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Money matters:
Graham Macdonald MBMG International Ltd.
God help America
People will know that we have, for a long time, been a great
fan of Warren Buffet and Berkshire Hathaway, What he has achieved over the last
fifty years in nothing short of incredible. We are even inclined to sympathize
with his reported comments last year when he complained that he was not paying
enough in taxes. Those comments should be read in the light of Berkshire
Hathaway’s recent reports that:
Berkshire and its subsidiaries’ income tax returns are continuously under audit
by Federal and various state, local and foreign taxing authorities. Berkshire’s
consolidated Federal income tax return liabilities have been settled with the
Internal Revenue Service (“IRS”) through 1998. The IRS has completed its audits
of the 1999 through 2004 tax returns and has proposed adjustments to increase
Berkshire’s tax liabilities which Berkshire has protested. The examinations are
in the IRS’s appeals process. The unsettled issues primarily relate to the
timing of deductions for unpaid losses and loss adjustment expenses and other
liabilities of property and casualty insurance subsidiaries.”
We are the first to recommend people and companies should always try to make
sure they legally pay as little in tax as possible so as to minimise business
operating expenses. Obviously Berkshire Hathaway believe in this as well since
their books are continually under federal inspection. Warren Buffett has also
taken wonderfully contrived steps to avoid death duties so for him to complain
about not paying enough was regarded by many as nothing short of breathtaking.
Many question whether he would like to make a voluntary donation to the US
Treasury? However, the real meaning from Buffett was that he, and BH and too
many other individuals and corporates have been paying taxes at rates so low but
the tax shortfall which has been hidden by excessive barriers will now come home
to roost. Everyone in the USA not only needs to pay more taxes, but in fact to
do so very soon.
Charlie Rangel (Dem.), chairman of the powerful House Ways and Means Committee,
has stated that he would bring about the “Mother of all Tax Reforms”. If it is
approved, this would bring about the largest tax increase in America’s history.
It would result in a massive hike in income tax whilst nullifying many
deductions available to Joe Public.
The Tax Reductions and Reform Act (2007) is being proposed as a tax cut for
middle income earners and businesses whilst at the same time getting rid of the
Alternative Minimum Tax (AMT). However, it’s creating quite a stir.
Why? Let’s deal with AMT first. This dates back nearly forty years ago and was
conceived as a way to prevent the very rich from avoiding making any form of tax
payments by ensuring that they pay at least a minimum amount. However, as
Americans have become more and more wealthy, more and more Americans have to pay
this tax (as it has not been adequately adjusted for inflation). Over 20 million
Americans now have to pay this tax.
The cost of combining the “Mother of all Tax Reforms” with rolling back the
George W. Bush administration’s tax cuts has been calculated at an absolute
minimum of USD3.5 trillion over the next decade. The initial idea was to target
those classified as ’very rich’. What is now being proposed is to raise the tax
of any individual earning in excess of USD 150,000 and a married couple with a
combined income over USD200,000 per annum.
Jim McCrery (Rep.), upon learning the details of Rangel’s proposals, said, “The
basics of the package are simple: This is the largest individual income tax
increase in history. The bill will add a 4% surtax on Americans earning more
than USD150,000 a year (USD200,000 for couples). That is on the top of the
scheduled expiration of the 2001 and 2003 [G.W. Bush] tax cuts.
So, under the Democrats’ plan, over the next few years, the individual income
top tax rate in the United States will rise from 35% to 44%. By way of
comparison, the other 29 Organization for Economic Co-operation and Development
countries - basically other developed nations - have an average top marginal tax
rate of 35.7%. In fact, only five OECD countries would have higher top marginal
tax rates in 2011 than the United States if the Democrats’ bill is enacted.
This crushingly high tax rate will affect approximately 10 million taxpayers
directly - including those who report business income, like small business
owners and farmers - but the damage could ripple throughout the economy. Because
small businesses and family farms often pay their income taxes as individuals,
this could be a massive tax hike on what is seen as the engine that drives job
growth in the USA.
In addition, the surtax is on adjusted gross income, not taxable income. This
sounds like a technical issue, but it means that Rangel’s bill will erode the
value of a series of tax deductions - including for mortgage interest,
charitable giving, medical expenses, state and local taxes, and the standard
deduction. And, because the surtax kicks in at USD150,000 for individuals and
USD200,000 for couples, the bill potential creates a huge marriage penalty.”
