With thanks for Professor Levine whose website contains information of much value. I have retyped the following Selected Writing of Rav Shimon Schwab as an important reference piece of an authentic Torah approach on how we, the orthodox public, should approach those who "[desecrate] all the fundamentals of Torah Judaism" in their dealings with their fellowman, Jew and Gentile. I really shouldn't have bothered with my own post from last night when this is far more powerful and poignant; speaking directly to the point, the words penned in the 1970's are as true then as now. My apologies for not having Hebrew a Hebrew typepad on my computer currently. If someone is kind enough type of the few pesukim in the essay in a cut and paste format, I'd like to add them. I've highlighted a few things in the essay below (twas hard to choose).
46* Chillul Hashem
Whenever we gather in prayer invariably we do recite or respond to the words of Kaddish: “May His Great Name be magnified and sanctified”. And whenever we introduce the daily Kedusho we call out: “Let us sanctify Your Name in the world”. And every so often during the course of our Tefilloh we emphasize our desire to belong to the sanctifiers of the Divine Name amongst men true to the injunction contained in Vayikro (22, 33) (“You shall not desecrate My Holy Name and I shall become sanctified in the midst of the children of Israel.”)
The second sentence of Sh’ma Yisroel begins with the command: “You shall love Hashem”, which is interpreted by our Sages: “Let the name of Hashem become beloved through you.” In other words, we are supposed to lead the kind of exemplary life which would contribute to the universal adoration of G-d and which would, in turn, enhance the glory and luster of the Torah, adding respect for the dignity of the Jewish people as a Kingdom of Priests and a Holy Nation.
The very opposite of the sanctification is the desecration of the Name as condemned by the Prophet with the scathing words (Yechezkel 36): “The came to the nations and desecrated my Holy Name, so that one said to them, is this the people of G-d who came from His land?”
Every form of Chillul Hashem lowers the awareness of the Divine Presence in the world. But if the desecrator happens to be a professed Torah observer or, even worse, a so-called scholar of the Torah, then the Chillul Hasehm not only weakens the respect for the Torah on one hand, but strengthens on the other hand the defiance of the non-observer and adds fuel to the scoffers, fanning the fires of religious insurrection of all around. Chillul Hashem is responsible, directly or indirectly, for the increase of frivolity, heresy and licentiousness in the world. Therefore, we should not be surprised reading the harsh words of condemnation we find in the Talmud: “He who has committed Chillul Hashem, even Teshuvoh, Yom Kippur, and suffering cannot fully atone for his sin until the day of his death (Yoma 86).”
“Better to commit a sin in secrecy than to commit Chillul Hashem in public (Kiddushin 40).
“The is no delay in the Divine punishment for Chillul Hashem, whether committed knowingly or unknowingly (ibid.)”.
“If one steals for a non-Jew, swears falsely and dies, his death is no atonement for his sin because fir gus sub because of Chillul Hashem” (Tosefta B. Kamma, 10).
“He who desecrates the name of Heaven in secrecy is punished in public” (Avoth 4).
“All sins are forgiven by G-d but Chillul Hashem He punishes immediately” (Sifri Haazinu).
This is but a small selection from the many fierce condemnations addressed by our Sages to the desecrators of the Divine Name.
All this comes to mind at this time since some perpetrators of Chillul Hashem are making the headlines of our daily newspapers. Certainly we are not sitting in judgment of the persons who are publically accused and we have to wait whether the indictments will be borne out by irrefutable evidence. However, be it as it may, the Chillul Hashem is there in the worst possible way. “Rabbi” so and so, who sits in court with his velvet Yarmulka in full view of a television audience composed of millions of viewers, is accused of having ruthlessly enriched himself at the expense of others, flaunting the laws of G-d and man, exploiting, conniving and manipulating – in short, desecrating all the fundamentals of Torah Judaism. And this sorry onslaught on our Jewish sensitiveness is repeated by similar allegations, proven or unproven, involving more prominent men who are stigmatized as orthodox Jews, sometimes even with so-called rabbinic diplomas.
While it is obvious that the vast majority of loyal and observant Torah Jews deal honestly and correctly with their fellow men, a very small minority of criminal perpetrators suffices to cast sinister aspirations on all orthodox Jews and, what is worse, on orthodox Judaism as a way of life. The Chillul Hashem of a few individuals provides excuses for the doubter, and encourages the desecration of Torah learning, Torah education and Torah influence. To defraud and exploit out fellowmen, Jew or gentile, to conspire, to betray the Government, to associate with underworld elements all there are hideous crimes by themselves. Yet to the outrage committed there is added another dimension, namely the profanation of the Divine Name and that means the profanation of all that is supposed to be held sacred by us as well as – in their heart of hearts –by the perpetrators themselves. What a sorry picture that is.
Suppose I have cheated my neighborhood or my Government and then I stand in the midst of a congregation of honest and decent men and women to recite the Kaddish which is the prayer for Kiddush Hashem in the world. What audacity! What a shame! Can there be a worse contradiction than the strict Sabbath observer who may also be a stickler for Kashrus and who at the same time violates the spirit of Shabbos and Kashrus during the week with non-kosher money manipulations?
Let us repeat. The profaners and the desecrators are only a handful of unscrupulous people and we even hope that some of them will be proved innocent. But it needs only very few violators to give us all a rotten name, aiding and abetting our many adversaries and antagonizing our few friends.
