Archive for July, 2009
Fairer Tax System: Reduce Complexity and Increase Compliance
In this presidential election year the arguments for a tax system that is fair have reemerged. The term fair is subjective and although there is no agreement on which tax structure would be the fairest, most would agree that it should be transparent, efficient, and simple. One dimension of fairness that addresses these criteria is the complexity of tax laws. Two hundred years ago James Madison, the fourth president of the U. S. reiterated this complexity conundrum:
“… if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood…or undergo such incessant changes that no man who knows what the law is today can guess what it will be tomorrow.”
Studies have shown that reducing complexity–for filing, paying, and reporting–will increase compliance rates resulting in increased government revenues. We want to maximize compliance rates without increasing the burden to comply and decrease tax evasion without adding to the administration costs. In trying to improve tax fairness by satisfying economic, distributional or other policy goals, the political process adds complexity by adding exemptions and reduced tax rates. The assumption is that to offset this loss in revenue statutory rates are increased and taxpayers that do comply bear the burden of paying a greater percentage of taxes and this affects fairness.
Finance, Credit, Investments-modern Interpretation
Finance, Credit, Investments – Economical Categories. Modern Interpretation
Scientific works in the theories of finances and credit, according to the specification of the research object, are characterized to be many-sided and many-leveled.
The definition of totality of the economical relations formed in the process of formation, distribution and usage of finances, as money sources is widely spread. For example, in “the general theory of finances” there are two definitions of finances:
1) “…Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage”. This definition is given relatively to the conditions of Capitalism, when cash-commodity relations gain universal character;
2) “Finances represent the formation of centralized ad decentralized money sources, economical relations relatively with the distribution and usage, which serve for fulfillment of the state functions and obligations and also provision of the conditions of the widened further production”. This definition is brought without showing the environment of its action. We share partly such explanation of finances and think expedient to make some specification.
First, finances overcome the bounds of distribution and redistribution service of the national income, though it is a basic foundation of finances. Also, formation and usage of the depreciation fund which is the part of financial domain, belongs not to the distribution and redistribution of the national income (of newly formed value during a year), but to the distribution of already developed value.
Proper Delivery Outside of California Begins the “Use Tax” Exemption Process
Often it is believed that simply purchasing an aircraft outside of California eliminates the sales and use tax liability. There is a half truth here; properly purchasing an aircraft outside of California does eliminate the sales tax obligation, however, it does not eliminate the use tax.
Many people do not know how, or where to begin when going through the California sales and use tax exemption process. The simple answer is that you must take delivery of the aircraft outside of California. However, there is more detail behind the simple answer. For example, the contract of sale (purchase agreement) must specifically reference the location where the aircraft will be delivered to the purchaser outside the state.
As standard practice, we advise that the delivery occur in Oregon. Oregon is the closest, non-sales tax state in proximity to California that will not have a jurisdictional claim for sales or use taxes simply because the sale occurs there. Therefore, Oregon is often times the most convenient location. However, it may not be convenient in every situation. There are a total of five non-sales tax states: Oregon, Alaska, Montana, New Hampshire, and Delaware. Many other states have guidelines for non-resident purchasers taking delivery within their state without fearing tax repercussions. Be sure you know the rules.
To properly evidence the delivery outside of California, you must maintain a clear separation between the seller and the buyer. To accomplish this, the seller will be solely responsible for transporting the aircraft to the out of state delivery location, and the buyer will be solely responsible for getting to the delivery location independent of the aircraft they are purchasing. It is recommended that the buyer travel via commercial airlines to generate and obtain confirmation of the travel to the out of state delivery location. In addition, the buyer must not exercise any right or control over the property until after it is delivered (test flights are ok, but insuring the property prior to delivery could pose a problem).
Once the seller and buyer have converged upon the delivery location, it is now time to execute the paperwork. They will execute the FAA Bill of Sale, FAA Registration, any delivery receipts prepared by the seller and a proper delivery document for California sales and use tax purposes. This is referred to by many in the industry as a “6247 statement.” Beware, some tax representatives will charge you for this form. This form when properly and completely executed and notarized will evidence the out of state delivery. The insurance on the property can become effective as of this day.
Upon completion of the delivery, it is recommended that you immediately purchase fuel for the aircraft, using a credit card. Doing so will generate a receipt that will contain the date, location, tail number, and the buyers signature. Keep copies of all your documentation; you will need it to support your exemption.
The out of state delivery is only a small part of the exemption process. There are many factors which come into play when the Board of Equalization is determining where the “place of sale” was. They will look at the contract of sale, insurance binder, evidence of delivery, evidence how the parties converged upon the delivery location, FAA Bill of Sale, FAA Registration, and other pertinent information to develop their conclusion as to where the delivery occurred. If there are conflicting dates, locations, or details, they may conclude that the delivery occurred somewhere other than where you intended, and classify your delivery as “ceremonial.” This means your delivery may jeopardize the availability of the sales and use tax exemption from the onset.
Factors Influencing Auto Loan Interest Rates
Day in and day out, one new model of car is rolling out and the desire for owning a vehicle has become irresistible for people. But the finance stands in the way as a hurdle.
Finance companies assist people who are desirous of owning a car and offer auto loans at affordable rates. As there are many companies that offer auto loans, it become imperative to do a thorough research to find the loan that is best suited to the individual.
The interest rates for auto loans differ from one company to another and if the right loan is not chosen, people may end up with paying high interest rates. Auto loans are of two types, namely, secured auto loan and unsecured auto loan. Generally, the interest rate for the unsecured auto loan is higher. But before applying for an auto loan, it is vital to know the current auto loan interest rates which determine the actual payment.
Basically, there are four different kinds of auto loan interest rates, namely, for 36 months, 48 months,60 months and 72 months and the interest rates between them fluctuate between 6.5 percent and 14 percent or even higher. Though the location of buying the car also has an influence on the interest rate, normally, the lower the number of months for the auto loan, the lower the interest rates.
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