The Federal Income Tax – A Brief History

Unless you’ve been out of the country since the ratification of the Sixteenth Amendment to the Constitution in 1913, you recognize that the IRS (a.k.a. the Internal Revenue Service) is the agency responsible for collecting personal income taxes from citizens of United States.

The IRS has a long-lived history returning to the Civil War era when President Lincoln and Congress created the office of the commissioner of the Internal Revenue. This appointment was to manage the collection of taxes on personal income to pay war expenses. This particular form of the income tax was repealed 10 years later. But, Congress wasn’t done and tried to revive the income tax in 1894. Interestingly, the Supreme Court ruled it unconstitutional the following year.

Amendments to the Constitution require a three-quarter majority by state. In 1913 Wyoming completed this three-quarter majority, once more returning to Congress the authorization to enact an income tax on its citizens. Also in 1913, the [in]famous 1040 form was issued and Congress levied a 1 percent net personal tax on incomes more than $3,000 and an enormous surtax of 6 percent on incomes over $500,000!

Historically the income tax rate has risen and fallen around the events of the times. For example, the top tax rate during World War I climbed to 77 percent to help finance the war effort. It dropped dramatically in post-war years to as little as 24 percent in 1929 but then rose once again during the Great Depression.

It was in the 1950’s that the agency dramatically reorganized exchanging a patronage system with career professionals. The governing body also changed its name from the Bureau of Internal Revenue to the Internal Revenue Service; better know today as the IRS. The positions within the Service are hired with the exclusion of the IRS commissioner and chief counsel both of which are chosen by the president and confirmed by the Senate.

The Restructuring and Reform Act of 1998 has established for us, an updated IRS. Alterations instituted with this act affected the most encompassing reorganization and modernization of the IRS in nearly half a century. The IRS reorganized itself to closely resemble the private sector model of organizing around customers with similar needs.

Stress-Testing Tax-Payer Patience!

Congress is working on plans to rein in the questionable activities of Wall Street, and re-direct the self-serving focus of major banks. I wish them good luck with that.

The financial firms are fighting back with propaganda blitzes aimed at raising public fear.

For instance, independent economists are debating the pros and cons of moves announced in the U.S. and the U.K. to remove some of the stimulus efforts that rescued the financial firms this time, for instance the U.S. Fed’s decision to stop its program of buying mortgage-backed securities, and the U.K.’s decision not to extend its program of allowing banks to exchange mortgage-backed securities for government bonds.

But the Institute of International Finance (IFF) has no doubt about what the outcome would be. It says it would have “a significant impact on the economy”, that mortgage rates will rise, and home sales and home prices will decline. The group also opposes the ‘Volcker Rule’ being considered by Congress, which would prevent banks that take in customer’s deposits from trading for their own profits in markets.

What is the IFF? It’s a global association of commercial and investment banks, insurance companies, and money management firms, which established itself in 1983, after the international debt crisis of the early 1980’s.

Financial firms have already been successful in convincing the SEC not to re-impose the ‘uptick rule’ that impedes relentless short-selling in market declines. Wall Street successfully lobbied to have the rule rescinded in 2007, just in time for the 2007-2009 bear market. The long-standing rule had been imposed in the aftermath of investigations into the causes of the 1929 market crash.

The SEC voted two weeks ago against re-instating the uptick rule, and instead provided a rule that any time a stock has declined 10%, short-selling will be banned for the rest of the day and the following day. It is so ridiculous that even those at Wall Street firms laughed about it and called it ludicrous. So now a stock can still be driven down 10% in a matter of minutes, but it cannot be driven down another 10% until two days later.

Adding to the insult to investors is the memory of how the financial firms howled bloody murder 18 months ago when their own stocks were subjected to heavy short-selling in the aftermath of the collapse of Lehman Brothers. Regulators rushed to their rescue by banning all short-selling in some 799 financial firms for the duration. The result was instant in creating a ‘short squeeze’ on short-sellers, forcing them to move to the buy side to close out their positions, which in turn sent the shares of banks and other financial firms rocketing to the upside. (The short sale bans were quietly removed a few months later after they had done their job).