Therefore, no white-washing, no condoning, no apologizing on behalf of the desecrators. Let us make it clear that anyone who besmirches the sacred Name ceases to be our friend. He has unwittingly defected from our rants and has joined our antagonist, to make us all suffer in his wake. And – noblesse oblige – the more prominent a man has become in orthodox Jewish circles the more obligated he must feel to observe the most painstaking scrupulousness in his dealings with the outside world.
Our observance of Torah and Mitzvos is regulated by the Choshen Mishpot, the code of social justice no less than by the other codes of the Shulchan Aruch. Whoever betrays his loyalty to one portion of the Torah uproots all others. For, at the roots of Chillul Hashem are gross materialism, blatant selfishness, insatiable love of wealth and brazen disregard for common decency. Even if, strangely enough, as it sometimes happens – those with ugly traits go together with excessive charity and benevolence. We call the type of twisted ethics [mitzva habaha beavreirah] i.e. virtue acquired by sin, which is worthless – less than worthless. It is a travesty and a farce. It means playing jokes with the Torah. It is blasphemy and therefore unforgivable. Let us proclaim, loud and clear, that we shall have no part of such sickly “Yiddishkeit”. Our aim is to strive for Kiddush Hashem. And in order to reach this goal we shall band together and march together, we and our children [] with clean hands and pure hearts towards the dawn of Geuloh, speedily in our days.
Thursday, July 29, 2010
Wednesday, July 28, 2010
The Criminal Element Takes Another Public Seat at the Dais
Crime and punishment is as old as the Torah itself. But it seems that in the past year that prominent communal organizations and segments of the Orthodox community have become very loud and bold in their public defense of convicted criminals within/affiliated somehow with the Orthodox community. So called pidyon shuvuyim campaigns to collect for the legal defense and make life more manageable for the wife and children of the convicted is nothing new. But large scale, broad based, and loud public support seems to be a new trend that has developed, I would say, in just the past year. It appears to me that there is a hashkafah of sorts that is developing and it reads like this: Hands off US.
I don't remember rallies or mass letter writing campaigns in support of the drug/money laundering rings of the mid-90's that spanned from NY to LA, but the issue wasn't exactly on my radar. There was a time where I owned a pair of pink tinted glasses and I'd like them back, thank you very much! And while there must have been some behind the scenes lobbying for President Clinton's pardons of the New Square group, when the news hit of the pardons (Jan. 2001), I believe it was the first that most people in the Orthodox community became aware of the crime (granted, the internet was only in its infancy). But my recollection of the aftermath was that most hung their heads in shame. But, I could be mistaken.
In 2009, the Agudah organized a number of business Asifas. These spawned from the arrest and subsequent conviction of the Spinka Rebbe and the New Jersey and New York stings in which arrests for money laundering were made in Deal and Brooklyn. Despite comments on blogs to "hang the mosser[s]" the public reaction of the Agudah leadership was not to organize letter writing campaigns, protests, or fundraisers. One could question is inviting the Rebbe to speak as an honored guest at a business asifa dedicated to promoting integrity was in good taste (I'd vote no since too much blame was placed on a "lack of education" when it is obvious to someone educated in such matters that you have to know exactly what you are doing to pull off massive fraud schemes***), at the very least there was some show of contrition, even if it was perfunctory. At the time of the Spinka arrests, Rabbi Adlerstein, wrote that there was a Silver Lining to the LA Scandal. He hoped that this case would be used to "reexamine issues of personal honesty and integrity" and pointed to some mussar shmoozes. I disagreed with the conclusion that these crimes were borne of insularity^^^, but shared the hope that in the internet era where stories
Well, here we are mid-2010 and it seems that promoting integrity and adherence to American Law and Choshen Mishpat might be a thing of the past. Early 2010, the Grossman Circus rolled into town. A number of Orthodox Communal Organizations, not just the usual suspects (!), banned together in a campaign that loudly called for staying the execution of a man who brutally murdered a young park police officer. The organizations involved even called in the Pope! From coast to coast, Orthodox Jews were asked to write sign petitions, write letters, and call the Governor of Flordia's office to try and stop the execution. And the community followed orders. Certainly leadership was aware that there are more than a few loose cannons that would come out of the woodwork, and the loose cannons didn't disappoint, harassing the Park family and continuing the circus with a funeral fit for a Rebbe and emotional hespedim. Treated a ba'al teshuva of high caliber (the words "ahavas yisrael" follwed his finaly Shema) despite the fact that he never was able to connect the words "I" with the "events" (i.e. murder) before his execution. On Tisha B'Av, his headstone was laid and the labels of HY"D, kedush, and hopes he will be a matzliach yosher continue. Not an ounce of tzniut was evident in this campaign!
Summer 2010, Lakewood hosts massive asifot for Rubashkin, raising upwards of $300,000 for his defense. Ten thousand are reported to have attended the men's gathering and another 3,000 the women's rally. We can argue whether or not the sentencing was excessive, and it may well be (I'm not a legal scholar, but I do know that it was within legal guidelines). But what is the ultimate message of such public and loud campaigns? What kind of society are we going to create when instead of dipping our heads in shame we loudly proclaim the great righteousness of the convicted? What kind of society are we going to create when week after week publications reinforce the notion that we live in tzarist Russia and are simply being persecuted for being Jewish? As far as I am concerned, the message being given is that corners can be cut (so long as you give plenty of tzedakah, bring the community together in achdus, or engage in great displays of Yiddishkeit).
