Mar. 22, 2010: UIYB: Tax Time

>> Rooney: NODE IT WAS
REPORTED THAT U.S. PAY CZAR
KENNETH FEINBERG WILL BE
REVIEWING THE EXECUTIVE PAY
AT GOLDMAN SACHS, MORGAN
KMAS AND OTHER COMPANIES
THAT TOOK BAILOUT MONEY.
OUR UP IN YOUR BUSINESS
CONTRIBUTOR KRIS FRIESWICK
IS HERE TO TALK ABOUT THAT
AND OTHER TAX TIPS.
WELCOME.

>> THANK YOU.

>> Rooney: SO KEN FEINBERG
IS GOING TO SEND OUT THIS
LETTER TO ALL THESE BANK
GUYS.
WHEN HE FINDS OUT THAT THIS
YEAR ONCE AGAIN THEY GOT ALL
THESE HUGE BONUSES, IS HE
GOING TO BE ABLE TO RECALL
ANY OF THAT OR TAX IT
SEVERELY OR WHAT?

>> WELL, HE'S ONLY LOOKING
AT A SMALL PERIOD OF TIME.
AND IT'S BASICALLY HE'S
ASKING BANKS TO REPORT ON
THE COMPENSATION OF THE TOP
25 EXECUTIVES IN 9 BANK THAT
OCCURRED BETWEEN WHEN THEY
RECEIVED TARP MONEY AND
FEBRUARY 19th OF LAST YEAR
WHICH IS WHEN THE
COMPENSATION LAWS WERE
ACTUALLY PASSED.
SO THEY GAVE THE MONEY AND
THEN THEY SORT OF CLOSED THE
BARN DOOR AFTER THE HORSE
WAS OUT.
THE POINT BEING THAT THEY
ARE NOW GOING TO BE LOOKING
AT WHAT THEY DID WITH THAT
TARP MONEY.
AND HOW MUCH OF IT ENDED UP
IN HUGE BONUS PAYMENTS AT
THE END OF 2008.

>> Rooney: THAT WOULD BE
WILD IF THAT HAPPENED.

>> NOW IF HE DOES FIND THAT
THIS, IN FACT, HAPPENED,
WHICH I DON'T THINK ANYBODY
WOULD BE SURPRISED IF WE
FOUND OUT THAT IT DID, WHAT
IS GOING TO HAPPEN THEN IS
HE CANNOT DO WHAT IS CALLED
A CLAWBACK.
HE CAN'T SAY WRITE ME A
GREAT BIG CHECK AND SEND THE
MONEY, YOU KNOW,
IMMEDIATELY.
WHAT HE CAN DO IS
RENEGOTIATE WITH THOSE BANKS
PAYMENTS THAT THEY ARE GOING
TO BE MAKING GOING FORWARD.

>> Rooney: IN TERMS IT OF
ASSESSMENTS AND ALL THAT.

>> EXACTLY.
AND HE ALSO HAS CONTROL OVER
ONGOING BONUS PAYMENTS ON
ANY N ANY BANK THAT STILL
HAS TARP MONEY THEY HAVEN'T
PAID BACK YET.

>> Rooney: LET'S GET AWAY
FROM HUNDREDS OF MILLIONS OF
DOLLARS WORTH OF BANK BONUS
US BECAUSE MOST OF OUR
AUDIENCE I DON'T THINK IS IN
THAT CATEGORY.
WHAT ARE SOME OF THE THINGS
THAT ARE COMING UP ON THIS
YEAR'S TAX FORMS THAT ARE
DIFFERENT IN TERMS OF
DEDUCTIONS AND THAT KIND OF
THING.

>> THE BIG ONE IS ANYBODY
WHO HAS BOUGHT A HOUSE THIS
YEAR KNOWS IS THAT THERE ARE
NOW THE FIRST-TIME HOME
BUYER TAX CREDITS, WHICH
WERE EXPANDED LAST YEAR TO
INCLUDE EXISTING HOME BUYERS
AS WELL.
IF YOU ARE A FIRST-TIME HOME
BUYER YOU GET AN $8,000 TAX
CREDIT.
IF YOU ARE AN EXISTING HOME
BUYER THAT MEETS SOME
CRITERIA, YOU CAN GET A
$6500 TAX CREDIT.
BECAUSE IT IS THE TAX CREDIT
THAT COMES RIGHT OFF THE TOP
OF WHAT YOU OWE.

>> Rooney: THAT IS GOOD
MONEY.

>> TAX CREDITS ARE AWESOME.
WE LOVE TAX CREDITS.
THEY ARE MORE POWERFUL.

>> Rooney: WHAT IF YOU DON'T
OWE ANYTHING.

