All Obama Can Do Is Ask Us to Look in the Rear View Mirror

Cadillac One -We Can’t Afford! to Go Forward!

Obama has been in the driver seat for four years with a majority in Congress for two years prior to his election and two years after his election, four more years than many presidents and the Democrats held the majority in the Senate for six years.  And yet his campaign is all about telling us to look in the rear view mirror, a.k.a. “it’s Bush’s fault.”  Since January 2007 and for four years, the Democrats were driving the bus.  We get Obamacare and 6 trillion in debt.

If you like this president and you believe in this president, just read Chapter Five of the book, Throw Them All Out.  If you still vote for this president, that’s on you.

Obama’s campaign slogan is “Forward.”  Frankly we can’t “afford to go forward, four more years with this president.  Obamacare alone will sink many small businesses and put us deeper and deeper into debt.  We have already spent more resources, more time, more energy, millions upon millions of dollars in personnel, administration and legal fees to shape this law.  If Sarah Palin had one amazing quality it was to tell it like it is, and Obamacare as it pertains to a solution to our healthcare’s rising costs, is like “putting lipstick on a pig.”

Highly regulated, healthcare is not free market capitalism and competition has been stifled.  Big insurance companies thrive on a highly regulated government subsidized system.  They want it.  They own the politicians.  The lawyers on both sides can pretend to fight for their constituent’s, then club it after work.

Obamacare is a politicians dream and a lawyer’s wet dream.

Now Obama’s campaign is about raising taxes on the high income earners.  That’s all well and good.  What he doesn’t understand is small business owners pay their taxes as ordinary income.  This is a legal structure setup to help small businesses to compete with large corporations.  Small businesses don’t need to pay more taxes.  The higher our personal tax rate becomes, the less we can invest in our small business. Raising taxes on ordinary income is raising taxes on small businesses. Lower the corporate tax rates for all businesses and more small businesses will follow.

High income earners are willing to pay more if big government spends less.  If big government didn’t pick favorites and simply lowered taxes on all businesses, we would have a chance to prosper.  Reign in regulation, stop subsidizing green energy companies and stop playing to the unions, a.k.a. Government Motors (GM), GE and Chrysler.  Stop subsidizing the oil business, but to be fair, stop subsidizing all big businesses.  Leave it to the states, counties and local governments to compete for and attract business.  Businesses will do better to choose a location and flourish where it is best for them, their employees and the community.

Bottom line, less big government, to the tune of $16 trillion in less than four years, less big union, like the takeover of GM, less big business influence, like the stimulus dollars paid to failed green energy companies, including Ted Turner and GE and less unemployment and welfare to us, as individuals, will follow.

Like Alan Kay says. “The best way to predict the future, is to invent it.”  Big government, get out of the way, let us reinvent ourselves.  We have the uncanny ability to prosper through free market competition.  That’s what’s best for our future.

Footnote:  Many conservatives may wonder why Governor Christie is pandering for Obama five days from the election.  Many say it is because he wants what’s best for the State of New Jersey.  I cry “Bullshit!” Obama came out and said he was going to do what’s best for all victims of this hurricane and I believe him, not because he cares, but for political expediency and his failed policies that left 4 American’s dead in Benghazi.  Christie is embracing Obama after this storm because he knows the door is wide open for him as the presidential candidate in 2016, if Romney is defeated and Obama is re-elected for another term.  Christie better hope the door is wide open, because what he had better understand. That at 69 years old, Romney will still be in better shape than Christie to win the next election.

Got Wood?

We have MoveOn.org in support of Occupy Wall Street.  Well what exactly do they do now?  Move On or Occupy?  Occupy or Move On?

Just for fun let’s look at these two organizations thinking M&A?  Which law firm would represent them?   Think IPO.  Which Wall Street firm would they choose? 

I tried to figure out which of these movements or occupations is best to follow.  Honestly, I’m not sure.  They both have valid arguments and serious flaws, like how they hurt small business.

A merger between MoveOn and Occupy could be a lesson to Microsoft and Yahoo, like oil and water.

If you go on the Move On website there are too many Move this and that movements to follow.  If you try to understand the Occupy this city, that State or country’s position, well… it gives one pause.  So we’re at a standstill.