Even worst, during the 3 weeks, a Yated columnist went so far as calling those who don't rally behind Rubashkin as having a "Goyishe Kop": "If I would not know better, I would say that they have stopped thinking in the traditional thought pattern of Yiddin throughout our galus." I'd counter that perhaps those of us with a "Goyishe Kop" are simple people who have no interest in mental gymnastics. While we have compassion for a fellow Jew, we don't act out of sheer emotion. We want to live our lives in a straightforward way where we represent ourselves in dealing with simple straightforwardness. We don't care to engage in mental gymnastics where we convert the distasteful and wrong into a mitzvah. We believe that callousness to financial crime indicates a breakdown in society and do not choose to gloss of things that are "if anything is a white collar crime." We understand the ramifications of our actions as they have consequences far beyond that of a single person and we understand that failure to recognize the rule of law will eventually bite us in the butts!
And so it has. July 28, 2010, Chabad annouces a public rally for a man who was brought to justice by those in his own community. (Background stories at VIN). And note that the ramifications of such a rally extend far beyond providing the $300,000 needed to continue paying the lawyer for legal defense. The ramifications are societal. There is callousness towards other people's money and property. There is an attack on the rule of law, a rule of law that protects me and you, our lives, our children, and our property. Try this on for size and if you watch this video, tell me what background piano music you are hearing)
"Him sitting in prison will not help anybody pay their bills. We have a moral duty to help him reunite with his family speedily."
"No children deserve to grow up without a father, especially such young children, and an oldest child who sacrificed himself for Jews in Eretz Yisroel, losing his arm in Gaza." [Really, no children!?! When will the gatherings be for the thugs that are sitting in prision for beating a Jew? Stealing from a Jew?]
Let's realize the consequences of our actions before we dig a hole so deep it is impossible to emerge from it. The message I'm getting from this year of public displays is me, me, me. Public displays of achdus might feel good, but quiet behind the scenes campaigns where appropriate will keep emotions at bay and preserve a sense of wrong and right. I'm not a sociologist, but I sense a change in the direction of certain elements within the Orthodox community and I think some reflection as to what this changes means for the community at large is well in order because actions always have consequences.
--------------------------------------------------------------------------------------------
****What I wrote at the time: Setting up a tax fraud scheme where hundreds of individuals "donated" millions of dollars and then itemized those donations when they knowingly received an 80-95% rebate is planned, deliberate, intentional, malicious, and illegal criminal activity. This isn't giving in to a small temptation such as deducting the price of your tickets to a Chinese Auction. This took massive manpower. Such a scheme perpetuated from the top and joined in by a hundreds of people speaks volumes about the lack of integrity, the worship of the dollar, and the precarious financial situation of the Orthodox Community as a whole, as the Chassidish community in particular.
^^^What I wrote at the time: "insularity combined with ignorance can bring out the yetzer hara for small crimes, but arrogance combined with desperation is the brainchild behind such complicated schemes as we have been continually witnessing for at least 20 years."
I don't remember rallies or mass letter writing campaigns in support of the drug/money laundering rings of the mid-90's that spanned from NY to LA, but the issue wasn't exactly on my radar. There was a time where I owned a pair of pink tinted glasses and I'd like them back, thank you very much! And while there must have been some behind the scenes lobbying for President Clinton's pardons of the New Square group, when the news hit of the pardons (Jan. 2001), I believe it was the first that most people in the Orthodox community became aware of the crime (granted, the internet was only in its infancy). But my recollection of the aftermath was that most hung their heads in shame. But, I could be mistaken.
In 2009, the Agudah organized a number of business Asifas. These spawned from the arrest and subsequent conviction of the Spinka Rebbe and the New Jersey and New York stings in which arrests for money laundering were made in Deal and Brooklyn. Despite comments on blogs to "hang the mosser[s]" the public reaction of the Agudah leadership was not to organize letter writing campaigns, protests, or fundraisers. One could question is inviting the Rebbe to speak as an honored guest at a business asifa dedicated to promoting integrity was in good taste (I'd vote no since too much blame was placed on a "lack of education" when it is obvious to someone educated in such matters that you have to know exactly what you are doing to pull off massive fraud schemes***), at the very least there was some show of contrition, even if it was perfunctory. At the time of the Spinka arrests, Rabbi Adlerstein, wrote that there was a Silver Lining to the LA Scandal. He hoped that this case would be used to "reexamine issues of personal honesty and integrity" and pointed to some mussar shmoozes. I disagreed with the conclusion that these crimes were borne of insularity^^^, but shared the hope that in the internet era where stories
Well, here we are mid-2010 and it seems that promoting integrity and adherence to American Law and Choshen Mishpat might be a thing of the past. Early 2010, the Grossman Circus rolled into town. A number of Orthodox Communal Organizations, not just the usual suspects (!), banned together in a campaign that loudly called for staying the execution of a man who brutally murdered a young park police officer. The organizations involved even called in the Pope! From coast to coast, Orthodox Jews were asked to write sign petitions, write letters, and call the Governor of Flordia's office to try and stop the execution. And the community followed orders. Certainly leadership was aware that there are more than a few loose cannons that would come out of the woodwork, and the loose cannons didn't disappoint, harassing the Park family and continuing the circus with a funeral fit for a Rebbe and emotional hespedim. Treated a ba'al teshuva of high caliber (the words "ahavas yisrael" follwed his finaly Shema) despite the fact that he never was able to connect the words "I" with the "events" (i.e. murder) before his execution. On Tisha B'Av, his headstone was laid and the labels of HY"D, kedush, and hopes he will be a matzliach yosher continue. Not an ounce of tzniut was evident in this campaign!
