Thursday, October 02, 2008
Every day it seems there is something in the news about Wall Street and the Federal buyout plan, but taxpayers around the country are confused about this complicated legislation and how it will impact their daily lives. Fortunately, the financial experts at CNN.com have gathered the following list of common questions about the bailouts and provided informative answers.
1. Why did lawmakers reject the bill?
Many lawmakers, especially on the Republican side of the House, had voiced concerns about the $700 billion cost to U.S. taxpayers, arguing that ordinary citizens were being asked to foot the bill to clean up a mess created on Wall Street. Fortune magazine's Washington bureau chief Nina Easton said that many lawmakers, facing re-election in November, feared a backlash among voters if they backed they plan.
"This legislation is giving us a choice between bankrupting our children and bankrupting a few of these big financial institutions on Wall Street that made bad decisions," said Republican Congressman John Culberson. Other Republican free market advocates argued that the bill would have been a blow against economic freedom.
On the Democratic side, there were concerns that the bill did not provide enough protection for taxpayers. Others said the legislation had been rushed through without due consideration. "Like the Iraq war and Patriot Act, this bill is fueled by fear and haste," said Democrat Lloyd Doggett.
2. What are the consequences?
Ahead of the vote, backers of the bailout plan had argued that urgent action was necessary to underpin the foundations of the entire U.S. economy. Billionaire Warren Buffett said that failure to agree a plan would leave the U.S. facing the "biggest financial meltdown in American history." In a televised address, U.S. President George W. Bush said that without immediate action by Congress, "American could slip into a financial panic and a distressing scenario could unfold."
But the immediate consequences were felt most sharply in the financial markets, already badly bruised by weeks of heavy losses. Approximately $1.2 trillion had been wiped off the market value of U.S. stocks by the close of Monday trading with the Dow Jones index suffering its worst ever points loss, losing 778 points -- a seven percent slide.
3. What are the international consequences?
International financial institutions have been hurt as badly as those in the U.S. by the credit crisis and banks and stock markets all over the world face fresh pain because of the failure of the rescue plan. UK Prime Minister Gordon Brown, who last week urged the U.S. to take "decisive action" to stem economic losses," described the result of Monday's vote as "very disappointing."
Belgium's Dexia on Tuesday became the latest bank to be bailed out by government funding with the governments of Belgium, the Netherlands and Luxembourg injecting $9.2 billion into the business to keep it afloat. The move came just two days after the same countries pumped $16.4 billion into failing insurance company Fortis. Iceland's government has also nationalized the country's third largest bank, Glitnir. Ireland's government said Tuesday it would guarantee all deposits in Irish banks following a massive fall in the value of banking stocks.
In Asia, the Bank of Japan pumped another 2 trillion yen ($19.23 billion) into money markets Tuesday as share prices across the continent fell heavily in response to losses on Wall Street. Central banks in the U.S., Europe and Asia have injected hundreds of billions into markets in recent weeks in an effort to boost liquidity and encourage trading. In Moscow, Russian stock exchanges were suspended for several hours after shares had plummeted. Key indices in Europe were mixed.
4. What happens next?
Treasury Secretary Henry Paulson says he will continue to work with congressional leaders to draft a plan acceptable to lawmakers and members of the House will likely be asked to vote again before the end of the week -- possibly on an amended plan including more protection for taxpayers' money. Those who voted against the plan can expect to be courted intensely in coming days.
White House spokesman Tony Fratto said: "We think the mechanisms in this plan were the best to deal with the crisis that we are facing. The core of this plan we think will solve the problem; it was big enough and substantial enough in terms of what we were trying to do... So this plan really needs to get done to give the Treasury Secretary the tools he needs to prevent our economy from slipping... The facts are that America's credit system is broken and it will be broken until we take the steps to fix it."
5. How does this affect the banks?
The financial landscape has already been radically transformed by the collapse in U.S. house prices and the subsequent credit crunch with investment bank Lehmans Brothers going bankrupt, Merrill Lynch being bought out by Bank of America and the U.S. government intervening to prop up mortgage lenders Fannie May and Freddie Mac and insurance giant AIG.