So to get this impasse, one would assume most activists would prefer movement to being at a standstill.  Going nowhere is boring.  Rhetorically speaking one could say both MoveOn and Occupy Wall Street are consistently incongruous and therefore not helpful? 

What one can be sure of is whether they are moving on or standing still, neither position is creating jobs. 

“Back in the day sonny” he croaks, from his Easy Boy recliner, “when all we knew was black and white, if we needed to make a point, we did it in a demonstrative, albeit sometimes incoherent fashion.”  Think Woodstock.  Joe Cocker’s With a Little Help from My Friends was a classic Joe Biden sound bite.  Incoherent!  Just kidding Joe!??  No need to insult anyone?

So one can’t help but ask, “Who’s Got Wood?”   Woodstock?  A cause expounding peace and love that resounded worldwide over a single weekend or Occupy Wall Street that makes us wish Jimmy Hendrix was still singing “Hey Joe” to Joe and Joe was heading for Mexico.  You decide.

Woodstock.  1969.  Made into a movie.  Not a Michael Moore movie.

A movie that will live on in history.  Why?  Almost all of these people now have good paying jobs.  Most of them pay taxes.  Yes, some are dead, surprisingly fewer than one would think, like artist Keith Richards, the wrinkly rocker from the Rolling Stones.  OK, he wasn’t even there and surprisingly, he’s not dead.

These peace loving folks went home after a long weekend of demonstration and made a difference for America.

Most folks here in America and around the world applaud Occupy Wall Street for making a statement.  We hear you.  We hear all of you.  You can make a difference, just not standing still.  Not anymore. Now you are hurting the same people you should be trying to help, job creators.  Small business people.

Take all the creative energy you have and do something positive.  Like in the movie “Pay It Forward.”

Feel free to agree, disagree or simply ignore me.  Express “yourself.”  Leave your comments, share or  spread the word with Stumble Upon button below.  Subscribe or come back often to visit.

Roth IRA, Invest to Pay Less Taxes

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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Like Fine Wine…

Silver Oaks Vineyard

The unemployment jobless rate has jumped for those over 55 from 3.2% to 6.8% since the 2007 recession began.

This is an opportunity for small businesses looking to reduce the risks normally associated with hiring.

As an employer, you might consider “like fine wine, the over 55 candidates should be getting better with age.”

Rule Number One: “Ready to drink.”  Most wines available today are ready to drink (0ver 90%).  If the price is right drink it now.

Heard recently from someone over 55, unemployed, highly qualified and experienced in their line of work.  Someone whom I hold in high regard,

“I feel like I’m letting my wife, my kids and my grandkids down.”

This alarming revelation from someone heretofore has exuded confidence, success in; and dedication to; his family and his career like none other.

Over 55 and unemployed, most workers are eager to reenter the workforce.

Rule Number Two: “Taste it.”  There are many experts out there that will tell you what wine to drink and when.  My local wine shop agrees to a point but is adamant about one thing, “it comes down to you and your own personal tastes and preferences.”  The expression, “look good on paper (label)” is a common misnomer.

If you are hiring and you are a “seasoned professional” yourself, you don’t have to look over your shoulder twice to find someone with whom you can relate in the over 55 crowd.  Put these new hires through a probationary period.  They will understand they need to “earn their stripes.”

Rule Number Three: “Preservation of a good wine requires proper resources and planning.”  If you can’t afford to wait and don’t have the proper means to store your wine, drink it now.

In business, when hiring I like to use the expression “hit the deck running.” If you can’t afford to mentor, shadow, train or hire an apprentice or wait for a new hire to become productive, generate revenues, replace intellectual property, hire experience.

Rule Number Four: Price doesn’t dictate taste or value: There are winemakers out there ranging from Cameron Hughes (CH) to garage winemakers who produce excellent wine at excellent values. Famous high end growers in Napa, Sonoma and other areas sell their surplus to winemakers like CH who produce great wines at great values.

Look for experience first. College degrees, certifications, etc… is no substitute for the real deal. Many of the over 55 crowd have been “through the war.” “The proof of the wine is in the tasting.”

Some great reference sites:

http://www.staythirstymedia.com/201107-059/html/201107-sipprelle-washington.html

http://www.staythirstymedia.com/201107-059/html/201107-cavaliere-starting-over.html

http://politicalcalculations.blogspot.com/2010/08/teens-vs-geezers-in-us-job-market.html

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