Broker Check


It's the Early Money that Counts

          Meet Jill and John, twenty-one-year-old twins who just graduated from college.  Jill, immediately upon entering the workforce, began contributing $50 a month to a stock mutual fund and continued to do so for the next eight years, until she got married and found more pressing uses for her money.  John, who married his college sweetheart immediately upon graduating and soon after started a family, did not start investing until he was twenty-nine.  Then he contributed $50 a month to the same stock fund, and he continued doing so for thirty-seven years until he retired at age sixty-five.  All told, John invested $22,200, while Jill contributed just $4,800.

          In this instance, Jill ends up with the most money upon retirement- $256,650, vs. $217,830 for John.  The reason, of course, is that John could never make up for the extra eight years that Jill's money was growing while he tended to other matters. Lisch Family of Businesses Newsletter Archives 12/15/05.

The IRS Scandal Will Get Worse

          No.  It was not confined to a few rogue workers in Cincinnati!

          When the scandal broke two months ago, IRS leadership in Washington claimed the harassment of conservative groups requesting tax exempt status was confined to the Cincinnati Office where a few rogue workers bungled the application process.  Lois Lerner, then the head of the exempt organization Unit in Washington said “the people in Cincinnati” did work that was “not so fine.”  Ousted acting commissioner Steven Miller also blamed it on the “people in Cincinnati.” They provided “horrible customer service.”  But House Oversight Committee Investigators talked to workers in Cincinnati who said everything they did came from Washington  and  was  directed  by  a  lawyer in  the IRS  Washington Office named Carter Hull.  

          In Mr. Hull’s sworn testimony that the tax exempt applications of conservative groups were sent upstairs within the Washington office at the direction of Lois Lerner, to the IRS Chief Counsel. The IRS Chief Counsel, William Wilkins, is one of only two Obama political appointments in the IRS!  This routing process is significant because sending applications through that office ensured that a Democratic appointee and his staff could act as a filter for conservative group applications and stall the applications due to the upcoming Presidential election.  And who is Mr. Wilkins?  When he was a partner at the DC law firm of Wilmer Hale he led the defense of Rev. Jeremiah Wright’s Church when the IRS investigated then Senator Barack Obama’s involvement with the church for any violation of its tax exempt status under IRC 501(c)(3).

          Were all tax-exempt applications of political groups sent to Washington?  According to the testimony of Ms. Hofacre of the Cincinnati office when she was given tea-party applications, she had to kick them upstairs.  When she was given non tea-party applications, they were sent on for normal treatment.  Was she told to send liberal or progressive groups for special scrutiny?  No, she did not scrutinize the applications of liberal or progressive groups.  “I would send those to general inventory.”  She became “very frustrated” by the “micromanagement” by Washington and she applied to be transferred.

          Not since the Nixon administration’s use of the IRS for political purposes has the IRS received such a black eye.

          And other than the firing of an acting IRS Commissioner who was due to retire in a few weeks, no IRS employee has been fired or suffered any consequences for violating the public trust!

          Some may choose to see this as a partisan scandal, that the Democrats did something wrong.  No, it should be seen as government employees who are not accountable for their actions preyed upon us, the citizenry.  Now it was the Democrats, then it was the Republicans; both times, they were government employees unaccountable for their actions.

          Stay tuned for future developments.  Wall Street Journal 7/18, 7/20-21, 2013 p. A15.

Part-Time America

          The U.S. jobs market report may be gaining a little steam but looking behind the numbers it shows a changing America due to the impact of ObamaCare.  Total part-time employment rose by 432,000 in July, more than double the total number of net new jobs.  Retail and hospitality accounted for more than half of the new jobs in June.

          One explanation is that ObamaCare requires employers with more than 50 workers to provide health insurance to all employees or pay a $2,000 penalty per worker.  The law defines a full time job as 30 hours a week.  This gives businesses that operate on thin margins, and that is most businesses, an incentive to hire more part-time workers.

          And who agrees with this, the AFL-CIO, the Teamsters and the Food Service Workers Unions who just petitioned the White House to change ObamaCare because as they allege the U.S. was built on a 40 hour work week with benefits which is speedily changing to a 20 hour work week without benefits and American workers now need two jobs to replace the one they had.

          I am reminded of the consequences of workers having multiple part-time jobs, which result in less income available for workers to spend each time I see a new vacant store sign.  Surely, that store went out of business due to the lack of customers who had money to spend.  Wall Street Journal 7/6-7/2013 p. A12 and Wall Street Journal 7/15/2013 p. B1.
           As always, if you have any questions about these or any other matters, do not hesitate to call us.

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