June 16, 2006

Accountant Unwittingly Makes the Case FOR Death Tax Repeal

Filed under: Economy,Taxes & Government — Tom @ 3:29 pm

From the New York Times’ letters section — (fourth letter; may require registration; HT Taranto of Best of the Web):

As a financial adviser, I spend much of my time helping clients decide how to handle their estate tax liability.

….. It’s not that hard to structure an estate to avoid the tax. That’s what the thousands of accountants, lawyers and financial planners do.

From my perspective, the estate tax is purely optional. So repeal is unnecessary except for the uninformed, the unfocused or those people who are unwilling to pay their financial planning team a little more to make the tax go away or be reduced.

People pay their professionals to avoid lots of income tax legally, and they do it every year. Why is it so hard for them to pay a little every few years to review the estate plan and avoid much or all of the estate tax?

This perfectly explains why the death tax SHOULD be repealed. How much tax is paid on a person’s wealth when he or she dies shouldn’t depend on whether or not you have availed yourself of the estate-planning industry. Financial planners could be helping their clients build their wealth instead of expending time, energy and endless documentation to avoid having it taxed. There’s no shortage of help needed out there in doing the former, if only financial planners and lawyers would lose their love affair with the latter (and death tax repeal would let them).

Repeal of the tax, or reducing its scope to paying capital-gains tax on actual gains at time of death, would be a win-win. Planners could better serve their clients or move on to work that adds value in other areas or accounting, investments, or the law. And as noted previously, it is probable that neither strategy (outright repeal or capital-gains treatment) would result in a loss of revenue to the Treasury; in fact, the more likely outcome would be MORE revenue.

The State of Ohio Has Recovered Fiscally: The Possible Impact

Filed under: Economy,Taxes & Government — Tom @ 1:26 pm

Straight from the Ohio Society of CPAs web site:

State revenue is exceeding budget estimates for fiscal year 2006, though any surplus will be used to replenish the state’s dwindling budget stabilization fund (BSF).

Total tax receipts exceed Office of Budget Management estimates by $350 million and state spending is down $585 million, according to Gongwer News Service. Should the numbers hold true, the state is on track to realize its first surplus since FY 2000.

Any surplus is destined to replenish the state’s budget stabilization, or “rainy day,” fund, which contains about half the money mandated by statute. This amount is 5 percent of the previous year’s state spending. In recent years, the legislature has raided the BSF to cover soaring Medicaid costs.

If any surplus remains after the BSF is replenished, remaining funds will be returned to taxpayers through the Income Tax Reduction Fund.

Three points about the $935 million swing to the better:

  1. Thanks to George Bush and Congress for the 2001 and especially 2003 tax cuts, which have finally filtered through to even poorly-run states like Ohio.
  2. This ought to be an argument to consider state tax cuts beyond whatever is going into the Income Tax Reduction Fund.
  3. IF spending can stay lower in the next fiscal year, IF the legislative version of Ken Blackwell’s Tax Expenditure Limitation (TEL) is enforceable (which appears to be in doubt), and IF the base from which TEL operates is actual spending and NOT what has been budgeted, the allowable spending increases under TEL might be appropriately low, and can stay low into the future.

Kelo New London Update: A Deadline, State Money, The Day’s FOI Request, and a Residents’ Petition Effort

Filed under: Economy,Taxes & Government — Tom @ 9:25 am

Yesterday’s New London Day (link requires registration after one day, and a paid subscription after seven days) appears to be the only publication paying attention to the Kelo holdout situation at the moment, even though:

  • Yesterday represented an important settlement deadline.
  • Connecticut’s governor reiterated the state’s intention to stick with its promise withdraw money from the Fort Trumbull project if settlements aren’t reached.
  • The New London powers that be refused a Freedom of Information request with what appears to be little justification.

First, about the deadline and the state money:

Fort Trumbull State Deadline Runs Out Today

City and state officials continued to hold out hope Wednesday that they could reach a deal with Susette Kelo and Pasquale Cristofaro, the two remaining holdouts in the Fort Trumbull redevelopment project, as today’s state-imposed deadline approached.

Gov. M. Jodi Rell said late last month that the state would withdraw additional funds it has offered for settlement packages unless the former property owners and the city reached agreement by today.

Rell also said the City Council should offer to relocate the houses of those who do not agree to settle to a single parcel in the 90-acre development site, and should allow the former owners to transfer the properties to their children. The council rejected those recommendations.

Mayor Beth A. Sabilia said Wednesday that negotiations with Kelo, the lead plaintiff in the legal challenge to the state eminent domain law used to seize the properties in the Fort Trumbull neighborhood, were “ongoing,” but would say little else, citing the sensitive nature of the negotiations.

