http://www.washingtonpost.com/wp-dyn/content/article/2010/03/05/AR2010030502974.html?hpid%3Dtopnews

For an eye-opening look at the U.S. and world debt landscape, below are two very useful interactive links to evaluate worldwide and U.S. public debt loads now and in the past.

http://buttonwood.economist.com/content/gdc

http://www.usgovernmentspending.com/federal_debt_chart.html

Current record levels do not bode well for interest rates and financial stability.

California’s $20 billion budget deficit and long history of high taxes, unfunded pension obligations and massive entitlement plans has creditors worried.  Recent debt downgrades and political gridlock will likely drive up future borrowing costs:

http://www.huffingtonpost.com/2010/03/01/californias-debt-now-risk_n_481058.html

http://www.treasurer.ca.gov/

To save some of your hard-earned taxes, check out tax planning strategies at: www.blakechristian.com

Also, for daily tax and financial updates, please follow me: http://twitter.com/taxcredits_CPA

Obama National Health Care Plan – More Taxes / Less Medicare Funding

http://online.wsj.com/article/SB123559630127675581.html

Following through on his campaign promise of raising taxes on the "wealthy", the Obama Administration will be rolling out their $318 BILLION tax hike including expiration of the Bush tax cuts and an increase in personal tax rates from 33% to 35% over the next few years.  In addition, a scale-back of home mortgage interest and contribution deductions are also anticipated under President Obama's proposal.   Not-for-Profit entities are suffering from the economy just like taxable businesses; therefore, this is an odd time to reduce the tax benefit for home mortgage deductions and reducing the incentive to support charitable organizations, which are typically very efficient in their operations. 

Another $316 BILLION of spending cuts tied to: i) reductions in government payments to private health-care providers supplying Medicare services and ii) other healthcare reductions are also planned.

These combined tax increases and spending cuts of $634 BILLION are designed to pay for President Obama's planned Single-Pay Medical Plan.

Download Obama Tax Hikes Feb 26 2009 WSJ

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The Fall of California 

Dennis Prager insightfully summarizes the steady decline of the California economy and identifies the architects of its demise.

Download California Destroyed by Left – Dennis Prager

Download CA Tax Rates article 12.2007

Infrastructure Projects - Excellent Idea — if Executed Properly

While infrastructure projects are a cornerstone of this Stimulus Plan, careful monitoring of bidding processes, budgeting, and implementation of these large projects to ensure that the benefits are equitably spread to the communities and residents in the hardest hit regions.

The most cost effective way to allocate these contracts while ensuring that local residents are properly represented on the projects is to require that a minimum percentage (say 20%) of contracts/ sub-contracts are set aside for small businesses headquartered in the infrastructure city or county.  In addition, both union and non-union contractors should be required to employ at least 25% of local residents.  In addition to improving the stimulative effect, this strategy will reduce pollution and should also streamline the local approval process, since job creation and retention are the clear focus of municipalities.

Download Reduce Emissions article 12.2007

Download Long Beach Press-Telegram 2009 Infrastructure Op-Ed

Obama's Stimulus Package -Will the Democratic Bill Morph into a Bi-Partisan Bill?

Updates on the proposed Obama Stimulus Plan, and the list of financial institutions that have received federal infusions thus far are reflected below. 

http://royce.house.gov/News/DocumentSingle.aspx?DocumentID=109713  Congressman Royce Comments

http://online.wsj.com/public/resources/documents/st_BANKMONEY_20081027.html  TARP Recipients

http://www.webcpa.com/article.cfm?ARTICLEID=30588   House Passes Package

http://www.webcpa.com/article.cfm?ARTICLEID=30584   Senate Tax Breaks

2009 – Continuing Economic Chaos?

Looking forward into 2009, the stock market and money markets have some real challenges.  Read what local economists Clyde Kendzierski and Bill Gross and JP Morgan have to say about 2009.

Download Clyde Kendzierski 2009 Economic Forecast

Download Bill Gross – Big Brother Investing (2) 

Download Nouriel Roubini (NYU Professor) 2009 Economic Forecast

Download JP Morgan on Money Fund Risks

Hopefully the Senate will refine the Stimulus Package to make it smaller and more effective.  A slower, more thorough evaluation process in the Senate should result in a better package for the U.S. economy, U.S. taxpayers, as well as the worldwide financial markets.

The federal government has declared Los Angeles, Orange, Riverside and Santa Barbara counties federally-declared disaster areas qualifying for individual assistance. Anyone who resides in any of these counties or whose business is in any of these counties may claim the tax benefits under this declaration. Furthermore, if the taxpayer's records are located in one of the designated counties, or, in theory, their CPA is located there, these deferral rules may apply.

The IRS has announced a delay until February 11, 2009, for tax return filing, tax payments, and certain other time-sensitive acts otherwise due between Nov. 13, 2008, and Feb. 11, 2009.  Therefore 4th quarter personal and business income and payroll tax payments normally due in December and January can be deferred until February 11th.

Due to the tough economic times and tight credit markets, the ability to defer these tax payments can offer significant cash flow advantages.

Note: Most individual taxpayers and "cash basis" businesses will still want to pre-pay their California taxes by December 31st in order to secure a 2008 federal deduction.

Download California_Wildfire_Victims_May_Qualify_for_IRS_Disaster_Relief[1]

Download Rev._Proc._2007-56[1]