Nutter's Washington

Questions for the Weekend: Who Does Putin's Hair and Sick Of Ohio

It is only Thursday but I am already putting together the weekend list. Washington is calm for the time being. Congress is in what seems like a 2 year recess, unfinished business languishing, coming back sometime in mid-November to do who knows what.

I am bored with the election candidates. Have not heard anything new for the past 4 months. If you do not know whom you are going to vote for, then maybe you should not vote at all. The train of endless approved and non-approved idiotic commercials is so demeaning to watch. They  must think we are all mush-headed.

The President stiffed world leaders at the UN General  Assembly so he could go and meet with the most important people in the world, the good citizens of Ohio. He cannot seem to figure out who instigated the debacle in Libya. I guess he is still on the “ally or enemy” question but he has earned the title of honorary citizen of the State. Wish he would have spent some time being a Leader of the Free World, rather than Youngstown. 

Estate Tax: Tax Rates, Carryover Basis and Stepped-Up Basis: Watch Out!

The federal estate tax Law is a mess, its structure vacillating over the past three years and its future is uncertain. It is not worth the effort to go through all the changes but there a few important things to note.

First of all the federal estate tax does not impact all that many estates even though the estate of every U.S. citizen is subject to tax upon death. Impact in the sense the decedents estate has to cough up addition dough to the government for dying and having property. However, there is a lurking income tax issue out there that goes along with it and it is a sneaky one.

Some background on the estate tax is in order. The federal estate tax is currently set at 35 percent on estates over $5.12 million. If nothing changes, on Jan. 1, 2013, the estate tax exemption will drop from $5.12 million to $1 million, and the estate tax rate will jump from 35 percent to 55 percent, the tax regime of pre-2001 changes.

Congressional Lame Duck: Abject Political Failure and a Bad Idea.

The Congress is about to go into a pre-election recess. Goodness, it is not even October 1^st. There are still about 50 days before the election. The amount of unfinished business is incredible and really important but lays fallow.

The Obama Administration does not care if Congress is in session. It has not worked with Congress for the past two years and even for the most part ignores fellow Democrats. Besides, Mr. Obama believes he does not Congressional approval for most of his agenda such an immigration amnesty, pulling the rug out of religious freedom for mandtory birth control health care and issuing pages of pages of new environment regulation. Actually it should be volumes of regulations. No real talk much less action on the fiscal cliff. I guess we all go “forward” over it.

So, Congress is out-of-here for a time. They passed what is known as a Continuing Resolution, which is actually just a massive one size fits all status quo spending bill. The latest one goes until March 2013. Congressional Leadership plans to come back to the Capital after their fates have been decided to solve all the problems in what is known as a “lame duck” session. Some lawmakers who return for this session lost their bids for reelection or retired and will not be in the next Congress.

Ten (10) Questions to Ponder over the Weekend

It is late Friday afternoon and I am tapped out for the week. Fortunately, I will be driving over to Black Water Falls in West Virginia tomorrow to gaze at majestic views and hear the babble of the water. However, I will not be idle as I have 10 questions to ponder over the weekend. No answers yet, but plenty to ponder.

1. Should the Republicans have nominated my cat-Mr. Giant- as their Presidential nominee as it would seem that anyone except Mitt Romney should be able to beat the incumbent. (Note: Mr. Giant was born in the United States as I have a real birth certificate and he while he is 7 in cat years, he is over 35 in human years)

 Mr. Giant pondering his next decision. 

 2. Is Federal Reserve Chairman Ben Bernanke a total flak for the Administration? Does Mr. Obama have pictures on him in some compromising position?

3. Is it possible that parts of the Muslim world do not like America even though Mr. Obama goes out of his way to support, praise them and has based his entire foreign policy on leading from behind?

4. Has anyone seen the photos of Kate Middleton in the nude?

5. Should anyone is Congress be re-elected or should we insist on all new candidates? Should they return a part of their salary for taking so many days off?

6. Do you think the Yankees will win the World Series against the Washington Nationals?

7. Do you know anyone, I mean anyone, who does not know who they will vote for in November? I do not. Even my garage guys have decided. Where are these undecided voters?

8. Are you sick of (a) swing states, (b) political commercials, (c) anyone from Ohio?

9. Whatever happened to global warming? Is that still around? How many illegal aliens will cross the Arizona-Mexico border this weekend? How many will be caught? How many will vote in the election? 

10. How many people have actually read the Constitution? What percent of high school graduates can identify all 50 States and their capitals?

 

Bonus Question to Ponder: If you put that Chicago Teachers Union Leader and the Mayor of Chicago in a no holds barred Texas chicken wire match, who would win?

Have a good weekend! 

 

 

Tax Drought: When will it Rain?

A good portion of the United States has in recent months experienced a water drought. Crops have withered, grain prices have increased, animal herds have been thinned, and food prices have increased as a result of the lack of moisture falling from the sky. It is horrible, a regrettable circumstances in spite of the crop insurance in place. 

There is another kind of drought for those of us who follow federal tax policy and earn our living at such endeavors. We are experiencing a drought also. Not, of course, of the same magnitude but nevertheless. Nothing is happening, now goint go happen anytime soon. 

According to the Congressional Joint Committee of Taxation, there are 60 tax provisions that expired in December 31, 2011 and another 41 that will expire at the end of this year. The size and magnitude of these provisions range from several billons of dollars a year to those that for budgetary purposes get an asterisk. Let’s take a peak at some of them.

