Saturday, December 18, 2010

The New Tax Law: Gifts For All

United States Capitol in daylightImage via Wikipedia
The Congress has prepared for us a nice Christmas gift. The new tax law is ready to go the president for signing. He will add the ribbon and bow to it. The label will say To: The US Taxpayer, From: The Gang up in D.C. When we open it up we will see it has a little bit of everything in it. Also it will be the gift that keeps on giving all year.

The gift will be a 2 percent cut in Social Security payroll tax.  If you make $50,000, for instance, you'll get an additional $1,000 in your paycheck. Weekly, that's about $19.23. If your household takes in $75,000, you'll get an additional $1,500, or about $28.85 a week.

There is something even if your unemployed. You will receive an additional 13 months of benefits.

The other changes are basically a continuation of current law.Federal income and capital-gains tax rates will remain the same as they have been, at least for the next two years. The standard deduction for married couples will remain the same for that period, too. Credits such as the Child Tax Credit, the Earned Income Tax Credit, the Dependent Care Credit, Studen Loan Interest Deduction, and the American Opportunty Tax Credit for higher-education expenses also remain the same.

The deductions that were going to expire in 2011 will continue through 2012. They are deductions for state and local sales taxes, higher education tuition and qualifying teacher's classroom expenses. Retirees can also use the proceeds from their IRA's to make charitable contributions. For the next two years, the rules and limits for all of these deductions remain the same.

We are going to lose some tax breaks also. A tax credit of up to $1,500 for installing energy-efficient home improvements is reverting to a limit of just $500. And the Making Work Pay tax credit has been eliminated; under the new law focusing on a 2-percent payroll tax reduction, an estimated 51 million households will actually bring home less in 2011 next year.

Again the Congress has done it's work in the usual way. Spend more money and not address the underlying problem. Reducing Social Security payments is a kind of stimulus. Continuing unemployment benefits is also a kind of stimulus. Congress has put a bandage on the problem as usual. They need to get together and see that that the other way to address budget problems is to reduce spending. They never can do that. When you or I have budget problems we cut our spending. The government can do that to.

The 7 Days Till Christmas Roundup

Uploaded from : http://upload.wikimedia.org/wi...Image via Wikipedia
There is only seven days to go till the big day. This week we will be making our last minute preparations. We are trying to stay warm but there's nothing better than a sipping hot chocolate by the fire. I have listed some of my favorite posts for this past week. Here we go:

Get Rich Slowly says A Non-Consumer Christmas: Simple Gifts for Kids and Grown-Ups

Jim over at Bargaineering explains the 2010 Bush Era Tax Cuts Extenders Bill Explained

Five Cent Nickel writes about The Cheapest 529 Plans





Couple Money says check out 10 Services to Evaluate Regularly

Financial Samurai says Let’s Just Be Regular People 


Invest It Wisely tells us 5 Responsible Ways to Use Credit Cards

Barbara Friedberg Personal Finance says Puff Daddys got it all together
RESILIENCE & WEALTH; inspired by Sean P. Diddy Combs


I hope your weekend is good.

Wednesday, December 15, 2010

Why George Bush Must Be Smiling.

I was going through the news sites tonite and something on CNN.com caught my eye. The headline read "Why George W. Bush must be smiling". I thought how odd that was. Usually, President Bush is getting trashed.

The author writes in his article how the ex-president must really be enjoying all the hoopla over the current tax debates. Knowing his tax cuts are surviving his presidency; he deservedly should feel proud.

Though President Obama ran on a platform of change, not much has changed. Most of Bush's policies are living on. Most of his counter terrorism policies have survived. The expanded off shore drilling are continuing. Afghanistan is still in the forefront overseas and has expanded.

But mostly the current tax rates will be continuing. Obama knows that they are inevitable, so why not just go along and put a little of his own flavor on them.

For a presidents decisions to live on in further administrations is not an unheard of event. Take F.D.R.'s social security. Lyndon Johnson had Medicare. So also, Barack Obama will have health care.

The decision to leave the tax rates as is and not raise them makes sense for the hard times we are in. If taxes were raised, the backlash would be tremendous. Just revisit the question in two years and then make the decision. Better yet, just keep the rates as is and cut the budget by 10%. But that's another post altogether.

Old George W. Bush hasn't said much since leaving office and basically I like it that way. But as time goes on, we are seeing the good things he accomplished for the country, bear fruit. The democrat that replaced him has basically  accepted many of his policies. Keep smiling George, you did good.

Tuesday, December 14, 2010

The Greatest Gift You Can Receive Is Friendship

Christmas lights on Aleksanterinkatu.Image via Wikipedia
The culture we live in teaches that it's the accumulation of things that will give us true happiness. During the Christmas season this is driven home. Just check the malls with all the crowds pushing and shoving to get the latest electronics and video games. What are we teaching our children?

I'm guilty I have done this too. But as my life has progressed  I have become aware of how material things are fleeting. Ask yourself what gifts did you get for Christmas last year, 3 years ago or 5 years ago. You probably don't remember. I'll also wager your kids don't remember. This is why the gifts you think are so necessary to get your children or friends, aren't. I don't remember the gifts but I do remember the experiences I have shared. The time I have spent with friends and family are etched in my memory.

There's an old saying that states, "A good friend forgives your faults. A loving friend doesn't see any". Having friends has become more important to me as the years have gone by. The things that your work can bring are  becoming less and less important.

Don't get me wrong, I haven't lived the hermits life. I have had friends and acquaintances forever. They have always been important. But recently they have been more important.  In my early years I always spent my time working to accumulate all the things that gave pleasure.  Those things were the house, car, vacations and children. After getting all those things what was there to satisfy.

The more friends I embrace, the more this circle of wisdom, common sense and laughter enriches and nourishes me. Some of us remember black & white TV, 10 cent phone calls and life before e-mail. These are friends that  can relate to me and my time. Even the younger ones who think I'm a relic of ancient history can also be satisfying for their individual point of view. It doesn't matter. True friendship trumps accumulated days on a calendar.

This is my hope for everyone. That you will come to realize that friendship are more rewarding than accumulating things.

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