But first . . .
. . . from Bob Herbert’s column in yesterday’s New York Times:
‘The House plan [opposed by the Democrats] offers the well-to-do $1.4 trillion in tax cuts, while demanding billions of dollars in cuts from programs that provide food stamps, school lunches, health care for the poor and the disabled, temporary assistance to needy families – even veterans’ benefits and student loans . . . The cut in Medicaid, if achieved entirely by reducing the number of children covered, would lead to the elimination of health coverage for 13.6 million children . . .’
☞ It is a grand time to be rich and powerful in America. Click here for the whole column.
And now . . .
John Seiffer: ‘Check out dinkytown.net for mortgage and other calculations. I forgot where I got this; if it came from you, my apologies.’
☞ Yes, you got it here February 19. But I started to play around with it a little and noticed a pretty glaring flaw in at least one of its calculators. Its 1040 Tax Calculator treats capital gains no differently from ordinary income. That’s such a huge and basic mistake, it makes we want to check everything else on the site before trusting it.
I reported the error and got a prompt response that, well, it was going to stay the way it was: ‘As you know,’ writes the author, ‘capital gains are a difficult area, due to the wide variety of tax rates depending on the holding period (less than one year, one to five years, over five years if the asset was purchased after January 1, 2001, over five years if the asset was purchased before January 1, 2001). In our calculator, which is used to give you an estimate of your tax liability, we decided to use the worst case scenario assuming that capital gains are all short term capital gains. This type of gain is taxed at your nominal tax rate, regardless of the amount. The amount of information required to calculate your actual capital gains tax was beyond the scope of the 1040 tax estimator, which was targeted to estimate taxes for the more typical taxpayer, many of which have little or no capital gains and the vast majority of which have almost all of their income from employment of one kind or another. I hope this clears up your question! I will be adding additional information to the definitions section of our calculator to let people know our assumptions regarding capital gain taxes.’
☞ Well, okay, I guess . . . But why include a line for capital gains in the first place if you’re not going to treat it the way most people would expect? Why not just rename that line long-term capital gains? Then you could say, in the definition, ‘We assume that any long-term gains you enter are taxed at the 20% rate, as most are, although for low-income taxpayers the rate can be 10%, and for assets held more than five years, the rate can be 18% and 8%, respectively.’
I have not checked out the dozens of other calculators on the site. But I would read the accompanying ‘assumptions’ carefully before relying on them. And maybe even check the calculations elsewhere, such as Bill Coppedge’s Handy Real Estate Site.
And finally, for the traveler . . .
S. N.: ‘I know you often talk about Priceline and BiddingForTravel, but I wanted to let you know about a similar site . . . BetterBidding.com. In addition to Priceline, they help you with Hotwire, as well as deals from other suppliers (there is an ‘Other Deals’ section). Priceline isn’t always the best solution, Hotwire can be better if you want to guarantee that certain amenities are available (like a pool, beach access, shuttle bus, kitchenette, etc). The site is only about two months old. I think it is useful already, and will only get better with time. I would ask you to encourage your readers to post their Hotwire (and Priceline) info there so that the database will continue to grow rapidly. The more information that is available, the better it is for all of us.’
Quote of the Day
The people who sustain the worst losses are usually the ones who overreach. And it's not necessary: steady, moderate gains will get you where you want to go.~John Train
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