Just watched this interesting debate on Bloomberg. You can watch the entire debate at http://www.bloomberg.com/video/64218982/
http://finance.yahoo.com/news/Is-Big-Government-Stifling-bw-215636396.html
Intelligence Squared U.S. Audience Says Yes
NEW YORK--(BUSINESS WIRE)-- Intelligence Squared U.S. (IQ2US), the Oxford-style debate series, an initiative of The Rosenkranz Foundation, hosted a debate last night that took on the timely issue of the proper role of government in a free and democratic society. Four experienced economists and former policy makers debated the motion, Big Government is Stifling the American Spirit at NYU’s Skirball Center for the Performing Arts. Though the final results were close, the side arguing for the motion moved a large percentage of the audience and they were victorious.
At the beginning of the evening, prior to the arguments for and against, 29% of the audience was in favor of the motion, 44 % were against it and 27% were undecided. After the debate, the side arguing for the motion carried the day and ended up with 49% of the vote, 43% were against the motion and 8% remained undecided.
The evening’s winning team argued for the motion and included Phil Gramm, the former Texas senator and vice chairman at UBS Investment Bank, and Arthur Laffer, chairman of Laffer Associates and former Reagan economic advisor known as the “father of supply-side economics.”
Laura Tyson, professor at the Haas School of Business at the University of California Berkeley and a member of President Obama’s Economic Recovery Advisory Board, and Nouriel Roubini, NYU Stern Business School professor and chairman of Roubini Global Economics argued against the motion.
Among the debate’s highlights:
“To me the American spirit is a belief that based on your own merit, based on your own hard work, no matter who your daddy was or who he wasn't, or who your mama was, that people are going to judge you on your ability, and that you have it within your power to succeed. Now, obviously it's better to be ---- it's better to be clever, and pretty, and rich. But being plain, and ordinary, and poor, those things are not insurmountable obstacles in America. And it's that belief of what we can do, but you can't have unlimited government and unlimited opportunity. You have to make a choice.” – Phil Gramm
“You will see that education…higher education, investments in technology, the things that build America's innovative spirit; these are big parts of what the federal government should and does do. You love social networking? Trace it back to DARPA. You love the latest biotech drug? Trace it back to the National Institute of Health. You like traveling on jet aircraft? Trace it back to the Department of Defense. There are many ways in which the U.S. government has spent over many years to build education infrastructure and technology which play into the spirit of America.” – Laura Tyson
“…if you tax people who work and you pay people who don't, do I need to say the next sentence to you? Help me; if you tax rich people, and you give the money to poor people, you're going to get lots and lots of poor people and no rich people. The dream in America has always been to make the poor rich, not to make the rich …poor.” – Arthur Laffer
"…if the American spirit is stifled today, it is because this is not a mental recession, this is a real recession, this is the worst recession we have had since the Great Depression with the unemployment rate now at 17 percent. We have nine million people out of work that have lost their jobs, and unless we address this problem, we're not going to resolve this mental, and physical, and economic, and financial depression." – Nouriel Roubini
John Donvan, correspondent for ABC News Nightline, is moderator of Intelligence Squared U.S. debates. Dana Wolfe is the executive producer.
To view transcripts and videos, download audio or video clips or learn more about Intelligence Squared U.S. please visit: http://www.intelligencesquaredus.org
Showing posts with label stimulus. Show all posts
Showing posts with label stimulus. Show all posts
Sunday, November 7, 2010
Friday, November 13, 2009
Lowdown on Home-Buyer Tax Credits
http://online.wsj.com/article/SB10001424052748703808904574529512997057836.html
By LAURA SAUNDERS
Last week, President Barack Obama signed a law that extends through next spring a temporary tax credit of up to $8,000 for some first-time home buyers, which was due to expire Nov. 30. The law also adds a new tax credit of up to $6,500 for certain repeat home buyers. The package, which the government estimates will cost a total of $11 billion, is intended to help spur housing sales, a critical part of the economy.
Here are some answers to common questions about the new rules.
Q: What has stayed the same in the new law?
