Google 'owner's manual' -- Not Traditional Wall Street

Page one in today's NY Times called its financial reports a "manifesto attacking Wall Street's traditions and the practices of most public corporations." How refreshing!

taxes cut? I dont think so.

washingtonpost.com: A Job's Value Goes Beyond Pay

The Alliance of Professional Associations - Focused exclusively on serving the professional community

Sharon Says Pledge to Spare Arafat Is Lifted

http://gmail.google.com/gmail

this is google mail. I am testing it.

THE IRAN NUCLEAR ISSUE

Weapons of mass deception... That was Bush and Iraq

But in Iran it is another story....and some people are thinking about what to do, in the Senate Foreign Relations Committee. This is a good thing to do.

Letter from President Bush to Ariel Sharon

If you are like me, you want to see the letter with your own eyes. Here is it.

What is really key? It recognizes "two states living side by side in peace and security as the key to peace, and to the roadmap as the route to get there." The two state solution is not new. The roadmap is not new.

Steps outlined "mark real progress toward realizing my June 24, 2002 vision, and make a real contribution towards peace." "We are hopeful that steps pursuant to this plan, consistent with my vision, will remind all states and parties of their own obligations under the roadmap."

This means it is good for Bush because its steps are an attempt to revive the roadmap.

"United States remains committed to my vision and to its implementation as described in the roadmap. The United States will do its utmost to prevent any attempt by anyone to impose any other plan." We are serious and we are firm. This is good.

"Under the roadmap, Palestinians must undertake an immediate cessation of armed activity and all acts of violence against Israelis anywhere, and all official Palestinian institutions must end incitement against Israel. The Palestinian leadership must act decisively against terror, including sustained, targeted, and effective operations to stop terrorism and dismantle terrorist capabilities and infrastructure. Palestinians must undertake a comprehensive and fundamental political reform that includes a strong parliamentary democracy and an empowered prime minister." When and how? These are my questions and what will we do if nothing is done?

"Second, there will be no security for Israelis or Palestinians until they and all states, in the region and beyond, join together to fight terrorism and dismantle terrorist organizations. The United States reiterates its steadfast commitment to Israel’s security, including secure, defensible borders, and to preserve and strengthen Israel’s capability to deter and defend itself, by itself, against any threat or possible combination of threats." This sounds good in theory, but just how will terrorism be dismantled? Like we are now doing in Iraq?

"Third, Israel will retain its right to defend itself against terrorism, including to take actions against terrorist organizations. The United States will lead efforts, working together with Jordan, Egypt, and others in the international community, to build the capacity and will of Palestinian institutions to fight terrorism, dismantle terrorist organizations, and prevent the areas from which Israel has withdrawn from posing a threat that would have to be addressed by any other means. The United States understands that after Israel withdraws from Gaza and/or parts of the West Bank, and pending agreements on other arrangements, existing arrangements regarding control of airspace, territorial waters, and land passages of the West Bank and Gaza will continue. The United States is strongly committed to Israel’s security and well-being as a Jewish state. It seems clear that an agreed, just, fair, and realistic framework for a solution to the Palestinian refugee issue as part of any final status agreement will need to be found through the establishment of a Palestinian state, and the settling of Palestinian refugees there, rather than in Israel." Finally, something on refugees that is sensible, smart and right. How will US ever get the Palestinians to agree to this? Israel will not be able to get this done alone. We will have to step in at some time and make everyone listen, learn and act right.

"As part of a final peace settlement, Israel must have secure and recognized borders, which should emerge from negotiations between the parties in accordance with UNSC Resolutions 242 and 338." Okay, okay we have heard this before, that's enough.

"In light of new realities on the ground, including already existing major Israeli populations centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949, and all previous efforts to negotiate a two-state solution have reached the same conclusion. It is realistic to expect that any final status agreement will only be achieved on the basis of mutually agreed changes that reflect these realities." This was never in the cards, was it? How will we ever get someone in the PA to talk with that will have ability to get this done?

Now about the fence. Bush reminds us that "the barrier being erected by Israel should be a security rather than political barrier, should be temporary rather than permanent, and therefore not prejudice any final status issues including final borders, and its route should take into account, consistent with security needs, its impact on Palestinians not engaged in terrorist activities." Duh. Didn't we say we are open to mutally agree on boarders? Who is there in the PA that can talk and get it done? Nobody we know.

Just how can we erect a Palestinian state that is viable, contiguous, sovereign, and independent, so that the Palestinian people can build their own future in accordance the June 2002 vision? We can't do it and they don't do it.

Who in the international community erally wants to see the Palestinian state develop into a democratic political institution with leadership committed democracy? They don't know what a free and prosperous economy is and they are not capable of building institutions dedicated to maintaining law and order and dismantling terrorist organizations.

A peace settlement negotiated between Israelis and Palestinians would be a great boon not only to those peoples but to the world. But then, who would the world have to blame for the ills of the world?

Yes, we are special and have responsibility: to support the building of the institutions of a Palestinian state; to fight terrorism, and cut off all forms of assistance to individuals and groups engaged in terrorism; and to begin now to move toward more normal relations with the State of Israel. These actions would be true contributions to building peace in the region.

How is this a bold and historic initiative? How will moving out of Gaza alone make an important contribution to peace? Gald that Bush supports the President, but how will he help make it a success?

U.S. Says Still Opposed to Assassination of Arafat

Arafat rules his own people – by sheer terror, by brute force, by barbaric tactics that would be unimaginable to most in the West.

We continue to deal with him. We continue to support him financially with U.S. taxpayer dollars. We continue to give him credence as an international peacemaker.

Does he really remain in power? Nope. Not in my eyes.

Know How to Pick 'Em

This is a good article for looking at how to select a good planner to meet financial goals...Stuart Kahan, the Executive Editor of CPA Wealth Provider was right on when he found the article and made the following comments: "Ms. Kilbride sums it all up this way: "Ultimately, you need to choose a financial planner with a compensation arrangement that you feel will place your interests first."

