False Alarm

I have never taken seriously the concerns by the big government fans linking the stock market decline to the efforts to allow people to have some control over their retirement funds. As I have always said, and is echoed in this piece, only an idiot would put all of his/her retirement funds in high-risk speculative stocks. Practically any investment would yield a better return than the Social Security Ponzi scheme. In fact, in most cases, you could put your money under your mattress and still be better off than flushing it away with our rulers in DC.

KMK

Tax Cuts Not Gonna Happen?

You can’t say National Review doesn’t have a breadth of opinion on topics, both on their main page as well as on their blog. Just the other day, they had an optimistic article by Bruce Bartlett on the likelihood of new tax cuts being enacted before the end of this year. Then, they have this piece from Joel Mowbray claming that there is no chance of that happening.

There couldn’t be a better illustration of how disorganized our rulers in DC are than this. Of course, the possibility of heavy military action does change the national priorities somewhat. It also reinforces my constant warning to only act on tax laws that are really here and don’t make plans on any that are promised.

KMK

Governors’ Fiscal Report Cards

The Cato Institute has just released its report card on the fiscal responsibility of each of the governors around the country. The report card’s grading is based on 17 objective measures of each governor’s fiscal performance. Governors who have cut taxes and spending the most receive the highest grades. Those who have increased spending and taxes the most receive the lowest grades.

This year, only two governors earned the highest grade of A: Bill Owens of Colorado (76) and Jeb Bush of Florida (67). Four governors received the lowest grade of F: Gray Davis of California (42), Don Sundquist of Tennessee (40), Bob Taft of Ohio (40) , and John Kitzhaber of Oregon (30). Our Arkansas GOP Governor Mike Huckabee scored a 52, for a “grade” of C.

You can also download the full 65 page pdf report.

KMK

Auto Leasing Exposed

Here is some more good information on why leasing vehicles is normally a big rip off for consumers, but very profitable for the leasing companies.

KMK

2003 Tax Rates

For those people who like to do some advance planning, I have posted the 2003 individual income tax rate schedules, plus the inflation adjusted amounts for personal exemptions and standard deductions.

I have also included more detail on the phase-outs of the personal exemptions and itemized deductions for the people who have been classified as unworthy evil rich by our rulers in DC. I also added this extra info for 2002.

This new info came courtesy of Research Institute of America.

KMK

Equal Opportunity

I’ve been getting a kick lately out of Bill O’Reilly‘s rabid reaming of attorneys who defend slimeballs who they know to be guilty of heinous crimes, such as the recently convicted murdering pedophile in San Diego, David Westerfield. Bill’s screaming fits are very entertaining and reveal a very real and passionate concern.

He has an excellent point and one that I have long agreed with regarding the morality of attorneys who see no problem assisting the scum of the earth escape justice for their vile actions. That is the very reason I stopped watching the David Kelly show, The Practice, a few years ago. The underlying theme of that show is that even the most disgusting dregs of humanity deserve the best legal defense possible. I just couldn’t stomach rooting for the heroes of the show to use various legal tricks to help their evil clients go free.

I have mentioned frequently that FoxNews is the only television network that has any credibility in terms of objective reporting of the news. As a relatively new network, they still have a problem attracting the top tier of advertisers and fill most of their ad slots with the same kinds of relatively sleazy vendors that are usually relegated to very late night on broadcast TV. So far, it seems that the ambulance chasing law firms that are recruiting clients for various negligence and class action cases haven’t been very offended by Bill O’Reilly’s crusade against unethical attorneys because they continue to buy time on FoxNews.

KMK

Auto Mileage Rates For 2003

Due to the slightly lower fuel prices as of June 30, IRS has announced the standard rate for business miles will be 36.0 cents for 2003. This is a half cent decrease from the 36.5 cents for 2002 business miles. Companies that base their employee reimbursements on the IRS rate have plenty of time to make the necessary changes.

In all of my almost 27 years in the tax business, this is the earliest I have seen IRS release their official mileage rates. It wasn’t long ago that they were announcing their standard rates in late December or early January, causing a mad panic for everyone who uses that rate for such things as official reimbursement plans.

I don’t mean to be a nitpicker here, but I’m not so sure that calculating the official deductible cost of operating a vehicle this early is realistic, especially in these uncertain times with the Middle East. The largest changes in the IRS rates have been caused by changes in the price of fuels. If a big war starts up in Iraq or other oil producing countries, and the price of gas skyrockets, IRS will either have to raise the official rate or people will need to use their actual expenses when calculating their vehicle deductions.

Of course, if there is a huge change in the price of fuels, we will probably see IRS issue a mid-year change in the rate, as they did in 1999, where it was 32.5 cents per mile from 1/1/99 through 3/31/99 and 31.0 cents per mile from 4/1/99 through 12/31/99. That makes taxes & accounting for vehicle expenses even messier than it normally is.

Likewise, there will be changes in some of the other IRS mileage deductions.

The standard mileage rate for use of a car for medical reasons will be 12 cents a mile. The 2002 rate is 13 cents a mile.

The standard mileage rate to use when computing deductible moving expenses will be 12 cents a mile. The 2002 rate is 13 cents a mile.

The standard mileage rate for the use of a car when providing services for a charitable organization remains at 14 cents a mile.

Again, this just illustrates the immense intellect of the IRS head honchos. They have been able to determine through their extensive research that vehicles cost less to operate for these other purposes than for business. This is quite different from the operating costs calculated by such unbiased sources as Hertz, who issue annual press releases claiming that it costs well over a dollar per mile to operate a car. Since my formal education in this area consists of nothing more than Auto Shop in high school, where we never covered this aspect of auto science, I have to trust the IRS brainiacs to steer us in the right direction.

KMK