1) First-time home buyers still get a credit of as much as 10% of the purchase price, up to a maximum $8,000. "First-time" means people, including both partners of a married couple, who haven't owned a principal residence for three years before the purchase.
2) All taxpayers who claim a credit must use the home as a principal residence for the next three consecutive years.
3) The credits offer dollar-for-dollar reductions of tax and are refundable. This means that a taxpayer who doesn't pay enough tax to offset the credit can get a refund. For example, if you qualify for an $8,000 credit but only owe $5,000 in tax, you could receive a $3,000 check from the Internal Revenue Service.
4) Under the new law, as under the old, 2009 home buyers may claim the credit on either their 2008 or 2009 returns, and 2010 buyers may claim the credit on either their 2009 or 2010 returns.
5) Taxpayers do not qualify for a credit if they buy from a lineal ancestor or descendent (sic), including parents or grandparents and children or grandchildren.
Q: What has changed?
Several important features took effect as of Nov. 6:
1) To take advantage of the tax credits, a buyer must have a contract in place before May 1, 2010, and the deal must close before July 1, 2010. No further extension is expected.
2) The price of the house is now capped. For purchases made after Nov. 6, no credit is available for any home costing more than $800,000.
3) There is now a tax credit for repeat buyers as well as for first-time buyers. Taxpayers who have lived in one residence for five consecutive years of the past eight can now qualify for a tax credit of as much as 10% of the purchase price, up to a maximum $6,500, of a new principal residence. The new home does not have to cost more than the old one.
4) Income limits for people who qualify for a tax credit are far more generous than under the previous law. For single filers, the credits now phase out between $125,000 and $145,000 of modified adjusted gross income; for married couples, the range is $225,000 to $245,000. For most people, modified adjusted gross income will be the same as adjusted gross income.
5) The new law contains anti-abuse measures designed to stem fraud, which became a problem with the previous home-buyer tax credit. Most buyers must be 18 or older, and no taxpayer may take a credit if he or she is claimed as a dependent on someone else's return. Taxpayers taking the credit will also have to furnish proof of purchase. According to Robert Dietz of the National Association of Home Builders, this will usually be a HUD-1 form.
6) People taking the tax credit, as under the old law, aren't allowed to buy a home from a lineal ancestor or descendent. The new law, applying to purchases made after Nov. 6, also says a person may not take a credit if the home is purchased from a spouse or the spouse's lineal relatives.
Q: If I bought a house last spring or summer, can I get a tax credit?
You qualify if you are a first-time buyer and meet the other requirements, but not if you are a repeat buyer. The new credit for repeat buyers applies only to purchases made after Nov. 6.
Q: What is the definition of "principal residence"?
If you own more than one home, your principal residence is usually the one where you spend most of your time. In determining residence the IRS may also consider where your family lives and your mailing address for bills and correspondence, among other factors.
Q: Can a principal residence be something besides a conventional house?
Yes. A principal residence may also be a condominium, co-op apartment, attached or semi-attached townhouse, or even—if it has eating, sleeping and toilet facilities—a boat, motor home or trailer. Manufactured homes qualify in some states.
Q: Does the person who claims the credit have to use the home as a principal residence?
Yes.
Q: If I buy a new home and live in it, do I also have to sell my old one in order to take advantage of the credit?
This is unclear. The law appears to allow repeat buyers to retain their old home, for which no tax credit was given, while claiming a credit for the new one. What is clear is that if you buy a new home using the credit, you must use it as your principal residence.
Q: How may the credits be allocated among two or more unmarried buyers?
This also is unclear. But if the IRS adopts the rules that applied to the previous tax credit, which are detailed in IRS Notice 2009-12, there is room for planning. The notice says that taxpayers may use "any reasonable manner" to allocate the credit. It even provides an example in which two unmarried buyers allocate the credit to the lower earner in order to qualify for it.
Q: I need the credit refund to help make the down payment. What can I do?
There's no rushing the IRS. But one option is to adjust your current withholding from your paychecks to reflect the fact that you will be taking the credit later. But be careful: If you don't make the purchase, then you may owe interest and penalties. Consult a tax adviser.
