Tag Archive for congress

Downgrade

August 9, 2011 Editorials Comments Off
National Security
Joe Boyles – Guest Columnist

Last week’s downgrade of United States Treasury bonds by Standard and Poor’s is historic.  S&P has been rating our government bonds since World War I; this is the first downgrade.  The other two international rating agencies, Moody’s and Fitch, have not followed suit … yet — but can similar action be that far behind?

The fundamental reason behind the downgrade is our public debt, now approaching $14.5 trillion.  This level of debt is about 70 percent of our gross domestic product.  That’s bad, but the future looks even bleaker as the Obama Administration projects annual deficits in excess of a trillion dollars for as far as the eye can see.  This is unsustainable … which the S&P recognized when they downgraded our bonds from AAA to AA+.

The battle over the debt ceiling which concluded (temporarily) before the August 2nd deadline was a precursor to the downgrade.  The president and his party wanted a balanced approach which would include raising taxes on “millionaires and billionaires.”  (Jargon rhetoric like this makes my head explode.)  The Republicans countered with spending cuts and no tax increases.  I’m not certain who “won” the debate, but I am certain that we’ve turned the corner on the debt ceiling – no longer will Congress blindly raise our “credit card” limit as they have done dozens of times without some sort of debate on the prudence and what must give.  The days of blank check spending are over.

If that message needed reinforcement, then S&P delivered the coup de grace with Friday’s action.

Meanwhile, the president appears feckless in his response.  No president can control the economy, but he gets credit for times when things go well and blame when they don’t.  Right now, he’s getting a lot of criticism.  Will this hold true 14 months from now when the course of the next election is set.  Who knows what will happen between now and then, but economies are like aircraft carriers at flank speed – it takes time and space to slow and turn them around.

Let me give you a formula for getting this economy rolling again.  First, let’s decrease federal spending.  That means tackling entitlements and reforming them for the 21st Century, not the New Deal and Great Society they were created for.  Second, let’s reform the tax code and make it flatter.  Remove a bunch of silly loopholes that accumulate through lobbying by special interests.  Third, let’s pull the shackles off business in the form of health care mandates, environmental rules based on poor science and general regulation.  Fourth, let’s begin domestic energy (oil and gas) exploration and production and watch tens of thousands of jobs be added to the economy.  Then, let’s stand back and watch the American economy grow impressively and lead the world as it should.

Do I believe that Barack Obama can provide the leadership to make these things happen?  In a word, no.  He is ideologically incapable of closing the gap between the possible and the likely.  His quiver is empty.  The revolver is spent – no bullets, silver or otherwise.

While the American economy is headed downhill in a hurry, the president is out raising obscene amounts of money to finance his billion dollar reelection bid.  Seems out of touch, doesn’t it?  Who’s to blame for the economic morass?  According to Obama, everyone and everything but him.  More signs of unreality.  What solutions does he offer?  More spending on unemployment insurance, investment in green technology, blah, blah, blah.  You know Mr. President, if you keep digging the debt hole, sooner or later you’ll end up in China … where most of our dollars are headed anyway.

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THE AMT: WHAT’S IT ALL ABOUT?

July 15, 2011 Editorials Comments Off

Business & Tax Insights

By Mark Buescher, C.P.A.Guest Columnist

Many taxpayers have never heard of the alternative minimum tax, but many individuals get hit with this extra tax and do not even understand it.  As the government seeks additional sources of revenue, AMT as it is commonly known, is expanding and more “average” taxpayers are now subject to the tax.

The original idea behind this tax was to prevent people with very high incomes from using special tax benefits to pay little or no tax.  However, the AMT has increased its reach and now applies to some people who do not have very high income or don’t claim many special tax benefits.

Proposals to repeal or reform the AMT have languished in Congress for many years, but effective action does not appear to be forthcoming in the near future.  As it stands, almost anyone is a potential target for this tax.

In simplistic terms, the AMT is nothing more than a parallel tax. First you compute your regular income tax.  Then you compute your minimum tax, and your “alternative” is to pay the greater of the two.

Whereas the regular income tax is computed on taxable income (adjusted gross income less itemized/standard deductions and personal exemptions), the AMT begins with adjusted gross income less deductions, adds back various deductions not allowable for AMT purposes, applies an AMT exemption ($48,450 for single taxpayers, $74,450 for married taxpayers) and is computed on the remaining balance.  The exemption phases out at higher income levels.

One reason that the AMT could be greater than your regular tax is that while the regular tax has graduate rates (from 10% to 35%), the AMT has only two rates, 26% and 28%.  Many deductions allowable for regular tax purposes aren’t allowable for AMT purposes.  The most common of those deductions include (but are not limited to) the following:

Taxes.  No AMT deduction is allowed for state/local income taxes, real estate taxes, or personal property taxes.

Miscellaneous itemized deductions.  No AMT deduction is allowed for unreimbursed employee business expenses, investment expenses, or any other similar miscellaneous deduction.

Large investment income.  For the regular tax, there is a special tax rate (sometimes as low as zero) for qualified long-term capital gains and dividends, but for AMT purposes, there is no special lower tax rate to apply to this income.

