According to New York magazine:
“In October, Obama’s former pastor, Jeremiah Wright, is expected to publish a new book and hit the road to promote it”
* * * * *
Want more from the Homa Files?
Click link => The Homa Files Blog
* * * * *
Archive for August 15th, 2008
Maybe dreams do come true …
August 15, 2008Uh Oh – What if employers want proof and patience ?
August 15, 2008Excerpted from WSJ, “… College is a Waste of Time”, Aug. 13, 2008
Re: “evidence of competence” … and apprenticeships:
Young people entering the job market should have a known, trusted measure of their qualifications they can carry into job interviews. That measure should express what they know, not where they learned it or how long it took them. They need a certification, not a degree.
The model is the CPA exam that qualifies certified public accountants … employers can assess where the applicant falls in the distribution of accounting competence. You may have learned accounting at an anonymous online university, but your CPA score gives you a way to show employers you’re a stronger applicant than someone from an Ivy League school.
Here’s the reality: Everyone in every occupation starts as an apprentice. Those who are good enough become journeymen. The best become master craftsmen. This is as true of business executives and history professors as of chefs and welders.
* * * * *
Full article (worth reading):
http://online.wsj.com/article/SB121858688764535107.html?mod=opinion_main_commentaries
* * * * *
Want more from the Homa Files?
Click link => The Homa Files Blog
* * * * *
Taxes – Beyond Mark Twain’s observation on death and taxes …
August 15, 2008Summary: Tell your rich relatives to check out in 2010.
* * * * *
Under the Bush Tax Plan, estate taxes were cleverly rebranded “death taxes” and have been phasing towards full repeal (zero federal estate taxes) in 2010.
But after 2010, estate taxes get automatically reset to 2000-2001 levels ($675,000 exclusion, 55% rate) unless Congress extends the provisions.
click table to make it bigger
* * * * *
Some Numbers
Based on 2004 IRS data (the latest available, full table below):
2.34 million adults died (a remarkably constant number over the past decade)
19,294 taxable estate returns were filed (less than 1% of adult deaths)
$5.3 million average taxable estate
22% average tax rate on taxable estates
$22.2 billion aggregate estate taxes collected (down from $24 billion in 2000)
click table to make it bigger
Source: http://www.irs.gov/pub/irs-soi/08es01hi.xls
* * * * *
Candidates’ Plans
Obama proposes a $3.5 million exclusion ($7 million for a married couple) with a top rate at 45%.
McCain proposes raising the exclusion to $5 million per person (which is thought by many to be the appropriate size to help small-business owners avoid cash-flow difficulties upon the death of a family member). and cutting the top federal estate-tax rate to 15% (linking the death tax with the current capital-gains tax rate … so that ” Americans will not be forced to pay more in death than they would if they had sold property prior to their death)”
Both Obama & McCain support retaining the current system for valuing stocks, mutual-fund shares and other inherited property whose value has increased over the years. at the time of the death (versus the original cost basis). This “stepped-up basis” is important to many heirs because it can affect how much they eventually owe in capital-gains tax, if anything at all, when they sell inherited property.
Source: http://online.wsj.com/article_print/SB121495543483521281.html
* * * * *
Observations
1. Under either plan, very few estates — less than 1 in a hundred — would pay Federal Estate taxes.
2. I’m surprised that the stepped-up cost basis doesn’t get more attention. Strikes me that eliminating it makes more sense than raising capital gains rates across the board.
3. These are only FEDERAL estate taxes. States impose their own estate taxes — and they vary widely (e.g. NY and NJ are high; FL and NV are low). For state rates check out http://www.finance.cch.com/text/c50s15d170.asp
4. Charities will benefit (versus complete repeal). The super-rich can direct mega-gifts to charities and foundations to at least keep the money out of the government’s hands.
5. Heirs may benefit by getting an early distribution of estates via gifts … which are limited to $12,000 per giftor / giftee combo … meaning that a married couple can give $24,000 to an individual, tax free, each year
6. Bottom line, for all but the uber-rich, this doesn’t seem like a big issue — as long as the candidates follow through on their promises (ok, call me cynical).
7. I say, since Warren Buffet is parading his tax guilt so publicly these days, set up a separate provision to tax all of his estate 100%. (Note: Buffet announced plans to give much of his estate to the Gates Foundation. That’s a worthy cause, but diverts money from the government coffers — where he wants everybody else’s money to go. Gotta ask: huh?)
* * * * *
Want more from the Homa Files?
Click link => The Homa Files Blog
The Homa Files 