Lies damn lies and statistics used by the opportunity of tax reform include:
- In 2005, America’s richest 25% of taxpayers paid 86% of all federal income
taxes despite earning only 67% of the country’s income.
- The highest-earning 1% (one percent), with earnings more than USD364,657,
coughed out over 39% of all federal income taxes. This is even though they only
earn 21% of the nation’s income. What this shows is that the top 1% pays about
half of the amount of federal income tax as the bottom 95% of tax returns
combined.
- The top 5% of income tax payers give the US government almost 60% of all taxes
paid.
- The top 25% gives 86% whereas the bottom 50% combined only contribute 3.1% of
all tax paid for the year of 2005. What these statistics show is that the amount
of tax paid by the bottom 50% has been in steady decline over the last 25 years.
Business, especially SMEs, are concerned. Data from the Department of Commerce
shows that SMEs employ over 50% of the country’s non-farm private labour force.
Almost six million small businesses employ nearly 60 million people.
There are fears that Rangel’s plans would seriously damage their competitiveness
as it would put up the maximum marginal tax rate on all small business income -
wages, distributions, capital gains and dividends - from 35% to 39%. The
creation of a new “surtax” on all incomes over USD150,000 will apply to Adjusted
Gross Incomes, NOT Taxable Income, which means it comes in BEFORE deductions.
Opponents believe this means a surtax of at lease 5%+ on taxable income as it
cuts the value of deductions for home mortgage interest, charitable donations,
medical expenses and other relevant deductions.
In addition to the reform, the proposed withdrawal of the Domestic Producer Tax
Deduction option would result in the renewal of tax benefit allowances.
You might find it strange that an organisation such as MBMG, committed to
reducing taxes payable to the legal minimum should on balance come down on the
side of Rangel in this. We think that these proposals are flawed, but like
Buffett, we think that urgent constructive property to increase the amount of
tax payable need to be introduced immediately. Sadly for America, a lot of
extremely unpleasant medicine needs to be swallowed now. Financial indiscipline
has been rife throughout US business and society for a decade or more -
Greenspan and Bush are being given much of the blame now, but the problems
pervade a deeper. Rangel may be the closest thing to a saviour right now - the
debate should be about how best to implement a mother of all tax reforms, not
whether it’s necessary or not. That time is long past.
MBMG provides a full range of planning and administrative services for
non-resident US nationals including best advice on structures, analysis and
filings.
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The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of any
actions taken or not taken as a consequence of reading the above article. For
more information please contact Graham Macdonald on
[email protected]@mbmg-international.com.com
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Snap Shots: by Harry Flashman
Panning - trials, tribulations and tips
More practice needed!
That’s better!
We have all, at some time, tried to take photographs of
moving objects. Provided they are going no faster than the average
garden snail, this is no problem, and any old camera will do. However,
by the time the snail shifts into top gear, we can start to have a
problem.
With the photographer standing still, while the mobile object flashes
by, can almost certainly result in an out of focus blur. Firstly, the
auto-focus (AF) cannot keep up with the changing focus, and then the
speed of the object means that it allows movement to be detected while
the shutter is open.
Take, for example, the average SLR (film or digital it doesn’t matter)
with the exposure set on Auto or P for program. The camera will work out
that 1/60th of a second at f11 should give a good exposure.
Unfortunately, that is for the total scene, and the motorcycle flashing
past is not “stopped” by 1/60th.
The answer lies in a technique called ‘panning’. This is the most
popular technique for action sports photographers, because it is one of
the best ways to really show “action”. Now many of you will have cameras
with an “Action” or “Sports” mode that you can select at the flick of a
switch. Despite what the camera manufacturer would have you believe,
professional action sports photographers don’t use it! Forget about it
and blot it from your consciousness.
The reason for this is simply that the selection of the “Action” mode
puts the camera on to a fast shutter speed to “freeze” the action.
“Isn’t that what I want?” I hear you cry. No, I’m sorry, you will get a
very static shot of your moving subject - a shot which does not imply
movement or action at all. A shot of a dog running can end up looking as
if Rover was frozen to the spot with its legs in a strange position.
Contrary to that which you would imagine, the technique to show speed
and action is not a super fast 1/1000th of a second shutter speed or
even faster with some of today’s super SLR’s - but rather something
around 1/30th to 1/60th. Now that really is surprising, isn’t it?
However, for this to work, the technique to handle this slow shutter
speed is called “panning”.
