THE TAX ATTIC with Jerry Coon

April 12, 2012 // 0 Comments

Avoid penalties, file an extension 162-0. I know it’s never been done before and the 2012 Detroit Tigers aren’t going to do it either. They aren’t going to win all of their games this year. They may even have lost a game between the time I wrote this article and the time you are reading it. However, I do think they have a shot at making a run at turning in a very good, if not the best, won-loss record in all of baseball history. The highest won-lost record in American League history was turned in by the 2001 Seattle Mariners at 116-46. I know this is hard to believe, but the best winning percentage of all time came from the 1906 Chicago Cubs with 116 wins and 36 losses. Unfortunately, both of those teams did not win the World Series in their record-setting year. Not necessarily a good precedent. I believe the best team in all of baseball history was the 1927 New York Yankees. They finished with a record of 105-46 and did win the World Series. That doesn’t surprise me in that the Yankees’ nickname was Murderer’s Row, because they killed pitcher after pitcher. I’m sure that nickname wouldn’t work today. They would be known as something a little less graphic. Even though I’m less than a Yankees fan, I do have to respect a team led by two of the greatest hitters and players in the history of the game, Babe Ruth and Lou Gehrig, and one of the best pitchers of the day, Waite Hoyt. They had seven future Hall of Famers on that team. What the Tigers have in common this year with that 1927 team is they are led by two of the best hitters and players of today, Miguel Cabrera and Price Fielder, and the best pitcher in the game today, Justin Verlander—possibly three future Hall of Famers. In today’s baseball, they have a stacked team. It’s too early to tell because things happen over the course of 162 games and seven months. Hitters go into slumps. Pitchers get hurt. Managers forget how to manage. But it sure seems like this is the year to be a Tiger fan. Go Tigers! The tax season ends next Tuesday, […]

THE TAX ATTIC with Jerry Coon

December 29, 2011 // 0 Comments

Changes that affect tax returns The passing of The Independent a few weeks ago prompted me to go back and review those initial articles I wrote for The Rockford Squire. It’s a little known trivia fact, but I wrote my first Tax Attic on October 3, 1996, replacing a business column written by Hal Babcock. Interestingly enough, The Independent also published its first edition the week of October 3, 1996. Roger Allen and I wrote columns for the Squire for virtually every week of the existence of The Independent, and we both are continuing to write columns today. I believe that’s called perseverance and longevity. This year, the Squire is celebrating its 140th year of publishing a weekly newspaper. I can’t vouch for exactly how many of those 140 years Roger has been penning his column, but I’m celebrating my 15th year of writing the Tax Attic. Congratulations to both of us and hopefully we can keep up the good work for many more years! I wanted to re-read a few of those 1996 articles to see what in the world of taxation I was writing about back then. My intent then, as it is now, was to write an article that would educate the public about taxes but also entertain those readers while reading an article about taxes. I have always felt it couldn’t hurt to mix in a little humor with a pretty dry subject. Have you ever heard the statement: “There’s nothing new under the sun”? It definitely applies to taxes. In those first few articles I wrote about the 1996 Tax Freedom Day and our federal tax burden. That’s still a pretty popular subject. If all of our pay went to taxes, on what day would we get to keep some of our own money? In 1996, Tax Freedom Day was May 7. In 2011, Tax Freedom Day was April 12. On the face of it, we gained quite a number of days. However, the Tax Foundation makes an important clarification when comparing 2011 and 1996. In 1996, there was a budget surplus, so when they declared May 7 as Tax Freedom Day, they meant May 7. In 2011, however, there is a budget deficit in the amount of a few trillion dollars. […]

THE TAX ATTIC with Jerry Coon

December 1, 2011 // 0 Comments

Supreme Court rules pensions taxable The Michigan Supreme Court on Friday, Nov. 18, upheld the constitutionality of the controversial Michigan pension tax changes made by our legislature last spring. Public Act 38, as signed by Governor Snyder, proposed taxing public pensions beginning on January 1, 2012. Private pensions have always been taxed, but public pensions paid to retired school, federal and state workers have not previously been taxed. The Act placed public and private pensions in the same pot and proposed taxing all of them at the same rate. However, there was some question as to whether the legislature had the power to levy a tax on those public pensions. Hence, the Michigan Supreme Court became involved in this sticky matter. It was asked to decide five issues. 1. Does or does not taxing public pensions “impair accrued financial benefits of a pension plan retirement system of the state…”? The pension recipients were promised a certain level of financial benefit upon retirement. Does taxing those pensions now reduce or impair that financial benefit? 2. Does or does not taxing public pensions “impair a contractual obligation in violation of the Michigan Constitution…”? Did the state have a Constitutional contract with the pension recipients to provide a promised level of pension benefit that would be reduced by the amount of tax incurred? 3. Does or does not taxing all pensions differently based on the date of birth “violate the equal protection of the law under the Constitution…”? People born before 1946 would pay no additional tax, so they were held harmless by the Legislature. People born between 1946 and 1952 would be impacted somewhat, while those born after 1952 would be extremely impacted by the bill. Is this legal? 4. Does or does not taxing all pensions differently based on the taxpayer’s total household resources “create a graduated income tax in violation of the Constitution…”? Michigan is a flat-tax state. Everyone pays at the same tax rate on their Michigan taxable income. The proposed law said taxpayers with total household resources in excess of $75,000 single and $150,000 joint were not entitled to a $20,000 single or $40,000 joint pension income exemption. Was this legal? 5. If the Supreme Court holds any part of the act as […]

