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  • Latest United Nations Push For Global Taxation

    The United Nations recently formalized a broad set of global taxes and penalties that it wants to impose on developed nations in the Northern Hemisphere, and especially the US. The UN wants to raise some $400 billion annually to send to lesser developed nations in the Third World. And the kleptocrats at the UN want to implement these huge new taxes by the end of this year while President Obama is sure to be in office.

    These new taxes include a 1% income tax on all billionaires worldwide, a tax on all financial transactions (stocks, bonds, etc.), a tax on currency transactions, a carbon tax on developed nations, a tax on commercial airline flights from the US to Europe, a tax on oil and gas extracted offshore, a global tobacco tax, etc. Oh, and one more: control of the Internet.

    Since the UN does not have the legal authority to impose these taxes, it will attempt to structure these new taxes as "treaties" with member nations. US treaties are signed by the President and ratified by the Senate. The House of Representatives has no say when it comes to treaties. The question is, would President Obama sign such a treaty? And would the Senate ratify it? I would like to say no.

    You need to read the information I have included (and documented) in today's E-Letter carefully and consider it seriously before the election on November 6. We cannot allow our country to be subjected to UN defacto control vis-a-vis these onerous taxes. Above all, we cannot allow the UN to control the Internet. There is a choice in the upcoming election, and we need to speak loudly!

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  • Cut a Check, Mr. Buffett

    Last week, Warren Buffett again came out in favor of higher taxes for the rich like himself. The next day, President Obama echoed Buffett's comments, proving that they were no more than a carefully orchestrated piece of political rhetoric. Even so, Buffett's article is a good starting point for a discussion of why some people pay higher rates of taxes than those who are rich.

    This week, I'm going to dissect Buffett's statements about his own tax rates and those of his staff. I'll also review the various categories of income that qualify for preferential tax treatment and why they are set up that way. In the end, you'll find that special tax treatment is often associated with activities that provide capital for economic growth as well as the requirement to take the risk of losing all of your money.

    I'll end up by showing a way that individuals, including Mr. Buffett, can make voluntary contributions toward reduction of the national debt without the unnecessary step of raising taxes. If Mr. Buffett feels strongly that he should pay more for government, he can just send them a check. Unfortunately, the real issue isn't that taxes on the rich have become too small, but that the government's appetite for tax revenue has grown too big.

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  • More Americans on Government Dole Than Ever

    IN THIS ISSUE:

    1. GDP Growth in the 1Q Was Disappointing

    2. The Fed's Decision & the Press Conference

    3. Editorial: A Tale of Two Recessions

    4. Reliance on Uncle Sam Hits a Record

    5. Unemployment Devastates Savings - and Benefits

    Introduction


    Our main topic this week is a new report from USA TODAY which found that Americans depended more on government assistance in 2010 than at any other time in the nation’s history, based on federal data. A record 18.3% of the nation's total personal income in 2010 was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs.

    Yet before I get into our main topic, there has been some important news on the economy and the Fed since last week's letter. Last Thursday's initial report on 1Q GDP was considerably weaker than expected. The government reported that 1Q GDP rose at an anemic annualized rate of only 1.8%, as compared to 3.1% in the 4Q of 2010.

    The Fed's monetary policy committee met last week and decided that the latest round of quantitative easing (QE2) will end in June as scheduled, and that no new QE3 is in the works. They also announced that short-term interest rates will remain near zero for an extended period. And Fed Chairman Bernanke continued to maintain that he believes rising inflation is temporary. I'll have more details below.

