Dave Barry on the Economic Stimulus Payment

This year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgen.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn’t that stimulating the economy of China?
A. Shut up.

Polygamist cult gets millions from U.S. government

Source: Jack Douglas Jr., McClatchy Newspapers.

FT. WORTH, Tex. American taxpayers have unwittingly helped finance a polygamist sect that is now the focus of a massive child abuse investigation in West Texas, with a business tied to the group receiving a nearly $1 million loan from the federal government and $1.2 million in military contracts.

The ability of the Fundamentalist Church of Jesus Christ of Latter Day Saints, or FLDS, to operate and grow is largely dependent on huge contributions from its members and revenue from the businesses they control, according to a former accountant for the church, and government officials in Utah and Arizona, where the sect is primarily based.

One of those businesses, NewEra Manufacturing in Las Vegas, has been awarded more than $1.2 million in federal government contracts, with most of the money coming in recent years from the Defense Department for wheel and brake components for military aircraft.

A large portion of the awards were preferential no-bid or “sole source” contracts because of the company’s classification as a small business, according to online databases that track federal government appropriations.

NewEra, previously known as Western Precision Inc. and located in Hildale, Utah, also received a $900,000 loan in 2005 from the federal Small Business Administration, the data show.

The president and chief executive of the company is John. C. Wayman, identified as an FLDS leader and a close associate to Warren Jeffs, the sect’s “prophet,” who was convicted last year as an accomplice to rape for arranging the marriage of a 14-year-old girl to her 19-year-old cousin.

When Jeffs, who was one of the FBI’s Ten Most Wanted Fugitives, was arrested in the summer of 2006, he was driving Wayman’s late-model red Cadillac Escalade, government officials say.

Wayman did not return phone calls seeking comment.

On NewEra’s Web site Wayman says the company is “an honorable and valuable asset to our country” in helping build military and commercial airplanes that carry people throughout the world. He does not mention its ties to the FLDS.

Steve Barlow, human resources manager for NewEra, said last week that it would be inappropriate to comment, “Given everything that’s going on. I could only give you the company motto: ‘Good parts on time.’”

U.S. Rep. Kay Granger, the Fort Worth Republican who sits on the House Appropriations Committee that deals with issues of defense, military and homeland security, said she is surprised that the federal government is doing business with a group accused of mistreating women and children.

“It makes me very uneasy,” Granger said. “It needs to be investigated without a doubt.”

To begin with, she added, federal authorities should look into NewEra’s financial records.

John Nielsen, who worked for the company when it was Western Precision in Hildale, said in a 2005 affidavit that he and other FLDS members were made to work for little or no wages, even as the company was bringing in lucrative government contracts and other work.

At the same time, $50,000 to $100,000 in company profits were going each month to FLDS “and/or” Jeffs, Nielsen said in the affidavit, filed as part of a civil lawsuit.

He said he and other sect members thought their working for free or for extremely low wages would bring them redemption. Instead, Nielsen said in the affidavit, he was found to be “wanting” by the sect’s leadership, ordered off the property and separated from his five young children and his wife. She was “reassigned” to another man, becoming the fourth of his six wives.

“It broke my heart,” Nielsen said in the affidavit. He declined to comment when reached by phone Friday.

In Texas, authorities raided the FLDS’ sprawling YFZ Ranch near Eldorado on April 3, beginning an exhaustive search of its 1,691 acres. Authorities were acting on a tip from a 16-year-old girl inside the compound who said she had been beaten and raped by a 50-year-old man whom she was forced to marry.

Since then, a state district court judge has ordered the removal of 416 children, many of them young girls who have children or are pregnant after forced encounters with their “spiritual” husbands in the sect’s towering white limestone temple, officials say.

“There’s a lot of bad shit in there,” said a high-ranking official with the federal Justice Department who did not want to be identified because of the sensitivity of the case. On Tuesday, the Justice Department executed a sealed FBI search warrant at the ranch.

