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State tax revenues in the second quarter plunged 17% from a year earlier as rising unemployment and reduced spending hurt sales- and income-tax collections, according to Census Bureau figures released Tuesday.
The decline was the sharpest since at least the 1960s. The biggest drop among major revenue sources was in state income taxes, which were down 28% from a year ago. Sales-tax revenues fell 9%. About two-thirds of state revenues are derived from sales and income taxes.
Falling revenues, combined with growing demand for social programs like Medicaid, have forced states to slash spending and scramble to raise revenue through changes including new taxes, legalized slot machines and pricier fishing licenses.
But with tax collections continuing to decline, many have been forced to reopen budgets after they have been passed to push through even bigger cuts to staffing and services. States, unlike the federal government, are generally required to balance their budgets.
The decline was the sharpest since at least the 1960s. The biggest drop among major revenue sources was in state income taxes, which were down 28% from a year ago. Sales-tax revenues fell 9%. About two-thirds of state revenues are derived from sales and income taxes.
Falling revenues, combined with growing demand for social programs like Medicaid, have forced states to slash spending and scramble to raise revenue through changes including new taxes, legalized slot machines and pricier fishing licenses.
But with tax collections continuing to decline, many have been forced to reopen budgets after they have been passed to push through even bigger cuts to staffing and services. States, unlike the federal government, are generally required to balance their budgets.
- Wall Street Journal
U.S. corporate debt default rates are expected to hit "unprecedented" levels in 2009, even though the economy may be past the halfway mark of the U.S. recession, according to a forecast unveiled on Monday at the Reuters Restructuring Summit.
The forecast for the 2009 corporate default rate has risen to 12 percent to 14 percent, from a May forecast of 11 percent to 13 percent, according to Bain's corporate default outlook. That suggests a total of about 180 to 210 companies could default on their debt this year.
Defaults will rise to 500 to 600 in the period between 2008 and 2011, up fivefold from the previous four-year period.
The forecast for the 2009 corporate default rate has risen to 12 percent to 14 percent, from a May forecast of 11 percent to 13 percent, according to Bain's corporate default outlook. That suggests a total of about 180 to 210 companies could default on their debt this year.
Defaults will rise to 500 to 600 in the period between 2008 and 2011, up fivefold from the previous four-year period.
- Newsmax
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The Last Great Offshore Tax Shelter
By Dr. Steve SjuggerudThursday, October 1, 2009
"I can't believe Porsche allows people to do this," I said out loud as I came out of the hairpin turn and sped back up to 100 miles an hour.
On Tuesday, I drove brand new Porsche cars on Porsche's private race track in Leipzig, Germany. Porsche let me (and my colleagues from The Atlas 400 Club) push their new, $100,000+ cars as hard as we wanted.
I was flying around the track in a new 911 Carrera. My wheels were squealing at the brink of spinout about a third of the time. And yet I could hardly keep up with my DailyWealth colleagues Ned and Brian in the new Panamera Turbo in front of me.
That day was unquestionably one of the most exciting things I've ever experienced. It was arranged for The Atlas 400 Club by my old friend Joel Nagel. A while back, he happened to meet the CEO of Porsche Germany at an international Rotary conference, and they hit it off. Joel speaks fluent German. And over dinner at the CEO's house, Joel put this day together for us.
While we were flying back to Munich that night, I sat next to Joel. He's an American attorney based in the States. And for most of his legal career, he's done tax planning. He told me he recommends his clients keep a portion of their assets offshore if possible.
I asked him about what's going on in Switzerland... With banks like UBS turning over records to U.S. tax authorities, it seems like its famous bank privacy laws are disappearing.
Joel said, "Oh, Switzerland is definitely still open for business." And he told me about a completely legal offshore option...
With what he called "the last, best tax shelter," you can...
· Grow your wealth without paying income tax on the gains.
· Choose how your money is invested.
· Access your funds without triggering taxable capital gains.
· Pass your money on to your heirs, without being subject to estate tax.
· Legally avoid reporting this offshore program to the IRS.
The idea at its core is simple and crafty: It's life insurance... But the important part is, the insurance is from an offshore life insurance company that issues U.S.-compliant policies.
The "trick" is, the money is officially the life insurance company's. But you can have it invested on your behalf by Swiss advisors. The Swiss are happy to do it... They're investing money from an offshore insurance company, not from you, the American.
Since it's legally life insurance, the money you've built up in that policy can be passed on to your heirs outside of estate tax. And you can access it by borrowing against it.
Now, I assume the fees are high. You're paying the cost of life insurance and then you're paying for an investment manager to invest your premiums. So it probably doesn't make sense to consider this unless you're able to put six figures into the premiums for a few years.
I don't have all the details... It was just a casual conversation with Joel. I'm not a tax advisor or a lawyer. And I'm not sure I got everything exactly right.
But my friend Joel Nagel is an attorney specializing in tax planning. We've been friends for a long time. And he's an interesting guy, definitely worth getting to know.