Q: Is it possible to qualify for a credit if I am building a home on a lot I already own?
Yes, according to the National Association of Home Builders. The purchase date is usually considered to be the date of first occupancy, so you would need to move in before July 1, 2010.
Q: May I take a credit if I am building a large addition to my home?
No; these credits apply only to the purchase of a home.
Q: Are there special rules for the military?
Yes. In general, members of the military and foreignservice and intelligence communities who are serving overseas on "official extended duty" for at least 90 days during 2009 and the first four months of 2010 have an extra year to take advantage of these credits. Consult a tax adviser who specializes in this area.
Q: Where can I get more information?
Go to federalhousingtaxcredit.com, a Web site sponsored by the National Association of Home Builders. You can also look for links from the IRS's home page, www.irs.gov, or search for Homebuyer Credit. Another option is to consult a professional tax adviser.
Write to Laura Saunders at laura.saunders@wsj.com
By LAURA SAUNDERS
Last week, President Barack Obama signed a law that extends through next spring a temporary tax credit of up to $8,000 for some first-time home buyers, which was due to expire Nov. 30. The law also adds a new tax credit of up to $6,500 for certain repeat home buyers. The package, which the government estimates will cost a total of $11 billion, is intended to help spur housing sales, a critical part of the economy.
Here are some answers to common questions about the new rules.
Q: What has stayed the same in the new law?
1) First-time home buyers still get a credit of as much as 10% of the purchase price, up to a maximum $8,000. "First-time" means people, including both partners of a married couple, who haven't owned a principal residence for three years before the purchase.
2) All taxpayers who claim a credit must use the home as a principal residence for the next three consecutive years.
3) The credits offer dollar-for-dollar reductions of tax and are refundable. This means that a taxpayer who doesn't pay enough tax to offset the credit can get a refund. For example, if you qualify for an $8,000 credit but only owe $5,000 in tax, you could receive a $3,000 check from the Internal Revenue Service.
4) Under the new law, as under the old, 2009 home buyers may claim the credit on either their 2008 or 2009 returns, and 2010 buyers may claim the credit on either their 2009 or 2010 returns.
5) Taxpayers do not qualify for a credit if they buy from a lineal ancestor or descendent (sic), including parents or grandparents and children or grandchildren.
Q: What has changed?
Several important features took effect as of Nov. 6:
1) To take advantage of the tax credits, a buyer must have a contract in place before May 1, 2010, and the deal must close before July 1, 2010. No further extension is expected.
2) The price of the house is now capped. For purchases made after Nov. 6, no credit is available for any home costing more than $800,000.
3) There is now a tax credit for repeat buyers as well as for first-time buyers. Taxpayers who have lived in one residence for five consecutive years of the past eight can now qualify for a tax credit of as much as 10% of the purchase price, up to a maximum $6,500, of a new principal residence. The new home does not have to cost more than the old one.
4) Income limits for people who qualify for a tax credit are far more generous than under the previous law. For single filers, the credits now phase out between $125,000 and $145,000 of modified adjusted gross income; for married couples, the range is $225,000 to $245,000. For most people, modified adjusted gross income will be the same as adjusted gross income.
5) The new law contains anti-abuse measures designed to stem fraud, which became a problem with the previous home-buyer tax credit. Most buyers must be 18 or older, and no taxpayer may take a credit if he or she is claimed as a dependent on someone else's return. Taxpayers taking the credit will also have to furnish proof of purchase. According to Robert Dietz of the National Association of Home Builders, this will usually be a HUD-1 form.
6) People taking the tax credit, as under the old law, aren't allowed to buy a home from a lineal ancestor or descendent. The new law, applying to purchases made after Nov. 6, also says a person may not take a credit if the home is purchased from a spouse or the spouse's lineal relatives.
Q: If I bought a house last spring or summer, can I get a tax credit?
You qualify if you are a first-time buyer and meet the other requirements, but not if you are a repeat buyer. The new credit for repeat buyers applies only to purchases made after Nov. 6.