While the men of the sect have held close rein on their “plural wives” and children, seldom allowing them to associate with the outside world, the male leaders have fanned out into successful public business ventures. They work as government defense contractors, dairy farmers, engineers, construction contractors, log-cabin homebuilders and suppliers of lanyards, the cords used on eyeglasses or nametags.

In addition, JNJ Engineering, a company owned and operated by FLDS leaders, has made millions of dollars in Las Vegas, the Las Vegas Review-Journal reported in September. The company won $11.3 million in contract work from the Las Vegas Valley Water District; all but one of the project workers came from the twin towns of Hildale and Colorado City, Ariz., where most of the sect’s 10,000 members live.

Jethro Barlow, a former accountant for the FLDS whom Warren Jeffs excommunicated in 2003, said Jeffs ordered sect members, their families and the companies they operated to “give till it hurts….

“And people did.”

Jeffs was able to rally church members to tithe heavily, even if it hurt them financially, because he had convinced them that they had to prepare for the end of the world, Barlow said.

The fever-pitched preparation continued, even after several apocalyptic deadlines had passed. It motivated the rapid construction of the temple at the YFZ Ranch and the erection there of manufactured cabin-like homes made by sect members in Canada, he said.

Barlow, who remains in Hildale, said he believes he and his family were kicked out of the FLDS because they were not among the favored ones in Jeffs’ flock.

Although Jeffs is now behind bars, sect members still consider him their leader and prophet, said Bruce Wisan, a nonmember appointed by the state of Utah to replace Jeffs as manager of a the FLDS’ trust. Established in 1942 to “preserve and advance the religious doctrines” of the church, it is now estimated to be worth between $100 million and $150 million.

Under Jeffs’ direction, Wisan said, sect households are required to tithe at least 10 percent of their gross income to the church, plus an extra $1,000 a month.

Tim Bodily, an assistant attorney over the tax division of the Utah attorney general’s office, said Wisan has received little cooperation from those within the sect, which has traditionally shown distrust for outsiders.

“He’s been provided no records at all, and no one inside the organization has provided any inside knowledge. … It’s a very difficult thing to do,” Bodily said. “Progress moves slow when dealing with these people. Texas has its hands full.”

Douglas is a staff writer with the Ft. Worth Star-Telegram.

Connecticut poor pay more of income on taxes, than rich according to report

From WTNH.com:

New Haven (AP) — A new report shows Connecticut’s middle class and poor families pay a higher percentage of their income in state sales and local taxes than the wealthiest families.

The report by Connecticut Voices for Children is based on an analysis of state and local tax data, the New Haven Register reported.

The report says the wealthiest Connecticut families pay 4.7 percent of their income in state and local taxes.

Middle-class families pay 9.6 percent of their income in state and local taxes. The report shows the poorest 20 percent pay 10.9 percent.

Opponents of increasing taxes for Connecticut’s wealthiest families city state figures show the top 5 percent of Connecticut taxpayers pay more in state income taxes than the bottom 95 percent combined.

IRS Audits of Big Companies Fall to All-Time Low

Source: TaxProf Blog:

The Transactional Records Access Clearinghouse (TRAC) of Syracuse University has issued a new report, Audits of Largest Corporations Slide to All Time Low:

The FY 2007 audit rate for the nation’s largest corporations has plunged to its lowest level in the last 20 years, less than half what it was in FY 1988 … The historic collapse in audits for the corporations with $250 million or more in assets was especially notable during the last two years when the rate dropped from 43% in FY 2005, to 34% in FY 2006 and then to an all-time low of 26% in FY 2007. [Click on chart to enlarge.]

But along with the declining number of audits for the largest corporations, the IRS data point to a second significant finding: the thoroughness of these essential audits has been dropping. One example of this broad problem can be seen by the fact that the typical amount of time auditors spend on each of the large corporate audits is down by 20% over the last five years.

Press coverage:

• Associated Press
• New York Times
• USA Today
• Wall Street Journal

Clintons Made $100m Since 2000, So Why Must Taxpayers Pay $2m/Year for Post-Presidential Perks?

