Friday, May 24, 2013

Congress lets our corporations pay only 10% tax

Why does the Congress allow corporations to use gimmicks to pay less tax than we do?
Apple paid just $3.3 billion on $34.2 billion of profits in 2011— giving it a tax rate of just 9.8 percent. Nearly every major technology firm has its share of tax tricks up its sleeve. Apple accomplishes this feat with a two-pronged tax strategy. For domestic sales, the company pays profits as a royalty on a subsidiary it owns in Ireland, which are then routed to a tax haven. For overseas sales, the company uses a second Irish sub, routes the profits through The Netherlands to avoid European taxes, and then sends its profits to its tax haven via the first Irish sub. This sub is called a “disregarded entity”—an affiliate not subject to U.S.income tax. (This strategy is called the “Double Irish with a Dutch Sandwich,” the report says.) Warren Buffett pays only 17% total tax, Mitt Romney only 14%, and John Kerry only 13%.
Isn’t it time you used IRS rules to your advantage too?

Why do high-fee money managers using no-fee index funds charge fees?
The latest buyers of index funds called ETFs are those managers who say, “We can pick the right stocks and beat the market, so pay us 2-3% of your balance annually.”
More than 100 mutual funds hold SDPR S&P 500 (SPY), while more than 70 portfolios use iShares iBoxx High Yield Corporate (HYG). Mutual Funds with ETF stakes include Columbia Dividend Income (LBSAX), Monetta (MONTX) and Vanguard Windsor II (VWNFX). ETF provider SPDR says that 21 of the 25 largest fund companies hold at least some ETFs. The managers could bid for individual securities, but, they figure, it is simpler just to buy an ETF. So why are they still charging us the full load?
Duh—because they can.  
Switch to the real thing AND pay no income taxes on your gains—EVER!

Do you own any of these funds?
Here are 10 funds that lag their low-cost index because they charge too much. 
Here are 12 real dogs that have lost you money (-8% to -14%) in the last 5 years AND still charged you 2-3% per year. It is enough to make you cry or quit!
Now there is an answer. Buy and hold ten low-cost funds earning 10-12% a year. Accumulate $400,000 in 25 years.

Hedge funds earn 5.4%, index earns 15.4%; amateurs beat “professionals”
Hedge funds’ returns have stayed “lackluster” this year, with the $2.3 trillion industry trailing the gains of the Standard & Poor’s 500 Index by about 10 percentage points, according to Goldman Sachs. Hedge funds gained 5.4 percent on average through May 10, compared with a 15.4 percent rise for the S&P 500 (SPX) and a 14.8 percent increase for the typical mutual fund, a team of Goldman Sachs analysts said.

Why are early retirees robbing their IRAs?
48 percent of people who were aged 61 to 70 and in the bottom half of the income distribution withdrew money from their IRAs annually during the period studied (2002-10). Even in the top quarter of incomes, 29 percent of people aged 61 to 70 annually pulled money out of their IRAs, EBRI said.
The sizes of the withdrawals were substantial, too, ranging from 12 percent of funds for young seniors in the top quarter of incomes to 17 percent for those in the bottom quarter.
Older seniors (aged 71 and up) appeared to be more frugal, according to the EBRI study. The Internal Revenue Service requires people with ordinary IRAs to make minimum withdrawals each year starting at age 70½. Many of the older seniors withdrew just the minimum—and then stashed some of the proceeds into other forms of savings. Save $3,000 a year on financial services to rebuild your funds:

CA pension firm’s long-term care insurance premium up 85%
People who bought long-term care insurance from CalPERS 10 or 20 years ago, thinking it would provide security in their old age, are stunned to learn the agency is raising rates by 85 percent over two years. What are the alternatives?

CA cites initial premiums for ObamaCare insurance
In southern Los Angeles, for example, a 40-year-old individual would pay anywhere from $242 a month for a plan from HealthNet to $259 for plans from Molina or Anthem. The comparable plan for a small employer costs $362.

How does your retirement look? Need more assets?
57% of U.S. workers have less than $25,000 in total household savings and investments, excluding their homes. 28% said they have no confidence that they will have enough money to retire in comfort, the highest level in the 23-year history of the EBRI study. Only 66% report having any retirement savings, compared to 75% of workers in 2009. 

SCAMS           “Deficits don’t matter” GOP grandfather, Dick Cheney, 2002

NJ hospital tops medical cost listing
Bayonne (N.J.) Medical Center, a 278-bed, for-profit hospital in a working-class city, charges the highest prices of any hospital in the nation, according to an analysis of federal billing data released by President Obama's administration. Based on the bills it submits to Medicare, the Bayonne Medical Center charged the highest amounts in the country for nearly one-quarter of the most common hospital treatments, according to a New York Times analysis of 2011 data, the most recent available. No other hospital was at the top of the price list more often.

Health plans sold by United States Benefits are bogus; premiums returned
Fake health plans go by many names. Check the details with your state insurance regulator.

41 Watchung Plaza, B242
MontclairNJ 07042

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