FrankenTax

Hopefully, we will hear more discussions like this on how the Alternative Minimum Tax (AMT) has grown out of control. It has evolved into a kind of blob monster, attacking & devouring everyone in its path, middle income people as well as the evil rich who were its original target. Try as they might, more & more people are drawn into its path just by normal inflation.

Another plug for the most active group battling the evil AMT: ReformAmt.

KMK

Pyramid Double Scam

These mild mannered suburban soccer moms in Sacramento weren’t satisfied just running an illegal pyramid scheme. They actually rigged the charts so that they were able to steal even more money from the dupes they lured into their plan. They figured that anyone stupid enough to even participate in a pyramid scam wouldn’t be smart enough to spot any shenanigans with the official record keeping. No honor among thieves.

KMK

Investing In Politics

I have mentioned quite often how the best investment possible is with campaign contributions (aka bribes). For a few thousand dollars, it’s often possible to receive millions of dollars worth of tax breaks or government largesse back.

Sometimes, people cut out the middlemen, often through the initiative process. Here in Arkansas, there are frequently ballot initiatives attempted to allow certain companies or families to have a casino monopoly. Just as with tax cut initiatives, these are always removed by opponents before the people are given a chance to actually cast their votes.

In the PRC, there is an initiative (51) that, according to this article, is a very similar thing. The people funding the petition drive stand to reap billions of dollars in immediate benefits if it passes. As can be expected, the rulers aren’t happy about being out of the loop on this one.

KMK

Scam Profits

It’s no secret that I despise most taxes of all kinds, including sales taxes, because they are used by our rulers to confiscate wealth from the little people and use for their dastardly projects.

As low as I consider tax and spend politicians to be, you can only imagine the level of disgust I have for people who use the tax laws as a means of stealing from the people to line their own pockets. I am specifically alluding to a scheme I have seen on a number of occasions that came up in a question I answered earlier today on AskMe.com.

The person submitting the question had been shopping at a store where things were marked down. He bought something for a big discount off the normal retail price, $25 instead of $200. When he was checking out, he was charged sales tax on the full retail price, not the actual price he paid. The store manager told him that was required.

My response to this is that the store manger is either an ignoramus or a thief. My guess is the latter. When he fills in his monthly sales tax reports for the State, he reports the actual sales made during the month at the actual prices paid by the customers. He calculates the appropriate sales tax on the actual sales volume and sends it to the State tax collector. What happens to the additional taxes that were collected by the store manager based on the inflated retail prices? I doubt that it’s going to charity.

While the original questioner had only been overcharged by about $10.50 ($12.00 instead of the actual tax of $1.50), you can only imagine how much the grand total would be for all of the store’s customers.

This kinds of thing happens quite often in another way. I buy almost everything over the Internet or from mail order catalogs. If the company doesn’t have a store or other physical facility inside this state, they are not supposed to be charging sales tax. Often times, they do add sales tax to their invoices when they aren’t supposed to. The impression most customers have is that that money will be passed on to their state just as their local merchants do. The truth is that those out of state vendors don’t do any such thing and just keep that money. It’s another source of bonus money, just like the outrageous shipping & handling charges many vendors add to bills.

What to do about it? Depending on my mood at the time and the amount of money involved, I have notified several out of state vendors that they were improperly assessing me sales taxes. About 75% of them adjusted their invoices accordingly. I have no idea if they stopped charging other out of state customers for sales taxes, but my guess is that they weren’t about to kill a cash cow just because one person caught on. With the other 25% of the vendors, who refused to remove the sales tax charges, I forwarded the info to our state tax agency. I haven’t heard how all of the cases turned out; but in some of them, the vendors were nailed with some hefty charges for years of unremitted taxes and penalties.

KMK

Nicely Feathered Nests

One of the many perks of being in power in DC is the very lucrative pension benefits our rulers have established for themselves. Coincidentally, it offers the best rewards to those who can stay in power the longest. What is completely missing from the benefits equation is any correlation to their performance. Crooks like Traficant and Torricelli are compensated exactly the same as those members who didn’t take as many bribes.

