Tax Guru-Ker$tetter Letter
Friday, August 24, 2001
Advance Look At Tax Forms
I am as vocal a critic of the IRS as anyone; so I look for opportunities to offer some balancing praise. They are doing a good job in making information available via their website. This is great from our side as tax practitioners and should be saving the agency a lot of taxpayer money in printing & postage.
Until just recently, IRS would mail out draft versions of the next year's tax forms upon request and sometimes print them in their weekly Internal Revenue Bulletin. I have always appreciated having an advance look at the forms for several reasons. I often used them in my seminars as hand-outs and overheads in order to keep everything as up to date as possible. I lose respect for books & classes that use tax forms that are several years old.
It's also useful in preparing to deal with new tax laws. For example, I have been following the new 1040 in regard to the advance rebate checks that are being mailed out. According to the draft form, there is going to be a worksheet in the instruction booklet that will assist in calculating how much credit a person is entitled to and factor in what has or hasn't been received already.
You can see the newly released drafts of tax forms here. I usually stop by a couple of times a week and sort the list by date to see what new forms are out and download the ones I am interested in.
Monday, August 20, 2001
Budget Surplus Misconceptions
Little Dick Gephardt and his fellow traveler socialists in D.C. are trying to call any tax cut irresponsible because the one recently passed has supposedly hurt the size of the budget surplus. Rush Limbaugh devoted most of his show to this topic today. I'm a big fan of Rush's; but while he made some good points about the fact that the tax rebates are supposed to reduce the surplus, he missed the big picture. He, and everyone else, have fallen into the trap of discussing the budget surplus as if the numbers are real.
This was just another Clinton time bomb. The surplus never really existed. All of the projections were literally pulled out of thin air, based on the underlying assumption that the stock market & resulting capital gains taxes would increase every year at the same rate as in 1999, which was an unusual bonanza year for the IRS. Clinton tipped his hand several times when every few months he would announce that they had magically discovered another trillion dollars of future surplus. It was a bunch of crap then and it is now. Unfortunately, nobody in power will admit this fact because that would reduce their power, which is all based on how much money they redistribute.
I have known Fed budget people for years and they have never once been anywhere close to accurate in their predictions of future budgets. They are no better than the weatherman. Budget estimates of 12 months out are never accurate; which makes any of these ten year predictions competely insane. If the Federal number crunchers are able to somehow get within $50 billion of their projections, they consider it a bulls-eye. They rarely hit closer than $100 billion. Their use of those future surplus numbers as gospel is as valid as if I were to project winning the lottery every month and spend accordingly. As with almost everything else, the mass media are completely incompetent when discussing this topic and are not to be trusted.
Friday, August 10, 2001
IRS Finally Defends Itself
On several occasions over the past 15+ years, I have expressed my frustration, as well as that of other tax practitioners, in our attempts to counter the arguments of the growing number of tax protestors. I have long had the very distasteful feeling of doing the IRS's job for them because they took the approach that to respond to the bogus claims would in some way raise their respectability. For all of these years, I have been pleading with IRS that they were completely wrong in that strategy. Advocates of the idiotic tax protestor schemes were using the IRS's silence as a sign that IRS agrees with them. IRS officials didn't seem to understand that in our society, silence signifies agreement.
With the exponential growth of tax protestor groups via the Internet, IRS officials have just now finally come to their senses and issued a 25 page formal document countering practically all of the tax protestor arguments being bandied about. It's in PDF format and can be downloaded here. Besides the debunking of the bogus theories, as I have done on several occasions myself, they cite several court decisions where proponents of those arguments lost and were often sent to the slammer, as additional incentive to pay attention.
I hope this finally takes the wind out of the sails of the scamming tax protestors and allows us to get back to fighting the screwed up tax system through legitimate means.
Federal Ponzi Scheme
I am glad to see more people using the same description for Social Security that I have been using for decades. This article by Dorothy Anne Seese is a very concise explanation of that point. Be sure to print it out & share it with your family & friends who are not on the Web and have to rely on the Democrat Party controlled media for their news.
This is another article that I discovered thanks to the hard working supporters of my new favorite website, Lucianne.com. This amazing site doesn't look like much at first; but it has become my main portal for the news every day. Even more valuable than the links to the actual cornucopia of news articles on the Web are the discussion threads accompanying each one. As with all such discussion boards, this one does have a few jerks (called "Site Pests"); but the majority of comments are very interesting. The discussion thread for Ms. Seese's article is here. Due to the massive volume of new items being posted, the threads are only alive for about two days.
Tuesday, August 07, 2001
One of my pet peeves for a long time has been how so many of the super-rich celebrities are so vehemently opposed to tax cuts, when they seem to be among those who would benefit the most. While I have long admired the work of such film makers as Tom Hanks and Steven Spielberg, it literally turns my stomach when I think of their support of the Clintons and their fellow Communist Travelers and their avowed hatred for Capitalism and the Constitution. I have some theories as to how they can rationalize these seemingly contradictory stands, which I hope to expound on some day.
In the meantime, here's another excellent piece on the subject by one of my favorite writers, Jonah Goldberg of National Review.
He also covers another irritation I have with celebrities and politicians. How the heck can they have any understanding of how we normal folks have to cope with life when they have huge herds of servants to do everything for them? Queen Hillary still has a large cadre of Secret Service agents to carry her bags and do all of the menial tasks that we little people have to do for ourselves every day. I often dream of how much more I could accomplish if I had dozens of servants, especially if they were paid for by someone else
Friday, August 03, 2001
The Emperor Has No Clothes
I hate to keep repeating the same subject; but there has been more coverage recently about the Social Security scam than at any time I can recall. While I would be overly optimistic to believe that this will actually lead to true reform, it's still a positive sign that people other than just rabid extremists, such as yours truly, are openly discussing it. This is a good piece from today's Washington Times.
The most amazing thing is that so many people are acting as if this is a new discovery. I can still remember my very first accounting class in 1973, where we analyzed the financial assumptions and mechanisms of the Social Security system. The conclusion was that it was an unsupportable pyramid scheme that would eventually collapse before any of us in the class reached retirement age.
Ever since that time, I have made it my mission for myself and everyone I work with to avoid pouring more money down this rat-hole. Real privatization is not to allow the government to invest part of your money in alternative investments. Real privatization is not sending any of that money to Washington and investing all of it ourselves for our own future needs.