THE TAX ATTIC — by Roger Allen, publisher

July 14, 2011 // 0 Comments

New look at home mortgages I went to a seminar recently that forced me to think outside of my financial box, so to speak. I’m from West Michigan, so my financial box is pretty conservative. Dave Ramsey isn’t my idol—that spot is and always will be reserved for the Detroit Tiger’s great player, Al Kaline—but I do appreciate and agree with most of what he says. Dave isn’t from West Michigan, but he could be. When I say his financial box is very conservative, I might actually be understating his stance. What shook up my box concerned the speaker’s treatment of home mortgages. Dave says to get rid of the darned things as soon as possible. It’s prudent to make the term of the loan 15 years as opposed to 30; 10 would be better. Make use of strategies such as bi-weekly payments. At the very least, pay extra on the principal each month. If you can squeeze in an extra payment once a year, do it. If you can pay cash for a house, do it quickly. For goodness sakes, the higher down payment you can make on the house, the better. Don’t pay any more interest to a financial institution than you have to. The speaker at this seminar had a slightly different take on the subject of mortgages. In fact, he said there is no book of “Dave” in the bible, so don’t take everything Dave says as gospel. That got a few nervous laughs from the crowd, especially by those of us from West Michigan. Starting out, he said a 30-year term is not a bad thing for a mortgage. It may have a slightly higher interest rate than a 15-year term, but it has a substantially lower monthly payment. My thought was, regardless of the payment amount, how can a higher interest rate be okay? The speaker pointed out that the lower payment was the key. We tend to dwell on the wrong part of the equation. The lower payment allows the taxpayer to set aside the difference to use how that person wants to use the money. Over time, that difference could add up to a substantial amount and could be used to buy a car or pay for […]


May 12, 2011 // 0 Comments

Baseball and recreational gambling I needed some event to get me interested in baseball this year. The Tigers have been playing poorly while winning less than half of their games. They are second in the league in strikeouts. Their lead-off hitter Austin Jackson, their starting third baseman Brandon Inge, and their starting right fielder Magglio Ordonez all have batting averages that have been under the dreaded “Mendoza” line, meaning their averages are below .200. Not good. The prized free-agent hitting signee, Victor Martinez, has been hurt, affecting both his playing time and hitting production. There just has not been much to get excited about—until Saturday night. In one game, Justin Verlander single-handedly got Detroit back on track. He pitched his second career no-hitter against the Toronto Blue Jays. How rare is this? The Tigers are charter members of the American League, starting play in 1901. In their 110-year history, only five pitchers have thrown a total of seven no-hitters. Their first one was thrown in 1912 by George Mullin. Forty years passed, until 1952, when Virgil Trucks threw two no-hitters in the same season—none for 40 years, then two in one season. They had another by now-Senator Jim Bunning in 1958, and then went until 1984 when Jack Morris turned the trick. Then nothing until Verlander pitched his first no-hitter in 2007 and followed up on that with Saturday’s overpowering performance. That puts him in pretty elite company. Only 30 pitchers in all of baseball history have two or more no-hitters, led by Nolan Ryan with seven. Before we think the Tigers haven’t had many good pitchers, we have to remember there have only been 249 no-hitters and many of the best pitchers ever don’t have any no-hitters. Some Hall of Fame pitchers who never threw a no-hitter include Lefty Grove, Whitey Ford, Don Drysdale and Dizzy Dean. Dizzy’s brother Paul Dean, got his, but Dizzy couldn’t pull it off. Some Hall of Fame pitchers who have one no-hitter include Bob Gibson, Jim Palmer, Tom Seaver, Juan Marichal and Carl Hubbell. In the second All-Star game in 1934, Hubbell consecutively struck out future Hall of Famers Babe Ruth, Lou Gehrig, Jimmie Foxx, Al Simmons, and Joe Cronin. Hubbell was one of the most effective pitchers […]

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