Tuesday, May 05, 2009

Newsbytes for Cinco de Mayo

Cinco de Mayo is a minor Mexican holiday that has caught on big here in the USA. There is other stuff going on in the Land of the Free and the Home of the Brave. Let's take a fast look, and then go whack a pinata or two.

The Almighty Fed in the form of Mr. Obama has pretty much decreed that business in the USA will run on the Chicagoland model. In a recent speech, Mr. Obama decided that paying higher taxes was the price to avoid villification if you were a corporation that earned money overseas. Now, I ask you; Why should anyone pay taxes on income earned outside the country that doesn't make it into the country?

In his speech, he talked about "dodging responsibilities while ordinary Americans pick up the slack". I have a question for him, his dunderheaded advisors, and the average guy that is also paying taxes. Does anyone really think that raising taxes is going to stop avoidance or evasion? Keep Reading Please. It gets better from here.

In that same press conference I think it was Treasury Secretary Tim (Avoid the Taxman) Geithner who talked about adding five or six hundred IRS agents to the payroll. That's just what we need, more government employees in an agency that could be cut down to a minor office within the Treasury Department if the Congress had a lick of sense.

For those folks who just haven't gotten it yet.... If the USA switched to the Fairtax we would be far better off. There is no avoidance. You pay your tax at the point of sale or service. No loop holes. No more public embarrassment for our officials who have to stumble through confirmation hearings trying to explain their own tax problems away. But, the Realists among us know that our Congress and the White House owe too many of their handlers favors that can only be repaid by ravaging the tax code.

And, to add further insult to injury, the people who are "picking up the slack" according to Mr. Obama are being set up to hang by that rope next April 15. You see, the government is overpaying some people the "make work pay" tax credit.

If you:
  • Are Married and both you and your spouse work -or-
  • You personally work two jobs (In today's economy how many fall into that category?) -or-
  • Are a Retiree having taxes withheld from your pension payments -or-
  • Social Security Recipients with jobs providing taxable income

There is a really good chance that you will be "overpaid" by hundreds of dollars thanks to flawed withholding tables introduced by the above mentioned "tax credit". So, look for a lower refund next year or having to pay. I personally fall into the first three of the four groups. How do you fit in?

All this can be found here. And from that source two major quotes just jump right out and slap me in the face.

The Internal Revenue Service acknowledges problems with the withholding tables but has done little to warn average taxpayers.

Obama has touted the tax credit as one of the big achievements of his first 100 days in office, boasting that 95 percent of working families will qualify in 2009 and 2010.

The message I get from the above is that the IRS, at Mr. Obama's order, knowingly rushed to implement these flawed withholding tables. They are aware of the problem and are not making an attempt to warn people about it let alone actually correct it.

Thanks Mr. Obama. This is truly change I can believe in.

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