The failure of the bailout plan will only undermine confidence in the banking system further, pushing more banks into trouble as customers withdraw their money. "They have to pass some sort of bill otherwise soon it's going to get down to the point where people actually take money out of the bank and put it in their mattress," trader Wayne Carson told CNN.
6. How does this affect the rest of us?
The credit crunch has already affected the entire economy with "Main Street" already feeling the squeeze from rising fuel prices, rising food prices and rising unemployment. Many economists fear the U.S. is heading for recession. With banks unable or unwilling to lend to each other until the credit crisis eases up, many companies may be unable to borrow the money they need to pay their weekly bills, including salaries. The likely consequence is further job losses.
"This is not about suits on Wall Street making their salaries, this is about financial institutions who loan money to your bank so that you can get a loan or you can buy a car or you can get a mortgage or you can get a credit card... this is our financial system that is freezing up," said CNN senior business correspondent Ali Velshi.
7. Should I panic?
"Panic probably doesn't help us out very much but a recession really indicates that jobs ends up being lost," said Velshi. "Right now we've lost 605,000 jobs (in the U.S.) this year and economists expect that to continue. Unemployment will continue to grow, home prices will continue to drop and consumer credit will get tighter.
(Federal Reserve Chairman) Ben Bernanke said if we don't pass this plan we may go into a deep recession. We've already heard from some economists who think we are already in a recession and that it could get deeper.... What he should have said is that if we don't pass this plan we may go into a deep recession but we may go into a deep recession anyway... This is not going to be a solution to a recession, this is a solution to a very particular financial crisis that we are under going right now."
According to the newest press release from the IRS, they have set-up a program to provide relief for victims of the recent Hurricane Ike. Below is a snippet from the release, or check out the full release for information on how to know if you will qualify for the relief or not.
Taxpayers who were adversely affected by Hurricane Ike qualify for tax relief from the Internal Revenue Service, including the postponement of tax filing and payment deadlines until Jan. 5, 2009.
Following the hurricane’s landfall on Saturday, Sept. 13, the federal government declared the following Texas counties a presidential disaster area qualifying for individual assistance:
Angelina, Austin, Brazoria, Chambers, Cherokee, Fort Bend, Galveston, Grimes, Hardin, Harris, Houston, Jasper, Jefferson, Liberty, Madison, Matagorda, Montgomery, Nacogdoches, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Waller and Washington.
"We are giving taxpayers in these hard-hit areas until early next year to file their returns and make payments," IRS Commissioner Doug Shulman said. "All Americans have concerns for those affected by this devastating hurricane, and our hope is that this extra time will allow people to stay focused on the rebuilding and clean-up effort."
Specifically, the relief postpones until Jan. 5, 2009, certain deadlines for taxpayers who reside or have a business in the disaster area. The postponement applies to return filing, tax payment and certain other time-sensitive acts due on or after Sept. 7, 2008, and before Jan. 5, 2009 –– including individual estimated tax returns and corporate tax returns that were due Sept. 15, and extended individual returns due Oct. 15.
In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after Sept. 7 and before Sept. 22, 2008, as long as the deposits are made on or before Sept. 22.
Monday, September 22, 2008
As a follow up to our previous blog entry, Obama vs. Biden The Similarities and Differences in their Tax Views, this week we are taking a deeper look at the tax views of the candidates running on the Republican ticket. Although Gov. Sarah Palin, and Sen. John McCain, have gotten a lot of attention in the media since the Republican National Convention, however most people are spending large amounts of time discussing Palin’s personal life. Instead of slipping around in the reporting on the barbs as they are tossed back and forth, we decided to put together this blog entry comparing the similarities and differences in Palin’s and McCain’s tax views. We hope this will provide more useful information for you as you enter the voting booth in November.
Balanced Budget
McCain:
In July of this year, McCain made a campaign promise to balance the federal budget by the end of his first term – a pretty ambitious goal indeed. Although balancing the federal budget is something both parties agree is important, the strategy McCain hopes to use is much different then his Democratic rival. One of McCain’s main plans is to reforming our healthcare system, Social Security, Medicare, and Medicaid. McCain has also claimed that he hopes to take a hard look at wasteful military spending in Iraq and Afghanistan and use the revenue to help balance the budget. “Since all their costs were financed with deficit spending, all their savings must go to deficit reduction,” a McCain spokesperson was quoted as saying.