The objective with panning is to be able to “stop” the moving subject,
but leave the background a blurred smear. This is carried out by moving
the camera in time with the action, so that the subject is in the center
of the frame at all times, while the background “moves” behind the
subject. Moving the camera to keep the subject in the center means that
the slow shutter speed is “fast” enough to stop the subject’s action,
but too “slow” to stop the effect of the movement of the camera on the
background.
This, by the way, is not an easy technique and will require that thing
called “practice”. Begin by picking on an easy subject, like motorcycles
going past you down the road. Start by selecting 1/60th of a second for
the exposure and practice turning your body as the subject moves past
you. You have to synchronize your movement with that of the moving
subject, and when you press the shutter you must continue to move at the
same speed especially when the viewfinder goes black as the shutter
fires and you cannot see the subject for a brief instant - the most
important brief instant.
When you have become good at this technique at 1/60th of a second, it is
time to then try 1/30th of a second. At the slower shutter speed, the
background will become even more of a streaky blur, giving an even
greater impression of speed and action.
There is another problem if you try and get more than one shot away, and
that is (with SLR’s), as the shutter goes up, it blacks out what you see
in the viewfinder. You are then shooting blind.
To sum up, to show action and movement, select a slow shutter speed and
try to keep the subject in the center of the viewfinder. And practice!
Modern Medicine:
by Dr. Iain Corness, Consultant
The black snake
Have you read a wonderful item penned by American writer Dave
Barry, the Pulitzer Prize-winning humor columnist for the Miami Herald,
about his recent trip to his gastroenterologist for a colonoscopy? According
to Dave Barry, he was sure he was going to be attacked by 17,000 feet of
garden hose inserted through his fundamental orifice.
If you haven’t read it, do a Google search, it is worth it. Serious laughter
will result, but here are the final two paragraphs. “And then it was time,
the moment I had been dreading for more than a decade. If you are squeamish,
prepare yourself, because I am going to tell you, in explicit detail,
exactly what it was like.
“I have no idea. Really. I slept through it. … and the next moment, I was
back in the other room, waking up in a very mellow mood. Andy (the
gastroenterologist) was looking down at me and asking me how I felt. I felt
excellent. I felt even more excellent when Andy told me that it was all
over, and that my colon had passed with flying colors.
“I have never been prouder of an internal organ.”
So that was Dave Barry’s colonoscopy. After days of agonizing, it was a
non-event, but what exactly is a colonoscopy?
A colonoscopy is test where the colonoscopist (a doctor who has specialized
in the Gastro Intestinal system) looks into your colon, the large bowel. The
last part of this tube leads into the rectum where the stool is stored
before being passed out from the anus.
The instrument is called a colonoscope, and is a thin, flexible, fiber-optic
tube with a small video camera at its head. This is sometimes called “the
black snake” and is controlled by the colonoscopist who directs it up the
rectum and into the colon, right around to the end of the small intestine.
The colonoscope also has a ‘side channel’ through which the colonoscopist
can take tissue samples (biopsies) of any suspicious growths inside the
colon.
A colonoscopy may be advised if you have symptoms such as bleeding from the
anus, pains in the lower abdomen, persistent diarrhea, or other symptoms
thought to be coming from the colon. The sort of conditions which can be
confirmed include:
Ulcerative colitis (which causes inflammation of the colon).
Crohn’s disease (also causes inflammation of the colon).
Diverticula (pouches which form in the lining of the colon).
Polyps of the colon.
Cancer of the colon.
Various other conditions may also be detected, but probably one of the most
important conditions is polyps, little grape-like growths which can turn
cancerous if left for a long time.
There is also a rigorous preparation for a colonoscopy, which is designed to
clean all the feces out of the colon before the procedure is done.
Incidentally, there is a procedure called a ‘virtual’ colonoscopy, by which
a CT scan of the abdomen is converted into images of the inside of the
colon. In the hands of experienced technicians and radiologists, the
accuracy of this procedure has improved, but the ‘real’ colonoscopy is still
the gold standard as far as finding pathology in the colon. By the way, the
same preparation is also required, to ensure the colon is clean. It is also
necessary to introduce air into the colon, via the anus, to be able to
electronically ‘see’ the inside of the colon.
There is another similar procedure to regular colonoscopy called a
gastroscopy, in which the fiber-optic tube is inserted via the mouth and
then down into the stomach to allow a direct vision look at the upper
gastrointestinal tract, and biopsies of suspicious ulcers and lesions can be
taken at the same time. And no, Veronica, it isn’t the same black snake!