Look at that last part carefully: Placing your interests first. Amen!" He really means planners must place the clients interest first.. amen!!!

Arts Patron of Rare Violins Vanishes for His Arraignment

No an easy story to read or understand, but... a federal indictment charging that he had used a Swiss bank account to conceal hundreds of thousands of dollars in income. Never a good idea to conceal income.

According to the article in the Times, the instruments, which Mr. Axelrod said at the time were valued at $50 million, were sold to the orchestra for $18 million. The Axelrods also endowed a concert series in their names.

"The Axelrods have been tremendously generous and visionary supporters of the orchestra and other organizations over the years and we wish them well," said a spokesman, Philip J. Leininger. "We're hoping that it all works well for them."

We have been reading Tropical Fish Hobbist for years and were thrilled that the violins were donated to the NY orch.... you just never know.

CPA Magazine - cpamag.com

I was featured in CPA Magazine, Tax Season 2004 cover story as one of The 100 Most Influential CPAs, written by
T. Allen Rose, CPA. Always goos to be on those type of lists...

Always fun to look at Barry's smiling face. But don't use this as dart board!

Tom says that "we have gotten inside the heads of fascinating CPAs, learning what makes them extraordinary. We CPAs want to reclaim our profession, so that the greed of a few will never again tarnish the reputation of this honest and noble profession. The CPAs highlighted here have a passion for what they do, and we can learn from all of them."

Amen!

Greenspan Speaks; Dollar Leaps'

Treasuries Down; Greenspan Awaited

Markets Tumble After Comments by the Fed Chairman

Yesterday he said...
expectations of higher interest rates...
threat of deflation was over in the United States...
growth prospects were bright...
But
Market reacts badly and tanks.

"Greenspan moved rhetoric faster and further than any of us expected,'' said a trader in London

The markets are likely to remain volatile as large investors react to each new piece of economic information...

Greenspan spoke and the market tanked. But what did he say?

Senator Lauterberg was right in his Statement on Alleged Bush-Saudi Oil Price Collusion when he said: "Now, with gasoline prices going through the roof, the Saudis have decided to cut back on production, making prices even higher. Instead of falsely accusing John Kerry of increasing gasoline taxes, the President should be working to stop this fleecing of Americans at the gas pump."

Bush Officials Deny Money Was Diverted for Iraq War

The book, "Plan of Attack," by Bob Woodward, asserted that President Bush left Congress largely in the dark when he approved $700-million worth of projects in July 2002 to prepare for the possibility of military action against Iraq.

What are we going to do to get them to start telling the truth? This is really getting very silly. I wrote to my Senators and asked them to start asking some tough questions and make them talk. Sunshine is needed now.

"Congress, which is supposed to control the purse strings, had no real knowledge or involvement, had not even been notified that the Pentagon wanted to reprogram money," Mr. Woodward wrote.

According to "Plan of Attack," before invading Iraq, President Bush replied that his earthly father would have been the wrong father to petition. "There's a higher Father that I appeal to." Bush wanted to invade Iraq and that was that. He didn't much discuss the war or its possible aftermath with anybody, with one exception: the holy ghost, Dick Cheney.

I have no faith in the President's holy-based war...

Security Companies: Shadow Soldiers in Iraq
Outsourcing the Army--I suspect that is why Cheney is so happy-- he is making money some how, and we'll never know the truth.

NY Times say, "But more and more, they give the appearance of private, for-profit militias — by several estimates, a force of roughly 20,000 on top of an American military presence of 130,000.

"I refer to them as our silent partner in this struggle," Senator John W. Warner, the Virginia Republican and Armed Services Committee chairman, said in an interview.

The price of this partnership is soaring. By some recent government estimates, security costs could claim up to 25 percent of the $18 billion budgeted for reconstruction, a huge and mostly unanticipated expense that could delay or force the cancellation of billions of dollars worth of projects to rebuild schools, water treatment plants, electric lines and oil refineries.

In Washington, defense experts and some leading Democrats are raising alarms over security companies' growing role in Iraq.

The Bush administration's growing dependence on private security companies is partly by design. Determined to transform the military into a leaner but more lethal fighting force, Mr. Rumsfeld has pushed aggressively to outsource tasks not deemed essential to war-making. But many Pentagon and authority officials now concede that the companies' expanding role is also a result of the administration's misplaced optimism about how Iraqis would greet American reconstruction efforts

Still, in many ways the accelerating partnership between the military and private security companies has already outrun the planning for it.

The combination of a deadly insurgency and billions of dollars in aid money has unleashed powerful market forces in the war zone. New security companies aggressively compete for lucrative contracts in a frenzy of deal making.

People -- This is serious stuff and costing us billions of dollars-- that is real money. The privatized military structure is costing us real money and real lives. The Times says "in many ways the accelerating partnership between the military and private security companies has already outrun the planning for it" but what can we do about it? We let our military die a slow death and now we are paying the price.

Should we start faith-based wars when we aren't religiouss and we can't win?

Professional Help: If accountants finally become a force in financial planning, will they raise professional standards?

Bob Clark asks, "If accountants finally become a force in financial planning, will they raise professional standards?" Bob Bunting, chair-elect of AICPA and chairman of Moss-Adams LLP, a major regional accounting firm in Seattlesays "When I think about financial planners, I don't think of them as competition. I think of them as future parts of our [the accounting] business."

Clark says Bunting "paints a compelling picture that CPAs have finally gotten their act together--and financial planning may never be the same."

What's more, CPAs have traditionally seemed to be in the best position to be a consolidator of personal financial advice, since clients are usually willing to give all of their financial information to their tax preparers. And there are many leading financial planners who started out life as CPAs.

Some of the earliest large-scale ventures into financial planning, like accountants who became registered reps with firms like H.D. Vest, deepened my confusion, however. It seemed these CPAs were giving up one of their best professional traits (their fiduciary duty) to adopt one of financial planning's worst (securities sales).