Summer 2010, Lakewood hosts massive asifot for Rubashkin, raising upwards of $300,000 for his defense. Ten thousand are reported to have attended the men's gathering and another 3,000 the women's rally. We can argue whether or not the sentencing was excessive, and it may well be (I'm not a legal scholar, but I do know that it was within legal guidelines). But what is the ultimate message of such public and loud campaigns? What kind of society are we going to create when instead of dipping our heads in shame we loudly proclaim the great righteousness of the convicted? What kind of society are we going to create when week after week publications reinforce the notion that we live in tzarist Russia and are simply being persecuted for being Jewish? As far as I am concerned, the message being given is that corners can be cut (so long as you give plenty of tzedakah, bring the community together in achdus, or engage in great displays of Yiddishkeit).
Even worst, during the 3 weeks, a Yated columnist went so far as calling those who don't rally behind Rubashkin as having a "Goyishe Kop": "If I would not know better, I would say that they have stopped thinking in the traditional thought pattern of Yiddin throughout our galus." I'd counter that perhaps those of us with a "Goyishe Kop" are simple people who have no interest in mental gymnastics. While we have compassion for a fellow Jew, we don't act out of sheer emotion. We want to live our lives in a straightforward way where we represent ourselves in dealing with simple straightforwardness. We don't care to engage in mental gymnastics where we convert the distasteful and wrong into a mitzvah. We believe that callousness to financial crime indicates a breakdown in society and do not choose to gloss of things that are "if anything is a white collar crime." We understand the ramifications of our actions as they have consequences far beyond that of a single person and we understand that failure to recognize the rule of law will eventually bite us in the butts!
And so it has. July 28, 2010, Chabad annouces a public rally for a man who was brought to justice by those in his own community. (Background stories at VIN). And note that the ramifications of such a rally extend far beyond providing the $300,000 needed to continue paying the lawyer for legal defense. The ramifications are societal. There is callousness towards other people's money and property. There is an attack on the rule of law, a rule of law that protects me and you, our lives, our children, and our property. Try this on for size and if you watch this video, tell me what background piano music you are hearing)
"Him sitting in prison will not help anybody pay their bills. We have a moral duty to help him reunite with his family speedily."
"No children deserve to grow up without a father, especially such young children, and an oldest child who sacrificed himself for Jews in Eretz Yisroel, losing his arm in Gaza." [Really, no children!?! When will the gatherings be for the thugs that are sitting in prision for beating a Jew? Stealing from a Jew?]
Let's realize the consequences of our actions before we dig a hole so deep it is impossible to emerge from it. The message I'm getting from this year of public displays is me, me, me. Public displays of achdus might feel good, but quiet behind the scenes campaigns where appropriate will keep emotions at bay and preserve a sense of wrong and right. I'm not a sociologist, but I sense a change in the direction of certain elements within the Orthodox community and I think some reflection as to what this changes means for the community at large is well in order because actions always have consequences.
--------------------------------------------------------------------------------------------
****What I wrote at the time: Setting up a tax fraud scheme where hundreds of individuals "donated" millions of dollars and then itemized those donations when they knowingly received an 80-95% rebate is planned, deliberate, intentional, malicious, and illegal criminal activity. This isn't giving in to a small temptation such as deducting the price of your tickets to a Chinese Auction. This took massive manpower. Such a scheme perpetuated from the top and joined in by a hundreds of people speaks volumes about the lack of integrity, the worship of the dollar, and the precarious financial situation of the Orthodox Community as a whole, as the Chassidish community in particular.
^^^What I wrote at the time: "insularity combined with ignorance can bring out the yetzer hara for small crimes, but arrogance combined with desperation is the brainchild behind such complicated schemes as we have been continually witnessing for at least 20 years."
Tuesday, July 27, 2010
Disconnect (Continued from last post)
A regular commentor felt that my last post was full of vitriol. If others detected that too, I apologize. I most certainly did not mean to convey such an emotion. I don't think that any feelings on the anger spectrum are particularly helpful in this debate. True, I have little sympathy for someone who places tuition in the same sentence as camp and making weddings. But that said, I absolutely recognize the strain of $20,000 a year of tuition in any middle income budget, especially in the budget of a family with six children to care for. (And, personally, I think it is important for us as a people and as a whole to "be fruitful and multiple.")
What I do think the letter underscores is that the way the scholarship system is designed leaves a lot to be desired. The letter writer is the receipient of a very large discount/scholarship. Yet he does seem not associate this discount/scholarship with receiving tzedakah, but rather goes on to demand that an elusive someone set up a tzedakah fund to help him.
I've never seen anyone complain that Bikur Cholim, which provides meals, support, and financial assistance, left them with some bills that they would need to meet independently. I've never seen anyone complain that Tomchei Shabbos allows families to be left without food during the week. I've never seen a family that received assistance in making a wedding complain that Hachnasat Kallah expected them to meet some percentage of the cost of the wedding.
Yet, somehow, tuition is different. Large a small donors give tzedakah throughout the year. Full tuition continues to rise making the cost of yeshiva even more prohibitive (and those who pay often scrap by without signing their child up for even a single extracurricular that would be in the interests of said child). And at the end of the day, there are people who receive substantial amounts of assistance screaming out that it is not enough.
But what I really suspect is that these families have tunnel vision. They see a massive $20,000 bill staring them in the face. That bill is so overwhelming to them, that they lack the ability to make a connection between their tuition that overwhelms them, the high tuition rates paid by other struggling families, the numerous fundraisers put on by the school, and the ongoing giving campaigns. There is a massive fee to be paid. That is what is first and foremost in the mind of the tuition payer (even the subsidized tuition payer), and it appears that there is limited understanding that such a massive bill is also being massively subsidized.
