Fraud, Waste, and the First Time Homebuyer Credit

The Cash for Clunkers program was by many accounts a waste of taxpayer money because its primary economic effect was to time-shift a bunch of new car sales that would have happened anyway. We also need to critically examine the first time homebuyer credit because the real estate industry is lobbying Congress to extend and expand it. That alone makes me suspicious that the program is a taxpayer ripoff. Read more

Income Re-Distribution Features of the 2009 Stimulus Plan

The AMERICAN RECOVERY AND REINVESTMENT TAX ACT OF 2009 (a/k/a Obama stimulus plan) includes some new features by which income earned by some taxpayers will be re-distributed in the form of tax credits.  The income being re-distributed will go to other taxpayers and, in many cases, to individuals who are not taxpayers at all but merely tax return filers.

Here is a list of some of these credits, as identified in reports prepared by the Congressional Joint Committee on Taxation: Read more

Stimulus Package 2009: Lightning Round Reactions

The Democrats in the House of Representatives introduced legislation this week containing $825 billion in new tax credits and government spending, packaged together in what they call the “American Recovery and Reinvestment Plan.”  I grabbed an executive summary of the Plan from Speaker Pelosi’s website so that I could share some quick reactions to the Plan. Read more

Year End Income Tax Guide (Part 1)

Part of the hard truth we all have to accept includes death and taxes.  Even Mr. ToughMoneyLove can take only such much hard truth so I choose not to write about death.  That leaves taxes.  This being December, it’s time to think about last minute tax strategies for 2008 and begin our tax planning for 2009.  I have put together a few tax planning “highlights” (or “lowlights” depending on your attitude about taxes) for you to think about.   These are arranged in no particular order of importance so you might want to scan all of them to find something that may be relevant to your situation. Read more