If something like this sounds interesting to you, don't take my word for it... To get in touch with Joel for more information (and for corrections on whatever I got wrong) about "the last, best tax shelter," e-mail him at nagellaw@aol.com.
Good investing,
Steve
P.S. Racing Porsches in Germany was part of the "charter" trip for The Atlas 400 Club, which my friend and colleague Sean Goldsmith just put together. We'll probably travel half a dozen times a year, all over the world. The club isn't for everyone – there's a steep entry fee. But if you'd like more information, send Sean an e-mail at sean@theatlas400.com.
On Tuesday, I drove brand new Porsche cars on Porsche's private race track in Leipzig, Germany. Porsche let me (and my colleagues from The Atlas 400 Club) push their new, $100,000+ cars as hard as we wanted.
I was flying around the track in a new 911 Carrera. My wheels were squealing at the brink of spinout about a third of the time. And yet I could hardly keep up with my DailyWealth colleagues Ned and Brian in the new Panamera Turbo in front of me.
That day was unquestionably one of the most exciting things I've ever experienced. It was arranged for The Atlas 400 Club by my old friend Joel Nagel. A while back, he happened to meet the CEO of Porsche Germany at an international Rotary conference, and they hit it off. Joel speaks fluent German. And over dinner at the CEO's house, Joel put this day together for us.
While we were flying back to Munich that night, I sat next to Joel. He's an American attorney based in the States. And for most of his legal career, he's done tax planning. He told me he recommends his clients keep a portion of their assets offshore if possible.
I asked him about what's going on in Switzerland... With banks like UBS turning over records to U.S. tax authorities, it seems like its famous bank privacy laws are disappearing.
Joel said, "Oh, Switzerland is definitely still open for business." And he told me about a completely legal offshore option...
With what he called "the last, best tax shelter," you can...
· Grow your wealth without paying income tax on the gains.
· Choose how your money is invested.
· Access your funds without triggering taxable capital gains.
· Pass your money on to your heirs, without being subject to estate tax.
· Legally avoid reporting this offshore program to the IRS.
The idea at its core is simple and crafty: It's life insurance... But the important part is, the insurance is from an offshore life insurance company that issues U.S.-compliant policies.
The "trick" is, the money is officially the life insurance company's. But you can have it invested on your behalf by Swiss advisors. The Swiss are happy to do it... They're investing money from an offshore insurance company, not from you, the American.
Since it's legally life insurance, the money you've built up in that policy can be passed on to your heirs outside of estate tax. And you can access it by borrowing against it.
Now, I assume the fees are high. You're paying the cost of life insurance and then you're paying for an investment manager to invest your premiums. So it probably doesn't make sense to consider this unless you're able to put six figures into the premiums for a few years.
I don't have all the details... It was just a casual conversation with Joel. I'm not a tax advisor or a lawyer. And I'm not sure I got everything exactly right.
But my friend Joel Nagel is an attorney specializing in tax planning. We've been friends for a long time. And he's an interesting guy, definitely worth getting to know.
If something like this sounds interesting to you, don't take my word for it... To get in touch with Joel for more information (and for corrections on whatever I got wrong) about "the last, best tax shelter," e-mail him at nagellaw@aol.com.
Good investing,
Steve
P.S. Racing Porsches in Germany was part of the "charter" trip for The Atlas 400 Club, which my friend and colleague Sean Goldsmith just put together. We'll probably travel half a dozen times a year, all over the world. The club isn't for everyone – there's a steep entry fee. But if you'd like more information, send Sean an e-mail at sean@theatlas400.com.
COULD GOLD SUFFER A BIG CORRECTION? SURE.
The latest on the battle for $1,000 gold: The sellers are in charge... and they could easily get "more in charge."
We don't need to overthink gold's uptrend. Gold is rising due to its centuries-old appeal as a store of wealth. With governments around the world engaged in crazed "tax and spend" policies, it's only rational to expect their Monopoly money currencies to decline in value. And for you trend followers, gold's long-term chart is a picture of the strongest uptrend in the world.
But here's a short-term consideration: As you know, we're expecting a strong rally in the dollar soon. Gold typically trades in a mirror image of the dollar. When the dollar is weak, gold rises. When the dollar is strong, gold falls.
Let's all keep this in mind: The dollar has enjoyed two solid rallies in the past six months. Both helped send gold down more than $60 per ounce. Both presented great gold buying opportunities. The third dollar rally will be no different.
We don't need to overthink gold's uptrend. Gold is rising due to its centuries-old appeal as a store of wealth. With governments around the world engaged in crazed "tax and spend" policies, it's only rational to expect their Monopoly money currencies to decline in value. And for you trend followers, gold's long-term chart is a picture of the strongest uptrend in the world.
But here's a short-term consideration: As you know, we're expecting a strong rally in the dollar soon. Gold typically trades in a mirror image of the dollar. When the dollar is weak, gold rises. When the dollar is strong, gold falls.
Let's all keep this in mind: The dollar has enjoyed two solid rallies in the past six months. Both helped send gold down more than $60 per ounce. Both presented great gold buying opportunities. The third dollar rally will be no different.