Why Natural Gas And Ethanol Shouldn’t Be Eligible For Subsidies

Washington’s most recent energy subsidy debates are focused on tax credits for industries involving natural gas and ethanol. The credit will expire at the end of this year, still the Senate voted to remove the subsidy. Thus the opposition to the $6 billion tax credit is increasing on a national level. Some Members of Congress have removed their names from the list of co-sponsors of the bill. In spite of this, bipartisan support is focused on extending the subsidies for the use of natural gas vehicles.

To see why none of these two industries deserve subsidies we can look at John Sullivan’s statement about this matter. He said that the natural gas industry will be fine without these subsidies, but the ethanol industry will not survive. Many argue that ethanol is not worth propping up by tax credit government intervention.

If something is not competitive in economical terms, then the state should not artificially encourage these technologies. It is not normal for a market to not be able to exist without subsidies, especially when there are alternatives. If the producers say their idea is viable, then they shouldn’t need tax credits anyway.

The argument turns to helping these producers to overcome the investment “valley of death”. They might say that they need tax credits in order to push through the initial hurdles of the transition from vehicles that run on gas to ones that are natural gas-powered. However, if natural gas is a good solution, then car manufacturers will implement it.

Preferential treatment to some industries has always been done through energy tax expenditures. These credits fool people into the perception that some technologies are more competitive than they really are.

The Consistent Decline Of The Las Vegas’ Housing Market

As the economy starts to improve, the housing market of Las Vegas has not been up to par. The prices of the median home declined in May and the historically depressed level of new-home sales remained constant according to a local housing analyst.

The Home Builders Research agency has reports of 291 new-home being sold in May, which increased from 258 in April, but is down from 506 in the same month in 2010 when there was a home-buyer tax credit government sponsored, at the federal level, was in effect. The median price of a home dropped from a year ago to a value of over $192,000.

The number of new-home sales has stayed low throughout the whole year, with an average of just 262 houses sold per month, and the total of 2011 is down 36 percent at 1,311.

The Home Builders Research president, Dennis Smith, said that the tally of new-homes sales should rise over the summer. They could reach up to 300 to 400 a month.

Smith’s regular traffic reports show the net sales per subdivision are now up to about one house every fortnight, up from about one per three weeks or month.

Also, home builders pulled over 430 new permits in May, up over a hundred from around 320 last month. The monthly permit counts are an indicator of the absorption of future new-homes.

“I’m not saying the recession is over,” Smith said. Smith also said to see the numbers go up over the next one to two months.

Activity of resales is running ahead of last year with nearly 4,000 existing home sales in May, a 9 percentage point gain from May of the previous year, according to Home Builders Research. For 2011, houses that are being resold are up 4.8 percentage points to over 18,000.

Dennis Smith said that he is prepared to increase this year’s sales projections up to 44,000, which does not include deeds from trustees.

“Yes, prices are down,” Smith said. He continued by saying that the Smith also said that it is a good opportunity to buy property in Las Vegas for individuals and investors, both large and small.

SalesTraq, based in Las Vegas, reported almost 300 new-home closings in May, a staggering decrease of over forty percent from last year, showing more progress. The median price actually rose 0.3 percentage points, to the current level of just under $194,000.

Of the existing-home sales, which also includes sales from trustees, jumped over a surprising 17.0 percent to just fewer than 5,000 during the month. However, the middle prices for existing home price fell by about 14 percentage points, to over $100,000.

SalesTraq counted over 800 sales, short sales, which is when the homes were bought for less than the usual mortgage balance, at the medium price of around $120,000. There were almost 750 real estate auction sales with a resulting median of $90,100. Of the approximate 2,000 bank-owned, or real estate-owned, sales were at a median of $102,000. There were over 1,300 nondistressed sales with a median sale price of $120,000.

A key to Las Vegas housing is, in fact, the real estate-owned element, said the president of Marketing Solutions, Steve Bottfeld.

Bottfeld said there are practically no signs of improvement and to watch for the number of potential foreclosures in the future.

According to SalesTraq, there were over 2,200 bank repossessions in May, a large 31 percent jump from last May and the most repossessed houses in a single month since October 2009. Smith said there were over 50,000 foreclosures in what is known as “silent inventory” which could make it on the market if lender policies don’t change.

Smith said that this would not lead to a longer recession but it would take several years to see any noticeable appreciation which would still be very small at 2 or 3 percent.

