Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for September, 2003

Posted by taxguru on September 25, 2003

Democrats: Repeal some tax cuts – Why it’s not safe to trust the DemonRats with the economy any more than with our defense.

Our Over-budget Government – As I’ve always said, the projected costs of government programs are always heavily understated. They always turn out to be hundreds of times higher. Of course, by then, the rulers who used those numbers, as well as the mind-numb sycophants in the press who accept them as legitimate, are long gone from the scene.

The Nevada tax increase – A big disappointment to the tax refugees who fled the PRC to relocate to the low tax neighboring state.

Grover Norquist’s Schwarzenegger campaign – Trying to get Arnold to take the no new taxes pledge.

When Texas Governments Compete with the Private Sector, We All Lose

Benefit Cuts for Baby Boomers? – What I’ve always predicted would be in the future for Social Security. Also why I’ve considered it insane for people to continue to flush their money down this sewer when there are so many very easy ways to hold onto the money and preserve a more secure future for themselves.

ACU Applauds Senate’s Delay of $13 Billion Tobacco Tax Increase – Nicotine addicts are such tempting targets for the money sucking vampires at all levels of government.

U.S. Income Gap Widening, Study Says – Any time you see a story like this, especially from an openly socialist publication, you know they are trying to set the stage for the inevitable solution to this “problem,” wealth redistribution by our imperial rulers.

Millions of Micro-Managers Share Blame for State’s Crises – To be fair, the governor isn’t the only one who needs to be recalled. He had plenty of help from the legislators in screwing up the state. Toss them all out and pick names at random from the phone directory, and there will be a better chance of fixing things than allowing the same crooks to stay in Sacramento, regardless of who, if anyone, becomes the new governor.

Posted in Uncategorized | Comments Off on

Shameless Plug

Posted by taxguru on September 25, 2003

Sherry has completely revamped her Mother Earth’s Treasures website to focus on the popular slide bracelets and other jewelry items that she has had such good success selling on eBay. She has been scouring all of her suppliers and buying up all of their inventory of the most popular styles. Cutting out the middleman (eBay), she passes the savings on to everyone by selling directly from her newly redesigned website.

Posted in Uncategorized | Comments Off on Shameless Plug

Posted by taxguru on September 25, 2003

Thanks to StangeCosmos for the following quotes:

The government is like a baby’s alimentary canal, with a happy appetite at one end and no responsibility at the other.” –Ronald Reagan. ………This reminds me of my infamous poster.

If you think health care is expensive now, wait until you see what it costs when it’s free.” –P.J. O’Rourke

Posted in Uncategorized | Comments Off on

Posted by taxguru on September 25, 2003

Your Tax Dollars at Work – Remember these big wastes of tax dollars next time you hear some lefty whine about the tax cuts for the rich taking food out of the mouths of starving babies. How many school lunches can be paid for from the money being flushed down the toilet on stupid studies and other boondoggle projects?

Political spin tiring as lies, damned lies – A tired old tactic to defend high taxes is to point out how they are even higher somewhere else. This is easy to do with each individual type of tax because they vary drastically all over the country. However, when it comes to overall combined tax burden, as well as the hidden tax in the form of endless regulations micro-managing every aspect of life in that state, there is no way to defend the position that the PRC’s taxes are too low. Unless, you are a socialist like the two nut-jobs (Huffington and Camejo) in the debate last night.

Posted in Uncategorized | Comments Off on

Posted by taxguru on September 25, 2003

Congress Asked About Internet Sales Tax – This is a big issue for several reasons, not just the fact that State governments are desperate for new tax revenues. As an accountant, I just dread the thought of vendors having to keep straight all of the sales tax rates all over the country and needing to file hundreds of different sales tax returns for each of the cities, counties and states in which their customers reside.

There are arguments on both sides of the fairness issue related to this. Local in-state retailers can make the claim that it’s unfair competition for out of state vendors to be able to offer tax free sales. However, the flip side is that out of state vendors are not using any of the local state’s infrastructure (roads, police, etc), which is paid for by those sales taxes. There is also the convenience factor to consider. Buying from out of state, you have to pay for shipping costs and wait for your item to arrive. Buying from a local retailer, you can take the product home right away.

Posted in Uncategorized | Comments Off on

Going To The Source Of Spam

Posted by taxguru on September 24, 2003

There has been a lot of news coverage of the recently signed law in the PRC that will supposedly penalize spammers $1,000 for each message they send. Enforcing that new penalty, which is supposed to take effect 1/1/04, against the scumbags who churn out the actual email will be difficult. What has more potential than hitting those spawns of Satan in the pocketbook is penalizing the vendors of the products they are advertising.

I have been noticing over the past several months dozens of spam messages each day trying to interest me in signing up for the Stamps.com service. I know that these spams were being sent by freelancers, but they do reflect badly on the Stamps.com management. This morning, I sent the press contact office at Stamps.com the following message.


Dear Stamps.com:

I am currently working on an article on ways to deal with spam. One is to prosecute and in other ways punish the advertisers who allow their products to be promoted via spam.