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  • ObamaCare Kicks In - Taxes Sure to Rise

    IN THIS ISSUE:

    1.   Rasmussen: 61% Favor Repeal of Healthcare Law

    2.   ObamaCare Officially Kicked-off on September 23

    3.   ObamaCare is Even Worse Than Critics Thought

    4.   Will Government Put Insurers Out of Business?

    5.  Income Tax on “Rich” Headed Higher Than in Clinton-era

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  • Obama’s Plans to Help(?) Small Business

    IN THIS ISSUE:

    1.  Does Small Business Need a Bailout?

    2.  Obama & the Democrats to the Rescue

    3.  What’s Not to Like About TARP III?

    4.  Higher Taxes Hurt Only 3% of Small Businesses – Wrong!

    5.  President Obama’s “September Surprises” So Far

    6.  My Thoughts on the Surprising Mood of the Electorate

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  • Largest Tax Increase in US History

    I reported last week that the Consumer Confidence Index plunged unexpectedly in June, and forecasters are still trying to figure out why the mood of the country turned so sour last month. Part of the reason is the fact that the Bush tax cuts of 2001 and 2003 are set to automatically expire at the end of this year. President Obama has said that he wants to extend the Bush tax cuts for all Americans except those households making $250,000 or more per year. Yet the legislation to extend the Bush tax cuts for all but the 'rich' is stalled in Congress, and Americans are worried that we will see the largest tax increase in history in 2011.

    We will also examine in detail why raising income taxes on the 'wealthy' is bad news for small businesses and job creation, especially with our fragile economy and high unemployment. For example, do you know that two-thirds of small business profits are generated by households making over $250,000 per year? That's according to the IRS. With taxes on this group set to rise from 35% to 39.6% next year (actually to 40.8% with the phase-out of itemized deductions), it's no wonder that small business owners are reluctant to hire new workers. President Obama has yet to figure out that soaking the rich does NOT result in higher income tax revenues.

    And at the end of this week's E-Letter, I will give you the results from our recent FINANCIAL LITERACY QUIZ. Over 6,000 readers took the quiz and most scored very well. Congratulations! I think you'll find the results very interesting.

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  • Is a Roth Conversion Right for You?

    Since their introduction in 1997, Roth IRAs have become increasingly popular. Unlike traditional IRAs, contributions to a Roth IRA are not tax-deductible, but earnings grow on a tax-free basis if held for the required amount of time. The ability to have completely tax-free income at retirement is a big plus, especially for young people.

    The Roth IRA rules also allow for someone with a traditional IRA to convert it to a Roth IRA. Prior to 2010, only those with incomes under $100,000 could do a Roth conversion, but now anyone can convert their traditional IRA to a Roth. However, just because it is now permissible doesn't mean that it's a wise financial decision for everyone.

    In this week's E-Letter, I'm going to discuss the pros and cons of converting a traditional IRA to a Roth IRA and when such a conversion may be feasible. I'll also let you in on a key factor in the decision to convert and how politics may actually come into play. I think you'll find this discussion very interesting.

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  • The Mother of All Budget Deficits

    President Obama unveiled his fiscal year 2011 federal budget last week, and it is another whopper. If approved, he would spend a record $3.83 trillion and run a deficit of at least another $1.3 trillion. The actual deficit could be much higher because his assumptions about the economy are considerably too optimistic in my opinion and that of many economists. Obama's new budget projections now show that the budget deficit for FY2010, which ends on September 30, will be much higher than previously forecast - a whopping $1.6 trillion. This week, we will examine the implications of trillion dollar deficits as far as the eye can see.

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  • The Largest Tax Increase in US History

    Back in 1948, President Harry Truman nicknamed the 80th Congress the 'do-nothing Congress.' Today, we sometimes find ourselves wishing that we could return to the days when Congress was accused of inaction. Unfortunately, the stage may now be set for that wish to be granted, but the consequences will be far from favorable. By allowing the Bush tax cuts to expire, Congress could levy one of the largest tax increases ever, all by just doing nothing.

    While President Obama and the Democratic leadership claim that they want to keep all of the Bush tax cuts in place for everyone making under $250,000 per year, they also know that they are going to build up huge budget deficits unless they find ways of generating some tax revenues. With cap-and-trade legislation and its expected tax revenues all but dead, the Dems are going to have to figure out some other way to pay for their march toward socialism.