>> IF YOU JUST BOUGHT A
HOUSE-- .

>> Rooney: OH, I THOUGHT YOU
MEANT ON YOUR TAX, COMES
RIGHT OFF THE COST.

>> RIGHT, SO IT WOULD BE, I
ASSUME THAT IT WOULD BE
ADDED ON TO WHATEVER YOUR
REBATE WOULD BE.
SO WHEN YOU ARE COMPUTING
HOW MUCH TAX YOU OWE THE
GOVERNMENT, YOU CAN TAKE
THAT $8,000 RIGHT OFF THE
TOP.

>> Rooney: AND NO THEY
EXTENDED THAT TOO, HAVEN'T
THEY.

>> APRIL 30th OF THIS YEAR.

>> YOU HAVE TO CLOSE BY JUNE
30ED.

>> Rooney: .

>> SO IT CONTINUES TO BE A
REALLY GOOD STIMULUS FOR THE
REAL ESTATE MARKET.
IT CONTINUES TO BE A REALLY
GOOD DEAL FOR ANYBODY THAT
WAS IN THE MARKET FOR A NEW
HOUSE ANYWAY.
AND NOW THIS IS JUST AN
EXTRA ADD INCENTIVE TO GET
IN THERE WHILE THE GETTING
IS GOOD.

>> Rooney: PEOPLE HAVE TO
GET OUT THERE, BUY, BUY,
BUY.
ANYTHING ELSE.

>> IF YOU PURCHASED A NEW
VEHICLE LAST YEAR, AGAIN AS
PART OF THE STIMULUS PACKAGE
TO INCREASE THE AMOUNT OF
NEW CARS THAT WERE BEING
PURCHASED, YOU CAN GET A TAX
CREDIT ON YOUR SALES TAX AND
YOUR EXCISE TAX.

>> Rooney: COULDN'T YOU DO
THAT ANYWAY?
EXCISE TAX IS ALWAYS
DEDUCTIBLE.

>> SALES TAX.

>> Rooney: EXCISE.

>> EXCISE AND SALES ARE TWO
DIFFERENT THINGS.
WHEN YOU PURCHASE THE CAR
YOU HAVE TO PAY THE SALES
TAX AND THEN THE STATE, THE
MUNICIPALITY THAT YOU LIVE
IN CHARGES YOU AN EXCISE
TAX.
AND CERTAIN, DEPENDING ON
WHAT, WHETHER YOU ITEMIZE
AND WHAT YOUR STATE INCOME
TAX IS AND SO FORTH THERE IS
A LOT OF DIFFERENT VARIABLES,
BUT THESE ARE TO YOU BEING
SET ASIDE AS SOMETHING THAT
YOU CAN GET A DEDUCTION ON
NO MATTER WHAT ALL THESE
OTHER INDEPENDENT VARIABLES.
NOW YOUR CAR HAS TO HAVE
BEEN LESS EXPENSIVE THAN
$49,000.
IF YOUR CAR MASS WAS MORE IT
DOESN'T CALL FOR A BREAK.
SO IF YOU BRAND A BRAND-NEW
SPANKING NEW MERCEDES IT
MIGHT NOT APPLY.

>> Rooney: LET'S TALK ABOUT
THE HEALTH-CARE BILL.
BECAUSE THERE ARE SOME TAX
SITUATIONS IN THERE FOR A
COUPLE CATEGORIES OF PEOPLE.

>> RIGHT.

>> Rooney: 200,000 AND OVER,
FAMILY OF FOUR OR A MARRIED
COUPLE WITH $250,000.
I TALK TO MICHAEL CAPUANO
ABOUT THAT.
AND I SAID THAT SOUNDS KIND
OF PUNITIVE TO ME IN A WAY
BECAUSE THESE ARE PEOPLE
THAT ARE ALREADY PAYING, YOU
KNOW, A BIG CHUNK OF-- WHY
THAT GROUP.

>> WELL, I MEAN THIS IS A
GOVERNMENT THAT STEALS FROM
THE RICH AND STEALS FROM THE
POOR BUT THEY JUST STEAL
MORE FROM THE RICH RIGHT
NOW.
BASICALLY WHAT IS HAPPENING
IS THEY ARE INCREASING THE
MEDICARE TAX SO WHEN YOU GET
A PAYCHECK IF YOU MAKE MORE
THAN $200,000 A YEAR AS AN
INDIVIDUAL OR MORE THAN
$250,000 IF ARE YOU FILING
JOINTLY WITH A SPOUSE, ARE
YOU GOING TO END UP PAYING
SIGNIFICANTLY MORE IN
MEDICARE TAX.
ARE YOU ALSO GOING HAVE A
BRAND-NEW TAX THAT NEVER
EXISTED BEFORE APPLIED TO
ANY UNEARNED INCOME WHICH
INCLUDES INVESTMENTS,
DIVIDENDS, THINGS OF THAT
NATURE.
WHICH IS ACTUALLY THE NET
EFFECT IS GOING TO BE THAT
IT WILL RAISE THE LONG-TERM
CAPITAL GAINS RATE FOR
PEOPLE IN THAT INCOME
CATEGORY TO THE HIGHEST
LEVEL IT'S BEEN SINCE 1997.