By Edward A. Zelinsky of TaxProf Blog:

The Clintons’ tax returns raise one further issue which also requires public discussion: The federal subsidy the Clintons have received over the last seven years while earning in excess of $100 million. Mr. Clinton’s aggressive pursuit of post-presidential income is incompatible with the extensive public support he has received from federal taxpayers since leaving office. That public support was designed to preclude the nation’s chief executives from facing financial hardship after their terms of office. It was not intended to subsidize the aggressive pursuit of a post-presidential fortune.

The federal taxpayer’s subsidy of Mr. Clinton has several components. First, as a former president, Mr. Clinton is entitled to receive, for the remainder of his life, the salary of a cabinet secretary. That salary is today $191,000 per annum. In addition, as a former president, Mr. Clinton also receives, at taxpayer expense, “suitable office space appropriately furnished and equipped.” Mr. Clinton’s office in New York City costs federal taxpayers over $700,000 per year to lease and operate. Federal taxpayers also defray the salary and benefits for office staff and some of Mr. Clinton’s travel outlays. The General Services Administration currently budgets for all of these costs a yearly total of $1,162,000 for Mr. Clinton. The equivalent annual figures for former President Bush and former President Carter are $786,000 and $518,000 respectively. In addition, Mr. Clinton is also entitled, at taxpayer expense, to Secret Service protection for the remainder of his lifetime – even though, as president, Mr. Clinton signed legislation limiting Secret Service protection for his successors to the first ten years after they leave office. …

For President and Senator Clinton, however, this post-presidential package merely provided a tax-financed base for the aggressive pursuit of unprecedented financial gain for a former chief executive. Mr. Clinton has apparently treated as tax-free much of the federal largesse he has received. …

This post-presidential package and the federal subsidy it represents were not intended as a conventional deferred compensation arrangement. They instead reflect the judgment that former presidents should not be required to hustle in the marketplace after they leave office.

A Tax System that Matches Oregon Values

By Mike Leachman via Oregon Center for Public Policy:

This tax season, a minimum wage worker who was employed full-time last year and raising one child will pay about $321 in state income taxes. That’s equivalent to the cost of about a month’s worth of food based on Bureau of Labor Statistics data.

For a single parent working at minimum wage $321 is a lot of money, especially when you compare it to the income tax bill that Intel Corporation, with $9 billion in profits, likely paid last year: 10 bucks.

Why is Intel, with $9 billion in profits, probably paying only 10 bucks? Because over the last decade the actions of Oregon’s legislature have not matched the values of Oregonians.

Intel hasn’t always paid a pittance in state income taxes. In 1997, the company paid over $50 million in income taxes to Oregon. The company boasted at the time that it was the state’s best corporate income taxpayer.

Today, though, thanks to huge corporate tax breaks handed to it by the Oregon legislature, Intel likely has joined the ranks of the majority of Oregon’s corporations, who get off paying just 10 bucks a year in income taxes on their profits.

That’s right, Intel, with $9 billion in profits, probably paid about three pennies for every dollar in state income taxes paid by a young working mother trying to raise a child on an annual income of about $16,200.

The story doesn’t stop with Intel, either. Most corporations operating in Oregon pay three cents for every dollar paid in taxes by a minimum wage worker. Two-thirds of the corporations operating in Oregon, including 20 corporations with profits of $1 million or more, get away with paying just 10 bucks a year in state income taxes. It would take 32 of those corporations to match the income taxes we ask that young mother working at minimum wage to pay.

It’s time for Oregon legislators to establish a new set of priorities for Oregon, priorities that better match the values of Oregonians. Oregon legislators wrongly shifted more of the costs of public structures away from big corporations and onto minimum wage workers and the rest of us. Let’s build a tax system that better matches Oregon values.

Oregon could eliminate income taxes on the minimum wage working mother by increasing the state Earned Income Credit. Such an increase would help that mother keep food on her family’s table, instead of sending a month’s worth of her family’s food budget to Salem to help pay for public structures — universities and state police, for instance — that Intel and other corporations operating in this state rely upon every day and get essentially for free.