Palin:
One of Palin’s most notable decisions as acting governor of Alaska was her choice to sign the largest operating budget in Alaska’s history, $6.6 billion. Right off she began cutting small building and renovation projects throughout the state. The list includes the infamous “Bridge to Nowhere” project which she deemed as wasteful and pledged to spend the funds on more important projects. She also sold the jet purchased by the former governor, as a campaign promise, generating an easy $2.1 million in revenue for her state. While these are all definite moneymaking decisions, Palin confused some onlookers by then promoting future seemingly earmark projects in the future. She raised sales tax just to pay for an additional ice rink and sports facility.
The Difference:
Palin and McCain both want a balanced federal budget, but Palin has more hands-on experience in cutting wasteful spending. In the two years she served as Governor of Alaska, she was able to drastically reduce spending and took on both Democrats and Republicans in her effort to do so. McCain on the other hand has made an impressive campaign promise, but whether he will follow through with it or not remains to be seen.
Nuisance Taxes
McCain:
Taking pride in his reputation as a tax cutter, not raiser, McCain plans to cut “nuisance” taxes on things like gas, utilities, tires, hotel rooms, etc. Part of the reason many candidates like McCain feel nuisance taxes are no longer needed is because they are not only a nuisance, but radically outdated. When the taxes were initially instituted, things like telephones, refrigerators, and certain kinds of fuel were not necessities of their time and thus not taxed. McCain has claimed that if nuisance taxes cannot be repealed entirely, then they should at least be updated and revised to suit current economic conditions.
Palin:
When addressing her state of Alaska in 2007, Palin was adamant about her dislike of nuisance taxes and the toll they were taking on Alaskan citizens. The tax levied on tires was one that particularly bothered Palin, as she claimed that driving in a severe-weather place like Alaska is hard enough with good quality tires. By making it even harder for citizens to afford new tires will put them in danger. She also said in her address that she wanted to reduce business license fees, an unfair tax on brave individuals who want to take the risk of starting a business.
The Difference:
Although McCain and Palin have both spoken out publicly against nuisance taxes, Palin has been much more vocal about the tax. The candidates also both agree on reducing business and corporate tax rates. Although Palin has not been very specific on her business related tax plan, McCain hopes to cut the corporate tax rate from 35% to 25% if elected.
Energy and the Environment
McCain:
On his website and television ads, McCain is quick to empathize with the warming climates and disappearing landscapes in the United States. In policy, however, his actions do not quite back up those statements. While it is true McCain was the first Republican in the Senate to sign onto reducing green house gas emissions, has often been criticized of “flip-flopping” when it comes to his energy policies. Specifically, his positions on the use of ethanol have changed multiple times in the past decade. Originally, he was not a strong supporter of ethanol, and then changed his position when research proved his view was unfound. Then, in February of this year, he reverted to his original anti-ethanol sentiments much to the surprise and confusion of the watching public.
To help promote his energy policies, the McCain camp produced a television ad featuring images of solar and wind energy along with trees and lakes to give viewers a feeling of peace and hope. However, in policy, McCain is a much stronger supporter of Nuclear energy and plans to commit billions to the advancement of nuclear energy in his climate change plans. In fact, McCain has claimed that he hopes to build 45 new nuclear power plants by 2030. McCain’s goal is to help provide cheaper energy to the American taxpayers, and although power plants will provide more energy they will cost millions, if not billions, to construct and operate.
Palin:
Alaska has some of the highest gas and energy prices in the country. Along with the high prices, the demand for such energy is also very high due to cold weather and sprawled out cities. To help ease the energy woes of her state, Palin proposed a one-time $1,200 rebate to qualifying Alaskans. She also signed into law a one-year gas tax holiday for Alaska to help ease the high fuels costs. Like many Alaskans, Palin is also a huge supporter of offshore drilling, and drilling of ANWR, the Arctic National Wildlife Refuge in Alaska.
Alaska’s state budget has been in the positive for years partially due to the big checks the state’s government receives from oil companies drilling in their state. Last year Alaska earned an estimated $6 billion in revenue from oil taxes, partially because of windfall taxes that were supported by Palin. With so much money coming into the government from the oil industry, it is no surprise that Palin supports more drilling. However, if the amount of drilling in Alaska were to increase would the federal government get a piece of the profit or just Alaska?
