August Tax Due Date Reminder

To contact us Click HERE

August 10	Employers - Social Security, Medicare, and withheld income tax. File Form 941 for the second quarter of 2012. This due date applies only if you deposited the tax for the quarter in full and on time.Employees Who Work for Tips - If you received $20 or more in tips during July, report them to your employer. You can use Form 4070.
August 15	Employers - Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in July.Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in July.

Holdsworth& Co.’s tax experts are available to answer your tax-related questions.  Feel free to contact us at 445-8633.

US Postal Service Needs Less Government Control

To contact us Click HERE
In the end it's all about government interference and unions that refuse to deal with reality.

Would the U.S. Postal Service Be Financially Stronger If It Sold Non-Postal Products?

Source: Michael Schuyler, "Foreign Postal Services Sell Many Non-Postal Products; Would the U.S. Postal Service Be Financially Stronger If It Did the Same?" Institute for Research on the Economics of Taxation, July 30, 2012.
August 10, 2012

Electronic diversion, together with the Great Recession and its after-effects, has buffeted postal services throughout the world. Nevertheless, the majority of foreign posts in high- and medium-income countries have remained profitable in recent years, according to data from the Universal Postal Union. This has led to calls for the U.S. Postal Services (USPS) to mimic its foreign counterparts, says Michael Schuyler, a senior economist with the Institute for Research on the Economics of Taxation.

One potential source of revenue that some proponents have advocated is in non-postal commercial products. In a study for USPS, the consulting firm Accenture analyzed 25 foreign post offices and found that a much greater portion of their revenues are generated from this area of operations.

•Diversified products, such as non-postal services, contributed 63 percent of the foreign posts' total revenue in 2008, up from 49 percent in 2003.
•At only two-fifths of the foreign posts did diversified products contribute less than 40 percent of revenue in 2008.
•While these numbers may overstate the prevalence of non-postal goods in these countries, Accenture emphasizes that their sales do net a profit in most cases.

However, despite these supposed benefits, a deeper look at the benefits of moving into non-postal services suggests that this would be an unwise policy choice for the USPS.

•The USPS is able to offer some of the lowest postal rates in the world because it specializes in what it does best: postal services.
•The evidence suggests that those nations' postal services with large operations in non-postal goods required significantly higher postal rates in order to cover startup costs.
•Further, the profits on such services, while in the black, were below industry averages, suggesting that they replaced more efficient private sector activities.

Given this downside, the USPS should focus instead on correcting its more fundamental problems if it hopes to become profitable again:

•Limited ability to control costs because of congressional micromanagement.
•The financial stress of funding extremely generous retiree health benefits.
•Postal rates that are low by international standards.

If the USPS can resolve these problems, thereby streamlining operations and filling its dry coffers with fresh cash, it can help to gain ground on five consecutive years of deficits.

Public Schools Must Have New Ideas to Succeed

To contact us Click HERE
The system will be fixed and it will be done by limiting the influence of the teachers unions and other outside forces that demand more of everything to help the 'children'. This strategy has failed in the past and it will fail now. New thinking is required and ideologies of the past dumped.

Public Schools and Money
Source: James Guthrie and Elizabeth A. Ettema, "Public Schools and Money," Education Next, Fall 2012 August 10, 2012

U.S. schooling may be on a historic glide path toward lower per-pupil resources and significant labor-force reductions. If not thoughtfully considered, budget-balancing decisions could damage learning opportunities for schoolchildren, say James W. Guthrie, a senior fellow and former director of education policy studies, and Elizabeth Ettema, a research associate in education policy, at the George W. Bush Institute.

Many members of the general public and the policy community believe that school districts are going bankrupt, teachers are underpaid and educator layoffs are rampant. Inaccurate media reporting, naive celebrity comments, education-advocate laments and talk-show dialogue reinforce this view.

What are the facts?

•Total K-12 public school spending approaches $700 billion annually.
•Inflation-adjusted per-pupil school spending has increased over the last century by, on average, 2.3 percent per year.
•There have been a few plateau years during recessions, but never a significant decline.

As a consequence, the United States now spends more money on K-12 schooling than any other nation in the world. Achievement levels in the United States are not commensurate with spending, however.

A new normal of public-sector fiscal austerity is emerging. If the entire public education system could be rendered more productive, that is, if higher levels of achievement could be coaxed from existing resource levels, some of the pain could be avoided or at least mitigated.

What can be done by state and district officials to wring the maximum effect out of every dollar?

•States and districts can discontinue costly practices that have not been shown to enhance student achievement, including paying educators for out-of-field master's degrees and salary premiums for experience; following "last in, first out" personnel provisions; relying on regular classroom instructional aides; and adhering to mandated limits on class size.
•Regulations that mandate inefficiency, such as legislatively precluding outsourcing, requiring intergovernmental grants to "supplement not supplant" existing spending, and prohibiting end-of-budget year surplus carryover, can also be revised to encourage smarter spending.