The housing boom went bust five years ago and since then, sales have fallen almost every year for the U.S. Analysts are expecting sales to eventually level off at around 5 million a year. Last year was the worst showing in over a decade as only about 4.9 million homes sold.

IRS Sets Tax Filing Extension Now To Five Months For Partnership, Estate And Trust Returns

New rules set by the IRS have changed the time of automatic extensions.  These rules affect estate, trust and partnership tax returns.  Instead of the former six month tax filing extension, the new period is just five months.  For most individual taxpayers the new rules will have little to no effect on filing date or individual taxpayer extensions.

The filing options with an extension for these entities was a six month period.  However, the new rules have reduced the amount of time allowed by one month.

In the past, the extension only required the filing of a single form and by filing a second form another extension of three months was added.

At the public hearing on this change on extensions, there was concern issued that taxpayers might not receive information about changes in time to gather necessary paperwork to complete their filings in a timely or accurate manner.

When this proposal went to public hearing, there were just seventy comments made on the changes.  Many of those making comments suggested that the due date be changed instead of shortening the time allowed for extensions.  This could have been accomplished by changing tax day to April 30 for individuals, or extending the individual extension to seven months.  Others making comments, suggested changing the normal filing date for those affected by the shortened extension period be changed to March 15, but still allowing them to request a full six month extension in order to get the necessary information to taxpayers that it would affect.

Intuit Buys Platform To Bolster Mobile Banking Capabilities

It was announced today, that Intuit Inc. has gained a mobile banking platform for mobile Web.  It has acquired this from Mobile Money Ventures (also called MMV), one of the best global providers of innovative mobile financial solutions.

This act boosts the position of Intuit Financial Services in their role as leading mobile and online technology provider to institutions.  The company will now be capable of directly managing customer support, and also have complete control over its’ mobile Web banking design.  The transaction will help Intuit Inc. provide more new innovations to their customers faster.

Users of Intuit’s current mobile Web technology are clients with over hundreds of U.S. banks and credit unions.  The existing web technology was provided by MMV.  Text message and application solutions for these customers to do their important banking from any mobile phone, is also a great asset they provide.  Mobile tax filing has also been made possible with this.

MMV was formed in 2008, and is based out of San Mateo, CA.  It began as a joint venture combining strengths of Citigroup, one of the top global financial services companies, and SK Telecom Americas, more of an amateur company, if you will.  MMV produced and provided Intuit with a reputable mobile banking solution, that is being made available to more than 400,000 customers.  Their technology optimized for all handset and screen sizes, so that anyone with any mobile device, can use it.  Now, it will be easy for someone to do their taxes, with mobile filing.

Intuit adds on a small team of employees with this acquistion, who have superb mobile expertise as well as significant history of deploying their solutions to financial institutions.  They will continue helping new and current customers on the platform.

Intuit signed this transaction today.   The terms have not been disclosed, as they are not material to their financial results.

IRS Revokes Nonprofit Tax Exempt Status

The Internal Revenue Service (IRS) has made changes to the nonprofit tax exempt status of agencies that are not for profit in the 445 area who have not filed required tax forms for three consecutive years now. This move has made it impossible for donors to claim deductions on their federal income taxes 2010 for donations given to these organizations.

About 275,000 local agencies all over the country have been affected by this IRS policy move, though according to the federal agency most of these agencies are not operating. A list of the affected agencies is available on the revoked list at Representative Chuck Shumer’s website. However some of the agencies listed are operating and according to them, they have been filing all the paperwork required. So work needs to be done to clarify who is tax exempt and how has lost their tax exempt status.

Unpleasant Surprise

Among these agencies include the Plattekill Public Library, New Windsor Little League, University of Michigan, Woodstock Area Meals, George Washington University and the Islamic Center in Washington D.C. According to these agencies, they have been filing their returns and their tax forms are up to date. They were all surprised when they found themselves on the list.

Why the List is Necessary

The 2006 Pension Protection Act claims that these organizations earning less than $50,000 should file their tax information. Cleaning up the list will increase tax revenues during a time when the US government is in need of increased revenue to help balance spending.

Assisting Potential Donors

The revocation is supposed to eliminate agencies not in operation. Donors can have a clear picture of existing agencies. The IRS had made attempts to reach out to all agencies but most of the organizations claimed that they did not get any information. What is puzzling for organizations is that copies of tax forms can be found on the Guide Star website filed in 2009.