In addition to her oil support, Palin is also skeptical that human behavior largely affects the global climate. While she recognizes ice in her home state is melting, she feels it is the natural course of earth, not caused by green house gas emissions. Palin also fought to have polar bear taken off the endangered species list, stating that the population was thriving, and that they are dangerous to humans. Some experts criticize Palin, claiming that removing polar bears from the endangered species list would lessen regulations about drilling in the arctic.
The Difference:
McCain’s and Palin's energy policies seem to be quite consistent, to end America’s dependence on foreign oil. They both support off shore drilling, a gas tax holiday, as well as developing alternative fuel sources. However, unlike Palin, McCain seems to have more mixed views on windfall taxes on oil corporations. He has previously attached Barack Obama’s support of such taxes, but recently revised his attacks and claimed that he might consider them.
Monday, September 15, 2008
As we all know, a few weeks ago Democratic Nominee for President, Sen. Barack Obama selected Sen. Joe Biden as his running mate. However, since the announcement was made, Joe Biden has not received much attention in the media. The upcoming election has by deemed by many as a crucial point in modern American history, and when you head to the polls this November it is important to make an informed decision. To help all of the readers of our blog fully understand the positions of the two gentlemen running on the Democratic ticket we have put together the following blog entry comparing the similarities and difference in Barack Obama’s and Joe Biden’s tax views.
The War in Iraq
Obama:
The increasingly large national debt is no secret to Obama, and he is not afraid to read between every line in the budget to find the problems. By ending the war in Iraq, Obama hopes to stop spending the billions that go into the war every year and put it towards education, healthcare, and other needs at home.
Biden:
In recent months, Biden has been very strong on his opposition to the war. He has claimed that he would also like to end the war and use the money here in the states. However, Biden had originally backed the war in Iraq and was quite vocal about his support. A few months before the war was officially endorsed by Congress, Biden was criticized for using propaganda tactics to convince other members of Congress to follow. Biden has since changed his view on the war, like many other politicians, and know predicts that our economy can save $100 billion a year just by ending it.
The Difference:
Both Obama and Biden now support ending the war immediately and bringing home troops quickly, as well as using the extra money to put into our own economy. However, at first Biden was strongly in favor of the war and many supporters of Obama have not forgotten that. There is concern among a few Democrats that Biden's opposition to the war is not as strong as Obama’s and that he might not follow through with plans to withdrawal troops.
Progressive Tax System
Obama:
Revising the American tax system, including tax increases on the richest Americans, has been one of the major components of Obama’s campaign. However, recently the Senator has seemed to reduce his desire to shake up the tax system. Pending worse economic conditions, Obama would like to let the Bush tax cuts expire, and hopes for better distribution of wealth from the top 1% to other working families. Obama has claimed that the amount distributed could be as much $131 billion and would like to use this revenue to fund his health care plans.
Biden:
The Bush tax cuts have been at the forefront of Biden's economic views. Biden has been very vocal about his opposed both Bush’s tax cuts for years, claiming the trickle down effect is not working and never will. Biden would like to end the Alternative Minimum Tax, but wants to levy other taxes to make up for the lost revenue. However, Biden noticed that repealing it entirely would surely put us into deficit, decrease government revenue, and unbalance the budget even more. He claims that the tax does need fixing and hoes to adjust it so that it does not affect struggling families.
The Difference:
While Obama would rather just wait for the Bush tax cuts to expire, Biden would rather repeal them entirely. Biden also sees no reason to leave unnecessary tax cuts in the economy as long as they are not doing what they were established to do. Both candidates are against the Alternative Minimum Tax, but have slightly different plans on what to do about it. While Obama thinks we should just leave it as it is, Biden would like to replace or adjust it to better suit the country’s needs.
Capital Gains
Obama:
Capital Gains has become a large part of Obama’s campaign. Originally, Obama had claimed that he would like to nearly double the tax rate, from 15% to over 28%. However, after winning the Democratic nomination Obama has revised his plans for Capital Gains and settled on a more realistic increase to around 20%. When questioned about his decision Obama said he would like to the tax rates back to levels experienced during Clinton’s time in office, though at that time rates were actually only 20%, not the 28% Obama initially proposed. Obama also voted for raising $47 billion by repealing the capital gains tax cut for military funding.