>> Rooney: WHEN WILL THAT
KICK IN.
I THOUGHT THAT DIDN'T DICK
IN UNTIL 2014.

>> THAT I BELIEVE IN 2013
ALTHOUGH I'M NOT SURE.
A LOT OF THIS STUFF IS STILL
FUNGIBLE BECAUSE THERE IS AN
ENTIRE SEPARATE BILL THAT
HAS NO, THEY GOING TO BE
CORRECTING WHAT THEY JUST
PASSED ON SUNDAY WITH A
SERIES OF I'M NOT ENTIRELY
SURE.

>> Rooney: RECONCILIATION.

>> IT'S NOT RECONCILIATION.
LITERALLY THEY WILL GO BACK
IN AND CORRECT STUFF AND
CLARIFY WHAT THEY REALLY
MEANT WHEN THEY PASSED THE
LAW.
AND THERE IS ALSO GOING TO
BE A TAX LEVIED AGAINST
ANYBODY WHO BY 2018 I
BELIEVE IF YOU DON'T HAVE
INSURANCE, AND YOU MEET ALL
THE QUALIFICATIONS OF
SOMEONE WHO IS POSED-- SUPPOSED
TO HAVE IT, THEY WILL LEVY A
TAX AGAINST YOU.

>> Rooney: OR A PENALTY.

>> A PENALTY TAX AGAINST YOU,
MUCH LIKE WE DO IN
MASSACHUSETTS RIGHT NOW.
SO A LOT OF THE STUFF IS
SORT OF MODELLED ON WHAT WE
ARE ALREADY DOING IN
MASSACHUSETTS.

>> Rooney: THERE IS ALSO A
TAX, ON EXCITE-- EXCISE TAX
ON THESE MEDICAL DEVICES
LIKE BOSTON SCIENTIFIC.

>> YES.

>> Rooney: I DON'T
UNDERSTAND THAT.
THAT IS A DISINCENTIVE TO
ME.

>> THAT IS JUST GOING TO GET
PASSED ALONG IT GOING
TO-- THAT IS ONE OF THOSE
SITUATIONS WHERE THEY HAD TO
PICK WHAT THEY WANTED TO
ACCOMPLISH WITH THIS BILL.
AND CLEARLY AS THE PREVIOUS
GUESTS HAVE MENTIONED, THE
GOAL WAS ACCESS, INCREASING
ACCESS, INCREASING THE
NUMBER OF PEOPLE THAT COULD
GET INTO THE MARKET.
IT DOES ALMOST NOTHING AND
IN FACT IT MIGHT DO THE
OPPOSITE OF CONTROLLING
COSTS.
BECAUSE WHEN YOU START
SHOPPING EXCISE TAXES ON
MEDICAL EQUIPMENT.
WHEN I START TAXES
PHARMACEUTICAL COMPANIES,
WHEN YOU START TAXING
HEALTHCARE COMPANIES THEY
ARE NOT GOING TO EAT THOSE
COST.
THEY ARE JUST GOING TO GET
PASSED RIGHT ALONG TO YOU
AND ME.
THERE IS GOING TO BE THE HHS
SECRETARY WILL HAVE CONTROL
L HAVE OVERTIGHT-- OVERSIGHT
OF HOW HIGH PREMIUMS CAN GO
UP BUT NOT OVER A LOT OF
OTHER AREAS, IT WILL BE
INTEREST SEEING HOW THIS
PLAYS OUT OVER THE NEXT FEW
YEARS.

>> Rooney: ABSOLUTELY.
KRIS FRIESWICK UP IN YOUR
BUSINESS, THANKS FOR THAT
GOOD INFORMATION.

>> THANK YOU.

>> Rooney: THAT IS IT FOR
GREATER BOSTON.
NOW STAY TUNED FOR THE DEBUT
OF A NEW SERIES HIGH SCHOOL
QUIZ SHOW AS STUDENTS FROM
20 MASSACHUSETTS SCHOOLS
PROVE IT'S COOL TO BE SMART.
WE'LL BE BACK TOMORROW NIGHT
AT 7:00.
I'M EMILY ROONEY.
GOOD NIGHT.