Category: Taxes

Here is an idea that should receive support from just about everyone: the taxpayer savings account (TSA). Instead of the current withholding system, amounts withheld from your paycheck would go into a segregated account that you own. Interest that accumulates would be yours to keep, instead of accruing to your employer or the government.

Recently, the Federal Reserve announced plans to resume monetary easing by purchasing $600 billion in U.S. Treasury bonds by June 2011. Bonds purchases give the sellers additional funds in their banks, which adds to banks' reserves and lending ability. The Fed's goal is to expand money and credit and thereby stimulate the economy.

Uncertainty about future public policies coming out of Washington, D.C., and the prospect of huge tax increases is stifling potential recovery and job creation. Business owners do not know what capital, labor or facilities will cost if they expand – or what their personal tax rates will be. The most important step Washington can take to spur recovery is to immediately and permanently reduce taxes on capital and labor.

Investment spending has been sluggish in spite of record low interest rates and enormous levels of excess reserves in the banking system. Banks have been criticized for not lending enough, but the real problem is that not enough businesses want to borrow.

Prior to the 1970s, there were barriers to foreign investment, such as laws limiting ownership of U.S. corporations. As trade barriers fell in the 1970s and the economies of countries in North America, Europe and Asia became more integrated, U.S. policymakers focused on incentives to attract foreign investment.

American businesses pay billions of dollars in tariffs each year on exports to countries that are willing to eliminate those tariffs. Why? Because Congress has failed to ratify three key trade agreements already negotiated and signed by the United States.

Drug courts are judicially supervised programs that provide long-term treatment and other services to nonviolent drug law offenders. Cases can be referred to drug courts in lieu of or in addition to traditional criminal punishment, such as incarceration or probation.

The Greeks have always been trendsetters for the West. Washington has repudiated two centuries of U.S. fiscal prudence as prescribed by the Founding Fathers in favor of the modern Greek model of debt, dependency, devaluation and default. Prospects for restraining runaway U.S. debt are even poorer than they appear.

All over the developed world, countries are facing an extremely unpleasant budgetary reality: Per capita health care spending is growing at twice the rate of growth of per capita income.

Investment firms include private equity funds (which raise capital to invest in start-ups or existing businesses) and hedge funds (investment funds that specialize in certain investments such as debt instruments, stocks or derivatives). They are typically not organized as public corporations, with stocks traded on an exchange, but as partnerships.

The regulatory reform bill currently before Congress will supposedly impose financial reregulation, reversing the alleged deregulation of the past 30 years.  What deregulation?  Can anyone point to the removal of a particular legal or regulatory barrier in the last two decades as a cause of the recent financial crisis?  If so,               will the new legislation restore this barrier?

Millions of Americans are saving for retirement in 401(k)s and Individual Retirement Accounts (IRAs). These accounts allow people to invest pretax dollars, but require them to pay taxes on their deposits and accumulated earnings at the time of withdrawal. By contrast, a Roth account allows people to deposit after-tax dollars, but withdraw the accumulated balances tax-free.

In October 2008 Congress passed the Emergency Economic Stabilization Act of 2008. The act created a $700 billion Troubled Asset Relief Program (TARP) aimed at preventing a meltdown of the banking system. Some TARP funds were subsequently used for purposes outside the financial industry, but most were used to purchase preferred stock in banks to shore up bank capital as a buffer against bad assets.

Each year, foreign governments and investors increase their holdings of U.S. debt. In effect, they are lending the United States money to finance its excess of imports over exports. However, continued excessive deficits could make U.S. trading partners reluctant to continue the process. Reluctance to buy or efforts to sell dollar holdings by foreign investors would cause U.S. equities to decline, interest rates to spike and the dollar to plunge.

The new health care law will substantially increase the tax burden of high-income workers and small businesses over the next few years.  Those tax increases could be piled on top of other tax increases on the labor and investment income of high-income earners.  The tax hikes will reduce the capital stock and discourage small business job creation – the opposite of what is needed to grow the economy.

Capitalism and democracy are both known to improve the quality of life. But which is more effective in promoting social welfare? Three typical measures of social welfare are health, education and disease prevention. Poor countries generally rank lower than developed countries on these social metrics, but better public policies can improve them.

There are many critical lessons to be learned from the financial crisis that began in the fall of 2008 and how it has since been handled. The federal government responded aggressively – at a huge cost – but nearly two years later little progress has been seen in the country's economic health. If the nation's financial services industry is to be revived, the system needs to be restructured and rebuilt from the ground up.

Each financial crisis is different, yet they all feature financial institutions making promises they cannot keep. The conventional explanation for the 2008 financial crisis and recession is that it was caused by a housing bubble, spurred by the Federal Reserve's low interest-rate policy and by lax regulatory oversight. All three claims may be true, but they do not identify the underlying institutional cause.