Tuesday, July 17, 2012

Wednesday July 18 Housing and Economic stories



TOP STORIES:

Here Are The New Taxes You’re Going To Pay For Obamacare - (finance.yahoo.com) ell, Obamacare is now official, which means that a lot more people in the United States will have health insurance. And it also means a lot more people will be paying more taxes. (You didn't think Obamacare was free, did you?) Here are some of the new taxes you're going to have to pay to pay for Obamacare:
·         A 3.8% surtax on "investment income" when your adjusted gross income is more than $200,000 ($250,000 for joint-filers). What is "investment income?" Dividends, interest, rent, capital gains, annuities, house sales, partnerships, etc. Taxes on dividends will rise from 15% to 18.8%--if Congress extends the Bush tax cuts. If Congress does not extend the Bush tax cuts, taxes on dividends will rise from 15% to a shocking 43.8%. (WSJ)
·         A 0.9% surtax on Medicare taxes for those making $200,000 or more ($250,000 joint). You already pay Medicare tax of 1.45%, and your employer pays another 1.45% for you (unless you're self-employed, in which case you pay the whole 2.9% yourself). Next year, your Medicare bill will be 2.35%. (WSJ)
·         Flexible Spending Account contributions will be capped at $2,500. Currently, there is no tax-related limit on how much you can set aside pre-tax to pay for medical expenses. Next year, there will be. If you have been socking away, say, $10,000 in your FSA to pay medical bills, you'll have to cut that to $2,500. (ATR.org)
·         The itemized-deduction hurdle for medical expenses is going up to $10,000. Right now, any medical expenses over $7,500 per year are deductible. Next year, that hurdle will be $10,000. (ATR.org)
·         The penalty on non-medical withdrawals from Healthcare Savings Accounts is now 20% instead of 10%. That's twice the penalty that applies to annuities, IRAs, and other tax-free vehicles. (ATR.org)
·         A tax of 10% on indoor tanning services. This has been in place for two years, since the summer of 2010. (ATR.org)
·         A 40% tax on "Cadillac Health Care Plans" starting in 2018.Those whose employers pay for all or most of comprehensive healthcare plans (costing $10,200 for an individual or $27,500 for families) will have to pay a 40% tax on the amount their employer pays. The 2018 start date is said to have been a gift to unions, which often have comprehensive plans. (ATR.org)
·         A"Medicine Cabinet Tax" that eliminates the ability to pay for over-the-counter medicines from a pre-tax Flexible Spending Account. This started in January 2011. (ATR.org)
·         A "penalty" tax for those who don't buy health insurance. This will phase in from 2014-2016. It will range from $695 per person to about $4,700 per person, depending on your income. (More details here.)
·         A tax on medical devices costing more than $100. Starting in 2013, medical device manufacturers will have to pay a 2.3% excise tax on medical equipment. This is expected to raise the cost of medical procedures. (Breitbart.com)

He felled a giant, but he can't collect - (www.nytimes.com) “TAKING on corporate Goliaths for their wrongdoing should not be so daunting.” That’s the view of Michael Winston, a former executive at Countrywide Financial, the subprime lending machine that was swallowed up by Bank of America in 2008. Mr. Winston won a wrongful-dismissal and retaliation case against the company in February 2011, but is still waiting to receive his $3.8 million award. Bank of America is fighting back and has appealed the jury verdict twice. After hearing a month of testimony from a parade of top Countrywide officials, including the company’s founder, Angelo Mozilo, a California state jury sided with Mr. Winston. An executive with decades of expertise in management strategy, he contended that he was pushed out for, among other things, refusing to follow questionable orders from his superiors.

Byron Wien: I Spoke To The Smartest Man In Europe, And What He Had To Say Was Terrifying - (www.businessinsider.com) Debt will lead to a collapse. So what does TSMIE see now? Basically that massive amounts of debt will bring the decline of Western Civilization, but that in the meantime, before that happens, policy makers would pull every trick they could in order to stave off a catastrophic event. He started out by saying he had done some preparation for our visit.  “I think the title of your essay should be ‘Dancing around the Fire of Hell.’  For years I’ve been telling you that the accumulation of debt was going to be the ending of the developed world and for years you have been telling me my views are too extreme.  The problem is you are an optimist and I am a realist.  You go around with a smile on your face thinking that there are serious problems facing us, but that everything will turn out favorably because the policy makers will do what they have to do to avoid disaster, and so far you have been right.  The developed economies and their stock markets have plodded along and investors haven’t made or lost much money in spite of the challenges.  At a certain point, however, the temporary measures that the policy makers put in place to avoid financial catastrophe prove insufficient and that’s where we are now.  I’m not saying that it will happen tomorrow but events are falling into place that will take the smile off your face.

Select Wal-Mart stores pulled in 25 to 40 percent in revenues from food stamps. - (www.mybudget360.com)
When you think of food stamp usage you rarely think about big financial profits.  Yet some businesses are managing to get a big piece of the food stamp pie.  Last year alone the government spent a record $78 billion in food stamps.  This is a large amount of money and this is why you might notice more EBT signs if you ever pay attention when you are driving around.  The money when broken down by the 46 million Americans receiving this aid is not much but actually speaks to the underlying bifurcated nature of our economy.  Many are stuck below poverty status and many in the middle class simply struggle to get by.  The Congressional Budget Office projects that food stamp usage will be high deep into 2015.  Let us examine where this money is actually going.

Foreclosure prevention laws extend the slump, experts agree - (www.ochousingnews.com)
State and federal laws enacted to protect homeowners from eviction in the wake of the 2008 housing crash may be extending the slump, according to a growing number of economists and industry experts. Foreclosures have all but ground to a halt in Nevada, which passed one of the stiffest borrower-protection laws in the country last year. Yet the housing market is further than ever from recovery, local real estate agents say, with a lack of inventory feeding a “mini-bubble” in prices that few believe is sustainable. The bulls, realtors and those who recently bought homes, assure us the recovery is solid, but the shadow inventory bulls want to ignore foretells another story. The dramatic spikes some markets like Phoenix have witnessed can only be sustained if shadow inventories never come to the market. Perhaps these future sales can be metered out at a rate which doesn’t push prices below previous lows, but perhaps not. Either way, it’s unlikely current gains will be sustained and rapid appreciation is forthcoming.





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