M&B on point
I was pleasantly surprised to see the column on page 16 of the June 7-20, 2010, issue of Accounting Today by Miller and Bahnson pointing out that, "A culture of deception is embedded deep in our profession, even to the point that few grasp its existence."
Their point was also made in an article in the same issue, titled "Acc'ting, biz groups object to Brown Amendment."
It would appear from the latter article that the American Institute of CPAs and other accounting organizations object to a proposed law that requires that reports submitted to the Securities and Exchange Commission "record all assets and liabilities of the issuer on the balance sheet of the issuer."
At a time where financial statements have become nearly useless to investors and likely played a large part in the current economic crises, I find it ridiculous that any CPA could object to recording all assets and liabilities of the issuer on the balance sheet of the issuer! If you read the language of our opinion (presents fairly, in all material respects, the financial position of the company) financial statements should always include "all assets and liabilities" regardless of arcane rules created by misguided intellectuals.
CPAs need to wake up and take charge of their profession before it is too late.
John W. Meara, CPA, ABV, CFE, CFF
Meara Welch Browne PC
Kansas City, Mo.
No mobile apps?
I read the Top New Products of 2010 (June 12-July 18, 2010, page 20). I think it was a worthwhile article; however, I was disappointed that there were no mobile devices or mobile apps mentioned anywhere in this article. You can't pick up a major newspaper without reading about how mobile devices and mobile apps are changing our world. Have you heard of the iPhone or the iPad and their related apps? Both are without a doubt the biggest technology game-changers in the last decade. They've become major mainstream products and are used day in and day out by CPAs. Your omission of these devices and the many tax, accounting and finance apps that run on them seems to indicate that you're out of touch with where technology in our profession is headed.
Todd Blome, CPA
Another response to Bose
A letter from Harry Bose, CPA (June 7-20, 2010, page 9), got my blood pressure up. It is disheartening to see an experienced small-firm practitioner suggest that Congress raise the top marginal income tax rate to 90 percent to restore "a progressive tax system" to support a functioning democracy.
Mr. Bose blames what he finds as a top-heavy concentration of wealth on Ronald Reagan.
Let's start with a few things Mr. Bose and I agree on. I too believe the Alternative Minimum Tax must be indexed. It's too late to even think about eliminating the AMT, but I support a redesign of the AMT to sweep in taxpayers with incomes over $1 million. Currently, one of the illogical consequences of the AMT is its phase-out for high rollers.
I, like Mr. Bose, find spending on lobbyists and campaign contributions unsettling. My solution is not to vote for anyone who is currently in office, since they are all doing a terrible job. Let's throw the bums out and, while we're at it, make them join the Social Security system.
Here's where I disagree with Harry Bose.
He argues that our current 35 percent top rate is not high enough and refers to the glory days of 70 percent and 90 percent tax rates. In those days, anyone with a decent financial advisor invested in tax shelters. Even a simple real estate investment generated huge depreciation deductions. The 1986 Act not only did away with that type of fun, but also brought in IRC 469, which effectively removed the tax benefits from investing in loss-generating activities.
Reaganomics successfully put more money in the hands of taxpayers and reduced government spending. History has shown that government is inefficient and the current bunch in Washington is spending money so fast, no tax increase will plug the leak.
Mr. Bose complains about the high cost of Social Security. Is he suggesting the rate be lowered? Social Security is quickly going broke. In 2013, taxpayers with adjusted gross income over $200,000 (single) or $250,000 (joint) will be paying more into Medicare on earned and investment income. That sounds like more tax on successful taxpayers to me.
Recently, The Wall St. Journal told us that the top 1 percent of U.S. earners pay 40 percent of total tax collections and the top 5 percent account for more than 60 percent of tax revenues. When is enough enough?
In January 2011, the top rate goes to 39.6 percent and in 2013, a 3.8 percent tax on investments, which is part of the insane Health Care Act, will bring the top marginal rate up to 43.4 percent. The taxpayers who are already paying a majority of the tax will pay even more. How are these same taxpayers expected to invest and build their own companies when more than half of their income is being taken for taxes? Don't forget about sales tax, the inevitable value-added tax that's coming, and heavy real estate taxes. What successful Americans pay in total taxes today far exceeds what they paid when the federal income tax rates were higher.
A serious problem with Americans is our impatience. Those who argue that Reagan's tax cuts were bad fail to look at the unprecedented economic boom our country and most of the world enjoyed during the Clinton and early Bush years. Reaganomics was not designed to achieve instant results, but half a generation later, our economy showed what giving more money to successful taxpayers can do. After a historic strong economy, it took some greed along with some bad planning and a total failure of our regulators to bring on our current economic disaster. Will higher tax rates save us? I sincerely doubt it.
Finally, Mr. Bose suggests that Accounting Today should not be political and should "be about tax planning and accounting standards." Accounting is dull enough already, and I applaud your continued political thoughts and attacks. Although I rarely agree with The New York Times editorials, I look forward to reading them daily. Accounting Today is independent of any regulatory or membership organization and, in my opinion, is more readable with some strong opinions.
Mr. Bose expressed concern about having so much wealth concentrated with so few and expressed his concern about our failing democratic system. On the contrary, I strongly believe that the current administration is undoing most of what my generation (age 64) worked so hard to build. I am disgusted with what they are doing to get votes from a majority of our population that pays no income tax. That situation will only get worse and will end democracy as we know it. I hope I am wrong.
Doug Stives, CPA
Professor of Accounting, Monmouth University
West Long Branch, N.J.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access