With the new Gastro Intestinal Center open at the Bangkok Hospital Pattaya,
introductory pricing has been made available for colonoscopies (B. 12,500)
and gastroscopies (B. 8,300) but you have to pay for your booking before
August 31. You then have up till the end of September before your date with
the black snake. If you are over 50 years of age and have thought about a
colonoscopy or gastroscopy, this is the ideal opportunity for you.
 Heart to Heart with Hillary
Dear Khun Hellary (sic),
First, let me clear up a misunderstanding you might have inferred from my other
two letters to you. Although I’m an Uncle I am not old. When I was in my 30’s I
was old. Now that I’m retired and living in C.M., well I’ve never been younger.
Anyway, I have a question and an observation; In the Thai culture about what age
should a youngster be before an adult returns the wai? The observation; My wife
lets me go to the bars now and then. This is the only way I can practice my Thai
- at least that’s what I tell my Thai wife. She won’t speak Thai to me, she’s
trying to learn English. So, I walk into a bar, order a beer and sit and drink
quietly while checking things out. By the time I’m half way this first beer, the
girls start filing by to introduce themselves. When I speak Thai to them they
without exception are very interested to talk to me. If I’m not interested in
her, I politely tell her in Thai or English, sorry but I’d like to “doo lin lin”
(look, like window shopping). Don’t know if I speak Chiang Mai or Bankok (sic)
Thai but one thing is certain, I never belittle them and use “pigeon” English. I
have noticed that when a farang comes in the bar and acts over eager or appears
a little tipsy, the girls don’t want anything to do with him. Take my advice you
guys and take it easy. And if you call a girl over to you - this is very
important - wave with your palm DOWN and not UP. When you call a dog you wave
with the palm up. Singed (sic),
Not enough Uncle Bills’ to go around
Dear Not enough Uncle Bills’ to go around,
What an amazing chap you are! Another farang who can speak (some sort of) Thai,
like the worried chap called “I ain’t bovvered” who has been writing in recently
with his problems with bar ladies, but you seem to have no trouble finding a
Thai tutor in the bar, as opposed to “I ain’t bovvered”. Perhaps he is calling
them over with the palm up? One of my acquaintances says that the way to get a
bar girl to come across (the bar) is by waving a 1,000 baht note in her
direction.
Now getting around to your real question, at what age do you return a
youngster’s wai? If it is a girl, at the age she has an ID card is erring on the
side of caution for you. If it is a boy, when he has an ID card is erring on the
side of caution. You don’t want to end up like the aging English rock star in
Cambodia, do you?
Finally, Uncle Bill, my little retired Petal, is English your native language?
Your spelling is like a native - of Peru. Just who the hell is “Hellary”?
Bangkok always has a “g” in the middle, just to remind you of Patpong, and were
you really “singed”? I hope the burns have all healed by now.
Dear Hillary,
How extraordinary that so many of your correspondents do not like having their
pockets deeply felt by ladies! Pater is quite the reverse and, thanks to an
understanding tailor, has pockets from top to bottom!
Mistersingha
Dear Mistersingha,
Pater goes to an understanding tailor, I see. Does he get his suits done in 24
hours, with three fittings as well? I would presume that some of the pockets
where he keeps his money are the long ones, to go with his short arms when the
time comes for payment.
Dear Hillary,
I am the most popular woman in Thailand, for people back home. I’ve had five
sets this year and it looks like there are more coming for Xmas. If I had
nothing else to do other than entertain old friends then it would be fine, but I
have things to do as well. I don’t want to give old friends the cold shoulder,
but I’m at my wits end, honestly! What should I do?
Guest house Gert
Dear Gert,
This is a very common problem when you live in a place that other people save
for 11 months to come and visit. It is also very normal for your old friends to
want to see you, and possibly save some money by staying with you. You actually
have the answer already when you called yourself “Guest house” Gert. I suggest
that you run your home more on the guest house lines. Tell your friends that as
you have other work to do, you will leave everything out for them for their
breakfast and then you will meet them for dinner at 7 pm and do things together
from there. I am sure your friends will appreciate that even though they are on
holidays, you are not. They need time to themselves too and will be grateful for
the chances to explore on their own. Have some brochures in their room with
suggested tourist day trips and let them take it from there. They will be happy,
you can do your work, and you can enjoy each others company at night.
