Making Work Pay Credit
It seems that many taxpayers may have missed a new credit this year, the "Making Work Pay" Tax Credit which is available for those whose modified adjusted gross income (AGI) is less than $95,000 (or $190,000 if married filing jointly). Taxpayers may want to take a second look at their already filed return, as the Credit can be up to $400 (or $800 if married filing jointly).
For more information about the Credit, click here.
IRS Extends April 15 Deadline for Taxpayers in Eastern Massachusetts and Rhode Island
This is not a April Fool's Day joke! Because of the flooding in Eastern Massachusetts and Rhode Island this week, the IRS has extended the regular April 15 deadline until May 11. The extension applies to all Rhode Island residents, and Massachusetts residents living in Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester Counties. In addition, it appears that the Massachusetts and Rhode Island state governments will be giving residents a similar extension. This should be a, albeit small, relief for those now having to deal with significant property damage from the weather. It is also going to be a relief for some accountants and attorneys facing the yearly crunch to get all their clients returns completed by mid-April.
Of course, the IRS encourages all unaffected taxpayers to still file their returns by April 15, and I'm sure that everyone out there will listen . . .
For the Boston Globe story, click here.
The Forgotten Man
I just completed an interesting book that deals with the history of "The Great Depression." One of the startling commentaries is one political theory opinion that but for the "New Deal" programs of the Roosevelt Administration, the United States may have gone the way of Russia in political structure. It is titled: The Forgotten Man.
The author Amity Shlaes begins with the original notion of "the forgotten man," described half an century earlier than the Great Depression by Yale philosopher Willaim Graham Sumner. He penned a lecture against the "progressives" of his own day in favor of "classical liberalism." The lecture resulted in an essay by the same name as Shlaes' book title.
Sumner described the issue as follows: "As soon as A observes something which seems to him to be a wrong, from which X is suffering, A talks it over with B, and then A and B propose to get a law passed to remedy the evil and help X. Their law always proposes to determine...what, A, B, and C shall do for X." As Shlaes says, "What about C? There is nothing wrong with A and B helping X. What was wrong was the law, and the indenturing of C to the cause." C is the forgotten man, or the men and women who pay and are never thought of by A and B or if they are thought of, they are ignored.
Roosevelt however successfully morphed the notion of the forgotten man to be X which justified numerous programs such as Social Security and Medicare. Later during the Johnson "Great Society" programs, this further expanded to include Medicaid and other social welfare benefits which have now been increased with National Health Care under the Obama Administration.
The modern forgotten man is now personified by television and talk personalities like Sean Hannity and Glenn Beck and persons involved in the "so called" "Tea Party Movement" or the "Henry" described in my previous blog entry.
Why is this important to estate planners? Because the national debate about public benefits and taxes appears to be something that is not going to leave us very soon. The country is sharply divided on many of these issues. As the politics continues to be sorted, there is no question that changes and/or increases in income taxes and death taxes will be with us for some time to come as it is the only way for A and B to get C to pay for X.