Biden:
During his time in the Senate, Biden has frequently voted against cutting the Capital Gains tax rate. He spoke out publicly in 2003 when the rate was reduced to its current 15%, and voted against cutting rates in 2005 and 2006. Although there is evidence to show that Capital Gains tax increases actually reduce federal revenue, Biden has stated that raising the tax could create an additional $195 billion in revenue.
The Difference:
Both Barack Obama and Joe Biden have been vocal of their support for Capital Gain rate increases. However, Obama’s seems to have been more about winning the Democratic nomination as he has reduced his desire to double the tax rates, and has even recently claimed that he might hold off on all tax increases if he was elected. Biden on the other hand, has long been a supporter of increasing the tax rate and has not changed his view since getting the Vice Presidential nomination.
Tuesday, September 09, 2008
As many of you may already know, the deadline for making Estimated Quarterly payments is just in a few days – September 15th. But who all has to make these tax payments? Well, essentially every American who earns more then $1,000 in income needs to pay taxes throughout the year. However, anyone who works as a wage-earning employee will have these taxes automatically deducted from their paychecks.
Therefore, if you own a business, are self employed, work as an independent contractor, or if you make any other money on the side, then you need to make estimated tax payments four times per year. You will need to make payments using IRS Form 1040ES, and you want to make sure to pay the correct amount of you could face penalties at the end of the year.
If you have never made a quarterly payment before, or if you are confused about business taxes then you should probably seek out help from a tax professional or accountant. Alternatively, many tax programs like QuickBooks for businesses can prepare and file the appropriate forms.
In a follow up to her earlier post about Sen. Joe Biden’s tax views, Roni Deutch has posted a blog to her personal blog, The Tax Lady Blog, about Gov. Sarah Palin and her tax history. Below is a snippet from the article, but you can read the full version at Gov. Sarah Palin: a Deeper Look at her Tax Views.
Energy Tax Rebates
In her own state of Alaska, Palin proposed a monthly $100 rebate for all Alaskans to help deal with energy and fuel prices. She soon dumped the monthly idea and decided to make it a flat rebate of $1,200 instead. However, criticism rose almost immediately because the flat rate did not suit every Alaskan’s needs, as fuel prices and demand are different in every region.
Balanced Budget and Tax Relief
As soon as Palin was elected as Governor she carried out a campaign promise and sold a corporate jet purchased by her predecessor for $2.1 million on eBay. Determined to reduce State Budget, she then signed the largest operating budget in Alaska history, $6.6 billion. She also slashed hundreds of construction projects in Alaska, cutting $237 million from the construction budget. The closure of some projects was applauded, while others were criticized, but the state needed the funds regardless of popularity.
In 2007 Palin took on the biggest construction project, the infamous, “Bridge to Nowhere”, which she had originally wanted to rebuild but then later opposed. “She made the final decision to kill a very bad project, so she deserves credit for that. But she didn’t do it as an ideological opponent of earmarks. She did it as someone who had to balance the books,” Keith Ashdown, a tax investigator told the Washington post.
Oil Taxes
Alaska’s economy and way of life has come to depend strongly on oil wealth. Palin proposed a $750 million oil tax increase, which eventually came to $1.5 billion. As soon as the bill was approved in the state’s legislature, Palin signed it into law.
However, she has also fought hard to try to open the Arctic National Wildlife Refuge for drilling, which many environmentalists and citizens across the country strongly opposed. The people of Alaska however, who’s economy depends on oil, agree with the drilling.
Finally, Palin has also been a strong supporter of a gas tax holiday, which received national attention when it was supported by Sen. McCain and Sen. Hilary Clinton.
Dairy Farm Closure
One of Palin’s more controversial finance choices was her choice to keep a state-owned dairy farm open. The Alaska creamery board recommended that the Matanuska Maid Dairy be closed, but Palin decided to keep it against their advice. Controversy arose when Palin replaced the entire membership of the Board of Agriculture and conservatism (the only people who could fire or hire members of the Alaska creamery board). In 2007, it became clear that the business was unprofitable and not worth keeping. At that time, Palin decided to just sell the farm.