What would it cost to eliminate the income tax on the minimum wage family? A little less than $50 million a year, or roughly the amount that Intel proudly paid in state income taxes a decade ago.

Oregonians believe hard-working families deserve food on the table. Next year, the legislature should better match its actions with Oregon values by increasing the state Earned Income Credit and raising the minimum corporate income tax so that corporations like Intel pay something similar to what they used to pay.

Think about it. Profitable Intel could once again proudly proclaim itself to be the state’s best taxpayer, and families struggling to make ends meet by working at a minimum wage job could open their cupboards and find that Salem had decided to leave them a little more to eat.

---

Michael Leachman is a policy analyst at the Oregon Center for Public Policy, which does in-depth research and analysis on budget, tax, and economic issues with the goal to improve decision making and generate more opportunities for all Oregonians.

THE NEXT TIME YOU HEAR A POLITICIAN USE THE WORD “BILLION”

The next time you hear a politician use the word “billion” in a casual manner, think about whether you want the “politicians” spending YOUR tax money. A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases.

A. A billion seconds ago it was 1959.

B. A billion minutes ago Jesus was alive.

C. A billion hours ago our ancestors were living in the Stone Age.

D. A billion days ago no-one walked on the earth on two feet.

E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it. While this thought is still fresh in our brain, let’s take a look at New Orleans It’s amazing what you can learn with some simple division.

Louisiana Senator Mary Landrieu asked Congress for $250 BILLION to rebuild New Orleans. Interesting number, what does it mean?

A. Well, if you are one of 484,674 residents of New Orleans (every man, woman, child), you each get $516,528.

B. Or, if you have one of the 188,251 homes in New Orleans, your home gets $1,329,787.

C. Or, if you are a family of four, your family gets $2,066,012.

Washington, D.C .. HELLO!!! … Are all your calculators broken??

Tax his land,

Tax his wage,

Tax his bed in which he lays.

Tax his tractor,

Tax his mule,

Teach him taxes is the rule.

Tax his cow,

Tax his goat,

Tax his pants,

Tax his coat.

Tax his ties,

Tax his shirts,

Tax his work,

Tax his dirt.

Tax his tobacco,

Tax his drink,

Tax him if he tries to think.

Tax his booze,

Tax his beers,

If he cries,

Tax his tears.

Tax his bills,

Tax his gas,

Tax his notes,

Tax his cash.

Tax him good and let him know

That after taxes, he has no dough.

If he hollers,

Tax him more,

Tax him! until he’s good and sore.

Tax his coffin,

Tax his grave,

Tax the sod in which he lays.

Put these words upon his tomb,

“Taxes drove me to my doom!”

And when he’s gone,

We won’t relax,

We’ll still be after the inheritance TAX!!

Accounts Receivable Tax

Building Permit Tax

CDL License Tax

Cigarette Tax

Corporate Income Tax

Dog License Tax

Federal Income Tax

Federal Unemployment Tax (FUTA)

Fishing License Tax

Food License Tax

Fuel Perm it Tax

Gasoline Tax

Hunting License Tax

Inheritance Tax

Inventory Tax

IRS Interest Charges (tax on top of tax),

IRS Penalties (tax on top of tax),

Liquor Tax,

Luxury Tax,

Marriage License Tax,

Medicare Tax,

Property Tax,

Real Estate Tax,

Service charge taxes,

Social Security Tax,

Road Usage Tax (Truckers),

Sales Taxes,

Recreational Vehicle Tax,

School Tax,

State Income Tax,

State Unemployment Tax (SUTA),

Telephone Federal Excise Tax,

Telephone Federal Universal Service Fee Tax,

Telephone Federal, State and Local Surcharge Tax,

Telephone Minimum Usage Surcharge Tax,

Telephone Recurring and Non-recurring Charges Tax,

Telephone State and Local Tax,

Telephone Usage Charge Tax,

Utility Tax,

Vehicle License Registration Tax,

Vehicle Sales Tax,

Watercraft Registration Tax,

Well Permit Tax,

Workers Compensation Tax.

