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Tag: tax

  • Economic Recovery Definition: Is the Economy Really Getting Better?

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    What is the definition of an economic recovery? This is the hot finance topic of the week. As the White House unrolls a PR plan to try and demonstrate that the recession is over thanks to the administration’s efforts, the question of how to exactly define economic recovery is causing confusion. Let’s look at the facts and try to determine an economic recovery definition.

    President Obama has claimed that 650,000 jobs have been created or saved through his stimulus plan. The Dow increased by 200 in response to the good news. Plus, the economy grew last quarter for the first time in a year at a rate of 3.5%. Modest, but good. There is also the increase in home sales reported in September. And even Ford posted a profit of nearly $1 billion this year, which came as a surprise to the business community. But do these positive reports illustrate that our economy is set for permanent stability?

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    Home Sales Up
    Chart shows new home sales for the past 13 months, seasonally adjusted
    AP
    AP

    Home Sales Up

      Chart shows seasonally adjusted annual rate of pending U.S. home sales

      AP

      Chart shows seasonally adjusted annual rate of pending U.S. home sales

      AP

      In this Wednesday, Oct. 21, 2009 photo a sign for a home under contract is seen in Philadelphia. The volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.(AP Photo/Matt Rourke)

      AP

      In this Wednesday, Oct. 21, 2009 photo a sign for a home under contract is seen in Philadelphia. The volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.(AP Photo/Matt Rourke)

      AP

      Chart shows new home sales for the past 13 months, seasonally adjusted

      AP

      Shea Homes townhouses are seen at the Victoria Gardens development in Rancho Cucamonga, Calif., Tuesday, Oct. 27, 2009. The number of buyers snapping up new homes dipped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wear off. (AP Photo/Damian Dovarganes)

      AP

      Chart shows new home sales for the past 13 months, seasonally adjusted

      AP

      In this photo made Oct. 26, 2009, a new development of townhouses is seen in Wakefield, Mass. Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.(AP Photo/Lisa Poole)

      AP

      In this photo made Oct. 26, 2009, a new development of townhouses is seen in Wakefield, Mass. Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.(AP Photo/Lisa Poole)

      AP

      New home models are shown in Homestead, Fla., Tuesday, Oct. 27, 2009. Sales of new homes are expected to post their sixth consecutive monthly gain as builders reap the benefits of a tax credit for first-time owners that expires at the end of next month. (AP Photo/Alan Diaz)

      AP

    Some say no. Increases in car and home sales have been spurred by federally-backed incentives like the $8,000 first time homebuyer tax credit and the cash for clunkers program. These increases don’t stand on their own as signs of consumer strength. So what can we use to define economic recovery?

    Writers at the Wall Street Journal believe the jobless rate is a much more meaningful benchmark. But right now it is too soon to tell exactly where that rate is heading based on the statistics available now. So even the jobless rate cannot help us develop a reliable economic recovery definition until we have more information.

    Let’s try looking to the president for his definition. The POTUS has declared: “The benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we are creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well.” (CBS News)

    As unemployment remains high and it is still difficult for people to get loans, we are clearly far from a lasting economic recovery — by the definition of the president himself. But as we have faced the worst economic decline since the Great Depression, it is silly to expect our economy to fully recover after a few months of federal intervention. Obama’s stimulus plan may not have created a full economic recovery within months, but it has helped many families survive what could have been a much worse financial scenario. It has also supported state governments that provide social services like police and teachers to all.

    This type of relief may not fit an expert’s economic recovery definition, but it has helped society overall in the short term. For that alone the president can be commended.

     

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  • Adviser: Obama Awaiting Finished Healthcare Bill

    The White House will not commit to health care legislation that would cap insurance premiums or tax benefits, taking a wait-and-see approach as congressional negotiators seek a deal, advisers said Sunday.

  • Method Man, Wesley Snipes Arrested for Taxes, but Not Nicolas Cage?

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    I’ve met Method Man only one time, and I’ve never met Wesley Snipes or Nicolas Cage. In spite of his mixed public image, Method Man actually comes across as an intelligent, attentive and down-to-earth human being. At the time I met him, I’d only been on national TV a couple of times, but he talked to me as if he’d known me his entire life. He even recited the lyrics to Ice Cube songs that I brought up and told me stories about Tupac. I was quite impressed.