In place of the practices above, states and districts can adopt strategies that foster efficiency at both the school and district level, such as adopting "activity-based cost" (ABC) accounting; empowering principals as school-level CEOs; adopting performance-based dollar distribution formulas and school-level financial budgeting; centralizing health insurance at the state level; and outsourcing operational services where proven to save money.

Progressive Liberal Agenda Crushs Lower Incomes

To contact us Click HERE
Why is this no surprise? If you have been paying attention at all you knew that everyone will pay for the progressive agenda of 'redistrubution of wealth'. I believe the problem is that most people have grown up to believe that our government is there to help in times of trouble.

For a large portion of the population, it's nearly inconceivable to believe that our elected leader wants to destroy our way of life that has sustained us for 236 years.

Obama Policies Hurt Less-Skilled Workers Most
Source: W. Michael Cox and Richard Alm, "Obama Policies Hurt Less-Skilled Workers Most," Investor's Business Daily, August 9, 2012.
August 13, 2012

Americans on the lower rungs of the economic ladder have not fared well on President Obama's watch, say Michael Cox, former chief economist at the Dallas Federal Reserve and director of the Center for Global Markets and Freedom at Southern Methodist University, and Richard Alm, writer-in-residence at the center.

•In the Obama years, high school dropouts have faced unemployment rates of 14 percent or more, well above the 8 percent of previous administrations.
•Wages for these workers had been rising, but they've stagnated under Obama.
•The record is similar for high school graduates, who are doing much worse under Obama than under previous administrations.

Intended or not, Obama's policies have been tilted toward the better-off segment of society, which suggests he's a practitioner of trickle-down policies that haven't had much trickle down. But it's important to understand why Obama's policies have left low-income workers in the lurch.

•Not surprisingly, the key is job creation.
•If salary plus benefits are too costly, firms will not hire.
•Too often, taxes and government-mandated benefits saddle firms with substantial hiring costs, blocking firms' incentive to hire.

The Obama administration has imposed new burdens on the job-creating process. Perhaps the best example is the Affordable Care Act (ACA), which, among other things, forces employers with 50 or more workers to provide high-priced health insurance for their workers. It doesn't go into full effect until 2014, but companies already have to take its provisions into consideration in their planning and hiring decisions.

The ACA places a higher burden on low-wage workers. How so?

•Median weekly wages of high school dropouts are $400 to $500.
•Workers with bachelor's degrees earn $1,100 to $1,200.
•The cost of health care is pretty much the same regardless of the workers' wage levels, but $100 more a week represents a lot steeper wage increase for a $450 worker than a $1,150 one.

Over time, employers might incorporate the $100 cost into the high-income employees' pay, but for low-income workers, doing this may be constrained by the minimum wage and other factors.

Result: The cost of low-skilled workers rises relative to higher-skilled employees. Companies will adjust their business plans to use less low-skilled labor.

Illinois Rushing to Financial Disaster : Still More Taxes?

To contact us Click HERE
The question now is how did this happen - who was in charge of this over the past several decades? Is this the same mess that California is in now, and are the same people that have driven the 'Golden State' into unsustainable debt the same crushing the great state of Illinois?

Is there a bright light shining into the darkness of progressivism for all of us to see? Will we all that notice of the edge of the cliff rushing our way or will we like Lemmings cascade over the edge into the ash heap of history?

On November the 6th, we can apply the brakes and save ourselves, but will we?

Illinois to Spend More on Pensions than on EducatioAugust 13, 2012
Source: Elizabeth MacDonald, "Illinois to Spend More on Pensions than on Education," Fox Business, August 6, 2012.


The state of Illinois faces at least $83 billion in unfunded liability between its five pension systems, and is on track to spend more on its government pensions than on education by 2016, according to a new study released by Governor Pat Quinn's office, says Fox Business.

Illinois faces severe underfunding in its pension system.

•It reported a funded ratio of 43.4 percent, far below the 80 percent considered healthy.
•Based on fiscal 2010 data, Illinois had the lowest funded ratio of any state, according to a June 2012 report by the Pew Center on the States.
•Among states, Illinois stands out for setting aside a huge 12 percent of its annual budget just for its chronically underfunded pension.

Credit rating agencies have threatened to lower the state's rating unless lawmakers ease the strain on the budget.

Meanwhile, Illinois joins New York, California and Maryland in having the highest state tax rates in the country. Illinois was dinged last year for boosting its taxes 67 percent.

Ideas for Illinois pension reform include capping abuses of government workers retiring as early as 55 years old and collecting nearly full pay every year; raising the age of benefits eligibility to a normal retirement age; and reducing the cost of living increases to pension payouts by one percentage point.

Meanwhile, Illinois government workers are entitled to solid state retirement health benefits. Illinois' gaping credit-default-swap spreads suggest market fears that the state will face an inability to service its bond debt.