I do think that the system of scholarships/discounts needs to be overhauled. I think that the way things work today causes a great deal of consternation, anger, and even sinah that is completely counterproductive to actually tackling the issues on the table in the productive way.
What I do think the letter underscores is that the way the scholarship system is designed leaves a lot to be desired. The letter writer is the receipient of a very large discount/scholarship. Yet he does seem not associate this discount/scholarship with receiving tzedakah, but rather goes on to demand that an elusive someone set up a tzedakah fund to help him.
I've never seen anyone complain that Bikur Cholim, which provides meals, support, and financial assistance, left them with some bills that they would need to meet independently. I've never seen anyone complain that Tomchei Shabbos allows families to be left without food during the week. I've never seen a family that received assistance in making a wedding complain that Hachnasat Kallah expected them to meet some percentage of the cost of the wedding.
Yet, somehow, tuition is different. Large a small donors give tzedakah throughout the year. Full tuition continues to rise making the cost of yeshiva even more prohibitive (and those who pay often scrap by without signing their child up for even a single extracurricular that would be in the interests of said child). And at the end of the day, there are people who receive substantial amounts of assistance screaming out that it is not enough.
But what I really suspect is that these families have tunnel vision. They see a massive $20,000 bill staring them in the face. That bill is so overwhelming to them, that they lack the ability to make a connection between their tuition that overwhelms them, the high tuition rates paid by other struggling families, the numerous fundraisers put on by the school, and the ongoing giving campaigns. There is a massive fee to be paid. That is what is first and foremost in the mind of the tuition payer (even the subsidized tuition payer), and it appears that there is limited understanding that such a massive bill is also being massively subsidized.
I do think that the system of scholarships/discounts needs to be overhauled. I think that the way things work today causes a great deal of consternation, anger, and even sinah that is completely counterproductive to actually tackling the issues on the table in the productive way.
Thursday, July 22, 2010
It isn't considered a bargain, It IS a Bargain
More serious blogging to return shortly. . . . . in the meantime, can someone buy this man a calculator!
Dear Chaim,
What you are paying in tuition IS a bargain. Take your calculator out. You are paying $333.33 per child per month. Your tuition isn't just "considered" a bargain. It IS a bargain plain and simple. Clearly mathematical analysis is not your strong point, because if it was, you would realize that there already is a tzedakah in place to help people cover tuition. That tzedakah is called other people's tuition, those you note are paying double the rates you are paying and even more (!). Unlike others, I will not discount your struggle, nor will I call you mean names. But do realize that it is tasteless to complain about your tuition and complain that there is no tzedakah to cover you when many of us are writing our first tuition/tzedakah check on August 1.
Sincerely,
Orthonomics
Letter follows, emphasis mine.
THE BIGGEST CRISIS
Dear Editor,
The biggest crisis today is not the shidduch crisis. Sorry to disappoint all of you. The number-one crisis is the parnassah crisis. Financially, our communities are in shambles. Mosdos are suffering like never before and many frum families are falling apart because they cannot afford their basic needs.
Among the major expenses faced by frum families is tuition. I just received a tuition bill from my children’s schools. This coming year, I will be paying over $2,000 in tuition a month
for six children - and that’s considered a bargain. Many people I know are paying double that or even more. And that’s not counting the cost of camp and the other countless expenses I face.
Where are we supposed to get this money from? How much harder can we work?
We need an organization devoted to helping people with tuition, just like we have so many other organizations for all kinds of important things.
Upon further observation, one will find that the second component of the parnassah crisis is marrying off children, which I hope to address in a future letter. For now, let’s address the
first component, tuition.
And for those who are wondering, yes, the shidduch crisis is the second biggest crisis in my eyes. But it shares second place with kids-at-risk.
Chaim F.
Dear Chaim,
What you are paying in tuition IS a bargain. Take your calculator out. You are paying $333.33 per child per month. Your tuition isn't just "considered" a bargain. It IS a bargain plain and simple. Clearly mathematical analysis is not your strong point, because if it was, you would realize that there already is a tzedakah in place to help people cover tuition. That tzedakah is called other people's tuition, those you note are paying double the rates you are paying and even more (!). Unlike others, I will not discount your struggle, nor will I call you mean names. But do realize that it is tasteless to complain about your tuition and complain that there is no tzedakah to cover you when many of us are writing our first tuition/tzedakah check on August 1.
Sincerely,
Orthonomics
Letter follows, emphasis mine.
THE BIGGEST CRISIS
Dear Editor,
The biggest crisis today is not the shidduch crisis. Sorry to disappoint all of you. The number-one crisis is the parnassah crisis. Financially, our communities are in shambles. Mosdos are suffering like never before and many frum families are falling apart because they cannot afford their basic needs.
Among the major expenses faced by frum families is tuition. I just received a tuition bill from my children’s schools. This coming year, I will be paying over $2,000 in tuition a month
for six children - and that’s considered a bargain. Many people I know are paying double that or even more. And that’s not counting the cost of camp and the other countless expenses I face.
Where are we supposed to get this money from? How much harder can we work?
We need an organization devoted to helping people with tuition, just like we have so many other organizations for all kinds of important things.
Upon further observation, one will find that the second component of the parnassah crisis is marrying off children, which I hope to address in a future letter. For now, let’s address the
first component, tuition.
And for those who are wondering, yes, the shidduch crisis is the second biggest crisis in my eyes. But it shares second place with kids-at-risk.