    The closest I’ve ever come to Nicolas Cage is when his movie came out about the 911 attacks and they forgot to include the black guy’s character. It was incredibly tacky, but effectively, there was an African American named Jason Thomas who played a huge role in 911 – large enough for them to include his character in the film. But somehow, in all their exhaustive research for this multi-million dollar blockbuster movie, they simply forgot that his character was black. Instead, he was cast as a white man. How the producers could have overlooked something so obvious was beyond me. In fact, I find it hard to believe that this was an accidental oversight.

    I don’t have much to say about Wesley Snipes, except for the fact that he should watch what he says about black women. Oh yeah. He needs to also pay attention to his tax bill.

    Where Nicolas Cage, Wesley Snipes and Method Man cross paths in my psyche is on the touchy issue of tax evasion. I listened to Method Man (in this interview) take full responsibility for the fact that he was arrested for owing $33,000 in back taxes. He even jokes about it, which is better than I’d be able to do.

    Nicolas Cage owes far too much money to joke about anything. In various media reports, Cage owes over $6 million dollars to the IRS. Now, I have no idea why Method Man is in handcuffs, Wesley got a prison sentence and Nicolas Cage just has to put his castle and mansion on the auction block (yes, the dude really owns a castle – that’s what my friends might call “Intergallactic ballin” – I came up with term that myself). I am also unsure how a man who’s made so much money could be so far behind on his taxes. At the same time, tax problems are human, and there are tons of Americans in all income brackets who have tax trouble every year.

    As you know, I enjoy finding true teachable moments in everyday life. Given that an IRS audit increases your chances of getting you into tax trouble, I thought I’d bring the classroom to the web and share a few facts with you about taxes, audits and finance.

    Here are 4 things that can increase your likelihood of being audited by the IRS:

    1) Having an income that is greater than $50,000 per year – When you make the cheese, you become a big fish and worth the time to audit. The IRS doesn’t have time to go after little wallets.

    2) You are self-employed – Statistics show that self-employed people tend to do the most wiggling and fudging on their taxes, so having your own business flags you as an audit risk.

    3) Making a mistake on prior tax returns – if you’ve made mistakes in the past, you are likely to make another one…at least more likely than everyone else. This will flag your return for a possible audit.

    4) An excessive number of tax write-offs – if the dollar value of your deductions exceeds a certain percentage of your income, then the IRS may come after you. Make sure that any write-offs you have are well documented and legal. You don’t want to cheat on your taxes or get too greedy when filing.

    Remember that tax problems can happen to anyone, so if you are subjected to an audit, don’t panic. Go buy a book on dealing with audits, “fess up,” pay your fine and go on with your life. You’re not in the same boat as Method Man.

    If you want to hear this right out of my mouth, feel free to click on the video below. I’m going to hang out in Chicago:

    Dr. Boyce Watkins is a Finance Professor at Syracuse University, a leading African American Speaker and author of the forthcoming book, “Black American Money.” To have Dr. Boyce commentary delivered to your email, please click here.

     

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  • Method Man: Arrested for Tax Evasion

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    Method Man Tax Arrest

    Grammy Award-winning rapper and Wu-Tang Clan member Method Man turned himself in yesterday to the Staten Island District Attorney on felony charges related to a $32,799 tax bill from 2004 to 2007.

    The 38-year-old rapper-actor (born Clifford Smith) was also in hot water with the government in 2008. He owed the IRS $52,503 in payments, and, as a result, his Lincoln Navigator SUV was repossessed.

    Judging from all of his debt, one would think that the ‘Soul Plane’ actor is suffering from a case of memory loss. And that just may be the case in this scenario.

    “Myself, I’m a pothead,” he told the New York Daily News in March. “Sure [the tax department] sent letters to my house, saying, ‘We need this money.’ They started sending them in 2002. Here it is 2009, and I never paid this s–t because I don’t think like that!”

    Although Smith may have a slight disability, district attorney Daniel Donovan claims the rapper can still face prison time.

    “Taxes are the burden that all citizens share in a civil society, whether you are an ‘average Joe’ on the street or a high-profile rap artist,” he said in a statement. “Because of the alleged action of people like Mr. Smith, law-abiding citizens face higher taxes and reduced government services. Failure to properly report and pay your taxes is a crime against all citizens and will be aggressively investigated and prosecuted.”

    Following his arrest on Oct. 5, Method Man was arraigned and released. He is due back in court Dec. 9. If convicted, he could face up to four years in prison.

     

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  • Tax Collectors Mine Social Networks

    Uncle Sam is tracking down tax deadbeats through social networks and making them pay up.