I receive well over two dozen spams each day pushing your service. I have been using your service for a few years, so I am already a customer. I do find it quite annoying to have to wade through dozens of spam solicitations every day.

As you may have heard, the governor of California just signed a law, effective 1/1/04, that will penalize spammers and the advertisers $1,000 per item.

For my article, I am interested in learning what, if anything, you are doing to police your affiliates from the abuse of spam. I would also be interested in knowing if you have a mechanism for recipients of spam advertising your service to forward those emails to a special email address for you to follow up on.

I am hoping to publish this article over the coming weekend. Your comments on these points would be greatly appreciated.

Kerry Kerstetter

Publisher

Kerstetter Letter

http://www.TaxGuru.net

A few hours later, I received the following reply from Stamps.com, expressing complete ignorance of the spam being sent on their behalf.


We received your complaint regarding an affiliate that may be using

unsolicited email addresses to send our offer. This would certainly

violate the rules of our affiliate program and I would be interested in

getting the original email that you received so that we can aggressively

pursue the responsible party. Thank you for taking the time to bring

this to our attention as we do not support the use of unsolicited bulk

mail.

Robert Bowman

Business Development

Stamps.com

3420 Ocean Park Blvd. Ste. 1040

Santa Monica, CA 90405

310-581-7206 office

To show Mr. Bowman exactly what I was talking about, I am now forwarding him each of the spams I receive advertising the services of his company. If others do the same thing, there is a better chance of Stamps.com exercising some of its clout to shut down those affiliates. Mr. Bowman’s email address is: rbowman@Stamps.com

My next target will be NetFlix, which is advertised in at least a dozen spams a day.

Posted in Uncategorized | Comments Off on Going To The Source Of Spam

Terminating Taxes In The PRC

Posted by taxguru on September 24, 2003

Arnold has obviously been receiving some good advice in his campaign to improve his focus on battling taxes and try to convince Republicans that his isn’t just a typical RINO. If what he claims in this column for the Wall Street Journal is true, that is step in the right direction. He does still need to counter the fact that he supports larger and more expensive government programs.

Posted in Uncategorized | Comments Off on Terminating Taxes In The PRC

Section 179

Posted by taxguru on September 24, 2003

The newly increased limits on the Section 179 expensing election have generated some confusion. One is the effective date, mainly for corporations that have fiscal years ending in a month other than December, which is how I advise most of my C corp clients to set theirs up. Since almost all of my C corp clients are wisely using a non 12/31 fiscal year, I have had to break the bad news that the tax returns I am now preparing, for years ending in 2003, have a Section 179 limit of $24,000. The new $100,000 limit will apply to the next year, that starts in 2003 and ends in 2004.

There is also some confusion regarding the purpose and benefits of the Section 179 expensing election, such as in this email I received last week from a reader:


With the new limit of $100,000 to expense equipment – – – –

Is my understanding correct that you can only expense items purchased up to $100,000 so long as it does not result in a negative or loss for the business. Any amounts that can not be expensed must then be depreciated as normal over their life. If this is truly the case – what good does that do for the small business guy – who does not make enough to expense anywhere near that amount against?

My response:


You are correct that the Section 179 expense allowable in any single year is limited by the overall taxable income. Any excess can be carried over to future years; or what often do, is opt out of the Sec. 179 and claim normal depreciation, that often gives a higher net loss, which can be carried back to recover previously paid taxes.

The reasoning and potential benefit behind having larger immediate deductions for new equipment purchases is to avoid the situation where a small business owner has plowed all of his/her profits and liquid cash into those purchases. If they are not immediately deductible, there could be a paper net taxable profit; yet there might be no cash left with which to pay the taxes. This kind of thing does happen a lot, plus situations where there is a paper taxable profit, but because the owner used all of the available cash to stock up on inventory (not deductible until sold), there was no money left to use to pay the taxes. Including the cost of new equipment along with other operating expenses does usually give a better representation of net cash generated from the business and thus makes it easier to pay the taxes on any net income.

Posted in 179 | Comments Off on Section 179

Posted by taxguru on September 23, 2003

Wasting a good opportunity – The mere thought of reducing government waste by just one percent panics the libs, who literally scream bloody murder every year if the expenditures for their many government give-away programs isn’t increased by at least twice the inflation rate.

Backers of tax-freeze plan offer way – Colorado’s version of Proposition 13, to limit the growth in property taxes.

Greenpeace Accused of Violating Tax Law – There’s about as much chance of this and other eco-terrorist organizations being disciplined for breaking the laws related to their tax exempt status as there is for anything to happen to the black churches who allow themselves to be used by DemonRats for their political campaigns. In other words, none.

Posted in Uncategorized | Comments Off on

Posted by taxguru on September 22, 2003

A big difference between real hurricanes, which are acts of God, and the ever increasing deficit in DC, is that it is caused by careless spendaholics with no fiscal discipline. While nothing can be done to prevent hurricanes, deficits can be controlled, if the right people are in office.

Posted in Uncategorized | Comments Off on