Congress was successful in making it difficult to avoid the AMT.  AMT planning requires the understanding of how the AMT is computed and how the various AMT non-allowable deductions factor into your tax return.  Obviously, the AMT can be difficult and complicated, but with a greater knowledge of its makeup, you may be able plan for its impact.

Mark Buescher, CPA, is owner and principal of Buescher and Ruff, LLC, a local full service accounting firm in Madison, specializing in tax preparation, business consulting and tax planning.  Tax laws contain varying effective dates and numerous limitations and exemptions that cannot be summarized easily.  For details and guidance for your specific situation, contact your tax advisor.

 

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CRENSHAW VOTES TO REPEAL OBAMACARE; SUPPORTS REPLACEMENT WITH REFORMS TO LOWER HEALTH CARE COSTS, GROW ECONOMY

January 20, 2011 Editorials Comments Off

Submitted by Ander Crenshaw’s Office

WASHINGTON, DC – Congressman Ander Crenshaw today (1/19) voted to repeal ObamaCare and will fight on to replace the new law with reforms that will lower health care costs and grow the economy.

“Dollar for dollar the numbers didn’t add up when I opposed ObamaCare before, and they don’t add up now. Raising taxes, imposing new mandates, and increasing uncertainty for employers and entrepreneurs is not what we need in a time of double digit unemployment and massive debt,” said Crenshaw, who urged his colleagues to support repeal in a House floor speech. “That’s why I support this law’s repeal and back its replacement with common-sense reforms to lower health care costs and protect jobs.”

“My constituents did not ask for policy that would weaken our economy and eliminate jobs. They didn’t ask for mandates to stand in the way of economic progress. They didn’t ask for cuts to Medicare.  And, they certainly did not ask for costly new taxes,” Crenshaw continued. “Yet, that’s what they have, and Congress is now in the position to brighten this stormy economic picture with policy that makes sense.”  

“My focus remains on the positive: passing reforms that stimulate the economy, like tax cuts and less red tape; on making sure patients can choose their own doctors and get the treatment they need when they need it; and on making sure the government doesn’t control delivery of health care in this country,” said Crenshaw. “These are the types of policy changes my constituents told me they wanted, and I’m standing by them as we move forward.”

Congressman Crenshaw voted against the Democrats’, 2,000-page, budget-busting health care bill on November 7, 2009 and again on March 21, 2010. He has a strong record of supporting health care reform and supported the Republican plan in November, 2009. The Congressional Budget Office found that plan would lower health care costs, increases access, maintain Medicare benefits, end lawsuit abuse and preserve the doctor/patient relationship all without raising taxes.

Crenshaw has a strong record of supporting health care reform and has supported the following steps to cuts costs, increase accesss, and restore choice by:

• Erasing arbitrary rules that currently restrict consumers from purchasing across state lines.

• Prohibiting insurers from discriminating against a consumer based on pre-existing conditions, one’s health history or future risk.

• Making insurance plans portable so if you change jobs, you don’t have to change plans.

• Mandating all insurance providers describe their plans with plain language so consumers know what they are getting.

• Allowing small businesses, the self-employed, and others to band together and purchase health insurance at lower costs, resulting in more coverage for more people.
• Passing comprehensive medical liability reform that will prohibit frivolous lawsuits that cost our country $126 billion every year and allow doctors to freely provide the best care possible.

• Offering immediate and substantial financial assistance, through new, refundable and advanceable tax credits to the working poor.

• Promoting prevention and wellness by giving employers and insurers greater flexibility to financially reward employees who seek to achieve or maintain a healthy weight, quit smoking, and manage chronic illnesses like diabetes.

• Rewarding high-quality care, instead of encouraging health care providers to order more and unnecessary services.

Crenshaw has co-sponsored a number of common-sense health reform bills, including the following pieces of legislation:

  • Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act 

(H.R. 1086) – Medical liability reform bill that would limit non-economic damages and statute of limitations on lawsuits, and restrict attorney fees.

  • Small Business Health Fairness Act of 2009 (H.R. 2607) – Small business health plan reform bill that would increase bargaining power of small businesses with insurance providers, lower costs by as much as 30%, and free small businesses from state mandates.
  • Promoting Health and Preventing Chronic Disease through  Prevention and Wellness Programs for Employees, Communities, and Individuals Act of 2009 (H.R. 3468) – Bill would provide citizens with a credit of up to 50% of wellness program and make competitive grants to eligible entities to plan and implement prevention and wellness programs that promote health and wellness and prevent chronic disease.
  • Improved Employee Access to Health Insurance Act of 2009  (H.R. 3821) – Bill would prohibit states from establishing a law that prevents an employer from instituting an auto-enrollment process for coverage of a participant.
  • Health Insurance Access for Young Workers and College Students Act of 2009 (H.R. 3887) – Bill would improve health insurance coverage of dependents by allowing young adults to stay on their parents’ plans until 25 years.
  • Health Care Choice Act (H.R. 3217) – Bill would allow for the purchase policies across state lines.
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