Perhaps not surprisingly, that trend didn't work out too well. "It was difficult for CPAs to go the broker-dealer route," Bunting admits. "Sure, firms like H.D. Vest have a lot of CPA reps. But when you look at the securities business done by individual CPAs, it is minuscule." Yet even in this failure, there are clues about why accountants may still come to dominate personal finance. Says Bunting, "CPAs just can't make themselves make a recommendation for a commission."

Moss Adams is uniquely positioned to understand the financial planning world: it has a planning subsidiary of its own, complete with an RIA, and through principal Mark Tibergien and others, Moss-Adams has more than 20 years of experience consulting with independent financial planning firms....

The reality is.. CPAs are financial planners and dawn good ones.

Impolitic Finance: As the presidential race gets started, the Democrats are attacking the tax code from the wrong end of the societal equation.

For Fund Investors, It�s Death By Taxes: Lipper study shows investors losing significant potential returns to taxes .

Shareholders of taxable equity funds are losing almost a quarter of potential returns because of taxes, according to a recent research study. Over time, the compounding effects of an average equity return of 10% being reduced by one-quarter are truly dramatic. Over the course of thirty years, with 10% annual returns, $10,000 will compound to nearly $175,000. At 7.5% returns, it will compound to $87,500 -- almost exactly half the amount. Yikes!

It is up to you to look over your mutual fund's activities to keep your tax burden at a minimum.

Don't Buy Mutual Funds at the End of the Year-- Mutual fund distributions are typically issued toward the end of the year, such as November or December. Those who purchase a mutual fund toward the end of the year may be buying themselves a quick tax bill along with their fund shares. Not good!

So find out when the fund will make its end of the year distribution: only buy shares after that occurs.

Given that yesterday was the tax filing deadline-- I wanted to find some of the more salient items from the Times and comment on them.

Bushes' Tax Returns

Tax Cuts Helped President but Far Less So the Cheneys-- This must reading.. but not front page news? What could the editors be thinking?

The commerical for CPAs... Tax Day Is Here Again -- And Full Employment!!

In a Lawsuit, U.S. Accuses a Tax Adviser of Fraud -- This is BIg news and must be watched....

You Are What You Tax-- on op-ed, that is interesting....

Corporate Tax Holidays This is an editorial and its is right on the point.

CPA2Biz - Bush Signs Pension Legislation

CPA2Biz - CPA's Guide to Effective Engagement Letter: Implementing Successful Loss Prevention Practices

I found an article I wrote on a good practice management book... Here it is...CPA's Guide to Effective Engagement Letter: Implementing Successful Loss Prevention Practices. The book's authors are: Ron Klein, Ric Rosario and Suzanne M. Holl

In general your engagement letter should cover the nature and extent of the financial planning you are being retained to offer. You also whould identify the specific services you will not do, such as offer investment advice if that is the case. Also you should include detailed client responsibilities such as providing accurate and detailed financial information and documents.

Your engagement letter could also discuss that you require a retainer before starting the work that will be applied to the final billing. If you bill for the work at your regular hourly rate you can state that plus indicate how often the bills will be sent.

It is also important to document how you will work in the area of investments or other products with your client. If you are rending investment advice or insurance advice make sure your engagement letter is specific and confirms to all applicable laws in these situations. If you are registered investment adviser and you charge a quarterly fee based on the gross value of managed assets and fees are payable in advance at the beginning of the quarter or in arrears this should be included in the engagement letter. If you are arranging to have the fees deducted from the client’s account, you should mention this in the engagement letter.

Many planners use an engagement letter to cover confidential client priviledge and privacy policies.

Historic Opportunity to Save $$$ -- Boy am I good, I love my tax cut...

Today is April 15 -- the last day for filing 2003 income tax return for filing for an extension.

But I saw the Bu.....

I love this Adidas ad: Impossible is a big word thrown around by small men who find it easier to live in a world they have been given than to explore the power they have to change it. Impossible is not a fact. It is an opinion. Nothing is Impossible...

Nothing Is Impossible is also the title of a book written by Christopher Reeves.

It leads to another point. My 18 year-old english settler thinks this thought all day, every day, as she steps up steps and down steps... I know she is in the room now because of her old dog smell and today since it is also raining she has the special dog rain smell...a nasty smell.

Back to AMT... I was going online and the taxes word was red so I had to look at it and found the MSN Money's 5 ways to beat the AMT.. Needed to look at it to see the story... Nothing earth shattering and nothing we did not think about before, but it is MSN Money.

The five tips mentioned are:

1) Turn your tax planning on its head. The usual way to try to keep a lid on your tax bill is to accelerate deductions and postpone as much income as possible. But if you’re at risk of falling into the AMT or you’re already in it, consider doing the exact opposite, Rubin says. The more ordinary income you have relative to your deductions, the less likely you will be in the AMT -- or, the less it will sting.

2) Time your state tax payments. When you pay your state taxes can determine if you get snared by the AMT -- and by how much. Your aim should be to match your state tax deduction with a high-income year. Here’s how: If your income is high this year, consider paying all of your state taxes or accelerate tax payments before year-end -- rather than waiting until just before your tax-filing deadline next year. If you ante up before Dec. 31, you can deduct your taxes on your 2003 return. If you expect your income to be unusually low this year, wait until after Dec. 31 to pay your state taxes. Whatever portion of your state taxes you pay after year-end can be deducted on your 2004 return.

3) Before tapping long-term capital gains, plan thoroughly. Before drawing gains, run the numbers to find out how much you can safely withdraw without triggering the AMT. “Take a smaller amount of gains over several years if you have to,” Rubin says.