Chaim F.
Friday, July 09, 2010
Tax Strategies for 2011
2011 is around the corner and a reader asked me, in regards to my previous post:
SL: Assuming that Congress is too fractured to do anything about restoring some of the tax cuts, at least for the middle class and below, are there any particular tax strategies that you think make sense - i.e. sell stocks that have appreciated to get the lower capital gains tax, defer charitable contributions? accelerate charitable contributions? etc.
Getting ready for 2011 will probably be an ongoing subject here at Orthonomics, so consider this installment one. Tax professionals are only starting to figure out what strategies make sense. Or, as one journal writes "new taxes requires us to think outside of the box when it comes to tax planning. In many cases, this means considering strategies that would be contrary to conventional planning practices."
Here are a few strategies to consider:
Accelerate income and defer deductions: normally we try to defer income and accelerate deductions. Hence, a small business owner or landlord might expense equipment in full, a family will try to lower their capital gains taxes by selling loosing stock offset gains, those who pay estimated payments will make sure to send their estimated payment to their state before the close of the year, and in December of the Fiscal Year a family will write out some checks for last minute tax deductions.
When impending tax rates are significantly higher, due to increased marginal rates and the elimination of the 10% bracket, individuals should consider the following (I'm including advice for those who file a Schedule C or Schedule E):
Be aggressive with collecting accounts receivable: If you can collect in 2010, it is worth more than in 2011. Start bothering your customers, subject to whatever halachic restrictions there are of course. (I think I am going to bother a client right now). If you are a second income earner teetering on the next marginal rate, the motivate to collect now is high. Likewise, it makes sense to push off expenses/acquisitions, but only in a way that is yashar. I'm not recommending forgoing payment of bills to vendors, only holding off purchases or changing payment schedules where possible.
Defer Itemized deductions from 2010 to 2011: So long as it is yashar and halachically proper (it wouldn't be proper to withhold a pledge due imo), holding off a voluntary donations from December 2010 to January 2011 makes sense, as does sending estimated tax payments to your respective state in 2011, rather than at the end of 2010 as you might be accustomed to doing.
If you depreciate equipment and have normally either used a double-declining method or fully expensed under Section 179, consider a straight-line or other approach. Of course, you will need the cash flow to be able to pay the tax bill.
If you have a NOL (non-operating loss), you should consider carrying it forward (a one time non-revocable election) rather than carrying back, as is often done.
Capital Gains If you are thinking of selling appreciate assets, 2010 might be the right year to do just that. If you are experienced with stock dealings, you are probably accustomed to selling your losers to offset the gains. For 2010, you might want to defer the losses until 2011, to offset higher future capital gains or just take the up to $3000 loss allowable by tax code.
Retirement Savings
Convert IRAs to ROTH IRAs/Invest in ROTH IRAs. The advice to convert IRAs to ROTH IRAs seems to be popular advice, and in many cases it is good advice. But you have to be very careful here. 1. You need to have the cash in hand to pay the tax bill (actually the rules have changed an you can defer 1/2 of your bill, but I don't recommend playing this type of game) and 2. Conversions can threaten your child tax credits where you are on the verge of being phased out. Taking at $800 hit on your tax credit in the here and now, e.g., might not be the wisest idea. For that reason, while the advice does make sense, it is so important to run the numbers in order to understand the full impact and make an informed decision.
That is it for now. More to come as the strategies develop. Now back to reminding a client that is long overdue with funds that although I've been flexible due to the situation and trust relationship, I need that money before 2011.
SL: Assuming that Congress is too fractured to do anything about restoring some of the tax cuts, at least for the middle class and below, are there any particular tax strategies that you think make sense - i.e. sell stocks that have appreciated to get the lower capital gains tax, defer charitable contributions? accelerate charitable contributions? etc.
Getting ready for 2011 will probably be an ongoing subject here at Orthonomics, so consider this installment one. Tax professionals are only starting to figure out what strategies make sense. Or, as one journal writes "new taxes requires us to think outside of the box when it comes to tax planning. In many cases, this means considering strategies that would be contrary to conventional planning practices."
Here are a few strategies to consider:
Accelerate income and defer deductions: normally we try to defer income and accelerate deductions. Hence, a small business owner or landlord might expense equipment in full, a family will try to lower their capital gains taxes by selling loosing stock offset gains, those who pay estimated payments will make sure to send their estimated payment to their state before the close of the year, and in December of the Fiscal Year a family will write out some checks for last minute tax deductions.
When impending tax rates are significantly higher, due to increased marginal rates and the elimination of the 10% bracket, individuals should consider the following (I'm including advice for those who file a Schedule C or Schedule E):
Be aggressive with collecting accounts receivable: If you can collect in 2010, it is worth more than in 2011. Start bothering your customers, subject to whatever halachic restrictions there are of course. (I think I am going to bother a client right now). If you are a second income earner teetering on the next marginal rate, the motivate to collect now is high. Likewise, it makes sense to push off expenses/acquisitions, but only in a way that is yashar. I'm not recommending forgoing payment of bills to vendors, only holding off purchases or changing payment schedules where possible.
Defer Itemized deductions from 2010 to 2011: So long as it is yashar and halachically proper (it wouldn't be proper to withhold a pledge due imo), holding off a voluntary donations from December 2010 to January 2011 makes sense, as does sending estimated tax payments to your respective state in 2011, rather than at the end of 2010 as you might be accustomed to doing.
