Archive for January, 2008

What’s All This Stimulus Nonsense?

January 30, 2008

Congress is rushing headlong toward passage of a cynical, election-year tax rebate for Joe and Jane America, ostensibly to salvage a sinking economy. The idea is that we’ll all run out and spend our rebates and thus achieve the desired “stimulus.”

Not gonna happen, my friends. If our family gets a rebate, we’ll be sinking it into paying down debt, not engaging in more conspicuous consumption.

It sounds like plenty of folks are thinking the same way, too. Here are some quotes from people interviewed by The Washington Post:

— “I would pay down what’s left on the credit card from Christmas and see what is left on the college bill. With all the brainpower in D.C., they can’t come up with a better stimulus idea?”

— “I would save it. It will not stimulate the economy. It’s the dumbest idea I have heard. They need to feed the money to businesses. Not to individuals, because individuals will just save. People, generally when times are tough, they will save their money.”

— “It’s like trying to put a band-aid on a gunshot wound. There is nothing carrying the economy.”

— “Taxes gone up. Groceries gone up. No raise. You have your bills. You can barely cope. Three-hundred dollars — how long can that last? That can’t even buy groceries.” Plus this similar comment: “How quickly can you blow $300? That wouldn’t last two weeks in gas money in my truck.”

— “It’s a rip-off. This is all a shadow and a dream. They give you the illusion you are getting something, but you are losing something.”

Wanna Pay More Taxes? Send A Check

January 29, 2008

President Bush had plenty to say about tax policy last night in his final State of the Union address. He even injected this dose of tax humor into the speech:

Some in Washington argue that letting tax relief expire is not a tax increase. Try explaining that to 116 million American taxpayers who would see their taxes rise by an average of $1,800.

Others have said they would personally be happy to pay higher taxes. I welcome their enthusiasm. I’m pleased to report that the IRS accepts both checks and money orders.

The Car Inspection Rip-Off

January 29, 2008

You may recall my recent post about the taxes we paid on our Toyota Sienna when we bought it a year ago this month. Well, that one-year anniversary means Aunt Virginia is waiting for another handout, this time in the form of the annual vehicle inspection.

There goes another 26 bucks down the bureaucratic drain.

I appreciate the rationale behind inspections. We don’t want people driving cars that are unsafe or unnecessarily pollute the environment. But in the quarter-century that I’ve been on America’s highways, I’ve only had a car fail inspection two or three times at most — and usually because I’ve been lax in getting the brakes changed or doing other regular maintenance. I’ve never had a serious problem revealed in an inspection.

So why do we have to go through the hassle every year? Do you really need to ask? The explanation is the same for fees like the annual inspection as it is for taxes: The government wants our money to work its fiscal madness.

Don’t Fall For The IRS E-Mail Scam

January 29, 2008

It’s bad enough that government revenuers legally relieve us of our hard-earned cash; it’s worse that high-tech scam artists try to seize upon the name of the IRS to rob the unsuspecting of even more money.

If you get an e-mail like this one that I received at my work account, don’t click on the link and by all means don’t respond to it by disclosing personal financial information:

After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of $134.80. Please submit the tax refund request and allow us 6-9 days in order to process it.

Protest Taxes And Go Straight To Jail

January 28, 2008

It’s bad enough when the government raises your taxes; it’s worse when they arrest you for daring to speak your mind against new taxes.

Blogger Michelle Malkin reports, with video of the arrest to illustrate the story:

Anti-tax activists in [New Jersey] were arrested last week for handing out flyers outside a town hall meeting convened by Democrat Gov. Jon Corzine.

Maybe I should think twice about continuing this blog. Nah.

Buy A Car, Go Without Food

January 27, 2008

This time last year, we took the plunge and bought a new minivan. The Oldsmobile Silhouette we had bought used from my parents had about 150,000 miles on it, so we jumped at the chance to lock in 0 percent interest on a new 2006 Toyota Sienna.

Our salesman reminded us of that purchase with a corny “anniversary” letter several days ago. The letter made me remember the tax sticker shock I had when we bought the car, so I dedided to relive the experience.

At a rate of 3 percent, we paid $692.04 in sales taxes. But that’s not all. There was also a $38.76 charge for the “dealer’s business license tax,” $34.50 for “government license fees” and $10 for “government certificate of title fees.”

The total tab for taxes and fees for a new car: $775.30. That’s enough to feed a family of four for two months or more, even with today’s inflation.

‘These Taxes Are A Killer’

January 27, 2008

That’s what Mendon, Mass., resident Russ Gregoire said upon opening his third-quarter property tax bill. He voted against the increases that have increased taxes in Mendon 10.27 percent. Taxation with representation certainly hasn’t been kind to him.

‘Dishonest’ Toll Taxes In New Jersey

January 27, 2008

A report from The News Journal in Wilmington, Del., some of whose residents could be among those paying higher tolls on major thoroughfares in New Jersey:

Aaron Tanzer doesn’t like the idea that every time he drives on the New Jersey Turnpike, his hard-earned dollars — money he made in Delaware — could go toward paying down the Garden State’s debt.