Sales Tax Increase
As mayor of Wasilla, Palin followed through promises to reduce property taxes as well as her own salary. However, she did have to raise the sales taxes by almost half a percent to pay for an indoor ice rink and sports facility though. The project would cost over $15 million to build, but could greatly stimulate small town’s economy. The tax increase was necessary to pay for the ice rink, as the state had already spent their budget on road and sewer projects. Palin pushed to have the sports facility built quickly, before the city had a clear title, and got a bad reputation as the property was in litigation for 7 years.
Monday, September 08, 2008
According to the newest press release form the IRS, they have setup a program to provide relief for victims of Hurricane Gustav. Below is a snippet from the release, but click here to read the full text, and to learn how to qualify for disaster relief.
“The IRS is postponing until Jan. 5, 2009 deadlines for taxpayers who reside or have a business in the disaster area. The postponement applies to return filing, tax payment and other time-sensitive acts otherwise due between Sept. 1, 2008 and Jan. 5, 2009. This includes:
Individual estimated tax payments due Sept. 15, 2008.
Corporate extended 1120 tax returns due Sept. 15, 2008.
Individual extended 1040 tax returns due Oct. 15, 2008.
‘As residents of Louisiana return to their homes following Hurricane Gustav, taxes are one thing they won’t need to worry about,’ IRS Commissioner Doug Shulman said. ‘This relief gives them extra time to get their lives in order before having to deal with their tax matters.’
In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 as long as the deposits are made by Sept. 16, 2008.
Taxpayers who reside in or have a business located in the following parishes qualify for the relief announced today:
Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Rapides, Sabine, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Vernon, West Baton Rouge and West Feliciana.
IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request tax relief.
If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing or payment due date between Sept. 1, 2008 and Jan. 5, 2009.”
Tuesday, September 02, 2008
Democratic Nominee Barack Obama announced that Senator Joe Biden would join would join his campaign as the Vice Presidential candidate over a week ago. However, his views on important tax and economic issues are still relatively unknown. Earlier in the week, Roni Deutch blogged on her personal blog, The Tax Lady Blog, about Biden’s tax views and voting record. Below is a snippet from the article, but you can read the full version at Sen. Joe Biden: a Deeper Look at his Tax Views.
Ending the War
One of Biden’s most progressive tax views is his adamancy about ending the war. Biden feels the sooner we end the war, the sooner we can start saving money again and reducing our national debt. Currently, the war on Iraq is costing around $100 billion a year, and Biden wants use that money to invest in our own country.
Bush Tax Cuts
The Bush tax cuts have been a large subject of debate this election season. Biden opposes the tax cuts and has voted against them recently and voted against similar tax cuts in the past when Bush Sr. was president. Although the argument has been made that the “trickle down” effect will make sure the tax cuts benefit us all, Biden claims that this tactic has not worked. “Imagine what we could do if we had a president who had the nerve and the wisdom to understand that rich folks are just as patriotic as poor folks--you just have to ask them,” claimed Biden. “I spoke to a group of millionaires about taking away their tax cut, and when I explained how I'd use it, they gave me a standing ovation.”
Health Care
Joe Biden is known for his fight for an ethical and easy health care system for America. Working closely with Social Security as well as Medicare, he has been a big part of numerous changes that have already been made to health care in this country. If elected as Vice President, Biden has claimed that he would like to work alongside Obama to strengthen prescription drug programs and make them affordable and available to everyone.
Biden recognizes that Medicare has many flaws and that it requires improvement. He would like to open programs to promote wellness and disease prevention, waive co-payments, and advance technology within the medical industry. He hopes to fund these new programs by repealing the Bush tax cuts for the top 1% and withdrawing troops from Iraq. However, there are noticeable flaws in Biden's health plans such as his neglect to recognize youth needs. Most of his plans emphasize senior health, which is important but should not be the only part of his plan.
Gas Prices
Taking on the OPEC monopoly is one of the riskier moves Biden wants to make. Some critics think this will not help but hurt the problem, as OPEC is not the only cause of high gas prices. Biden’s other energy plans are to invest in new alternative energies will be pricey at first, but have the potential to save billions in the long-run.