STILL THINK THIS IS FUNNY?

Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world.

We had absolutely no national debt, had the largest middle class in the world, and Mom could stay home to raise the kids.

What happened? Can you spell ‘politicians!’

And I still have to “press 1″ for English.

What the heck happened?????

10 reasons your taxes are going up

http://www.marketwatch.com/news/story/story.aspx?guid=%7B2DA65225%2DC2F9%2D48C9%2DA828%2DD52C52621C6C%7D&siteid=rss

Paul B. Farrell
Market Watch
Mon, 24 Mar 2008 06:03 EDTReason No. 1: “Most Americans have yet to feel any of the costs of the Iraq war,” write Nobel economist Joseph Stiglitz and Linda Bilmes in an excerpt of their new book, “The Three Trillion Dollar War,” in Vanity Fair. “The price in blood has been paid by members of the volunteer military. The price in treasure has been financed entirely by borrowing. Taxes have not been raised to pay for the war.”

Well, folks, the party’s over. Campaign rhetoric won’t hide America’s excesses, denial, incompetence and arrogance much longer. No matter who’s elected, taxes will increase to cover massive debts. Greed has driven America’s great economic engine into a “debt contagion” ditch with a recession, bear market, price inflation, and weak job and housing markets … you bet your taxes will increase.

Yes, our five-year war was totally financed by borrowing. But unfortunately, “deficit spending gives the illusion that the laws of economics can be repealed. They cannot. Americans will have to pay for the war at some point — and when they do, they will be paying not the Bush markdown but the full price,” the authors say.

We’ve been mislead by Washington’s Enron-style accounting that hides many costs:

* Supplemental financing bills, outside the budget
* No veterans health-care estimates included
* No equipment replacement costs to restore our military
* Nothing about increases in state and homeland security

The real cost isn’t $800 billion, it’s already $3 trillion. And still, it doesn’t include

* Interest on the ever-increasing $9.3 trillion federal debt
* Damage to our credibility from a weak dollar
* Out-of-control inflation in energy
* And the brutal damage to Iraq and other Gulf states

Washington’s hiding all that from us. We were sold a war-on-the-cheap, to cost a mere $50 billion to $60 billion, to be self-financed out of oil revenues. Today we’re spending $50 billion every month! This war is already an economic disaster for America and the bill’s still coming due.Still, we know there’s strong opposition to taxes. But can a new president change much? Certainly not with two-thirds of the budget in untouchable entitlements and interest costs. Besides, Washington’s not run by our 537 elected officials but by 35,000 lobbyists. And after the elections, all 35,537 will still be part of a conspiracy that hates change and loves to spend the $3 trillion Federal budget.

Mark my words: Taxes will (must!) be increased to recover from years of excessive spending, accumulating deficits and future earmarks. A new president may expose the problems but without Congressional restraint the taxpayers will get stuck paying “the full price.”

Frankly, since both parties are mired in narrow ideologies, it’s questionable whether either can manage a $15 trillion GDP economy. Read “Mismanagement 101,” Dan Gross’s Newsweek column: “As oil hovered near $100 a barrel, President Bush complained to OPEC about high oil prices. OPEC president Chakib Khelil responded acidly that crude’s remarkable run had nothing to do with the reluctance of Persian Gulf nations to pump oil, and everything to do with the ‘mismanagement of the U.S. economy.’” And our heavy reliance on borrowing keeps making it even more difficult for the next president.

But unfortunately, even though the party’s over, that $3 trillion war debt is just a fraction of America’s out-of-control debt which is bigger than the official $9.3 trillion federal debt. It’s reason No. 1 taxes are going up.

