On the Money From the June 5, 2009 print edition It’s tough to recall a time with so much overlap between government and private business enterprise. Government monetary and fiscal activities are drawing more attention than ever. Relationships that previously were devoutly separate have begun to merge. For example, auto union workers are being transformed into shareholders, and banks now plead to return money to the government rather than accept it. The terms “public” and “private” are becoming hard to distinguish. Witness the most recent initiative by the U.S. Department of the Treasury – the Public Private Partnership Investment Program (PPPIP). A new word, “privblic,” may enter the financial glossary. As government’s commercial activities become more integral to private business, they reach down into everyone’s daily...
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On the Money From the April 4, 2008 print edition Tax avoidance is the legal utilization of the tax law to one’s own advantage. A person is entitled to reduce their amount of tax by legal means. In Gregory v. Helvering (1935), the U.S. Supreme Court stated that, “The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” Tax evasion is when illegal means are used to not pay taxes. Evasion usually involves deliberate misrepresentation, concealing the true state of fiscal condition, and in particular, dishonest tax reporting. To prove that if a scheme is creative or complex enough it must be legal, some have...
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On the Money From the April 3, 2009 print edition As the world economy collapsed last fall, (and some would say it’s premature to use the past-tense of that verb), regulators took aim at activities that have a depressing effect on the financial markets. One of the activities that drew the SEC’s ire was the practice of “abusive naked short selling.” As opposed to “long trading,” which is purchasing a stock for cash and selling it later after the price has increased, “short trading” is the reverse. That is, the short-seller borrows a stock and sells it, and at a later time buys the stock in the market, hopefully at a lower price, and returns the shares that were borrowed. Notice that the first part of...
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On the Money From the February 6, 2009 print edition Form 1040, one of the most foreboding phrases in the English language, had its origin a scant 96 years ago with the passage of the 16th Amendment to the Constitution. In 1913, electricity itself was still rare, let alone electronic appliances. Today, most of what we do is electronic – even replacing paper books and newspapers with eBooks. Much of the financial system runs on electronics including banking, bill paying, trading stocks and now an expanded ability to contribute to the fiscal well-being of the country by filing Form 1040 from the comfort of your own computer. On Jan. 16, the IRS announced its expanded e-File program. According to the IRS, the new e-file program includes...
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