4) Avoid private-activity bonds. There is a certain kind of municipal bond called a private activity bond that loses its tax-free status under the minimum tax. Private activity bonds are issued by private companies for projects that benefit the public, such as airports, seaports and stadiums. If you’re worried about getting bumped into the AMT or you you’re in it, you will probably want to dump these.

5) Exercise incentive stock options gradually, and with care. Your best chance at avoiding the AMT when it comes to ISO’s, is to exercise them gradually -- a few a year -- and when the gap between your exercise price and the market price has narrowed. And consider a couple of tricks: If you’re ready to exercise your options and you’re worried about coming up with the cash to pay the AMT, you can exercise them early in the year, hold them for at least 12 months, then sell them prior to your tax-filing deadline. That way, you get the advantage of the new 15% long-term capital gains rate when you sell, and you will have raised cash from the stock sale to pay the AMT. The danger, of course, is that the share price tanks. If this happens before the end of the year in which you exercised, you can sell the shares before Dec. 31. That wipes out the AMT issue altogether.

The final words to the wise are “Always plan at least two years at a time.”

The best approach now is for all accountants to speak out about needed changes to the old AMT system..

MERRILL LYNCH ANNOUNCES RESULTS OF RETIREMENT PREPAREDNESS SURVEY

No surprise.. Advice is needed for being prepared for retirement ...

The survey found that 50 percent of respondents said they felt either "extremely" or "very" knowledgeable about selecting between options in an employer-sponsored retirement plan. And, only 15 percent of employees said they contribute the maximum allowable amount.

"For the second year in a row over half of the Americans surveyed believe that 401(k) accounts are guaranteed by law. No such guarantee exists....

BTW -- the 401Khelp center contains some helpful information for plan trustees...

Why Your Tax Cut Doesn't Add Up Behind the promises to save you money, a hidden agenda is at work, with a stealth tax to pay for it all

So welcome my friends to the show that never ends: tax season. Not the deadline of April 15 but until election dayl Nov. 2....

Allan Sloan published a story in Newsweek dated: April 12, 2004. It is worth reading and tells the story that I have posted earlier today...

Here's some of his words: "Now, like a piranha that's escaped into the swimming pond, the AMT is biting everyone in sight. It's changed from a class tax to a mass tax. When you calculate your AMT income, you can't deduct things like state and local taxes that are itemized deductions for the regular tax. You apply the AMT brackets (26 and 28 percent) to your AMT income, and pray it's lower than your regular tax. If not, you lose. I wouldn't touch this without tax software, but you may be braver than I am.

"About 2.3 million returns for 2003 got nipped by the AMT, and that could rise to more than 30 million by 2010. This year's new victims ranged from a two-person New Jersey family with big state- and local-tax deductions to a seven-person family in rural Kansas taking the standard deduction. In a tongue-in-cheek calculation in the July 7 issue of Tax Notes, tax mavens Leonard Burman, Bill Gale and Jeff Rohaly calculated that in 2008, the government would realize more revenue by abolishing the income tax and keeping the AMT intact than it would get by abolishing the AMT and leaving the income tax intact. It makes your head spin.

"For fluky reasons, capital gains-the underpinnings of most tax shelters-haven't been AMT items since 1986. Dividends logically should have been added to the AMT last year when Bush cut the tax rate on them, but they weren't. So the AMT has become a hidden tax on-you guessed it-salaries. At the low end, you pay through the nose for Social Security and Medicare. In the middle and upper-middle levels, you're bitten by the AMT, or soon will be. The Tax Policy Center calculates that in 2010, the AMT will claw back $40 billion-some 34 percent of the income-tax cuts Bush pushed through in 2001. This means that when Bush showed us $100 of income-tax cuts for 2010, their cost for budget-projection purposes was only about 66 bucks. Slick. I wish I could pay my bills with that kind of math.

"Taking the AMT out and shooting it is so expensive in terms of forgone tax revenues that both the Bush and the Kerry campaigns are ducking, talking about commissions to study the AMT rather than just ending it.....

It ain't over until its over... We need to figure out what the gov can do with all of this... This weekend Barrons talked about fairness and simplicity.. It looked liked they like it...

Alternative Minimum Tax Yes, I'm ranting again, but...

Although the IRS's National Taxpayer Advocate reported earlier this month that the AMT was the most serious problem faced by taxpayers, President Bush's 2004 State of the Union address did not mention the AMT.

In April, Newsday did a story on AMT-- GOTCHA! ALTERNATIVE MINIMUM TAX Fix law or it will zap ordinary folks ... This is the story that is needed and I hope there will be emphasis on it as we got through our discussion on taxes....

The overall result of the tax cuts were a significant shift in tax burden from the wealthy to those in the middle classes. Consider two groups of taxpayers: Those earning $100,000 to $200,000 now account for 22% of total federal income taxes owed to the government. That's the same percentage shouldered by those earning more than $1 million. By 2010, however, the share paid by million-dollar-earners will drop to 18%, while the lower-earning group's share will rise to 27%. The Brookings Institute discusses the projections and problems about AMT -- it examines how a tax that was originally aimed at 155 taxpayers could grow under current law to target 33 million. According to Brookings, "by 2008, it would cost less to repeal the regular income tax (leaving the AMT in place) than to repeal the AMT."

Although the AMT was originally enacted in the 1960s to prevent wealthy taxpayers from avoiding tax liability through the use of tax avoidance techniques, it now affects substantial numbers of middle-income taxpayers and will, absent a change of law, affect more than 30 million taxpayers by 2010...one in four households will owe the alternative minimum tax by 2010.

Repealing the tax through 2010 would cost the Treasury $600 billion in revenue, according to the non-partisan Tax Policy Center, a Washington think tank.

Get educated and speak out on this... It is a big trap for the unweary.

Why not eliminate estate tax? I have heard this question before and.... The federal deficit picture is looking worse and worse, but proponents will continue to pursue total repeal, even though it would cost something around $100 billion in foregone revenue this decade and $750 billion next decade....

