When you combine all of the above with other disturbing trends I’m seeing in City Hall of removing or threatening to remove people from committees if they don’t vote how the Mayor wants them to or even worse, the Mayor recently, in his own words, “holding a gun” to the TPC to get them to vote to increase the bus fares, one begins to wonder about how open and transparent our government is and if the public opinion matters.
Monthly Archives: October 2005
Hut to Hut Ride
Hut System’s seven-day, 206-mile route from Telluride to Moab, Utah, is almost completely on USDA Forest Service and Bureau of Land Management roads, unpaved but well-maintained. Each segment averages about 35 miles a day. The route is not technically difficult (there are a few glorious stretches of single track available as optional routes), but you must be in decent shape to handle more than 16,000 feet of ascents at an average altitude of 9,000 feet. (The company offers a Durango-to-Moab route that is even more challenging.
Fight Rising Home Heating Costs
Natural gas prices have more than doubled since last year. Homeowners can expect to see, on average, a 50-percent increase in their bills this winter.
Renee Montagne talks to Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, about what homeowners can do to save on their heating bills.
WiFi America
How does free wireless broadband access and phone service everywhere sound to you? Google has a plan for San Francisco — it’s got telecom and cable companies worried.
Bogle’s New Book: The Battle for the Soul of Capitalism
Time magazine called him one of the world’s 100 most powerful and influential people. Now John Bogle weighs in on the current direction of America with his new book, The Battle for The Soul of Capitalism.
Bogle, who founded the Vanguard Group of mutual funds in 1974, was the company’s chairman until 2000. Vanguard, one of the largest fund groups in the world, holds accounts totaling more than $800 billion.
Tax Shelters: KPMG and Legal Issues
Jonathan D. Glater takes a fascinating look at the “Wonderworld” of the Tax Law, the US DOJ and the KPMG Tax Shelter Cases:
Eight former executives of the accounting firm KPMG and one outside lawyer have been indicted on charges stemming from their role in designing and selling questionable tax shelters. Yet so far, no court has decided that the shelters were improper.
One tax shelter promoter has asked a federal judge in San Francisco to tackle that very question: the legality of the shelters. And federal prosecutors in Manhattan appear to be worried that the judge might do that. Lawyers for the government have twice argued that the judge should wait for the criminal case to conclude.
More here.
Travel Podcasts via Lonely Planet
The usually excellent (though some of their latest books make me wonder) Lonely Planet has launched travel podcasts. Fabulous!
Our Tax System’s “Wonderland”
Contrary to what has been reported in the media, however, the IRS does not “ban” tax shelters. Whether a shelter qualifies as a tax deduction is, like any other point of law, adjudicated in court. But BLIPS, FLIP, OPIS and the other tax shelters in this case have never been brought before a judge, so their legality and legitimacy has never been settled as a point of law.
Never. The way tax law has usually developed in this country is that the IRS issues its point of view on a shelter, putting taxpayers who use it on notice. If the IRS then takes the taxpayer to court over the shelter, he has the chance to respond before a judge, who makes a ruling and precedents are thus established. In this case, the IRS has called in the prosecutors first.
This in itself is striking. Despite some recent legal setbacks, the IRS has an excellent track record of obtaining favorable rulings on tax shelters it dislikes. Yet no taxpayer has been brought to court over these shelters, and no judge has ruled on whether they “work,” in the jargon of the tax-shelter business. In America, last we checked, the accused are innocent until proven guilty. That gives this KPMG trial an Alice-in-Wonderland quality; the accused are on trial for promoting a fraudulent tax shelter that has never been proved to be fraudulent in the first place.
This is not the first time the Justice Department has taken this route, and recent history suggests it may have a tough road ahead. Last November, Justice froze $500 million in assets at Xelan, a charitable trust set up for doctors in California, alleging that the trust was a vehicle for tax fraud. Six weeks later, the Federal Court for the Southern District of California threw out the case, noting, among other shortcomings, that the prosecutors could not show that any court had ever ruled that Xelan’s activities were illegal under the tax code.
Spaceship One @ The Smithsonian
The first private space ship took its place Wednesday next to Charles Lindbergh’s Spirit of St. Louis, a hoped-for symbol of a new era of space tourism alongside the icon of trans-Atlantic flight.
Watch video and photos of SpaceShip One’s appearance at the recent Oshkosh EAA AirVenture here.
Massive Offshore Tax Giveaway
As mentioned here, I, too, would like the 5.25% tax rate that our good Senators Russ Feingold and Herb Kohl supported (to repatriate foreign profits via a one year tax break). Timothy Aeppel looks at the results:
But it’s far from clear whether the spending has spurred the job growth that backers of the break touted.
A law signed by President Bush shortly before the 2004 election allows companies to transfer profit from overseas operations back to the U.S. this year at a special low tax rate of 5.25%. Businesses often keep such funds outside the country in part to avoid paying taxes in the U.S., where the effective rate on repatriated profit for many companies is normally closer to 25%. Backers said the measure would provide an incentive to companies to invest those funds in U.S. operations.
Most companies using the break have offered only broad outlines for how they intend to use their windfall. For the most part, they say they are using the bulk of the money for tasks such as paying down debt and meeting payrolls. Direct job creation rarely appears on the list.
Some companies are even bringing home piles of cash while continuing to downsize. Colgate-Palmolive Co., of New York, said in July that it planned to repatriate $800 million, at a time when the company also is pursuing plans to shut a third of its factories and eliminate roughly 12% of its work force, or 4,450 people, over four years.