Today is Tax Day, our national day of shame, due to the calendar, which postponed the inevitable from April 15 to April 18 this year. Small comfort, the three-day reprieve. Perhaps for CPAs it provides a little pressure relief, but I suspect not, as I would bet that clients simply postpone “getting their stuff together” an extra 3 days.
For those who procrastinate, I can recommend using computer programs, including Quicken and Microsoft Money, or various free personal finance programs that are well described at a website called thebalance.com. Getting into the habit of tracking your spending pays huge dividends, both for tax preparation and budgeting (the word we all hate, but need nonetheless).
We hear a lot these days about the “Cost of Freedom,” and it was on display over the past few days, when we launched a barrage of high-priced explosive hardware on people who would rather kill us. The single MOAB cost is reportedly $170,000, and the 59 Tomahawk missiles each cost about $1 Million, according to MarketWatch. This is part of the “Cost of Freedom.”
Staying free is very expensive, but well worth the actual cost. Also expensive is “Free Stuff,” and I wish someone would call New York to relay that simple information to Governor Andrew Cuomo. (He probably wouldn’t listen anyway, but I’d feel better.)
The tax-happy Peoples’ Republic of New York has announced the MOAB of giveaways. Starting this Fall, college will be “free” for many New Yorkers. Nirvana. In the beginning, it applies to families earning less than $100,000 annually. Whether that limit is Gross Income, Adjusted Gross Income, Modified Adjusted Gross Income, Taxable Income, or After-Tax Income, I can’t say. It rises to $125,00 by 2019.
What’s the problem? Take a look at the “Cost of Free College” (thanks to the Daily Signal for their analysis). The first year estimated cost to taxpayers is $163 Million. In subsequent years, the earnings limit is expanded, raising the cost to taxpayers.
Here are a few reasons to believe that this program is a boondoggle-waiting-for-school-to-start:
- Taxpayers, many without college degrees, will have to pay higher taxes to support “Free College”
- “Free College” will put more pressure on private educational institutions, which are not included in the program
- The cost of going to college remains high, even after “Free College” pays the tuition, as room and board, plus miscellaneous expenses, continue to increase
- Student loans will still be needed (and likely expanded). The default rate is already high, and no remedies exist – they must be repaid
- More young people will be going to college, crowding out non-college degree jobs, including plumbing, electrical and carpentry, many of which already have shortages
- Graduates will have to pay even higher taxes when the begin working
College is not a universal panacea, nor is it free. Steering too many people into “Free College” increases their probability of failure, delays their earning ability, and leads to shortages of skilled labor. It tends to “dumb down” the entire educational system by encouraging bad decision-making. These are a few of the unintended consequences of the “Free Stuff” mentality that pervades today’s political left.
Van Wie Financial is fee-only. For a reason.