Q: What is the definition of "principal residence"?
If you own more than one home, your principal residence is usually the one where you spend most of your time. In determining residence the IRS may also consider where your family lives and your mailing address for bills and correspondence, among other factors.
Q: Can a principal residence be something besides a conventional house?
Yes. A principal residence may also be a condominium, co-op apartment, attached or semi-attached townhouse, or even—if it has eating, sleeping and toilet facilities—a boat, motor home or trailer. Manufactured homes qualify in some states.
Q: Does the person who claims the credit have to use the home as a principal residence?
Yes.
Q: If I buy a new home and live in it, do I also have to sell my old one in order to take advantage of the credit?
This is unclear. The law appears to allow repeat buyers to retain their old home, for which no tax credit was given, while claiming a credit for the new one. What is clear is that if you buy a new home using the credit, you must use it as your principal residence.
Q: How may the credits be allocated among two or more unmarried buyers?
This also is unclear. But if the IRS adopts the rules that applied to the previous tax credit, which are detailed in IRS Notice 2009-12, there is room for planning. The notice says that taxpayers may use "any reasonable manner" to allocate the credit. It even provides an example in which two unmarried buyers allocate the credit to the lower earner in order to qualify for it.
Q: I need the credit refund to help make the down payment. What can I do?
There's no rushing the IRS. But one option is to adjust your current withholding from your paychecks to reflect the fact that you will be taking the credit later. But be careful: If you don't make the purchase, then you may owe interest and penalties. Consult a tax adviser.
Q: Is it possible to qualify for a credit if I am building a home on a lot I already own?
Yes, according to the National Association of Home Builders. The purchase date is usually considered to be the date of first occupancy, so you would need to move in before July 1, 2010.
Q: May I take a credit if I am building a large addition to my home?
No; these credits apply only to the purchase of a home.
Q: Are there special rules for the military?
Yes. In general, members of the military and foreignservice and intelligence communities who are serving overseas on "official extended duty" for at least 90 days during 2009 and the first four months of 2010 have an extra year to take advantage of these credits. Consult a tax adviser who specializes in this area.
Q: Where can I get more information?
Go to federalhousingtaxcredit.com, a Web site sponsored by the National Association of Home Builders. You can also look for links from the IRS's home page, www.irs.gov, or search for Homebuyer Credit. Another option is to consult a professional tax adviser.
Write to Laura Saunders at laura.saunders@wsj.com
Friday, October 16, 2009
Stimulus jobs report 'rife with mistakes'
http://money.cnn.com/2009/10/16/news/economy/stimulus_jobs/index.htm
On stimulus jobs reporting, a big 'Oops'
Error in Recovery Act accounting raises doubts about government's ability to precisely track the flow of funds and jobs.
By David Goldman, CNNMoney.com staff writer
Last Updated: October 16, 2009: 4:53 PM ET
NEW YORK (CNNMoney.com) -- Gaffes in federal reports this week about stimulus have called into question the government's ability to accurately track how many jobs are being created by the massive $787 billion Recovery Act.
The data in Thursday's reports were filled with mistakes, including an error that made it look like a French vaccine maker received the largest stimulus contract, $1.4 billion, when in fact it has gotten an award one-100th the size.
Government research organization OMB Watch said its assessment of the reports revealed many inconsistencies in the job data.
"The data is rife with mistakes," said Craig Jennings, senior federal fiscal policy analyst at OMB Watch. "When you put out data that hasn't yet been checked, it undermines transparency, because you are putting out wrong information."
According to the Recovery Board, a non-profit, government-funded organization that operates stimulus data tracker recovery.gov, the government expected mistakes and is reviewing reports of them.
Uncovering how many jobs stimulus created is critical to the debate about the Recovery Act's value. Critics argue that the mammoth funding simply represents more government spending and is not effectively being used to create jobs. But proponents say stimulus is a crucial shot in the arm for the economy, and that the labor market would have fallen further without it.
"Understanding how many jobs are created will answer the very fair and important question, 'What return on our investment are we getting?' " said Christopher Mihm, the Government Accountability Office's managing director of strategic issues.
