More On Tax Planningfrom The Advisor's Professional Library
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
The AP report of Ivy League professors who started a website urging “the rich” to give back their tax cuts is flying ‘round the blogosphere, but give credit to the Wall Street Journal’s “Best of the Web” column from last Thursday for first pointing to its absurdity.
GiveItBackForJobs.com encourages “those who have the means” to voluntarily “give back” the difference between what they would have paid had the Bush-era tax cuts expired, and what they are currently paying now that the tax cuts are extended. It even provides a helpful calculator, and encourages visitors to donate the difference to organizations like Habitat for Humanity, Goodwill, Children’s Aid Society and Nurse Family Partnership. Quality organizations all, but shouldn’t the taxes be returned from whence they came? No, according to the website’s backers:
“The government has, by extending the cuts, deprived itself of the resources required to support the policies that will secure a vibrant middle class. But joint action by visitors to this site will begin to replicate good government policy, outside the government and free from the grip of obstructionists within it [emphasis mine].”
So replicating good government policy outside government is a good thing? If only we could think of another term for something like that…what is it? Oh yeah, the private sector. Tax cuts are bad because government needs more money, but we shouldn’t give the money to the government because it’s too inefficient due to the presence of “obstructionists.” The thought process of these philosopher kings is something this state school graduate can’t seem to grasp.
It’s tough to encourage a tax revolt when taxes are too low. But as the Journal helpfully notes, it’s even tougher to encourage a tax revolt when taxes are too low and the suggested corrective actions will make them even lower. One of the benefits of taking their suggestion, the professors proudly trumpet, is that the donations will be tax deductible (seriously).
It’s this sort of muddled thinking that have so many concerned with the lack of real world business experience within the president’s inner circle (most of whom are academics), and why the administration is so estranged from the economic engine that drives this country.