He might feel differently if doubling the tolls in New Jersey would mean better highways, but out-of-staters shouldn’t have to pay for New Jersey’s past financial mistakes, he said. “It seems dishonest,” said Tanzer, of Bear. “Those tolls were intended to help people who drive those roads.”

To New Jersey Gov. Jon Corzine, raising tolls on the Atlantic City Expressway, Garden State Parkway and New Jersey Turnpike, and introducing tolls on New Jersey 440 in Middlesex County, is the least painful way to pay off $16 billion in state debt and fund transportation projects for the next 75 years.

The Candy Man Can Tax You, Too

January 27, 2008

The Candy Man must be related to Aunt Virginia because he collects a tax for her every time we stop to satisfy our sweet tooth. All five of us Glovers made an unhealthy stop for candy bars today, and it cost us 9 cents in tax.

One of the side benefits of blogging about our daily taxes may be that it makes us think twice about spending money on “food” we shouldn’t really be eating anyway.

Just dreaming!

Tax Bite, Week 4

January 26, 2008

Jan. 20-26
Gasoline: $10.65
Groceries: $3.84
Eat-In/Other: $4.86
Sales: $6.62
Metro: $3.30

Weekly total: $29.27
Year-to-date total: $132.46

The Upside Of A Down Housing Market

January 26, 2008

I used to think that buying a home was a smart financial move because mortgage payments didn’t increase every year like rent. Silly me, I left the greedy government out of the home-ownership equation.

Ever since we bought our first home in 1997, our mortgage payment has increased every year because of property taxes. As our property increased in value, the taxes pegged to that value did as well. That reality has been a serious pain in our family budget the past few years because of skyrocketing property assessments in Northern Virginia.

These days the housing market is in the tank. That’s never a good thing, but there is an upside to it: lower taxes. We were pleasantly surprised to receive a hefty rebate from our escrow account yesterday.

The government is sure to get a slice eventually, though. We can either splurge by spending our windfall — and paying sales taxes. Or we can dump it into a savings account — and pay taxes a year from now on the interest we earn.

It’s Expensive To Be A Soccer Mom

January 26, 2008

I drive a Toyota Corolla because I use it primarily for commuting solo and thus can save money thanks to the better gas mileage. Buying less gas also means paying fewer taxes.

But my wife has to haul three kids most of the time, so her vehicle is a Toyota Sienna minivan — the choice of soccer moms across America. Soccer moms don’t get great gas mileage and thus have to pay more in gas taxes.

My wife filled the Sienna this morning. The tab of $50.02 included $6.69 in taxes. Ouch!

‘Abolish The IRS’ — I Like The Idea

January 25, 2008

It’s an idea espoused by Republican presidential candidate Mike Huckabee in his latest campaign ad: “I wanna be the president who nails the going-out-of-business sign on the door of the IRS. … I’ll lead the fight to abolish the IRS, and we’ll keep our jobs and paychecks.”

Huckabee supports the FairTax proposal to eliminate all federal income and payroll taxes — personal, corporate, gift, estate, capital gains, alternative minimum, Social Security, Medicare and self-employment. A “consumption tax,” fancy lingo for a sales tax, would be imposed instead, and poor people would receive rebates for taxes they pay.

I don’t like any taxes, but a plan to kill a tax code that forces average folks to labor for hours over tax forms or hire accountants definitely interests to me — and a consumption tax encourages savings because if you don’t spend it, you aren’t taxed. Another appealing option is a flat tax on income to make filing easier.

The Tax Hikers Of Minnesota

January 25, 2008

Residents of Minnesota soon may be paying up to 7.5 cents more a gallon at the gas pump. Republican legislators in the Gopher State see a tax hike of that amount, which was proposed by the U.S. Chamber of Commerce, as a potentially acceptable compromise for funding transportation projects.

The state’s per-gallon gas tax — currently at 20 cents, according to the American Petroleum Institute — would jump to 27.5 cents, and total federal and state taxes would be 45.5 cents per gallon.

Don’t Expect Checks Anytime Soon

January 25, 2008

Anytime federal officials pass a tax law, they make life miserable for the IRS — and taxpayers feel the burden.

Last year, for instance, Congress passed a law to extend something called the “alternative minimum tax.” It’s designed to make sure even the wealthy pay at least some taxes despite their write-offs, but as family incomes have increases, more and more people are being hit by the tax.

The IRS griped about the December vote on  the proposal taxing its antiquated computer system and delaying the start of the 2007 tax-filing season.

Now President Bush and Congress appear to be on the fast track to giving millions of Americans tax rebates this year and the IRS is telling them to expect a wait. Again, the IRS’ technology are part of the problem.

The New York Times reports:

President Bush’s plan to send payments to 117 million households to stimulate the economy would impose major strains on the Internal Revenue Service, delays in answering calls to the agency and require a host of technical rules to determine who ultimately collects the benefits, officials said Thursday.

… The Congressional Joint Committee on Taxation warned that the tax-filing season could be disrupted and hinted that it might be June before checks were issued.

IRS computer and other systems “are today fully engaged in processing 2007 tax returns,” the committee said Monday in a report. “As a result, it is not practical to contemplate distributing cash rebates until the peak filing season is completed, which in past years has been the very end of May.”