Yet the financial firms insist that short-selling is good, contributing to price efficiency and adding market liquidity, and need not be regulated. Well, apparently as long as it doesn’t include short-selling of their stocks.

Meanwhile, how are the banks doing in response to government pressure that they help the economy recover by making loans and modifying troubled mortgages, using some of the $billions they received in stimulus money, and the huge profits they’re making from low interest rates and their high-risk trading in derivatives (probably the next bubble to burst)?

Well, the FDIC reported a few weeks ago that bank lending plunged last year to its lowest level since 1942, with the failure to lend showing up in all forms of loans, including home mortgages, commercial loans, and construction loans. The Federal Reserve reports that lending remains tight.

And how are the major banks doing with their promises to aggressively modify mortgages for qualifying home-owners, those who are behind on payments but able to handle payments if loans are modified to more reasonable rates or extended to longer terms?

The latest report from the Home Affordable Modification Program shows incredible foot-dragging and excuses. Of 3.4 million qualified mortgages only 3% have been modified. The lender with the best record is GMAC, which has modified 17% of the 65,751 qualifying mortgages on its books. One of the worst records has been by Bank of America, by far the largest lender, with 1.1 million delinquent mortgages, of which it has only modified one percent.

As they did after a similar report six months ago, the banks have promised to do better.

In the other direction, however, many major financial firms are doing just fine.

The latest SEC filing by Goldman Sachs reveals that in 2009 the firm made more than $100 million in trading profits in just one-day on 131 days, an average of every other trading day. It lost money on only 19 days, and on the losing days none of the losses exceeded $100 million. That broke the record it had set the previous year, 2008 (when the financial system was supposedly close to total collapse), when Goldman made more than $100 million in one day on a then record 90 days. With the stock market in a sickening bear market decline in 2008, could one assume there was considerable short-selling involved, easier with the uptick rule abolished?

As for redirecting the focus of financial firms, so far it’s been a case of thanks to taxpayers for bailing us out again, but don’t look for us to return the favor. Dig yourself out of the mess. And to the 16 million unemployed, we’re not hiring you. In fact we’re sending you some company, downsizing our loan operations and closing branches – unless you’re a hot shot trader who can make us $5 million a day trading derivatives in our expanding trading departments – we might offer you a $5 million signing bonus.

Bank and Government Foreclosure Listings

With the economic meltdown all over the world, many people have had to face losses, however, there are some who are have had an advantage of this situation. This phase has been a golden opportunity for a few to buy their dream homes for a fraction of the current market price and a mind blowing value. This article will help the reader with the numerous websites on the World Wide Web.

What Are Bank and Government Foreclosures?

Mortgage loans are easy home loans and most people opt for a mortgage loan when they plan to purchase their dream home. Foreclosures are made when the mortgage holders are unable to make their monthly payments. In such a scenario the financing bank takes possession of the home and sells it off quickly to recover the losses. This means the price is drastically lowered for that foreclosed property. With recession gripping the world many properties and estates have been foreclosed. This has given a bright opportunity to first time buyers and investors to take possession of an estate at the fraction of the ongoing market price. Since every level of society has faced the heat of recession therefore the foreclosed properties are not limited to single family homes and townhouses but also extended to the condos and executive homes.

Search 100% Free Real Estate Foreclosure Listings

The Internet has simplified a lot of things for us and finding foreclosure listings at the click of the button is one among it. There are innumerable websites which have been developed to meet the rising demands of foreclosed properties. These websites offer a certain fee to give access to their databases; however, there are few others which offer free trial services. During this free trial period one can access all the information just like any other paid member. It is recommended that people try a few websites before making any payments. These websites prove detail information about the foreclosed properties, pictures, virtual tours and neighborhood details and information. Once one has short listed their choices they can get in touch with the agent and go for a walk through. Care should be taken to see that the websites are updated on a day to day basis else one may end up wasting time on properties already sold.