I guess it’s not much different from awarding the same retirement benefits to the law abiding former presidents as to those who committed perjury, raped interns and sold pardons.

KMK

CD Prices

Anyone who has bought blank CDR and CDRW disks knows that their prices have plummeted in the past few years. I have been using CDRW disks instead of the old 3.5 inch floppies for backing up client tax and accounting files for about the past year now. I have seen blank CDRs for 25 cents each in packs of 25 and 50.

This just makes the prices the record companies charge for music CDs seem even more outrageous. As someone who has been buying hundreds of new CDs a year since they first came out, the prices long ago stopped appearing to be fair. When CDs first came out as a music format, it didn’t seem strange for them to be priced higher than the vinyl LPs and cassette tapes. However, when the economies of scale kicked in, as they have long ago, it was natural to expect the prices to drop.

I happened to be reading a copy of PC Magazine and thought this column by John Dvorak hit the nail on the head on this issue. While I can’t vouch for his figure of 25 cents for all of the manufacturing cost of a music CD, it is obvious that it is a tiny fraction of the $18 we paid a few days ago for the new Peter Gabriel CD (on sale at Wally World).

This kind of price gouging is why there is very little sympathy for the record companies as they complain about the various online file traders. I’ll admit that I have used some of them to find obscure songs or ones that we need in a hurry (LimeWire is currently my favorite); but I still buy dozens of new CDs each month. Record executives are as oblivious to the real world of economics as are our elected rulers in setting tax policies. Just as lower tax rates result in more taxable economic activity and more revenues, lower CD prices would result in much more product sold and much less desire to download bootleg copies.

On a semi related note, has anyone else noticed how prolific the artists of the 1960s were compared to those of today? The Beatles produced a new album every six months or so. Nowadays, it’s two or three years between albums for most recording artists. Is it because the quality is so much better now that it takes that much longer to perfect?

KMK

Privatizing Social Security

The JackAss Party is getting a lot of free publicity from its ad showing George Bush tossing wheelchair bound senior citizens off of a cliff. As with just about everything from the Dem’s, this is a big misrepresentation of the truth. They claim that privatizing any part of SS accounts would subject poor retirees to the decline in the stock markets and reduce their benefits in synch with the market declines. This is an out and out lie.

It would be political suicide, and has not been proposed by anyone, to make any changes to the system for people currently receiving benefits. Any plan to allow alternative investments for SS taxes would be for younger workers, who will have plenty of time to accumulate substantial savings in the decades before they retire. As this column aptly describes, even with the gyrations of the stock market, investments there will yield a much more secure retirement than the Federal Ponzi scheme.

KMK

Stupidity On Both Coasts

Proving that the Left Coast doesn’t have a monopoly on idiotic tax policy, New York City’s RINO Mayor Bloomberg is suggesting that raising tax rates is under serious consideration. As this short article on Bloomberg’s hypocrisy mentions, such a practice of raising tax rates to combat a recession will result in a type of financial death spiral. Tax revenues will drop due to changes in behavior. This will lead the geniuses in power to reflexively raise rates again, compounding the problem even further. It’s too bad Rudy Giuliani wasn’t able to groom a successor who could continue his conservative policies.

KMK

Debunking Lies

This is a good summary of the truth behind a lot of the lies being told by the liberals, blaming the current economic problems and Federal deficit on the Bush tax cuts. As with just about everything said by the Left nowadays, it is all a bunch of B.S. In their twisted minds, their hatred of Bush justifies a total disregard for the truth. As always, the mainstream media continue to use these same tactics as part of their agenda to demonize Bush and canonize the Clintons.

KMK

Chasing the Ambulance Chasers

Per my earlier comments re: sleazy lawyers running ads to encourage frivolous lawsuits: