Taxation And Finance » Taxation

The Financial Idea Behind Socially Conscious Investing

american for fair taxation — Sat, 10 Jul 2010 09:38:03 +0000

If you are one of the growing number of people who not only want their investments to do well, but to do good as well, you might be interested in socially conscious investing. This is the practice of seeking out companies that meet standards of social performance in addition to normal financial criteria. Most social criteria are positive; that is, they are attributes that people look for in a company.

However, some criteria are negative; that is, they are aspects of a company that would keep people from investing in it. The most common positive social criteria are clean environmental records; widespread advancement of women and minority employees; action on child care and AIDS for workers; safe, nonpolluting products; active investment in community and social projects; promoting alternative energy sources such as solar and geothermal power; commitment to worker safety; and fair bargaining with unions.

The most common negative social criteria are dealing with the military or arms business; operating nuclear power facilities; testing products on animals in a way that is considered cruel; selling tobacco or liquor; fostering gambling; and creating water or air pollution.

The financial idea behind socially conscious investing is that if a company does not pollute and treats its workers well, in addition to promoting other progressive policies, it will probably be able to stay out of trouble with government agencies and the public. That will be good for business and, in the long run, the firm’s stock price. Conversely, a company that is constantly fined by the government for polluting, suffers strikes by oppressed workers, and experiences nuclear meltdowns is probably not going to offer profitable stock.

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Although an Investor Pays the Typical Brokerage Fee

american for fair taxation — Sat, 10 Jul 2010 09:28:42 +0000

The American Stock Exchange, which is now merged with Nasdaq, offers a fairly extensive array of index shares, which combine all the opportunities of indexes with the advantages of stock trading. The best-known among these index shares are “Spiders,” technically called Standard & Poor’s Depositary Receipts, or SPDRs, and “Diamonds,” or the Dow Jones index shares. The index shares can be bought and sold through regular, discount, or online brokers just like other securities.

Like an index fund, the shares mimic the markets they represent. The Spider, for example, is a unit investment trust that holds shares of all the companies in the S&P 500 and closely tracks the price performance and dividend yield of the index. Slight misalignments occur when the trust must be rebalanced and must adjust for an inflow of dividends. Diamonds are set up the same way, only they use the 30 stocks of the Dow Jones Industrial Average. The ticker symbol for Spiders is SPY, and the symbol for Diamonds is DIA.

Although an investor pays the typical brokerage fee when buying or selling, neither of these instruments involves a sales load. Unless a stock is added to or deleted from an index, generally there is little trading within a fund, so capital gains taxes are kept at a minimum. However, owners of Spiders and Diamonds will be subject to taxes on the investor’s share of dividends as they are granted. In most cases, expenses for Spiders and other index products are lower than those on a mutual fund or even an index fund. Annual expenses for Spiders are 0.18 percent, or put another way, for an investment of $10,000 the annual expense would be $18.

There are no 12b-1 fees or hidden costs sometimes found in mutual funds. As for performance, index products historically have outperformed actively managed mutual funds over the long term.

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Download Metatrader 4 To Support Your Online Trading

american for fair taxation — Fri, 18 Jun 2010 10:30:07 +0000

Trading online is one great way to earn money from the internet. More people are now interested in running this business and improve their financial situation. If you also have an interest in starting this business, it’s not a difficult task to do. You just need to learn from the expert or from the articles on the internet. There are many online trading guides for beginners and you can make use the information to educate yourself about online trading.

When you have mastered the basics of online trading, now all you need to do is choosing a reputable trading platform to support your business. Among the trading platforms that are available today, metatrader 4 comes as the most outstanding trading product that you can rely on. This new trading platform is designed to help you run your brokerage service business in an easier way. Compare to the other trading products, this trading platform comes with more features and benefits. Once you have installed Metatrader on your PC, you can directly start your brokerage business since it doesn’t need any additional software. The technology in Metatrader is the newest one; it allows you to serve 10,000 traders simultaneously and the entire trading process is guaranteed to be secure. If you think that this trading platform is suitable for your need, just download metatrader at Download-metatrader com au. This portal allows you to download Metatrader through an easy click so that you can directly start your business. Metatrader download service from this site is easy, convenient and secure. The navigations are designed to be simple to make your download process more convenient.

By using Metatrader 4, now you can expect more profitable brokerage service business. This trading platform allows you to work in a convenient way and finally reach better profits. Don’t wait until tomorrow to download this world-class trading product. Just visit the site, click the ‘download button’, and the trading platform will be yours.

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The Fair Market Value of Services Rendered by Traders

american for fair taxation — Sun, 23 May 2010 19:11:58 +0000

Assets alone generate free cash flows. Factors other than assets, such as “trader expertise” and “activity levels,” should not be used to allocate free cash flows, because they do not generate free cash flows in the first instance. Rather, traders, marketers and key support personnel are paid the fair market value of their services, and, for accounting purposes, compensation is included in cost of goods sold and/or below-the-line expenses. Stated differently, operating profits and free cash flows do not embody the fair market value of services rendered by traders, marketers and key support personnel. In allocating after-tax free cash flows (the return to providers of debt and equity capital), one should look only to the fair market values of income-generating assets leased or purchased with such capital.

The formulary apportionment method outlined in Notice incorporates a single “risk factor,” variously measured as the maturity-weighted volume of swap transactions, open commodity positions at year-end, etc. Leaving aside the reasonableness of including this type of factor in the allocation formula, risk, in a trading context, cannot be reduced to single measure. Nor is the nature of risk constant over time.

The current commodities trading environment, characterized by extremely volatile prices, has greatly exacerbated trading firms’ price and credit risk, and effectively precluded open positions of any duration. Non-performance risk is probably the single most important risk at present, and it is not reflected at all in the measures of risk briefly described in Notice . There is also much greater risk that delayed payment (and the attendent interest costs) will eliminate the narrow margins that firms currently earn in traditional merchant trading activities. Additionally, commodities trading firms’ investments in upstream hard assets (e.g., stakes in bauxite, alumina and copper mining companies) have given rise to other risks not contemplated in Notice.

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Don’t Waste Your Time for Cleaning

american for fair taxation — Tue, 04 May 2010 06:31:20 +0000

Are your kids often spilling out their ice cream or foods inside your car? Alternatively, do you like to bring your dogs along in your SUV? Well, you might really know how frustrating to clean those mess. You need extra time and extra power to keep your SUV looks and smell good.

Protecting your SUV from that kind of mess is always your top priority. You can accept your SUV interior suffers from dog scratch or stain mark from your kid’s food. If you want to protect your SUV floor, truck liners will be a great choice. Truck liner provides defense surface to protect car mat from spills and stain. It is easy to install and with its durable materials, it is a designed to be easy to clean.

One of the leading names in truck liners is Weather Tech. Their truck liners will make from high quality acrylic material giving top protection and durability. Weather Tech Tuck liners will design with elite fit and finish for specific car models. It will be easy to install and perfectly fit to your car floor. With Weather Tech truck liners, you can be sure that your car floor is highly protected and no frustrating cleansing no more.

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Taxes for the citizens of America

american for fair taxation — Mon, 26 Apr 2010 23:34:42 +0000

The American people will get new news about tax. America is now in the recovery of the global crisis. In addition, the latest news from the world of taxation, Barack Obama claimed the president was considering the possibility of additional tax.

“I want to get a better understanding,” he said in an interview. For now, White House representative said Obama had not considered about the increase in VAT or value-added tax (VAT) is.

However, White House representative, Robert Gibbs dismissed the news. In addition, the president obama has not been considering a tax increase for the citizens of America. European countries impose VAT, which taxes the value added at each stage of production of specific commodities. It can be apply, for example, for the raw product will sent to the factory, factory production jobs and so on to the retailers.

Obama says he is waiting for recommendations from the advisory commission to address the fiscal deficit and other problems. In an interview with CNBC Can VAT alleviating the crisis in America today. , Obama said, “I know a lot of talk lately about the value-added tax (VAT). That’s something that has been running in several countries, and would probably be something new for the United States.”

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Debt and Equity Capital Used to Finance Trades

american for fair taxation — Sat, 24 Apr 2010 17:33:11 +0000

Many tax practitioners, both in and outside the government, believe that the global trading of commodities and financial instruments presents unique difficulties vis-avis the application of transfer pricing regulations. A number of features set trading activities apart from many other types of economic activity:

There is often limited division of labor among legal entities constituting a controlled trading group.
Traders in different jurisdictions may work collectively on a single “book of business” or otherwise collaborate quite closely.
Debt and equity capital used to finance trades may be fungible across legal entities.
Traders are not physically tied to a particular geographic location by necessity (that is, they could make the same contributions to the generation of trading profits independent of their geographic base of operations)
By its nature, trading is a multi-jurisdictional activity.

Given the limited division of labor among controlled trading group members, transfer-pricing methods that presuppose a particular division of labor (the resale price and cost plus methods) are generally not applicable. Because individual members of a trading group can contribute to the generation of joint trading profits in a variety of ways, and, depending on booking conventions, may not purchase (or sell) commodities or financial products from (or to) one another, the comparable uncontrolled price method, likewise, is often not a viable approach. This perceived lack of fixed correspondence between contribution and location, and the dearth of genuinely comparable standalone firms, effectively precludes other traditional transfer pricing methods as well. In lieu of the “separate entity”, approach that underlies all the conventional U.S. and OECD transfer pricing methods, the IRS has more or less endorsed of global trading firms.

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In an Economy With Complex Tax Rules

american for fair taxation — Sun, 11 Apr 2010 06:29:40 +0000

The second basic model that we discussed above and that was developed in Feldstein relates the investment-GNP ratio to the difference between the maximum potential net return on a standard investment project and the net cost of funds that firms face. This model is the operational extension to an economy with taxes of Irving Fisher’s notion that investment depends on the difference between the marginal efficiency of capital (or the internal rate of return on an incremental investment) and the rate of interest.

In the standard textbook version of this theory, the firm faces a downward sloping marginal-efficiency-of-capital schedule and a horizontal rate-of-interest line. At the point where the two intersect, the firm has an optimal stock of capital. If, however, the marginal efficiency of capital exceeds the rate of interest, the firm has an incentive to invest. Adjustment costs limit the speed with which the firm closes the gap, but the volume of investment can be assumed to be an increasing function of the difference between the marginal efficiency of capital and the rate of interest.

In an economy with complex tax rules, the analog to the marginal efficiency of capital schedule depends on the tax rate, the depreciation rules and investment tax credits, and the rate of inflation, as well as on the pretax profitability of the available investment projects. Each point on the schedule represents the maximum net cost of funds that the firm can afford to pay to support that incremental project. We represent shifts in the level of this entire schedule by the maximum net cost of funds that the firm can afford to pay on a hypothetical “standard” project.

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Project In an Economy Without Taxes

american for fair taxation — Fri, 02 Apr 2010 23:27:26 +0000

The analysis relating investment to the net rate of return is the simplest possible model of investment behavior. The economy is treated like a black box in which the mechanism is obscure but which produces the plausible result that more capital flows into nonfinancial corporate capital when the rate of return on that type of asset is high. We now turn to a more explicit model of investment behavior in which corporate demand to invest reflects the difference between the profitability of new additions to the stock of plant and equipment and the cost of funds with which to finance that investment. This approach, labeled the return over cost model of investment, differs from the previous analysis in two fundamental ways. First, the investment decision is explicitly made by the corporation. Second, the decision reflects a comparison of the cost of funds and the prospective yield on new marginal investments rather than the yield on existing capital.

The return over cost model is the empirical implementation in a world of taxes and mixed debt-equity finance of the simple textbook model in which the rate of investment depends on the rate of interest and the marginal efficiency of investment. To make that operational, the location of the investment demand schedule is represented by the rate of return that the firm can afford to pay for funds used to finance a “typical” project. This return, which we label the “maximum potential net return”, is analogous to the internal rate of return of a project in an economy without taxes. Changes in tax rules, inflation, and pretax profitability all alter the maximum potential net return and therefore the incentive to invest.

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These Tax Changes on Investment

american for fair taxation — Tue, 02 Mar 2010 23:18:47 +0000

Any analysis of the effects of these tax changes on investment must recognize that other potentially important determinants of investment were also changing during the same period. The economy slipped into 2 back-to-back recessions beginning in the second quarter of 1980 from which it did not begin to emerge until the final quarter of 1982. The tight monetary policy in 1981 and the sharp increase in projected structural deficits in the federal budget caused an unprecedented rise in real interest rates that began in 1981. Investment in particular industries and assets was substantially affected by the dramatic surge in the U. s. merchandise trade deficit which sharply reduced output in particular industries even while the overall economy was expanding. A surge of technical change in computers and related office equipment boosted the demand for those products even among firms that were not doing any investment to expand capacity.

All of these changes mean that the research presented here must be regarded as preliminary. Additional years of data will help to reduce the remaining uncertainty, especially if the fall in real interest rates and in the cost of equity capital continues. Disaggregated data can also help to resolve questions about the special factors that raise or reduce investments in particular industries and types of assets.

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