Fix Bad Credit – 5 Safe & Easy Steps

There’s a number of ways to fix bad credit and true credit repair involves more than just sending dispute letters. So be beware. Many repair agencies offer little beyond disputing negative information. The problem with these compnaies is that they’ll often dispute just about anything–even if it is 100% valid.

Why it’s Dangerous to Dispute Valid Information

The reason disputing valid information is so dangerous is because it’s illegal. Of course, you do have the right to dispute anything on your report that you feel is inaccurate or incomplete, but disputing something you know is valid can make your problems worse-and it can even result in a lawsuit. So why take chances? There is a better, safer approach to credit repair.

Fix Your Credit in 5 Easy Steps

Step One: Make a Budget

Budgeting your money may be one of the most important parts of te repair process. Although it is possible to resolve some of your credit problems without a budget, you’re most likely going to have to start saving money and planning for future expenses. For example, paying off your debts and collection accounts will often require lump sums of money. So before you begin addressing all of those credit report issues, be sure you’re spending money appropriately and preparing for the future.

Step Two: Analyze Your Credit Report

If you’re going to start the repair process, you’ll need to know exactly what’s listed on your credit report. Every year, you’re entitled to a free copy of your credit report from each one of the three major credit bureaus (TransUnion, Equifax and Experian). A careful examination of your credit report will also reveal potential errors or suspicious information that you may want to have investigated.

Step Three: Make Corrections to Your Credit Report

There are many reasons to have your credit report verified. If you see anything on your report that you feel is inaccurate, it’s probably a good idea to send a verification (or dispute)letter to have it corrected or removed. Even a mistake that seems minor can have a great impact on your credit score. Checking your report for errors is an essential part of credit repair.

Step Four: Negotiate Debt Settlements

If you have been budgeting your income up to this point, reducing your debt and finally paying it off should be relatively simple. Collection agencies are often willing to agree to a debt settlement. Debt settlements are the best way to have your debts reduced to an amount you can actually afford to pay. Be aware that credit repair certainly requires more than making corrections to your credit report. After all, one of the most damaging things to have on your credit is unpaid debt. And when dispute letters fail to satisfy your unpaid debt, you’re going to have to take a different approach to resolve these kinds of issues.

Step Five: Establish New Lines of Credit

It’s possible to get approved for new, positive lines of credit–regardless of your credit history. Once your finances are under control, your credit report has been verified, and your debt has been paid down, you’ll be in a good position to establish new credit. Establishing new lines is credit is one of the very best ways to increase your credit score.

While credit repair may be challenging, it’s very possible–and its rewards are plenty. It is not always the fastest process-it will, of course, take some time to correspond with credit bureaus and collection agencies and you’ll probably have to save some money in order to pay off your debt-but it’s usually a sure and safe process. Following these five steps, you’ll see just how easy it can be to fix bad credit.

Choosing the Ideal Investment Property

Recession – The major reason for a fall in property rates in India

Developing countries like India have proved very beneficial for the constructors and builders. As it is developing day by day, many international companies are taking interest in investing and establishing their projects in India.

Property market was highly influenced in the last decade. Thousands of people invested money in property business. But the recent inflation and recession had brought a drastic change in the property business. House prices have fallen down to great extent. Numerous companies are going under liquidation including the property companies. So in order to avoid the liquidation, the real estate companies had to decrease the prices of the properties forcibly.

We find various advertisements that say properties at affordable prices in India. Moreover finance people and banks are also giving housing loans at lower interest rates. The market is now is with new rates as the older rates are vanished.

Internationally known builders like Omaxe, Parsvnath, TDI and DLF have built up their projects in Delhi NCR areas. Reviews can be seen on the internet that majority of people are buying those properties. Many international and foreign companies have pen up their branches in India due to quick and spontaneous increase in Indian commercial properties. So Indian real estate market is having the international advantage.

If you have dreamt of your own house property, but does not have enough monetary support, then rush to your nearest bank which will give you complete information about various housing rates.