But the enormity of the stimulus bill leaves some experts saying it will be impossible to accurately portray the data. The sheer size of the reporting is dumbfounding: Tens of thousands of recipients will file reports after receiving stimulus funds from one of 28 government umbrella agencies, or from one of countless agencies from the 50 states.
Making it even more difficult to discover the true jobs number is a decision to put the responsibility of correcting mistakes on the stimulus recipients' shoulders. For transparency's sake, government agencies can point out errors but are powerless to change them. All of the data are under government review, and a report on the errors the agencies find will be available at the end of the month.
"It's important that those errors get caught before they get published, and right now they're still under review," said Jennings. "It's possible that some will be caught by the review, but it will take an incredible amount of man power just to sift through the data."
Recipients of stimulus funds were required to report how many jobs they saved or created and how much money they have received from government agencies by Oct. 10. The first sliver of that information was posted on recovery.gov on Thursday, with much more data to come on Oct. 30.
The contract awards posted Thursday represented less than 7% of the total stimulus funds doled out so far. By far the largest part of stimulus is in grants to states, which account for 83% of stimulus funding. Federal agencies and recipients are spending nearly three weeks reviewing these state reports to improve their accuracy before publishing them.
Loans to recipients make up the other 10%. Both grants and loans will be posted on recovery.gov at the end of the month.
There were 5,232 federal contracts reported Thursday, but 41,944 grants and loans will be reported on Oct. 30. Gov. Arnold Schwarzenegger of California recently said that his state alone submitted 5,747 reports from agencies and others who received funds from the state.
Mistake-prone reporting
A mistake in the very first contract listed on the site prompted doubts about the reliability of the reports.
Recovery.gov erroneously reported Thursday that French vaccine maker Sanofi Pasteur had received $1.4 billion in stimulus funds from the Department of Health and Human Services. The company topped the site's list titled "Largest federal contracts in U.S."
When CNNMoney.com first asked about the contract on Thursday, a spokeswoman from Sanofi Pasteur suspected the $1.4 billion figure was a mistake. HHS spokeswoman Vicki Rivas-Vazquez said the number on recovery.gov was erroneous and the actual amount was $10.4 million.
Sanofi Pasteur said Friday that $10.4 million is the correct figure.
"We anticipated errors in the reporting and so informed many reporters beforehand," said Edward Pound, spokesman for the Recovery Board. "This is the first time this kind of reporting is being done. These reports are being reviewed by federal agencies and recipients to catch any errors or problems."
The Recovery Board has the tall task of compiling all of the data, and is spending $18 million revamping its Web site to manage all of the information.
OMB Watch said its review yielded "really weird job numbers," including many discrepancies within the reports themselves. For instance, Jennings said OMB Watch found that many companies said in a narrative portion of their reports that it was able to retain several employees because of stimulus funds, but the "jobs created" column read "zero."
The Recovery Board aggregates its jobs data from the "jobs created" column to display the total number of jobs saved or created. Jennings speculated that recipients might have been confused about the scope of the term "created."
"I would not stake any sort of claims on those job numbers," said Jennings. "We don't know what's going on there."
Even the job figures that are input correctly do not always reflect the true number of positions created by stimulus funds.
For instance, UT-Battelle received a $338.7 million contract, listed as the fourth largest on the recovery.gov site. So far, the company, which manages Oak Ridge National Laboratory in Tennessee for the Department of Energy, has spent $13 million and created 41 jobs, mostly related to the oversight of subcontractors.
But the funding is actually creating many more jobs, said Thom Mason, UT-Battelle's CEO. Among the firm's first stimulus projects is the building of a chemistry and new materials research lab, which will employ 150 construction workers. None of these positions will appear on UT-Battelle's reports to the federal government.
"It's important that everyone reports on a consistent basis," said Mason, who expects to hire up to 4,000 subcontractors with stimulus funds. "The difficulty is that it gives you a number that's not really a realistic reflection of how many jobs are created."
--CNNMoney.com senior writer Tami Luhby contributed to this report. To top of page
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