    The expiration, or 'sunset', of the Bush tax cuts could provide the necessary tax revenues they seek and all without having to cast a vote in favor of a tax increase. This week, I'll discuss the possible effects of a huge tax increase during a fragile economic recovery as well as the possibility that Congress may just sit on their hands and do nothing in order to fill their insatiable need for tax revenues.

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  • Obama's Assault on the Poor

    During the 2008 presidential campaign, then-candidate Barack Obama promised he would cut the taxes of 95% of working Americans. Most agree that he delivered on this promise with the 'Making Work Pay Tax Credit' (part of the $787 billion stimulus bill), which gave most individuals a paltry $400 refundable tax credit or $800 for working families. So, a question that naturally comes to mind is, how's that tax cut working out for you?

    The answer, unfortunately, is that it's not working out very well at all, especially for those in lower-income households. While the stimulus bill did provide some modest temporary payroll tax cuts for most working Americans, other Obama administration initiatives may effectively negate that relief by increasing taxes and/or the costs of goods and services. These tax and price increases are among the most regressive I've ever seen, meaning that they will hit the poor a lot harder than any other demographic group.

    You won't see this analysis in the mainstream press, so read on to see what kind of change Obama is really bringing about.

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  • Healthcare Reform or Government Takeover?

    President Obama addressed a rare joint session of Congress on September 9 when he spoke at length about his desire to substantially reform America’s healthcare system. Whether you are among the apprx. 56% of Americans who now oppose the healthcare reform bill in the House, or you are among the apprx. 43% who support it (latest Rasmussen poll), it is important to know the facts - a number of which the president failed to address or misrepresented in his speech.

    While I have refrained from writing at length on the healthcare reform debate, I feel the issue is just too important, and too politically charged, not to speak out. In the pages that follow, we will delve into some of the biggest problems and challenges with the House healthcare bill, H.R. 3200 - America's Affordable Health Choices Act of 2009. Given that there is so much misinformation on healthcare reform out there, on both sides, maybe this will help.

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  • Obama's Tax Policy: None Dare Call It Welfare

    We have recently learned the details of President-elect Obama's massive income tax overhaul, and the plan is much worse than we had anticipated. Obama's liberal tax plan would give annual tax rebates to millions of Americans who already pay NO income taxes whatsoever. Giving government tax rebate checks to those who already pay zero income taxes is nothing short of expanding the welfare state (or socialism as I prefer to call it). Worst of all, if Obama gets his massive tax plan approved, it will mean that a majority of Americans will pay little or no income taxes, while the so-called "wealthy" will foot the rest of the bill. If we reach such a point, there will be little to no chance of true tax reform for the foreseeable future. Read what follows very carefully....
  • "Gifting" & Things To Be Thankful For This Holiday

    As we near the end of 2008, it is important that we take our eyes off of the gyrating stock market for a while and consider year-end tax planning opportunities. One of the best ways I have seen to minimize the effects of estate taxes is the "gift tax exclusion." In 2008, a couple can gift $12,000 each, for a total of $24,000, to a child, grandchild or anyone they want. This is a great way to remove assets from your estate, but can also be a good way to teach fiscal responsibility, even to adult children. This week, I'll discuss the gift tax exclusion and detail a way it can be used to pass along your investment philosophy to the younger generation. Plus, I'll take time during this Thanksgiving Week to let you in on some of the things I am thankful for, even during these tough economic times....
  • Would You Buy Stock In U.S.A., Inc.?

    A few years back, I wrote an of article discussing how the US economy could be described as the largest corporation in the world and, as such, were shares of USA, Inc. an attractive investment? When I first wrote on this subject, I was confident that USA, Inc. would continue to surprise on the upside, and it did. However, in light of the many recent challenges to our economy, is USA, Inc. still a good investment?...