• The Bush tax cuts will expire at the end of the year. Unless Congress acts not only does the top rate increase but also so do the bottom tax rates. The marriage penalty will also be re-instated.
• The current rates on capital gains now at fifteen percent will expire at the end of the year.  
• The lower rates on dividends installed in 2003 will expire at the end year.
• The Alternative Minimum Tax (AMT) will scoop up millions of taxpayers unless a correction is enacted before the end of this year.
• The temporary 2% employee payroll tax cut will also expire at the end of the year.

This is old stuff, the so called the "tax cliff". It is a legislative certainly none of the major tax issues will be solved, much less seriously considered until after the election.

Payroll Tax Reduction Expiration: Stepchild in the Room

The fiscal cliff is the dreaded phrase of the time. Unless you can not read, ever watch or read news or have devoted your life to only following football, the fiscal cliff is a combination of the expiration of about 140 federal income tax provisions and the first installment of the budget sequester which mandated a reduction of budget authority for some defense and domestic social programs. This will all happen in less than about 4 months unless changed by Congress which will spend most of that time in recess.

The biggest tax increase will be the reversion to pre-2001 tax rates and levels for all taxpayers enacted during the Bush Administration. If current income tax rates are allowed to expire, every taxpayer will pay more taxes and perhaps even a few non-taxpayers will start to pay some modicum and token taxes. There are so many other nuances involved besides the actual marginal rate, like the marriage penalty, reduced rates on investment income and investment write-offs. In addition there is that nasty Alternative Minimum Tax (AMT)

However, there is a subject that should be mentioned and one, if not acted upon, will impact everyone by increasing taxes for all no matter what happens on the rates. It is the two percent reduction in employee payroll taxes first effective in 2011. I do not hear any of the candidates nor anyone in Congress bring this stepchild up for discussion.

Do You Like Me? Romney v. Obama

Last week during the Republican National Convention, there was considerable gibberish on the “likeability” of the candidates. Seems like various polls have put Mr. Obama as more likeable than Mr. Romney. So, it has come to that to decide the future workings of our government and its increasing impact on society and the economy.

I have known a lot of disagreeable people in my life. People who were mean, rude, and just unpleasant to be around. I have worked with them, socialized sometimes with them and encounter them almost every day. I do not like these people at all.

Mitt Romney is not unlikable. He seems like a man who has a great bond with his family, with his church and has gone out of his way to help others. He is not the kind of person I would pal around with, he comes from a different background, class, and his experiences in life are different from mine. He probably does not tell a joke well, may not be the jester at the party but he seems like a well-grounded solid guy. He is the neighbor who will wave back and return the borrowed lawnmower but not the one who you would invite to the backyard Bar-B-Que, not because he is unlikeable but he is just not comfortable to be around.

Mr. Obama, in my view, is not all that likeable. He seems narsicctic and phony. He thinks he is the smartest guy in the room and will tell you so but he is not, although he is a clever and successful politician. He is never wrong, it is always the other guys' fault He certainly does have some good qualities such as his affection for his family, good character. But, is this enough?  

If there was a social gathering, I could imagine Mr. Romney going around to make sure everyone has a drink or snack. I could imagine Mr. Obama sitting in the corner, pontificating and expecting someone to bring him a honey flavored beer.

Of course, my impressions are not based on any personal interaction. I can understand why some like Mr. Obama. He is younger, hipper, speaks in a cadence, and loves to embrace liberal social issues. However, I would not be inviting him over either.

Choosing a President is a personal decision. There are many factors that sway a vote. People can decide based on a single issue, a sound bite, rabid partisan allegiance, a person hair, or who knows what? What the country needs is competent government, a clear plan to address the many problems and a person with the fortitude to lead. Likable is not a factor, particularly where the difference between the candidate’s vision for America is so stark. 

One final note, former President Bill Clinton-the icon for liberal women’s groups for his cheating on his wife in the White House among other places-gave a well-received speech last night at the Democrat Convention. The dedicated party welcomed and deserved to see and hear their leaders, although in this case the speaker was disbarred and impeached. No matter about the performance or the substance of Mr. Clinton. It is not about him, although he would like it to be. It is about the election and record of President Obama.

 

 

Sixteen Trillion in National Debt: That did not take long

The U.S. Department of Treasury has announced the national debt has surpassed $16 trillion dollars sometime last week. Wow, I can remember $15 trillion like it was yesterday and $14 trillion before that. Seems like under the Obama Administration, the trillion dollar hits just keep on coming.

 

In case you do not follow these things, Mr. Obama has presided over four straight years of trillion dollar-plus deficits. Also, in case you do not follow these things, Mr. Obama does not care nor has he made any realistic effort to address this dangerous build-up of debt, particularly in the past two years. I mean a real effort, not some campaign fingerpointing, blame game. 

This week is the Democrat National Convention. Deficit reduction, or even slowing the growth of government spending will not be on the list of topics to discuss. Neither will the jobless rate. What will be on the speaker's podium is talk about gay marriage, abortion, immigration amensty, teacher's unions, tax increases, Bain Capital, and about any matter of character assassination one could dream up. Hard to believe Mitt Romney started WW I and WW II. 

That is not to imply the Republican Convention was much better. Stale slogans, short on specifics, and lots of rhetoric.  Most conservatives blame Mr. Obama if their newspaper is late. However, there is a difference and it is this. The Obama Administation has a record for all of us to judge. We all deserve some answers to the most important questions. Some explanation, not excuses. This would include the deficit, debt limit and the explosive growth of government. Do not expect much.

Which brings me back to the deficit. Almost $ 4 billion a day, day after day, day after day. Sixteen trillion and before next year sets, on to $17 trillion. Hard to imagine how it got this way, easier to imagine the eventual consequences.