A spokesman for the governor declined to comment.

If I’m reading this correctly, I’m stunned. It appears that the City is so bent on not giving immediate-family transfer titles back to the holdouts, and so insistent on eviction, that it will stick to its guns even if the Governor, as promised, takes state money off the table.

It’s hard to see where this makes financial sense. It only appears to make sense in the context of what Investors Business Daily last week called “the city’s fixation with throwing out residents for a tarnished trophy” (i.e., “we have a Supreme Court ruling, therefore, we must win.”). E-mail me is I’m missing something obvious here.

Now to the Freedom of Information request:

The city cannot yet disclose the terms of settlements because the settlement agreements include that condition and because the plaintiffs who have settled do not wish the terms to be disclosed at this time, NLDC President Michael Joplin said last week.

City officials denied a request under the Freedom of Information Act for copies of the settlement agreements this week. The Day has appealed that decision to the state Freedom of Information Commission.

Based on this previous post that excerpted a Day editorial, it appears that the plaintiffs don’t have the right to impose the gag on settlement information that they and the city would prefer. Hence the appeal.

It’s not too tough to see where Michael Cristofaro stands at the moment: “May 31st didn’t mean anything to my family,” Cristofaro added, a reference to the city’s original deadline for plaintiffs to settle and surrender their properties. “June 15th doesn’t either.”
____________________________

UPDATE: Today, The Day reported that the state-imposed deadline passed at midnight without a resolution. It also noted that “The Coalition to Save the Fort Trumbull Neighborhood plans to submit petitions early next week calling on the council to either repeal its June 5 authorization to Londregan to evict the remaining plaintiffs and collect use and occupancy fees or submit the matter to voters in a referendum. Thirteen people have collected hundreds of signatures of city voters, Coalition Co-Chairman Neild (sic?) Oldham said Thursday.”

Bizzy’s AM Coffee Biz-Econ-Life Links (061606)

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 8:01 am

Free Links:

  • More ho-hum job news“Rolls-Royce Corp. will add 600 jobs to its plant in the city (of Indianapolis) over the next eight years as part of a $145 million expansion, officials said Wednesday.”
  • Even more ho-hum job news“DirecTV, the nation’s largest satellite-TV provider, announced it will add 1,000 jobs as it moves to make Denver the hub of its sales and service support.”
  • Still more jobs news“Medrad Inc.’s second major expansion announced in the last seven months could add 500 jobs at a Butler County (PA) site over the next five years.”
  • The jobs just keep on coming“About 750 jobs will be added at DaimlerChrysler AG’s assembly plant later this year as production will begin on the Dodge Nitro sport utility vehicle, the Chrysler Group said Thursday.”
  • Betcha didn’t know this about the wonders of state-run health care in Germany — Disgruntled German doctors have been engaging in what the BBC euphemistically calls “industrial action” (i.e., not working, or not working as much, thereby shortchanging patient care) for three months. Now up to 20,000 doctors are saying they will go on an indefinite strike.
  • Something is serious awry here, and somebody had better get a handle on it (HT Hard to Do Any Worse via Techdirt):

    Leon County (FL) Elections Supervisor Ion Sancho doesn’t mind letting the state know when he’s testing voting machines, but he doesn’t think the Secretary of State’s office should tell him how – or whether – he can do it.

    Sancho said he will attend a public hearing in the R.A. Gray Building at 1:30 p.m. Monday to discuss a pending rule change. He said the new rule would require a representative of the Department of State to be present whenever a county runs a test on voting machines.

    “I don’t, for the life of me, understand why they want to do something like this,” Sancho said Saturday. “I have no problem with notifying them, but I don’t think I need their approval.”

    The requirement that someone from Florida’s Department of State be there is not unreasonable, but their ability, if they have it, to quash testing is not.

    The two blog links noted something the Tallahassee newspaper report didn’t –

    Last year, Sancho allowed computer security experts to demonstrate in a test election that election results could be altered undetectably. The demonstration sent shock waves across the country and resulted in many states issuing increased security procedures in an attempt to mitigate the security vulnerabilities it revealed.

    This reeks of heavyhanded tactics from the voting machine vendors. As the Techdirt post noted, this could be a disaster waiting to happen:

    No matter what your political leanings may be, it’s a travesty that so few people seem that concerned about making sure election results are accurate — and that so many politicians seem to be going out of their way to make it even harder to make sure those votes are accurately counted.

    As I said last month about establishing controls over electronic voting: “If touch-screen voting can’t be made to accomplish these (control) objectives as well as a paper-based system can, does, and has, it should be abandoned.”