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Mamma Mia!: US/UK/Germany Comedy/ Musical/ Romance –
Starring Meryl Streep, Pierce Brosnan, and Colin Firth. Donna, an
independent, single mother who owns a small hotel on an idyllic Greek
island, is about to let go of Sophie, the spirited daughter she’s raised
alone. On a quest to find the identity of her father to walk her down
the aisle, Sophie invites to the wedding three men from Donna’s past.
Mixed or average reviews.
Boonchu 9: Thai Comedy – A continuation of this popular Thai
comedy series. The son of the original Boonchu is a happy monk who is
defrocked by his mother and sent to university in Bangkok. There he
meets up with new “friends” – two homeless kids, Kratay and Krateng –
who, as friends will do, drug him and mug him.
Boys Over Flowers: Final: Japan Romance/Comedy. Wildly popular film in
Japan, based on a top selling manga, featuring five popular Japanese
idols.
Made of Honor: US Comedy – A piece of fluff about, what else, love
problems, starring Patrick Dempsey and Michelle Monaghan.
Death Race: US Action/Thriller – The most twisted spectator sport
on earth as violent criminals vie for freedom by winning a race driving
monster cars outfitted with machine guns, flamethrowers, and grenade
launchers. The previews are the most repulsive imaginable.
The Coffin/Longtorai: Thai Horror – Thai superstar Ananda
Everingham as a claustrophobic architect who participates in obscure
coffin rituals.
WALL·E: US Animation/ Comedy/ Family/ Romance/ Sci-Fi – The film
is a work of genius from the first frame to the last. Robot love in a
dead world, and the cutest love story in years. There’s virtually no
dialogue for the first 40 minutes; you’ll be enthralled. Reviews:
Universal acclaim.
Where the Miracle Happens: Thai Drama – A powerful plea for
compassion towards neglected segments of Thai society – the uneducated
and exploited people, many hill-tribe, who are not really citizens of
Thai society. It’s a plea for giving everyone living in Thailand at
least the opportunity for education and health care, and freedom from
exploitation.
Produced by Her Royal Highness Princess Ubolratana Rajakanya, this film
is a drama adapted from a story in her book, “Short Stories from My
Thoughts.” Her Royal Highness also stars in the film as a successful
businesswoman who loses her daughter in a car accident. To fulfill the
wishes of her child, she travels to a remote school in Chiang Rai and
helps rebuild the local school.
It’s a heart-felt plea, told in basic and simple dramatic terms, with
the standard ingredients of Thai drama and comedy fused into a quite
moving film. Her Royal Highness acquits herself quite beautifully as the
prime actor of the film. The production values are top rate – the
photography is luscious.
If you relax and let yourself be drawn into the story, there’s no way
you won’t be very affected at story’s end – I admit it, I was in tears.
Rogue: Australia/US Thriller – An American journalist on
assignment on a tourist river boat in the Australian outback encounters
a man-eating “rogue” crocodile. A modest and effective thriller, with
some extraordinary shots of the breathtakingly-forbidding Australia
harshness, accompanied by some quite excellent music throughout which
captured for me the beauty and danger of the location. The whole is a
sort of study of crocodiles and crocodile lore by the director/writer
Greg Mclean, who seems to really love the subject, and who seems very
fond of the Northern Territory landscape. Rated R in the US for language
and some creature violence (some of which has been clipped by the
paternalistic Thai censors). Early reviews: Mixed or average.
Hanuman: The White Monkey Warrior: Thai Action – Utter trash, and
the biggest argument yet for imposition of censorship, let alone a
rating system. Not only not fit for kids; not fit for adults either.
Detailed beheadings with close-ups of the surprised looks on the faces
of the decapitated heads, loving depictions of skin being slowly ripped
off of humans, and worse. All involved should be heavily fined.
The Mummy: Tomb of the Dragon Emperor: US/Germany/Canada Action
/Fantasy – One bang after another, one explosion after another, one
bloody fight after another, all to no purpose. Ignore this one, unless
of course you like mindless action, and the rest. Brendan Fraser and
Maria Bello play retired British aristocrat-adventurers who head East
for adventure and meet their grown son, and the three then unearth the
mummy of China’s ruthless Dragon Emperor and his vast terra cotta army.
Generally negative reviews.
Scheduled for Sep 4
Bangkok Dangerous: US Action/Drama – Directors Danny and
Oxide Pang return to remake their popular 1999 thriller about a ruthless
hitman (Nicolas Cage) who travels to Bangkok in order to carry out four
crucial jobs. During the course of his missions, the triggerman falls in
love with a pretty local girl while also forming a friendly bond with
his young errand boy.
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