The Taxman86 is Back.
The following reprint was the last issue of the Taxman86 Speaks from October 27, 2000. Many things have happened since then including the cancellation by the Republican Leadership in the Senate of H.R. 5542 "Taxpayers Relief Act of 2000."
Thus the Speaker of the House J Dennis Hastert and President Clinton have wasted over one year of political capital on their Community Renewal Program. All is not lost since we will have a new president one of these days, and with it a new vice president, whether Secretary Cheney or Senator Lieberman, who will become Chairman of the Community Empowerment Board, which is pretty impressive to say the least.
For those who may be interested in what may be coming next year we suggest that a quick review of H.R. 5542 "Taxpayers Relief Act of 2000" sponsored by Congressman Armey [not Chairman Archer] may be helpful, especially the effective dates.
In particular we suggest you look at Sections 615, 616 and 617, which would have become effective upon enactment, and for which an effective date of October 1, 2000 could be possible when enacted next year as part of H.R. 1 "The New Growth Act of 2001."
As an aside, the projected surplus is now targeted to be $6T for the fiscal years 2001 to 2011 with estimated tax receipts of $30T. A proposed Tax Cut of $1T, or 3% thereof, appears to be acceptable to Democratic Leadership; and with be forthcoming under either president.
The following is a reprint of Taxman86 Speaks on October 27, 2000. You can click the "previous issue" link at the top/bottom of this page to go directly to this archived newsletter or continue reading the reprint below.
Same time Last Year, and the Year Before; What Does It Cost To Improve the Neighborhood; Big Things Are Coming.
1. The Veto is coming, the Veto is coming, $240B over 10 years is too big.
The New York Times, and the Washington Post say shame to the Republicans and let the Veto come to the big time Tax Cut of $240B over 10 years [that is about 1% of the projected $25T+++ in tax collections over the same period]. To see how the numbers shake out check the Joint Committee on Taxation's Report, and the Tax Bill itself . The Editorials say it all and we suggest you check them out at The New York Times and The Washington Post.
Where is the Surplus coming from? How about all those Home-based Businesses that we keep reading about 27M strong. Is it possible that the Small Business Revolution is increasing the self-employment income that will be subject to 15.3% tax on earnings of $80,000+ next year, or $160,000 if a partnership of two? That is $24,000 off the top plus state and federal income taxes. Invested at 5% would provide quite a nest egg at 65. Oh by the way, Popcorn is a very successful home based Internet business, not something you eat.
2. What does it cost to defer capital gains taxes on Enterprise Zone Businesses?
First off what is an Enterprise Zone Business, check out IRC Section 1397B, which suggests that you have to be located in one of the 31 Empowerment Zones, or 95 Enterprise Communities, hire 35% of your full or part time employees from the neighborhood, and then be able to sell out at a profit after one year to qualify under proposed IRC Section 1397B [Section 615 of the Taxpayers Relief Act of 2000]. Finally those capital gains profits have to be reinvested within 60 days of the gain. If all goes well it appears that the number for 40 Empowerment Zones is $700M+ over 10 years [$100M over 5 years], or possibly $1.4B [$200M over 5 years] for the 95 Enterprise Communities out of a total of $240B+++ tax bill. Assuming these numbers are correct, and how they estimate potential profits reinvested is beyond us, think of all the venture capital that has been created and reinvested in these 135 Distressed Communities [this topic is too simple for the New York Times or Washington Post Editorial Writers]
3. The Taxman86 Speaks has been silent because of its efforts on Yourself-Inc.com.
Coming soon will be the daily The Taxman86 Speaks but you will have to re register at Yourself-inc.com, that is the bad news, the good news is that it will be energized with links to discussion groups, comments and questions, and will be living color, all through the efforts of Chris Kling and the Yourself-Inc.com, Incorporated staff. We are very excited about these possibilities, and hope you will join us. Our Taxsavings website is shifting more towards IRC Section 1397B, which could have been available to the 95 Enterprise Communities, including the San Diego Enterprise Community if CCDC and the other movers and shakers had seen the light. But maybe there is an Empowerment Zone in the works [9 new ones have been promised], one that will cover all of downtown San Diego, Little Italy, Old Town/Sports Arena, or maybe one for downtown Las Vegas and the Stratosphere, only the shadow knows, effective January 01, 2002.
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.