Also, research has show eliminating the estate tax would have a significant negative impact on giving to charitable organizations. This to me a very big reason... not having charitiable contributions means the little guy will have to pay more out of his pocket for social services and this is not a good thing.

United for a Fair Economy -- No joke...
Shifty Tax Cuts: How They Move the Tax Burden off the Rich and onto Everyone Else

A new report, entitled “Shifty Tax Cuts: How They Move the Tax Burden off the Rich and onto Everyone Else,” from United for a Fair Economy (UFE) indicates that between 2002 and 2004, the Bush tax cuts to the top 1% of US income earners redirected billions of dollars in revenue that could have eliminated virtually all of the budget shortfalls in the states.

“When President Bush and Congress trumpet, ‘Here’s a tax cut', we say, ‘Taxpayer beware!’ said Chuck Collins, United for a Fair Economy co-founder. “Unless you are super-rich, it’s a tax SHIFT, not a cut. Non-wealthy taxpayers will pay for these tax cuts with increased state and local taxes or cuts in public services.”

“Between 2002 and 2004, a full $197 billion in new tax breaks went to the top 1% of American taxpayers,” Hartman commented. “This is money that has disappeared into the pockets of the very wealthy, making it unavailable to solve ongoing budget crises at the state and local levels.”

“I got a rebate check last summer for $400,” said Collins. “Then my eight-year-old’s public school asked me to contribute money to replace worn-out chairs for the students. At the same time, I found out they laid off the librarian because of budget cuts. What good is a $400 tax cut when parents have to cough up additional money for chairs and books or else see their children go without?”

The report concludes that the total federal, state and local tax burden has become increasingly the responsibility of middle-and low-income families in recent decades, and that revenues being generated by taxes are not sufficient to pay for existing public services. Work in particular is being taxed at a higher rate than investment.

Kerry on Taxes

Let look at the language from the Kerry campaign on taxes, FACT SHEET: John Kerry's Framework to Cut the Deficit in Half and Invest in Affordable Health Care and Better Schools

Here's something about Kerry's estate proposal: "Provide an immediate tax break for small businesses and family farms by immediately raising the estate tax exemption to $4 million for a family and $10 million for a family-owned business or farm. The estate tax would be maintained for the largest estates."

Current tax law taxes estates valued at $1.5 million and greater. Over the next five years the exemption will rise incrementally to $3.5 million, until 2010, at which point the entire estate tax momentarily evaporates, only to revert back to its its 2002 level in the year 2011. Fearful of this event, the Bush administration has made the complete elimination of the "death tax" now and forever a top priority.

He made the following comments: "We must continue to pursue an aggressive, pro-growth economic agenda. (Applause.) Congress has some unfinished business on the issue of taxes. The tax reductions you passed are set to expire. Unless you act -- (applause) -- unless you act..., small businesses will pay higher taxes. Unless you act, the death tax will eventually come back to life. Unless you act, Americans face a tax increase. What Congress has given, the Congress should not take away. For the sake of job growth, the tax cuts you passed should be permanent. (Applause.)"

The Kerry proposal, as the San Francisco Chronicle put it, would "reduce but not repeal" the "death tax". Kerry's plan would allow estates falling in the more-than $1.5 million and less-than $4 million that are currently taxed to go untaxed; by doing so, it would greatly reduce the number of Americans affected by the estate tax. This would reduce lobby calling for outright elimination of the estate tax, allowing the government to continue to reap the benefits from a nearly 50% tax on estates over $4 million.

The Administration justifies tax cuts by claiming that they will lead to job growth, the evidence shows that the last round of tax cuts did not deliver. According to the Economic Policy Institute, for the nine months as a whole, the administration projected that a total of 2,754,000 jobs would be created after the tax cuts took effect. In fact, only 689,000 jobs were created over that period for a cumulative shortfall of 2,065,000 jobs.

According to the Center on Budget and Policy Priorities, the tax cuts the President is proposing would cost more than $2 trillion over the next ten years (not including the cost of increased interest payments on the debt.) This is 36 times larger than the combined ten-year cost of the Administration’s other recent domestic proposals.

Economic Policy

Center on Budget and Policy Priorities

Urban Institute-Brookings Tax Policy Center

Office of Management and Budget

OMB Watch

Institute for International Economics

Economic Policy Institute

New America Foundation

The Century Fund

National Bureau of Economic Research

Citizens for Tax Justice

The Concord Coalition

Foreign Labor Statistics

We wanted to see the Presidential Daily Briefing and we got the PDB of August 6, 2001. I am glad to see it and think that it says what is says...

Let's recall that on August 6, 2001: Bush gets briefing titled "Bin Laden Determined to Strike Inside US." And then begins his month long vacation in Crawford. Also, a blogger reminds us that that evening he gave a speech on stem cells not terror cells...

As the New York Times put it today:

"No reasonable American blames Mr. Bush for the terrorist attacks, but that's a long way from thinking there was no other conceivable action he could have taken to prevent them. He could, for instance, have left his vacation in Texas after receiving that briefing memo entitled "Bin Laden Determined to Strike in U.S." and rushed back to the White House, assembled all his top advisers and demanded to know what, in particular, was being done to screen airline passengers to make sure people who fit the airlines' threat profiles were being prevented from boarding American planes. Even that sort of prescient response would probably have been too little to head off the disaster. But those what-if questions should haunt the president as they haunt the nation. In all probability, they do and it is only the demands of his re-election campaign that are guiding Mr. Bush's public stance of utter, uncomplicated self-righteousness.

Isn't it true that Clinton largely ignored Al-Qaida and Bin-Laden for most of his Presidency? Let's stop playing the blame game.... the terrorists are responsible for 9-11. Could both Presidents have done more? Probably. (Although, I do think Clinton could have more easily thwarted the attacks than Bush) Let's look at the real problem. The CIA and FBI dropped the ball...

