE ACCOUNTING REVIEW:
1926-2005 ---
http://www.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1
Bob Jensen's threads on accounting theory
---
http://www.trinity.edu/rjensen/theory01.htm
Tom Lehrer on Mathematical Models and Statistics
---
http://www.youtube.com/watch?v=gfZWyUXn3So
Systemic problems of accountancy (especially the vegetable nutrition paradox)
that probably will never be solved
---
http://www.trinity.edu/rjensen/FraudConclusion.htm#BadNews
Bob Jensen's economic crisis messaging http://www.trinity.edu/rjensen/2008Bailout.htm
Bob Jensen's threads --- http://www.trinity.edu/rjensen/threads.htm
Bob Jensen's Home Page --- http://www.trinity.edu/rjensen/