FROM THE DESK OF ERNIE GOSS

I have heard Professor Goss speak many times.  He is a conservative economist and his commentary always seems to hit home.  I thought you might find his December commentary interesting. 

Is U.S. Adopting Europe's Anti-Competitive Economic Policies? Import French Wine, Not Economic Policy

Last week, Francoise Hollande, Socialist President of France, recommended homework be eliminated in French schools. He argued that assigning homework provides an unfair advantage to students with stable home environments. This same type of anti-competitive thinking has produced a social safety net in France and most of Europe that has undermined economic incentives and encouraged workers to remain unemployed or underemployed.   

For example, the World Bank estimates the annual cost of the social safety net as a percent of GDP in France is more than twice the size of that in the U.S. (graph). Not surprisingly over the past decade, France's unemployment rate averaged 2.6 percentage points higher than the U.S. rate, and the Gaullist nation's annual GDP growth was about one-third that of the U.S.    

Unfortunately, the Obama administration's proposed tax increases currently under deliberation by Congress on higher income, higher productivity and more highly educated workers pushes the U.S. in France's direction.  

The top five percent of wage earners, or those earning over $154,000, already pay an average income tax rate 11 times that of the bottom 50 percent of U.S. workers. Not only do Obama's tax rate hikes on the most productive Americans shrink incentives, they reduce the yearly budget deficit by less than 10 percent. Instead of diminishing the income of higher wage workers via elevated taxes, U.S. economic policy should be directed at raising the income of lower income workers. The U.S. should import French wines and movies, not French economic policy.

CENSUS 2012- DO I HAVE TO DO IT?

We have been receiving calls and emails from our clients on whether they are required to participate in the Census Bureau business survey that was just sent out.

Our response: your business is required to participate in Census Bureau business surveys by law (Title 13, United States Code).

 

13 U.S.C. § 221: US Code - Section 221: Refusal or neglect to answer questions; false answers

(a)Whoever, being over eighteen years of age, refuses or willfully neglects, when requested by the Secretary, or by any other authorized officer or employee of the Department of Commerce or bureau or agency thereof acting under the instructions of the Secretary or authorized officer, to answer, to the best of his knowledge, any of the questions on any schedule submitted to him in connection with any census or survey provided for by subchapters I, II, IV, and V of chapter 5 of this title, applying to himself or to the family to which he belongs or is related, or to the farm or farms of which he or his family is the occupant, shall be fined not more than $100.

(b)Whoever, when answering questions described in subsection (a) of this section, and under the conditions or circumstances described in such subsection, willfully gives any answer that is false, shall be fined not more than $500.

(c)Notwithstanding any other provision of this title, no person shall be compelled to disclose information relative to his religious beliefs or to membership in a religious body.

ARE WE MAKING TOO MANY ATTORNEYS?

There are too many law students. The Bureau of Labor Statistics estimates that the economy will create 21,880 new jobs for lawyers annually until 2020. But law schools produce more than 44,000 graduates each year. The Wall Street Journal

NEW HIRE LETTER - NEBRASKA

You may have received a letter from the State Directory of New Hires reminding you that you are required to report newly hired and re-hired employees.

Remember on October 21, 2011, President Obama signed the Trade Adjustment Assistance Extension Act of 2011. The law amends the term “newly hired employee” to mean an employee who has not previously been employed by the employer; or was previously employed by the employer but has been separated from such prior employment for at least 60 consecutive days. Nebraska’s new hire statute §48-2302 was amended to add this requirement which became operative on October 1, 2012.

The state uses the information to find people whom aren't paying child support; therefore the state knows where to garnish paychecks. 

To find out more information you can check Nebraska’s website at: NEW HIRE

FREE MEAL TAXABLE

Q:  I received an invitation for a free meal at an investment seminar? Is this taxable, if I go?

A:  No, the event is governed by the tax rules for meal and entertainment expenses. Therefore, as the recipient of the meal, you don't owe any income tax on this benefit. But it's not completely "free"; undoubtedly, you'll have to listen to a sales pitch from a financial planner, plus you may have to endure follow-up contacts.

Tip: If you pay to attend an investment seminar or convention, you can't deduct the cost, either.

NEBRASKA INHERITANCE TAX

I recently had a question on the Nebraska inheritance rates. The rate depends on who is inheriting your estate. For example, if a part of your estate goes to a nephew, the county gets a 13% tax.

NEBRASKA INHERITANCE TAX AS OF AUGUST 16, 2012

	Exemption	Rate
Surviving Spouse	All	0%
Class 1 – Near Relatives Father Mother Grandfather Grandmother Brother Sister Son Daughter Child Children legally adopted Grandchild Any lineal descendent Any person to whom the deceased for not less than 10 years prior to death stood in the acknowledger relation of a parent Spouse of any of the personal listed above Surviving spouse of any of the persons named above	40,000.00	1%
Class 2 – Distant Relatives Uncle Aunt Niece Nephew Any of the above related by adoption Lineal descendents of the above (first cousin) Spouse of surviving spouse of any of the above	15,000.00	13%
Class 3 – All Other Inheritances More distant relatives Second cousin Great-Uncle Great-Aunt Great-grandparent Unrelated people		18%

All states are different and there is talk in the Nebraska legislature and by the governor of some changes.

We will keep you posted.

WHY YOUR 2013 PAYCHECKS AE 2% LESS

The questions are already rolling in: "Why did my pay drop?" The simple answer is the expiration of the payroll tax holiday as part of the fiscal cliff deal. The payroll tax holiday was enacted in 2011, which reduced the employee share of the Social Security payroll tax from 6.2% to 4.2%. The holiday was not renewed when it expired at the end of 2012. The payroll tax holiday proved popular, but it cut federal revenues by some $10 billion per month.