Living With The Rules- How to keep the SEC happy without going out of business. By David J. Drucker

My first paying project when I left the AICPA was preparing a Compliance Manual for a sole practitioner new RIA CPA.. It was work and we learned in the process. I have to say it was worth the thinking and making the manual complete. Since then we have updated the manual for new rules and regulations...

Most of my clients use a service such as NRS to keep updated on compliance issues that must be addressed and/or included in the compliance manual. If you need help and want to engage me... contact me... This is something I can do.

Wanted: Real Disclosure -- that is what we want to see and it is really, really, really needed: now.

Tracey Longo got it right this this issue of Financial Advisor magazine when she said that "the rules on brokers compensation disclosure are changing—but slowly."

Things have been slowly changing but they are not uniform but with new rules beign considered things really may change faster... Let's hope!

REPORT OF THE COMMITTEE ON COMPENSATION PRACTICES prepared by the SEC in 1995 was a step in the right direction... This is good reading and worth re-reading.

Rice: Bush understood al-Qaeda threat -- But he does nothing...

Wanted to see what Aljazeera, the Arab news network, said...about Rice.... "He made clear to us that he did not want to respond to al-Qaida one attack at a time. He told me he was 'tired of swatting flies'."

Rice calmly admitted there were indications in the summer of 2001 that suspected al-Qaida operatives were planning a major attack against US interests.

"Yet, as your hearings have shown, there was no silver bullet that could have prevented the 9/11 attacks''

Family Affair: the Bushes and the Bin Ladens.. this was found on The Dubya Report. Too many relationships for too long. It is also interesting that Bush and Cheney will meet with 9/11 commission together. They are in it togehter knee deep. I'm sorry but problems run deep and we'll never know.

Not sure if this is true, but I have to show it to you... Wall Street Journal is mentioned as "quietly reported on September 27 that the Bin Laden family had invested with The Carlyle Group, a merchant bank that boasts several Reagan-era former government figures including George Bush Sr. among its management. The story received some attention from the alternative media, but even the fact that George W. Bush sat on the firm's board for four years barely raised eyebrows in the mainstream media or among the public." Can the WSJ really do a quiet report? are't investment advisers required to know their customers, but Carylyle is not a IA. There are always loop holes....

It is a good Friday... and I stayed home again.

Today, John Kerry is going to be on The O’Franken Factor. Should be good. I’m curious to hear whether John Kerry can loosen up and banter with Al Franken.

Condi Rice Testifies Under Oath Before the 9/11 Commission: Bush Did Nothing to Prevent 9/11 Hijackings....

Condi Rice -- her childhood in segregated Birmingham, Alabama, her role as the first woman to be national security advisor in the White House, her counseling President Bush on international affairs and her words at the hearing on 9/11 commission-- I don't get it and I don't get her.

She authored a piece in the Washington Post last month called,9/11: For The Record.

In case you haven't seen Peter Bergen's list of nine questions that should be asked of Condi Rice when she appears before the 9/11 Commission, it appeared in Sunday's NY Times.

She talked on CCN about the charges by a former administration official Dick Clark involved with fighting terrorism. What really happened behind the scenes as the White House put together its strategy? Was the president ignoring the problem before 9/11? The transcript is here and her comments are here.. She said it then and she said it all today again.

But today she was on the record. I watched it but it is hard to know what is the truth. Condi claimed Bush was innocent in terms of having not failed to prevent 9/11 ... she claimed that no one had known that Al-Qaeda was planning to attack buildings with planes. It is very obvious that Bush and Company are choosing their words very carefully. "If our administration had intelligence that terrorists were going to hijack an airliner on September 11 and fly it into the World Trade Center we would have acted on it."

Here are the Center for American Progress Comments Regarding the Testimony of Condoleezza Rice Before the 9/11 Commission. The cartoon is good to view too.

Others say the lies that Rice told to explain away Bush's pre-9/11 briefings on the threat of deadly hijackings by Al-Qaeda was the political equivalent of robbing a bank in broad day light -- and getting away with it....

You know that Al-Qaeda cells are in the country .. and they want to attack you (from the Aug PDB --pres daily briefing)... When she was asked "Do you know if the Pres met with the head of the FBI?" she said "I don't know." If you know that Al-Qaeda is after us, and you know that that is important, you must know if they met... No?

Forbes Magazine
A Bribe By Any Other Name
Thursday April 1, 6:32 pm ET
By Neil Weinberg
Belatedly, regulators are digging for dirt in the pension management business. They're going to need a big shovel.


The Santa Clara Valley Transportation Authority's pension board put out a tough-sounding memo in January, announcing that it was firing Putnam Investments as the manager of its $36 million international equity portfolio. The move had been recommended by the pension fund's adviser, Mercer Investment Consulting, in the wake of Putnam's poor returns and its indictment for securities fraud.

The board didn't mention that Mercer had originally sifted through hundreds of candidates and picked Putnam for a list of ten recommended managers in 2000. Nor did it note that Mercer and Putnam are part of the same firm--Marsh & McLennan. Another unmentioned fact: Mercer receives millions of dollars annually from many of the money managers it is supposed to objectively evaluate for clients like Santa Clara VTA.

Mercer apparently didn't do a very forceful job of communicating this conflict of interest to the board members in Santa Clara. "We're not aware Mercer is being paid by money managers," says Emmanuel Bagnas, investment program manager for the $240 million (assets) Santa Clara VTA fund, which covers 2,150 transport workers and retirees.

Wake up, Manny. That's the way this game is played. Experts like Mercer that collect fees for advising pension sponsors also pocket fees from the money managers to whom they refer pension business. That's legal, if the arrangement is disclosed (as Mercer says it is with every client). Mercer, whose public pension clients control a combined $434 billion, insists the dough it gets from portfolio managers doesn't influence its advice about which managers are the best. Its competitors in pension consulting make similar claims.