If you depreciate equipment and have normally either used a double-declining method or fully expensed under Section 179, consider a straight-line or other approach. Of course, you will need the cash flow to be able to pay the tax bill.
If you have a NOL (non-operating loss), you should consider carrying it forward (a one time non-revocable election) rather than carrying back, as is often done.
Capital Gains If you are thinking of selling appreciate assets, 2010 might be the right year to do just that. If you are experienced with stock dealings, you are probably accustomed to selling your losers to offset the gains. For 2010, you might want to defer the losses until 2011, to offset higher future capital gains or just take the up to $3000 loss allowable by tax code.
Retirement Savings
Convert IRAs to ROTH IRAs/Invest in ROTH IRAs. The advice to convert IRAs to ROTH IRAs seems to be popular advice, and in many cases it is good advice. But you have to be very careful here. 1. You need to have the cash in hand to pay the tax bill (actually the rules have changed an you can defer 1/2 of your bill, but I don't recommend playing this type of game) and 2. Conversions can threaten your child tax credits where you are on the verge of being phased out. Taking at $800 hit on your tax credit in the here and now, e.g., might not be the wisest idea. For that reason, while the advice does make sense, it is so important to run the numbers in order to understand the full impact and make an informed decision.
That is it for now. More to come as the strategies develop. Now back to reminding a client that is long overdue with funds that although I've been flexible due to the situation and trust relationship, I need that money before 2011.
Saturday, July 03, 2010
Higher Taxes: No I'm not Crazy Thinking that Yeshiva Tuition is Going to Become Even Harder To Pay
With apologies to my readers who object to politically charged posts, please be forgiving . . . . . . I realize that not all my reader are fans of the ATR (Americans for Tax Reform) and might take issue with the use of the terms "ObamaCare" and "Death Tax" as opposed to Health Care Reform and the Estate Tax, but as far as I can tell, all the details in the following article (posted after my ramblings) are accurate. I have also spoken to tax professionals and any repeal of the rollback appears highly unlikely. (Happy 4th of July!)
One thing I can't stand is when discussions of political policy turns completely self-centered and the entire focus of the frum community is inward, i.e. what's in it, or not in it, for me? But one reason I'm pointing out the tax changes coming your way and mine is because this is something the frum world needs to grapple with and get prepared for now. In January 2011 your withholdings should go up. If you are self-employed/contractor, prepare to make greater quarterly payments. In 2012, a higher tax bill is coming. So, feel free to self-center the comments and let us know which tax hikes are going to affect you, and how they will affect your ability to give tzedakah and/or pay yeshiva tuition.
Numbers would be even better (feel free to mark yourself under an anon# name to preserve privacy). I'm not usually so open, but my current calculation of tax hikes (assuming no change in income) between 2010 and 2011 to be in the neighborhood of $2600, which doesn't include changes on dependent care credits and the use of Coverdells. Nor does that include additional tax which we will incur regardless of changes in income as our itemized deductions fall (yeah for refinancing, boo for the rest of it). I've included the social security and state tax damage from capping the Flexible Spending Accounts in my calculation. To put the $2,600 in perspective, it isn't peanuts.
It if probably a good thing that I'm already convinced that yeshiva tuition isn't going to be something we can afford long into the future because, I hate surprises! We might as well start mentally preparing now. As I was trying to explain to a friend recently, adding another tuition + covering the steep tuition increases + all the other expenses that come with age isn't a simple matter of just cutting back on retirement savings because there isn't a 1:1 relationship. (Someone really should remind me not to enter tax planet while on a pleasant day in the park with the kids and the other Moms because I just start running scenarios and talking mostly to myself. Not to be politically incorrect, but ladies generally like to give "chizuk" not listen to ramblings from an accountant about teetering on the edge of credit phaseouts, the next tax bracket, and how big medical expenses are about to become even less affordable).
The article detailing many tax hikes is cut and pasted below. There is a lot of bad news in here for Americans hoping for an economic recovery. There is a tax hike in here for everyone, and by that I mean almost everyone (yes, even Kollel Families!). The 10% tax bracket is being eliminated for starters. Below is a chart of what the estimated tax brackets for 2010 and 2011 for those who want to start making calculations. My apologies for only including Married Filing Jointly. I'm not attempting to discriminate, but to not overload a post with too much information. A few comments, as usual, in orange will be interspersed in the article.
2010 Estimated Tax Brackets (Married Filing Jointly)
10% Bracket $0 – $16,750
15% Bracket $16,750 – $68,000
25% Bracket $68,000 – $137,300
28% Bracket $137,300 – $209,250
33% Bracket $209,250 – $373,650
35% Bracket $373,650+
2011 Estimated Tax Brackets (Married Filing Jointly)
Tax Bracket Married Filing Jointly
15% Bracket $0 – $70,040
28% Bracket $70,040 – $141,419
31% Bracket $141,419 – $215,528
36% Bracket $215,528 – $384,860
39.6% Bracket Over $384,860
Six Months to Go UntilThe Largest Tax Hikes in History From Ryan Ellis on Thursday, July 1, 2010 4:15 PM
BREAKING: Wounded Warriors Face New Tax This Independence Day
In just six months, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15% [excluding those who get hit by the AMT, all benefit from the 10% bracket. My experience tells me that many large families and kollel families sit in the 10% bracket]
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. [Ouch!The child tax credit includes up to 3 children currently. Really an ouch. I mistakenly confused the phaseout on a welfare credit I deal with too often with this credit (oops). This will really hit families hard. Not really an upside, but families that cut back on retirement and hit the phaseout won't get such a double-whammy] The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut. [A hit for dual income families].