Links Requiring Free Registration:

  • More ho-hum housing news“Climbing interest rates and cooling speculative demand is putting pressure on the housing boom, but as long as jobs continue to be created and builders curb production, the sector will experience a soft landing, according to Harvard’s Joint Center for Housing Studies.”
  • Another story on blue state to red state migration — Not labeled as such, of course, in The New York Times, but here’s the giveaway quote in the piece: “When the jobs don’t grow, the people go.” It’s apparently so bad that a Democrat, gubernatorial candidate Eliot Spitzer, is proposing $6 billion in tax cuts and $11 billion in spending cuts — which of course leads to the question of where the heck current alleged Republican Governor George Pataki has been all these years while the brain drain was occurring. It also makes me wonder how Mr. Pataki can possibly, as he does, consider himself presidential material.

Positivity: Cancer survivor gets new look on life

Filed under: Positivity — Tom @ 6:02 am

Carolyn Choate of Nashua, NH is a cancer survivor who has handled her victorious battle with an unusual flair. Just read on:

June 12, 2006

….. When she was diagnosed with aggressive breast cancer three years ago at the age of 45, she was told by some doctors that she might have only three years to live. Immediately, she went into survival mode – finding the best doctors, researching her disease and undergoing aggressive therapy in the form of a radical mastectomy, chemotherapy and radiation – none of which left her feeling or looking pretty.

Besides losing her breast, she lost all her hair and eyebrows. Her nails fell off and her skin was ravaged by the therapies, and because the treatment had affected her tear ducts, salty hot tears fell down her face 24 hours a day. And because she had estrogen-sensitive breast cancer, she had to have a hysterectomy and went through instant menopause – with all hot flashes, dry skin and every symptom that usually occurs to women gradually – all at once.

And while all this was happening, she continued to work, going on air at TV 13 with wigs that – in combination with hot flashes – had her swooning under the hot lights of the studio.

“But I didn’t care about my looks.” Choate said. “All I could think about was staying alive. At one point, I just took off my wig and put on a baseball hat when I went on air. I remember six months into treatment when I thought I was dying, I didn’t want to buy a new pair of shoes, even though I needed them. I figured they would outlast me and it seemed like a waste of money.

“I wasn’t feeling sorry for myself. I was just being practical. That’s one thing about cancer. It puts things in perspective. All of sudden, it doesn’t matter how you look. I was focused on how my daughters and my husband and my gardens would get by without me after I died. I wasn’t thinking about how puffy my eyes looked.”

Many people who survive cancer feel the day you feel like putting on mascara or care if your earrings match your blouse is a sublime event. It means you’ve moved on from survival to living.

It’s that epiphany that Choate celebrates this week on her signature show “142 Main” which airs on TV 13 (channel 13 on Comcast and 31 on Adelphia) for the first time today at 7 p.m.

She remembers about a year after her diagnosis, just finishing up treatment, the doctor found what looked to be a suspicious mass on her collarbone. She and her doctors were concerned that it was a recurrence of cancer, which at that point, would have most likely meant certain death. But then, the tests came back negative. The mass was benign.

“Until I heard that. I was literally planning my funeral,” Choate said.

Then she felt her entire life shift. She tells her “142 Main” audience – “I was determined not only to survive, but thrive.” She said through medical treatment, lifestyle changes including diet and exercise and a spiritual renaissance – she felt reborn.“I really felt like I was a miracle. That I was alive because I had to make a difference in the world.”

And after three years of eating carefully, exercising, founding and raising money for the Adult Learning Center Breast Cancer Education Initiative for Low Income and Minority Women, teaching at the foundation and finishing her master’s degree in writing at Rivier College, she felt great. And she was ready to “do something to make my outside match my inside.”

Choate had her husband make a tape of her, no makeup on, her mastectomy scar in full view, as a way of applying to the ABC television show “Extreme Makeover.”

“But I never heard back,” she said.

Not one to take no for an answer, Choate decided to create her own makeover show, starring her.

“Who needs Hollywood when you have such great professionals right here in Nashua?” she said.

….. Choate said she did this special show to celebrate her survival, but more to inspire others who have just been diagnosed or who are in the midst of treatment, to know “there’s life after cancer – a good life.”

She ends the piece by lighting three candles on a bran muffin (her new healthy outlook on life precluded her from using a gooey, fatty cupcake).

She looks straight into the camera, her new veneers sparkling. “If you’ve just been diagnosed with cancer, you’re in my prayers. If I’ve been an inspiration to you, you’ve answered mine.”