Action Tax Attic

The Tax Attic

January 23, 2015 // 0 Comments

Deb & I went to “American Sniper” last weekend. What a great movie. The story of Chris Kyle, credited with over 160 enemy kills, was well-done by Producer Clint Eastwood and actor Bradley Cooper. Navy Seal Kyle possibly had another 95 but that additional number was not verified. Of course, the movie had a very sudden and very sad ending when he himself was shot at a range by a veteran he was trying to help. I wish there had been a better way to end it, but the fact is during any of Mr. Kyle’s 4 tours of duty in Iraq, similar to a number of his fellow soldiers, it could have ended just like that anyway. He had survived getting shot twice and lived through 6 IED explosions so he used up a few lives over there. Philosophically speaking, it makes one wonder how many lives does a person get on this earth before he moves on to the next one? I have used up a couple that I know of, but if I get as many as Chris, I might be writing The Tax Attic for another 62 years. Beth would be pleased but I don’t know about Deb.   Watching the movie brought up memories of Rockford’s only Congressional Medal of Honor winner, John Sjogren. Similar to Mr. Kyle, Mr. Sjogren was credited with a large number of enemy kills. It’s just that John’s all came within a few hours in one intense battle. On May 23, 1945, his unit of the 40th Division was charged with taking Hill 3155, better known to the soldiers as Suicide Knob. No matter, an assault was ordered on the hill so up the hill they went. During the battle, under great personal duress, John took on Japanese soldiers firmly entrenched in pill boxes. He had his men pass up their hand grenades and then John moved into position where he could stuff the grenades into the pill boxes one after another. By the time it was all over, he had taken out 9 pill boxes and was credited with ending the lives of 43 Japanese soldiers. That type of effort was enough to earn John the Medal of Honor and it was presented by […]

THE TAX ATTIC with Jerry Coon

October 27, 2011 // 0 Comments

Tax news, good and bad We received some good news/bad news from the federal government last week. The Consumer Price Index for this year showed an increase of 3.6%. The good news is the 55 million people who receive Social Security benefits are entitled to a 3.6% increase in those benefits beginning in January 2012. Another 8 million people who receive Supplemental Social Security benefits will also receive the 3.6% increase. In total, that means almost one-fifth of all residents will get a pay raise. The bad news is the 3.6% increase means that our cost of living has officially increased over the past year. It takes more to pay the basic bills this year than it took a year ago. That means we have some inflation going on whether the economists and the Federal Reserve people want to admit it or not. If it costs more to live this year than it did last year, shouldn’t that increase be called inflation? In my mind it is. Have you ever wondered how they came up the 3.6%? There are many different Consumer Price Indexes. Each of these Indexes measures a specific time frame and a specific basket of goods. For the purposes of Social Security, the federal government uses a Consumer Price Index called the CPI for Urban Wage Earners and Clerical Workers. The time frame measured is July, August and September. Washington looks at what it costs to buy the basket of goods in this particular CPI in July, August and September of 2011 versus those same products’ cost in July, August and September of 2010. They are comparing apples to apples and the total cost to buy all of the apples was 3.6% higher in 2011. For the previous two years, the total cost had been flat. That does not mean that all of the costs were flat. It simply means that the total cost of all of the products in the CPI basket did not increase in the time frame of July, August and September from one year to the next. This is truly a catch-22 situation. To a large percentage of recipients, Social Security is their main support. Regardless of what the CPI for Urban Wage Earners and Clerical Workers calculated out […]

The Tax Attic with Jerry Coon — June 3, 2010

June 3, 2010 // 0 Comments

“The Golden Age of Retirement” In my opinion, we are well past the mid-point of the age that future generations will come to call “The Golden Age of Retirement.” I have three reasons to back up my assertion. First, there are still mass amounts of people receiving benefits from defined benefit pensions, i.e. you work for 30 years and receive a pension of X amount of dollars. The employer shoulders 100% of the pension burden forever. As we are seeing from the General Motors debacle and the City of Grand Rapids issues with their pension shortfalls, the defined benefit pensions as we know them today are just not sustainable to the employing entity. “Forever” seems to be the issue. These pensions are quickly being replaced by defined contribution pensions, i.e. 401k contributory plans or Simple Individual Retirement Account plans, where the employee puts in some dollars and the employer puts in some dollars. The employee receives the value of the account when he retires and the employer has no further liability. In many employment scenarios, older employees are covered by a defined benefit plan but all new employees are covered by a defined contribution plan. It appears this switch will continue, especially in non-unionized private industry, until there is no more defined benefit plan coverage. Eventually, the only entities having employees with defined benefit plans will be government and public entities such as schools and unionized private industry entities such as UAW and Teamsters. The second reason I call today “The Golden Age of Retirement” is the current Social Security benefit rules. Practically everyone qualifies, once they reach the proper qualifying age, to receive a Social Security benefit, no matter how little their income or assets or how large their income or assets. In 2009, 51 million beneficiaries received $650 billion in benefits. In the late 1800’s, the Germans were the first nation to set up a Social Security system. We followed them in the 1930’s with our own version. Our version, called the Federal Insurance Contributions Act (FICA), was crafted to fulfill a rather limited set of needs. Beneficiaries could begin drawing at the age of 65. The kicker was that the average life expectancy for both men and women was less than 65. […]