What does that package actually do and what impact will it creates? A site which I frequently visit has a good, nice, simple and clear explanation of the package.
Credits to About.com.
The plan has seven components:
Immediate Relief for Families
This will cost $260 billion over 10 years.- Cut taxes by $400 for individuals and $800 for families.
- A payment of $250 to recipients of Social Security, veterans pension and SSI benefits.
- $70 billion to continue the AMT tax shelter.
- Greater access to child tax credit for working poor and expand earned-income tax credit to families with three children.
- A $2,500 college tuition tax credit.
- $8,000 tax credit for first-time homebuyers in 2009.
- Car buyers could deduct the interest on new car loans.
- Extension of unemployment benefits and suspension of taxes on those benefits through 2009.
Modernize Federal Infrastructure
- $46 billion for transportation and mass transit projects.
- $31 billion to modernize federal buildings.
- $6 billion in water projects.
Increase Alternative Energy Production
- $17 billion in renewable energy tax cuts.
- $5 billion to weatherize homes.
Expand Health Care
- $24 billion to subsidize COBRA benefits for laid off workers.
- $87 billion to help states with Medicaid.
- $10 billion to National Institute for Health
- $17 billion to modernize health information technology systems.
Improve Education
- $54 billion to school districts and states.
- $21 billion for school modernization.
- $17 billion to boost Pell Grants.
- $13 billion for Head Start.
- $12 billlion for special ed programs.
Invest in Science Research and Technology
- $10 billion for science facilities.
- $4 billion to increase broadband infrastructure.
- $4 billion for physics and science research.
Help Small Businesses
- $54 billion to help small businesses through a variety of tax incentives and write-offs.
Obama increased spending from the $190 billion plan he proposed earlier, after realizing that dramatic and aggressive action is needed to stem the economic crisis. Some components of that plan, such as enacting a foreclosure moratorium, have already been implemented by Fannie Mae. Others, such as eliminating taxes for seniors making up to $50,000, are still part of Obama's economic agenda elsewhere.
Obama's biggest challenge is to create enough of an economic stimulus to soften the recession, but not big enough to create further doubts about the ballooning Federal Debt, now over $10 trillion. In fact, the package includes legislation to raise the debt limit to $12 trillion.
How Will the Plan Work?
Obama's tax rebates will encourage consumer spending, although many doubt that it is enough. The stimuli for businesses will help revitalize the economy, especially helping small businesses. The state aid will help keep them from having to either raise property taxes or cut needed services. The public works construction will retain or add 3 million jobs, and lower transportation costs. All incentives should be removed once the danger is over to reduce the deficit and avoid future inflation.
I find it depressing that Mike Hamersley gets to confiscate honest citizens income while he himself by his own definition is a tax cheat. Misprison, it is a crime not to report a crime. Any U.S. citizen who knows of another who has committed a crime and does not report it to the authorities, is guilty of Misprison and could be subjected to years in prison for the commission of such crime. Therefore I must hereby notify all legal authorities that Mike Hamersley a high level Government official in the bankrupt state of California at the FTB (who is nationally known as a tax shelter fighting crusader) is guilty of tax evasion and conspiracy to commit tax evasion as (he defines it); guilty of theft of honest services; conspiracy to defraud creditors; possibly perjury to the Senate and other government agencies: and violation of 7216, disclosure of confidential taxpayer information to third parties. It is indeed a rather long list.
Hamersley testified to the Senate in 2003 that tax fraud involves devising transactions which allow for tax losses and “hiding the true facts from the IRS”. The transcripts are available for all to see. Hamersley also restated the same in his lawsuit against KPMG in 2003 (which is a public document).
As one example of Hamersley’s fraud, Hamersley while at KPMG gave advice to a client that tens of millions of tax losses could obtain with a 20% to 30% of success upon IRS audit if the IRS discovered the true facts of the transaction. Presumably, if the IRS did not discover the true facts of the transaction, a higher chance of success upon audit by the IRS would obtain. Hamersley was advising on a series of preplanned asset and stock transfers which involved separating assets from liabilities inside a company, transferring the assets to a foreign company and selling the stock of yet another company to the client’s lawyer for a dollar, all to achieve tens of millions in tax losses and defraud the creditors of the company from which the assets were being stripped. Hamersley’s participation in all these crimes is confirmed in an email by him dated May 24, 2000 prepared by him while working as a tax expert at KPMG.
Hamersley also further participated in hiding the true facts of the transaction from the IRS and the creditors by reviewing and approving documents prepared in June of 2000 which gave effect to the transaction back to 19999 (which based on Hamersley’s definition of tax evasion, is a classic case of backdating a fraudulent tax shelter).
In fact, the transaction approved by Hamersley is very similar to the one he claimed in his lawsuit against KPMG involving XYZ corporation (which we all now know was Occidental Petroleum) as tax fraud.
This of course creates an interesting conundrum for Hamersley, as it is likely he will claim his tax shelters were not fraudulent (not with standing his email which describes the possibility and chances of success upon IRS audit if the IRS discovers the true facts), however, if that is so, then his description of tax fraud to the Senate, other government officials, taxpayers whom he now confiscates income from and all the people he gave speeches to and articles he wrote for are being lied to. In which case, Hamersley is guilty of lying to the Senate and other government officials, perjury; outright theft of income from those taxpayer’s whom he is now confiscating income; theft of honest services from the FTB and those who he gave speeches to or wrote articles for on tax fraud; and most incredibly, conspiracy to defraud creditors by participating in a convoluted scheme to separate valuable assets from liabilities for profit at the creditors expense.
Further, Hamersley by giving a so called substantial authority opinion to his client committed outright conspiracy to commit tax evasion under his own definition because his own email discusses the possibility of the IRS determining the true facts and according to Hamersley if a tax is due and owing and you lie to the IRS in any way, that is tax fraud.
Whistlewhat, please help me out here. I am a bit confused by your statements about Hamersely. I read Travails in Tax and personally observed Hamersley's testimony before the Senate Finance Committee. He seems like an exceedingly honest guy to me. Didn't KPMG say Hamersely had absolutely no involvement or knowledge of tax shelters in its press release to the Senate Finace Committee after Hamersley testified in October 2003? I read that KPMG press release on the PBS Frontline website. http://www.pbs.org/wgbh/pages/frontline/shows/tax/interviews/release.html
Whistlewhat (aka Angry Citi Investor, Angry Citi Shareholder, Thoreau, Whistlefraud, etc.–I have to admit it is difficult to keep track of all the aliases you are using to post identical comments while appearing to be different bloggers.):
Your comments about Hamersely just don’t make any sense at all. I too am highly skeptical that your bold statements about Hamersley could be based on any reliable evidence at all. I too read Travails in Tax and personally observed Hamersley’s testimony before the Senate Finance Committee. He seems like an exceedingly honest guy to me too. Yeah, isn't it a fact that KPMG said Hamersely had absolutely no involvement or knowledge of tax shelters in its press release to the Senate Finace Committee after Hamersley testified in October 2003? I read that KPMG press release on the PBS Frontline website. http://www.pbs.org/wgbh/pages/frontline/shows/tax/interviews/release.html
See also Hamersley Senate Finance Committee Testimony 003 TNT 204-35 online at http://finance.senate.gov/hearings/testimony/2003test/102103mhtest.pdf
Are you suggesting Hamersley and KPMG are in cahoots? Wow, that would be a bold strategy seeing as Hamersley sued the crap out of them. Case No. BC 297209, Los Angeles Superior Court (June 23, 2003.), also reported in Tax Notes Today full copy of complaint 2003 TNT 124-5