Archives For March 2011

Barron’s 30 Best CEOs

March 26, 2011

Interesting list of the 30 Best CEOs from this week’s Barron’s. Of this year’s list, 18 CEOs lead American companies and 12 are from international firms.

Here is their list. You can click on the link to see more information on each CEO.

I’d like to see a ranking of all the CEOs of say the S&P 500 Index or some sort of index. That would be interesting to me.

NOTE: It’s Spring Break week for us so I’ll be away from the computer much of this week.

I wanted to share this list of the top ten tax breaks according to the Joint Committee on Taxation that I found in yesterday’s WSJ. I think it’s funny that they consider them expenditures. It’s the PEOPLE’S money, not the governments. Anyway, here is the list:

• Deduction of mortgage interest on owner-occupied homes.

• Exclusion of employer contributions for health insurance.

• Exclusion of retirement contributions and earnings.

• Reduced rate of taxes on dividends and capital gains.

• Exclusion of Medicare benefits.

• Earned income credit.

• Deduction of state and local taxes.

• Deduction for charitable contributions.

• Child tax credit.

• Exclusion of capital gains at death.

I’m not sure why “Exclusion of retirement contributions and earnings” is in that list since the government will get taxes on this money at retirement.

I would consider giving up all deductions EXCEPT for retirement contributions for say a 10% – 15% flat tax.

Taking away these deductions without adjusting tax brackets would probably increase my wife’s and my taxes by 25% or more. We don’t have a lot of mortgage interest but we do tithe, which is a significant amount of money. Losing that deduction combined with our other deductions are more than twice the piddly $11,400 standard deduction. Add the employer’s contributions to the 401(k) and health insurance (along with our portion) and we’re talking some serious pain.

What would happen to your taxes if these deductions were to vanish? Discuss amoung yourselves while I go do my annual tradition of working in the yard over Spring Break.

ATM Fees Are Going Up

March 18, 2011

From the WSJ:

Some of the nation’s biggest banks are imposing a variety of new fees on people who withdraw money from automated-teller machines.

The move is the latest example of the burgeoning new fees that banks are imposing on customers accustomed to years of free services. Banks are scrambling to replace billions of dollars in revenue expected to be lost from new federal regulations on overdraft charges and debit cards.

As far as I can tell, this is only a big deal for those who use an ATM outside of their bank’s network. In other words, it doesn’t appear that banks will charge customers for using their bank’s ATM machine.

Of course, people can avoid (or at least lower) ATM charges by either not using the machines or limit the number of transactions by withdrawing more money each time.

Read in today’s WSJ about Republican Ways and Means Chief, Dave Camp’s tax plan. Here’s the plan in a nutshell:

• Cap rates at 25% for both businesses and individuals.

• Eliminate or reduce deductions for both businesses and individuals.

The article states that Camp’s aides would not get specific on what deductions would be reduced or eliminated.

Question: How can we ever reform the tax code if we keep playing politics? Give us the facts. Let us discuss them in an open forum.

I can tell you from looking at the two bullet points above that this code would be a slap in the face to the middle class and an absolute boon to higher income earners. My wife and I would owe thousands more in taxes were these changes to take place. But, since Mr. Camp didn’t furnish more information then it’s really anybody’s guess as to what would happen under his taxing scenario.

I’m all about fairness. I’m all about one rate for everyone. Everyone needs skin in the tax game. I’m tired of people getting a free ride and still getting to vote. That’s not right.

I receieved an email from a PR person for a website for the Spectrem Group. So, I went to check it out. One of the first graphics I see is this one, which you can click on to see a larger version:

Can any of you figure out what they are trying to say with this graphic? Here’s a link to the story if you’re interested.

If I ever post a graphic that is this hard to understand, please let me know.

Interesting story about a survey of millionaires that found 42% of them don’t feel as though they are rich. The article also says that the survey respondents feel that it would take $7 million in order for them to feel comfortable.

Although my wife and I aren’t millionaires, I can’t really say that having a million dollars would make me comfortable either. I think it’s all relative. If you have nothing and are struggling, a million dollars would definitely make you comfortable (or at least you think it would).

Another article referencing this survey wrote the following:

“Fidelity noted the wealthiest 5 percent of Americans hold more than 55 percent of the nation’s wealth. And if they aren’t feeling flush, imagine how the other 95 percent feel.”

Good point.

NOTE: This is a re-worked post from earlier this morning. I misread the Wall Street Journal article and thought they were talking about total cost of production and not just component cost.

I saw a graphic in today’s Wall Street Journal that detailed some of the component costs of the new iPad. The graphic broke down some of the component costs:

• Display: $50

• Front and rear cameras: $4.50

• Main processor: $25

• Radio components: $25

• Flash memory: $30

• Sensors: $2.50

• Battery: $20 – $25

As BG points out in his comment below, component costs aren’t the only costs to go into the creation of a product. There are also engineering, research and development costs, and marketing costs.

Anyway, I thought the component aspect was interesting. I thought components were more expensive than that.