Anybody who remembers how analysts insisted they weren't influenced by their firm's underwriting assignments, or how auditors insisted that tax consulting assignments never clouded their judgments, may be a bit skeptical of such claims. One skeptic is the Securities & Exchange Commission, which put out a report six years ago describing a cozy "pay-to-play" system in the pension consulting industry. Money managers vying for pension fund assignments, said the report, buy services from a consultant "to curry favor … in his ranking and recommendations" to pension plans.

Little follow-up has happened since. In December the SEC belatedly sent several big pension consultancies a five-page questionnaire, seeking thousands of pages of information on how they do business. New York Attorney General Eliot Spitzer also recently served a few subpoenas seeking similar information.

One thing the regulators may find:It would take superhuman impartiality to ignore all the money coming in from money managers. Pension consultants rely on money managers for several times as much revenue as they get from pension funds themselves, says Edward Siedle of Benchmark Financial Services, which investigates money managers for pension funds. Mercer gets $250,000 a year from one of its top clients, the Chicago Teachers' Pension Fund. It also receives up to $58,000 each from many of the Chicago pension program's 40-odd money managers who pay to attend Mercer seminars. (Presumably Mercer also got money from other pension sponsors using those same stock pickers, but it declines to say how much.)

"It's a rare day when a pension consultant recommends a money manager who hasn't paid to play," Siedle says.

Just what do the pension sponsors get for their consulting fees? Not much, it seems. Almost 80% of public pension funds use pension consultants, compared with only 41% for corporate pension funds and only 25% for foundation endowments. Yet the public pension funds averaged annual returns of only 8.1% in the decade through 2002--half a point less than corporate retirement plans and a full point less than foundation plans, says Donald Trone, director of the Center for Fiduciary Studies in Sewickley, Pa. Some of this difference may be attributable to lower equity allocations in governmental funds. But still, aren't the consultants being paid to get the allocations right?

The largest pension-consulting firm is Callan Associates, a San Francisco-based firm owned by its employees. Callan's government clients oversee $800 billion in pension assets. Callan had a financial relationship with 14 of the 16 money managers it recommended to the Hawaii Employees' Retirement System, a state auditor's report noted recently. Hawaii's investment performance, meanwhile, ranked in the bottom 15% among public pension funds in the past five years.

Money managers, rather than hand over outright bribes to pension consultants, pay them for an array of services. Callan charges money managers up to $51,000 a head to sit in on Callan Institute seminars. Perhaps not surprisingly, representatives of the pension sponsors--the guys with the lucrative contracts to dish out--get into these seminars free. Money managers pay $40,000 per asset class for Callan to calculate their investment performance, plus a roughly equal amount for the software needed to do the measurements, says Trone, who formerly worked for Callan.

Callan disputes the numbers but declines to elaborate, citing client confidentiality. It adds that the money managers paying such fees "are not entitled to, nor do they receive, any preferential treatment from our fund sponsor consultants."

Many brokerage firms also act as pension consultants, getting compensation by having the money managers route trades their way. Such soft-dollar payments make brokerages big players in consulting. A Center for Fiduciary Studies report shows Merrill Lynch and Citigroup's Salomon Smith Barney are among the nation's top ten public pension consultants in terms of number of clients. Neither company responded to requests for comment.

The conflict of interest is sometimes rather blatant. The former PaineWebber (now part of UBS) was the lone consultant to Nashville's Metropolitan Employee Benefit Board, generating fees by handling the pension fund's securities trading. In a bid to jack up its income, a city audit charged, PaineWebber presented the fund's board with misleading information to steer it away from index funds, which aren't actively traded and therefore generate lower fees for the brokerage firm. But the pension fund would have earned $60 million more from 1996 to 1999 had it invested in index funds, the city audit found. UBS PaineWebber agreed in 2002 to pay the city of Nashville $10 million to settle the dispute.

A good question to ask is why the pension fund sponsors are so oblivious to the conflicts. The Texas Permanent School Fund board cast aside pay-for-play concerns and hired Callan Associates over three candidates who accepted no pay from money managers, an auditor's report noted last year. The fund also let another consultant set up its portfolio, evaluate his own advice and recommend a small brokerage to which he had loaned $60,000. The board "may not have placed sufficient importance on the need for independence," the audit said.

Brian Graff, executive director of ASAP, a pension actuarial lobbying group, says more such lapses will emerge. "I'm not suggesting the SEC's focus on pension consultants is inappropriate," Graff says, "but the problem with how pensions are managed is a lot bigger than that."

Financial consultants promote 529s for estate planning

Last week I got a call about 529 plans from Benefit News. They were working on an article and quoted me about the advantages of 529 plans... The article says that I am Maryland-based.. The fact is I am based in la-la-land... Not Maryland.

Your contribution to a 529 plan is treated as a gift to the named beneficiary for gift tax and generation-skipping transfer tax purposes and so you need to be aware of this exposure particularly if you are making other gifts to the beneficiary during the same year.

Also if you make a contribution of between $11,000 and $55,000 for a beneficiary, you can elect to treat the contribution as made over a five calendar-year period. This allows you to utilize as much as $55,000 in annual exclusions to shelter a larger contribution. The money (and the growth of your account) gets out of your estate faster than if you made contributions each year.

Here is what Steve Brown said I said: "Sec. 529 plans have always been good estate planning tools. In some states, a parent or grandparent can put in up to $250,000 all at once, which would fund a child's college," Phyllis Bernstein, president and founder of the Maryland-based Phyllis Bernstein Consulting says. "The benefit of money into a 529 is they can change the beneficiary."

"For instance, Bernstein says, if one child ends up getting a scholarship, the money can be used for another child. That kind of control over estate funding has always made the plans an attractive tool, she notes. What's more, they provide the perfect estate tax escape hatch.

But the best news is that the asset leaves your estate but doesn't leave your control. The 529 plan allows you to get very large sums of money out of your estate but you still have a fair amount of control over it -- you can change the beneficary to a sibling, a cousin, etc-- making this unique.

