If You’re Going to Lay Pipe, Why Not Do It Right?

September 16, 2011 1 Comment

How Do I Mix Oil and Water?

These oil spills can be prevented, not to be confused with the term “Oil Sands,”but do I have your attention?

You don’t.   Not unlike capitalists and environmentalists.  

But if you’re going to lay pipe, why not do it right (twice)?  The Calgary-based TransCanada’s $7-billion Keystone XL pipeline is the dubious answer.  The proposed pipeline is a major infrastructure project that would create 20,000 unionized construction jobs and hundreds of millions of dollars in tax and other revenues in the six states through which it would pass. How about we appease both sides of this controversy; the environmentalist hate it and the capitalists love it; by adding to the mix?  Add a water pipeline.  An irrigation pipeline.  Bury it right next to the oil pipeline.  Collect and dispense water from the pipeline as needed.

Send it down and dispense it through parched draught stricken lands and collect it from flood swollen, land dispensing and collecting water as needed, creating the most progressive irrigation system the world has ever known.  Where in the world are we experiencing droughts?  Think Texas.  Not to mention Saudi Arabia and Kuwait.  Check out Wall Street Journal Business article called “Facing Up to End of ‘Easy Oil’” by Ben Casselmann, dated May 24, 2011.

The sweetest part of all… the oil companies and the Canadian government and Canadian corporations can subsidize it.  Just ask Exxon.  They’re spending millions to advertise it.  Ask Canada’s ambassador to the United States, Gary Doer.  He can hardly refuse a slam dunk.  Don’t forget our environmentalists.  Ask Margot Kidder arrested for protesting the pipeline.  Is she going to deny the drought and flood victims the relief from water?  Water, life giveth, life taketh away.

Oil Sands!

Oil Sands

Now it’s up to our State Department.  They need to decide before year-end (2011).  Move over Bill!  Maybe it’s time for Hillary to lay some pipe.  How do you mix oil and water?!  Wired  Magazine has some ideas.  Maybe we lay less pipe?

In any case, nothing is ever easy.  Unless you’re Bill.

 

Filed under Celebrities, Conservative, Event, Fair Tax, Flat tax, Go Green, income tax, leadership, Musings, Rants, Small Business, startup, stimulus, Talent, taxes Tagged with , ,

Roth IRA, Invest to Pay Less Taxes

September 9, 2011 1 Comment

by John Holland, South Shore Investment Advisors, Charleston, WV

Social Security was intended originally to be a tax free benefit for retirees in America. Over the years this has changed for the majority of us.

Income Thresholds
There are two separate income thresholds for filers that will determine whether they have to pay tax on their Social Security benefits. Here is a breakdown of the categories:

Income Percentage of Social Security Taxable
Single, Head of Household, Qualifying Widower and Married Filing Separately
(where the spouses lived apart the entire year)		 Below $25,000 All SS income is tax-free
$25,000 – $34,000 Up to 50% of SS income may be taxable
$34,000 and up Up to 85% of SS may be taxable
Married Filing Jointly Below $32,000 All SS income is tax-free
$32,000 – $44,000 Up to 50% of SS income may be taxable
$44,000 and up Up to 85% of SS may be taxable

When calculating your income you must include ½ of your social security benefit and all of your interest and dividend income. This includes tax exempt interest from municipal bonds and distributions from IRA’s or 401k retirement plans.

As an example, let’s say Jim Johnson withdrew $19,500 from an IRA and had $2,000 of interest income. He received $16,000 from social security and had $1,500 of gambling winnings. ($19,500 + $2,000 + $8,000 + $1,500 = $31,000). Jim is single so his social security benefit will be 50% taxable.

You can see that if you’re married and your spouse receives social security as well as distributions from a retirement plan, your tax liability will start eating up your social security benefit pretty quickly.  If both husband and wife receive just $2,000 a month from an IRA they will easily be in the upper threshold paying taxes on 85% of their combined benefit.

There is currently a loophole that exists called the Roth IRA. If you’re over 59 ½ and your Roth has been established for at least 5 years, you can take tax free distributions from it. Under current law these distributions don’t count when calculating your social security taxability. You can take a distribution of any size from a Roth and owe zero taxes on it and zero taxes on your social security. Let’s do another example.

