July 7, 1997 Greek Liturgy Before they self-destructed, the Greeks invented a remarkable method of taxation: the "liturgy", a voluntary alternative to progressive taxation. Rich citizens donated to the city and received great honor in return. As a result, Greeks often gave three or four times what was expected: but a miser was held up to scorn. The liturgy had no need for force, but created a new meaning for private property. As a voluntary trust for the city, it involved duties more than rights. This principle made bureaucracy unnecessary. Service in the government was an honor and carried no salary. In return the Athenian courts protected private property, while taxes were tolerated only when based on "reasonableness and loving care". Today, at enormous cost, we use the opposite approach: heavy taxation and bureaucracy and incredibly complex rules. As a result, for us, paying a penny more than absolutely required, or serving `for nothing", is almost unthinkable. The liturgy was a balance between too much and too little government in the accumulation of private property. The Greeks eventually failed, but the Romans learned from them A Union For the Self-Employed Now we`ve seen everything, a union for self-employed individuals! It is called Working Today, and membership is $10. Their address is Box 681, Times Square P.O., New York, NY 10108. The group`s aim is to support people in the new mobile workforce. Members have access to a group rate health insurance plan, a prepaid legal plan, continuing education, flat-rate Internet access and group rates for computer software, travel and office supplies. It advocates for the self-employed on tax and employment policies. Sara Horowitz, the President, says the goal is to see if a labor organization for a workforce united by their independence and insecurity, rather than a common trade, can gain adherents. Shades of the International Workers of the World, a wobbly idea! IRS Extends Deadline for Electronic Payments Bowing to Congressional pressure, the IRS postponed until the end of the year, the deadline for companies to sign up to pay their taxes electronically. The previous deadline was July 1. The deadline applies to businesses with more than $50,000 in federal payroll taxes in 1995. While the 10% penalty will be waived through December 31 if businesses don`t make the electronic hookup, they must make timely deposits using the existing paper tax coupon. Discount Brokerages Not Cheap In a recent court decision against Olde Discount Corporation, a discount stock broker, a judge ruled that "commissionless trading" was a fraud and that a reasonable person would understand that Olde was in business to make money, despite the promise of commissionless transactions. In other words, if you`re dumb enough to believe that commissionless means there`s no commission, you apparently deserve what you get. In a program that Olde called "Special Ventures", brokers were encouraged to sell particular stocks in Olde`s inventory because they would receive not only the commission, or "markup" that the customer knew about, but also an extra "credit". A document in the case described how the broker who sold 1,000 shares of Artisoft, Inc. to a customer would get a $105 commission plus a $250 "credit" from Olde`s trading department. But, to get the credit, which comes from the spread between the bid and asked prices, orders must be entered at the market or offering price. If the client put in a limit order, ("they`re squeezing that extra one-eighth or one-quarter out of your pocket") the broker did not get the extra credit. Health Insurance Portability In August, 1996 the President signed the Health Insurance Portability and Accountability Act of 1996. The law effects group health plans` portability, access and renewability requirements. The law allows individuals who leave their jobs to keep their health coverage or obtain new coverage regardless of any pre-existing medical conditions. Group healthplans or their insurees will not be able to deny coverage or apply pre-existing condition restrictions to those who had prior health coverage for at least 12 months. This provision is effective for plan years beginning on or after July 1, 1997. Please see your insurance agent for further details. Watch What You Say to the IRS A federal judge awarded $325,000 to a woman whose family business was raided by armed IRS agents four weeks after the woman insulted an IRS agent. The taxpayer said to the agent, "Honey, from what I can see of your accounting skills, the country would be better served if you were dishing up chicken fried steak on some Interstate in West Texas, with all that jewelry and big hair." The raid, known as a jeopardy assessment, was made four weeks later when the agent asserted the Government was in danger of not collecting $324,000 in income taxes. Three months after the raid, the Government settled for $3,485, which covered six years of assessments, for an average of $581 per year. The judge also criticized the IRS District Director who went on a radio show and discussed the case, a clear breach of confidentiality. During the nine day trial, the IRS denied any wrongdoing. Anybody want to pound that stake into the IRS`s heart? We suggest that had a professional representative been retained, this unpleasantness could have been avoided. If you have any questions about this or any other financial matters, please call me. We remind you that Howard Lisch can also handle your financial planning, investment and life insurance needs.