A study by the Congressional Joint Economic Committee, released yesterday, finds that taxes, not fees and expenses, remain the biggest cost to mutual fund shareholders. Pass-through capital gains taxation in mutual funds is the problem, they say. All of the account's earnings are exempt from federal tax when they are withdrawn if they are used for qualified education expenses.

Your 529 plan investment grows tax-deferred, and distributions to pay for the beneficiary's college costs come out federally tax-free. This treatment applies for distributions in the years 2002 through 2010. Unless Congress decides to extend this tax break, qualifying distributions made after 2010 will be taxable to the beneficiary (earnings portion only).

Passover Sedar 2 is done -- Only the table cloth is left to clean now...

My favorite Passover quote from the Haggadah: "Let all who are hungry come in and eat, let all who are needy come and make Passover."

I was looking for a recipe to use with some of the Shemurah matzah and found the essay...Latke vs Hamentash: A Materialist-Feminist Analysis. The point of posting this today is because we ate and ate and ate hamentash during Purim and now we will do it with matzah. With matzah, my main dish is matzah balls, but my dad used to make matzah bries and latkes, so I was looking for something easy and good -- not a latke.

No being a fan of Gefilte fish, I can't even really read gefilte fish humor... and I sure can't judge it. I think the story on the Biblical Source of Gefilte fish is a quick read and needs to be told during passover. I served 14 pieces last night but only 4 were eaten. It is not the dish of the future.

Do we really need to eat Brisket and Turkey all week? Yes. This week we will eat Matzah and the left overs from the Seder. Next week we will begin a serious diet.

Grateful Dead Heaven

Totally non-personal finance related, but I can't help but to post this.

The Internet Archive now has over 300 Grateful Dead shows for your listening pleasure. They have concerts from 1979, 1985, and 1990. You have the choice to download or stream the shows to your desktop. I am going through them show by show at work and home. I only had the pleasure of attending 5 Dead shows in my life and they were indescribable. This resource is a must for Deadheads everywhere.

OK, I'll relate this to finances: It would suweeeet to save money by playing each one of these shows. I know many CPAs who are fans and this tip can save you lots of money... and a penny or two saved is a penny or two earned.

Tyco Corruption Case Ends in Mistrial

A mistrial was declared Friday in the larceny and fraud trial of former Tyco executives Dennis Kozlowski and Mark Swartz, as jurors failed to reach consensus on allegations that the two looted the conglomerate of $600 million.

The decision, announced Friday by Judge Michael Obus in federal court in Manhattan, marks the second high-profile mistrial for prosecutors trying to clean up white collar crime on Wall Street. In October 2003, the obstruction of justice trial of former Credit Suisse First Boston banker Frank Quattrone also ended in a hung jury.

Justice Obus declared a mistrial on Friday after one juror, Ruth B. Jordan, said she had received a letter from a stranger that was "highly critical" of her perceived intention to hold out for acquittal. The previous week, other jurors said Ms. Jordan was not deliberating with them in good faith.

I have heard legal experts say that in the Tyco case, which lasted almost seven months, New York state prosecutors presented far too much evidence without offering jurors a coherent explanation of the crimes Kozlowski and Swartz were accused of committing. As a result, they said, the jury was bored, confused and prone to infighting.

Kozlowski, Tyco's former chief executive, and Swartz, the former chief financial officer, were being tried on 32 counts of larceny, fraud and conspiracy.

A retrial in Mr. Quattrone's case is scheduled to begin this month, and Manhattan prosecutors say they plan to retry the Tyco case.

In other white-collar cases, the trial of Jeffrey K. Skilling, the former chief executive of Enron, which is expected to begin next winter, federal prosecutors will have to explain arcane accounting concepts to the jury. The prosecutions of Bernard J. Ebbers, the former chairman of WorldCom, and Richard M. Scrushy, the former chairman of HealthSouth, may also turn on jurors' understanding of somewhat complicated accounting principles. The trial of Mr. Ebbers is scheduled to begin in November; Mr. Scrushy's is set to start in August. This all should make for some very interesting financial and accounting lessons...

I am against no-sex marriages...

The NY Times did a piece last week What Marriage Means to Gays: All That Law Allows Others that contains a chart on the rights of marriage, a primer. It is helpful to understand the issue since it compares marriage and domestic partnership and best legal approximation.

More facts from the EBRI Fact Sheet on why employers offer domestic partner benefits, who utilizes them (primarily unmarried heterosexual couples), and the legal issues involved.

If you want to be a good American and understand the injustice, look at the article and then read and print the chart. All Americans should have the same rights. America is country of the free so be brave. See the chart and get the facts.

A factoid from WSJ on The Value of the College Degree

Friday's WSJ mentioned that begining in the 1980s and extending into the 1990s, the demand for educated workers grew far faster than the increased supply, pushing their wages far above those of lesser-skiller workers. Wages of men over age 25 with a four-year college degree are now typically 41% higher than wages of similar men with a high-school diploma, according to the analysis of governmental data by the Economic Policy Institue, a Washington think tank. Twenty five years ago, the differential was just 21%. For women, the premium for a colelge diploma has grown to 46% from 25%.

That makes a college degree a darn good investment.

job growth hits 4 year high

NY Times reports that 308,000 Jobs Created; Growth Markedly Beats Expectations

U.S. employment rose last month at the fastest pace in nearly four years as hiring increased across a wide array of industries, the government said today in a report that stunned financial markets.

Stocks and the dollar jumped higher, while U.S. bond prices fell as investors were caught off guard by the surprising labor-market strength. The Dow Jones industrials average shot up more than 100 points in the minutes after the opening bell.

Some economists now say the Federal Reserve could raise overnight interest rates from the current 1958 low of 1% sooner than had been expected. The NY Times quoted Mickey Levy, chief economist at Banc of America Securities, "This is a watershed number," "It realigns the employment conditions with all the other economic data."