John Doe has a Roth IRA with a balance of $1,500,000. He’s 65 years old and the account has been established for more than five years. He starts taking a $100,000 annual distribution and he receives $24,000 each year from social security. His income tax will be zero. The Roth IRA distributions are tax free and don’t count towards his social security income threshold. John will receive $124,000 annually in retirement benefit with zero tax liability. Of course these tax laws could change in the future, but today a Roth IRA is the best retirement vehicle available.

If your single and make less than $107,000 you can make a full contribution to a Roth and if you’re married the limit is $169,000. If your annual income is higher than these limits you can still convert a traditional IRA to a Roth. Of course you have to pay taxes in the year you convert the assets and I believe you should do this while the Bush tax cuts remain intact. I believe these tax cuts will be repealed in 2013 and replaced with higher marginal rates.

If you are an equity partner in a small business, this might make even more sense if we let your company pay the taxes (as an executive bonus or alternative form of compensation) on the money you move out of our existing retirement accounts into a Roth IRA.  It can be done gradually dictated by cash flow coming from the business.  If it is done before we lose the tax breaks it could make sense.

No matter if you’re 25 years away from retirement or 5 years away you should consider a Roth IRA for at least a portion of your retirement income. The tax free benefits in retirement are too great to ignore.  

John Holland e-mail: hollandzjr@aol.com

Good advice for the younger generation, especially with all the hype over social security.  If you’re a small business owner and you’re worried about higher capital gains taxes into your retirement years, there’s some good advice for you here as well.  Subscribe – Comments welcome. Pass it on.  : http://wp.me/p1nHZg-Dr

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Free Wheeling for Honduras Orphanage by Carl Gallo

September 6, 2011 1 Comment

Michelle and Sarahé with Carl
Michelle, Paola,
Dania and Julani
 with Rachel
from our group.
Click on image
for full size.

Free Wheeling  for Honduras Orphanage

by Carl Gallo

I was greeted with temperatures around 109 degrees in Telgucegapita, Honduras (weather).

We had no running water, and certainly no air conditioning, but I was also greeted with smiles and hugs from little girls such as Michelle and Sarahé with me in picture.

We ate rice, tortillas and refried beans every day, but we had the privilege of having food and breaking bread with those same children.

We sat on the floor and ran in the yard and went swimming in a river that we in the States would snub our noses at, but sitting, running and swimming was never so much fun as it was with those little, giddy girls.

In the picture to the right (click on thumbnail) notice the barbed wire at the top of the concrete fence that boarders the home in the background – along with a guard dog, that is their protection against intruders.  For more information on crime in Honduras.

This was my first trip getting down and dirty to a country such as this, and I hope it is  not my last.

Dania facing the camera, with my wife, Kathi in the background

I have been thinking long and hard about how I can help…what can I do to make a difference every time I re-visit Honduras and the orphanages?

Besides bringing supplies and clothing and offering financial assistance, I want to start a bicycle ministry.  Free bikes, with multiple seats, where both the father and mother could pedal. Tike bikes, tires and repair services.  Doesn’t that sound great?  Todo para la Gloria a Dios!

I don’t know how to go about doing such a thing, but you could bet your bottom dollar that I’ll be making some phone calls to find out.  I’ve had a couple of chats with a Christian bike enthusiast who has great experience in manufacturing and has connections with bike part importers.  Carlos Byrne – fluent in Spanish and English and he wants to help.  On the surface, our game plan is to set up an assembly operation in Honduras and train the older boys at the orphanage to put them together.  We’d order the bike parts from China and have them sent to Honduras.  Simple, cruiser bikes – just 2 styles…unisex adult and child.  No gears, one speed, fat, knobby tires for the rough terrain, fat, cushioned seats, all the same color.

I’ll keep you posted.

Salud,

Carl L. Gallo

For more about the Honduras orphanages they are under one headship:

There are actually two orphanages with whom we are associated – the first is a small group of only 10 to 15 girls. http://eternalfamilyproject.org/.  The second is about 90 children, both boys and girls – http://wwh2h.org/

The Gallo family:

Carl and Kathi Gallo have six children of their own, and one granddaughter 6 months old.  Their four oldest children are adults, leaving them with two high school students at home.  Kathi does a wonderful job hosting and feeding Mission teams of 4 to 14 at a time from around the world at their home, 4 to six times each year. They are constantly looking for opportunities to leave this world a better place.

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