Last week we posted an entry on the 10 most famous tax evaders of all time, and now it seems that we can add another person to that list, Ruben Studdard. According to Fox News, the former American Idol winner owes over $200,000.00 in unpaid taxes to both his local and federal government.
“Ruben Studdard, the season two "American Idol" winner, faces state and federal property liens after allegedly not paying close to $200,000 in taxes, BlackVoices.com reported.
Studdard, who married Surata Zuri McCants on June 28 and is without a current record deal, owes $21,730 in state income taxes, and $171,920 in unpaid income taxes to the federal government, according to the report. The story cites a lien filed in Jefferson County Circuit Court.
A majority of the unpaid taxes are from 2003 — the same year Studdard won "American Idol."
The state liens were filed July 25, and the federal ones were filed in May.”
Wednesday, August 27, 2008
Being a celebrity can get you a lot of free designer clothes and a group of paparazzi following you, but it cannot get you out of paying taxes. Whether they were trying to hide small fortunes or simply forgot to pay, dozens of celebrities have found themselves in a tax evasion scandal. To help us all remember to pay Uncle Sam, please enjoy the following list of the 10 most famous celebrity tax evaders of all time.
1. Judy Garland
The beloved star of Wizard of Oz found her self in a heap of trouble when the sate of New York stuck her with a $4 million bill for tax debt in 1967. Garland was forced to sell her home and travel from hotel to hotel until she could get back on her feet years later.
2. Martin Luther King Jr.
Alabama’s Governor, John Patterson, “conveniently” charged the civil rights leader with tax evasion during the peak of his civil rights movement. King was charged under the notion that he pocketed cash when he was moving one of his churches. Victory was his though, when his case went to trial and an all white jury and judge acquitted him of all charges. King was lifted by the news and was quoted as saying, “I am frank to confess that on this occasion I learned that truth and conviction in the hands of a skillful advocate could make what started out as a bigoted, prejudiced jury, choose the path of justice.”
3. Damon Dash
The talented and popular music mogul was faced with $2 million in tax debt on a $50 million dollar fortune that he supposedly did not pay taxes on. At the time rumors circulated that he went to former business partner Jay-Z for a loan, but many suggested he sell his famous collection of 1,000 + pairs of pricey sneakers for the cash.
4. Annie Liebovitz
Although extremely talented, the world-renowned photographer of the stars and simply “forgot” to pay her state taxes. Fortunately, the case was quickly settled after Liebovitz paid the state of New York $135,916 in owed back taxes.
5. Joe Francis
Best know for his erotic video series “Girls Gone Wild”, Francis had a run-in with the law when he was charged on two counts of tax evasion against both his company and himself. Not only did Francis evade paying his taxes, but also he hid money in foreign accounts. Unfortunately, his soft porn empire cost him more than a good public image; it cost him an estimated $20 million in fines and unpaid taxes.
6. Richard Hatch
The first winner of the much-loved TV series “Survivor”, Richard Hatch never paid any taxes on his $1 million prize. Hatch had claimed that CBS agreed to pay his taxes, however he was unable to produce any evidence to support that claim. Eventually the former game contestant was convicted and is currently serving a 4-year prison sentence.
7. O.J Simpson
The infamous O.J Simpson currently owes the State of California a massive $1.5 million dollars in tax debt. His lawyer tried to claim that Simpson has been a legal resident of Florida for 12 years, however Simpson’s tax debt dates back to 1996.
8. Luciano Pavarotti
The beloved opera singer was investigated for tax fraud in 1999 and ended up owing the Italian government $11 million. He was investigated again in 2001, but was acquitted of the new charges in court.
9. Al Capone
The world’s most famous mob boss Al Capone, was not afraid to say he thought taxes were a joke. Unfortunately for Capone the federal government brought charges of tax fraud against him in 1931 and not only levied an $80,000 fine against him, but also sent him to prison for 11 years.
10. Martha Stewart
Martha Stewart, lifestyle guru and domestic queen alike, was upset when stuck with a $220,000 tax debt. Stewart claimed she spent very little time in her New York home and felt she did not need to pay taxes on it. Not long after Stewart learned about her tax problems she was famously found guilty of insider trading and sentenced to a year in prison.