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones. [In other words, don't think a yerusha will pay your bills. . . and, no, tax planning isn't just for the super rich].
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013. [Confusing sentence. In other words, dividends will be taxed as regular income and then, there will be an additional tax on investment income, including royalities and rental properties, come 2013 as part of the Health Care Package].
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). [In other words, if you overshoot on your FSA come 2011, you will end up forfeiting the funds because you will no longer be allowed to load up on Advil at tax advantaged prices].
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. [Special Needs is only one demographic sure to be hit by the lowering of the FSA. A few other demographics: families with lots of kids, families paying for catastrophic care, any family paying for braces or major dental work].
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers. [I wish I understood the AMT better].
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated."
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families. [Unlike most employees who must meet a 2% floor before deducting any business expenses as an itemized deduction, educators have been given a nice gift, decreasing both federal and state income tax. Like I said, these changes are broad and there is an increase in there for everyone].
Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there. [Shuls, schools, and all tzedakas listen up. . . the news isn't good].
Read more: http://www.atr.org/sixmonths.html?content=5171#ixzz0sgPL3f3c
One thing I can't stand is when discussions of political policy turns completely self-centered and the entire focus of the frum community is inward, i.e. what's in it, or not in it, for me? But one reason I'm pointing out the tax changes coming your way and mine is because this is something the frum world needs to grapple with and get prepared for now. In January 2011 your withholdings should go up. If you are self-employed/contractor, prepare to make greater quarterly payments. In 2012, a higher tax bill is coming. So, feel free to self-center the comments and let us know which tax hikes are going to affect you, and how they will affect your ability to give tzedakah and/or pay yeshiva tuition.
Numbers would be even better (feel free to mark yourself under an anon# name to preserve privacy). I'm not usually so open, but my current calculation of tax hikes (assuming no change in income) between 2010 and 2011 to be in the neighborhood of $2600, which doesn't include changes on dependent care credits and the use of Coverdells. Nor does that include additional tax which we will incur regardless of changes in income as our itemized deductions fall (yeah for refinancing, boo for the rest of it). I've included the social security and state tax damage from capping the Flexible Spending Accounts in my calculation. To put the $2,600 in perspective, it isn't peanuts.
It if probably a good thing that I'm already convinced that yeshiva tuition isn't going to be something we can afford long into the future because, I hate surprises! We might as well start mentally preparing now. As I was trying to explain to a friend recently, adding another tuition + covering the steep tuition increases + all the other expenses that come with age isn't a simple matter of just cutting back on retirement savings because there isn't a 1:1 relationship. (Someone really should remind me not to enter tax planet while on a pleasant day in the park with the kids and the other Moms because I just start running scenarios and talking mostly to myself. Not to be politically incorrect, but ladies generally like to give "chizuk" not listen to ramblings from an accountant about teetering on the edge of credit phaseouts, the next tax bracket, and how big medical expenses are about to become even less affordable).
The article detailing many tax hikes is cut and pasted below. There is a lot of bad news in here for Americans hoping for an economic recovery. There is a tax hike in here for everyone, and by that I mean almost everyone (yes, even Kollel Families!). The 10% tax bracket is being eliminated for starters. Below is a chart of what the estimated tax brackets for 2010 and 2011 for those who want to start making calculations. My apologies for only including Married Filing Jointly. I'm not attempting to discriminate, but to not overload a post with too much information. A few comments, as usual, in orange will be interspersed in the article.
2010 Estimated Tax Brackets (Married Filing Jointly)
10% Bracket $0 – $16,750
15% Bracket $16,750 – $68,000
25% Bracket $68,000 – $137,300
28% Bracket $137,300 – $209,250
33% Bracket $209,250 – $373,650
35% Bracket $373,650+
2011 Estimated Tax Brackets (Married Filing Jointly)
Tax Bracket Married Filing Jointly
15% Bracket $0 – $70,040
28% Bracket $70,040 – $141,419
31% Bracket $141,419 – $215,528
36% Bracket $215,528 – $384,860
39.6% Bracket Over $384,860
Six Months to Go UntilThe Largest Tax Hikes in History From Ryan Ellis on Thursday, July 1, 2010 4:15 PM
BREAKING: Wounded Warriors Face New Tax This Independence Day
In just six months, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15% [excluding those who get hit by the AMT, all benefit from the 10% bracket. My experience tells me that many large families and kollel families sit in the 10% bracket]
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. [Ouch!
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones. [In other words, don't think a yerusha will pay your bills. . . and, no, tax planning isn't just for the super rich].
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013. [Confusing sentence. In other words, dividends will be taxed as regular income and then, there will be an additional tax on investment income, including royalities and rental properties, come 2013 as part of the Health Care Package].
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). [In other words, if you overshoot on your FSA come 2011, you will end up forfeiting the funds because you will no longer be allowed to load up on Advil at tax advantaged prices].
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. [Special Needs is only one demographic sure to be hit by the lowering of the FSA. A few other demographics: families with lots of kids, families paying for catastrophic care, any family paying for braces or major dental work].
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers. [I wish I understood the AMT better].
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated."
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families. [Unlike most employees who must meet a 2% floor before deducting any business expenses as an itemized deduction, educators have been given a nice gift, decreasing both federal and state income tax. Like I said, these changes are broad and there is an increase in there for everyone].
Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there. [Shuls, schools, and all tzedakas listen up. . . the news isn't good].
Read more: http://www.atr.org/sixmonths.html?content=5171#ixzz0sgPL3f3c
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