Solutions

Something is wrong with our system.

Last night I got the privilege to listen to Van Jones speak here in Portland. It was an SRO crowd which was amazing given that his speech was at the exact same time as the State of the Union address by President Obama.

I arrived early and sat next to a black man about my same age. His name was Craig and we had a super conversation waiting for the program to start. Craig had come to hear Van talk about green jobs as he was desperately looking for work. Here was an American who wanted to contribute and yet, couldn't find any paid work.

Craig's pain was palpable. His pain is no different than millions and millions of other Americans, from every corner of our country.

Everywhere I look I see needs.

Our infrastructure is failing. Our bridges desperately need repair. Many here in Oregon won't withstand the next major earthquake we all know is coming. Our Sellwood Bridge has been closed to bus traffic for years and rates a 2 out of 100 possible points for structural integrity. You think we might be better off fixing it?

Schools, everywhere except newer suburban schools, are in need of significant improvements and upgrades. My daughter attends a Portland HS that is nearly 100 years old.

I'm guessing that more than 80 percent of our housing would benefit from energy efficiency improvements that would save money in the long run. We could put a million people to work within the next 12 months weatherizing homes using a revenue neutral model that is win/win/win for all.

We need more teachers and smaller class sizes. We need more opportunities for our youth and less prisons (American prisons now hold 1/4th of the world's prison population. Does that seem right in the Land of the Free?)

We need more caregivers and support for the caregivers we have.

We need programs for our returning veterans who come home from service with too few opportunities and too little support.

At the same time, everywhere I look I see people who need jobs and want to help.

It is a failure of our system and our imagination that we can't put these two needs together.

We are not some third world country without resources and imagination. We can fix this problem.

Small Business Jobs and Tax Relief Bill

President Obama signed the Small Business Jobs Act of 2010 (HR 5297) yesterday.

The Act expands loan programs through the SBA, strengthens small business preference programs for federal government projects, provides export incentives, and offers a variety of small business tax breaks. Many of the provisions are effective immediately.

These changes are in effect for 2010 and provide some great tax planning opportunities:

• Increased section 179 expensing
• Extension of 50% first-year bonus depreciation
• Zero capital gain tax rate from IRC Sec. 1202 small business stock
• Increased IRC Sec. 195 deduction for business startup expenses
• Five-year carryback of general business credits
• New deduction for self employed health insurance costs on the Schedule C
• Removal of cell phones from the definition of listed property

You can read more details in this Journal of Accountancy article on the House Bill.

Bush Tax Cuts Set to Expire

Amongst other things, President George W. Bush was famous for cutting taxes, spending money, and running up the deficit.

While his tax cuts reduced taxes on most if not all citizens, they really helped the super-rich with most of the benefits going to them. In fact, it could be argued that his tax cuts facilitated what might be the greatest transfer of wealth in our nation's history. Of course this transfer of wealth went upwards, from the lower- and middle-class to the upper class where we now have one of the highest concentrations of wealth in the world.

While President Bush certainly wanted his tax cuts to be permanent, passing temporary cuts made them appear less costly to the U.S. Treasury, and provided Republicans a future opportunity to make them permanent. That time is now. Most of those temporary tax cuts expire in 2010.

This is going to be a huge battle. The Republican talking points state that allowing the Bush tax cuts to lapse is the same thing as a tax increase while Obama's plan is to let the cuts expire on high income individuals while reducing taxes on average working families.

Who do you believe? How will these tax changes effect you?

The good folks over at the non-partisan Tax Foundation created the website MyTaxBurden where you can enter some tax information and see your tax obligation three ways:

• pre-Bush tax cuts (the system we'll return to if Congress fails to act)
• Bush tax cuts (what will happen if the tax cuts are extended)
• Obama's budget plan (What he ran on and what he's proposed)

I hope you'll check it out and I'd love it if you posted your results here.