Here are another nine problems increasing our government’s debt and adding pressures for new tax hikes. I’m sure you can think of many others:

2. America’s new Wall Street welfare program

This one’s scary. For the first time in almost a century, the Fed’s bailing out the investment bankers, those wild speculators who got us in this mess — bailed out while two million homeowners face foreclosures and increasing interest rates.
The real sinners are free to sin again! Like J.P. Morgan Chase’s $2 — now $10 — freebie of Bear Stern’s equity, while the Fed stuck the taxpayers with billions of Bear’s junk debt. Now Wall Street’s greedy traders are free to start speculating again, playing in the same old $516 trillion high-risk derivatives casino. Bad move: The Fed’s setting America up for an even bigger crash around 2012.

3. The Fed’s nationalizing America’s financial industry

Bear Sterns is a symptom of a systemic disease. As BusinessWeek put it: “Financiers preached the free-market gospel and pocketed unheard-of sums of money, yet when times got tough they called for a government bailout.”

The Fed’s dealing with America like a third-world banana republic, effectively nationalizing our financial industry! Wall Street’s speculators have over $200 billion in junk write-offs. But like the government accounting tricks hiding war costs, Wall Street has also been inflating junk asset values and ginning up profits. And now the Fed’s even helping them mask losses to prevent panic. Eventually this PR stunt will cut Wall Street’s future earnings and increase taxes.

4. Huge resistance to cutting social and entitlement programs

Lobbyists like AARP will fight all cutbacks in Medicare and Social Security entitlements, even though those unfunded benefits will balloon to $50 trillion to $65 trillion within a generation. Economists say solving this problem will take Draconian cuts of 40% in benefits or tax increases of 40%. If we don’t, entitlements will consume the entire budget in a generation. Untouchable near-term: Ergo, minimal cuts, higher taxes.

5. America’s pork barrel lobbying machine

The Washington Post says lobbying is “Washington’s biggest business.” All those 35,000 lobbyists will be around for the entire 2009-2012 first term of the next president, and all screaming for government handouts. The Democrats need them. And while McCain promises to veto earmarks, his campaign’s inner circle is made up of special interest lobbyists, ostensibly working for “free.”

Expect little change. Lobbyists earn big bucks squeezing megabucks out of the federal budget, and your taxes pay the bills.

6. White House’s free market nonaction policies

“We’re on top of it,” said the President in his St. Patrick’s Day speech at the New York Economics Club, as if the credit meltdown had little effect on the economy. The Treasury secretary even got a Katrina-style “great job, Hank” for working one whole weekend to magically fix the crisis.

Unfortunately, the Treasury and the Fed are following the same playbook that pushed the 1970s economy into a long, deep recession. Pimco’s Bill Gross says we need an aggressive Rooseveltian fiscal package. No chance. This administration only knows a free market (for business) and tax cuts (for the top).

7. Aging infrastructure: roads, bridges, water, sewer, etc.

Imagine taking that $50 billion monthly cost of fighting and rebuilding Iraq and shifting it to upgrading our own highways, hospitals, power, sewer and water plants. Dream on. Yet our deterioration continues and deferred maintenance only works so long. Expect higher gas taxes, plus sizeable cutbacks in state and local services, or general tax increases.

8. Paradigm shift: consumer spending vs. consumer savings

In one generation our savings rate declined below zero. Policymakers favored a consumer-driven economy, capital formation fell and debt piled up. Meanwhile, consumers took a cue from an out-of-control “spend and borrow” government piling up huge deficits.

9. Recession reality replacing arrogant optimism

The past five years the Wall Street Bubble Machine relied on an artificially low 1% Fed rate to create the housing boom and then the subprime-credit meltdown. Meanwhile our optimism and faith in capitalism sank with all the phony asset values and stock prices concocted by Wall Street … and it’ll happen again … because Wall Street’s relentless, all-consuming greed is setting up the economy to crash and burn again, all too soon … and the taxpayer will pick up the tab … again.

10. Now your turn, what’s your top reason taxes will increase?

Seriously, you tell us, what did we miss? Or do you honestly believe we can “stay the course” and not increase taxes? If so, tell us how. Tell us why we’re wrong in saying: “No matter who’s the next president, your taxes are going up.”