July 2003

the Generalist

www.arkcpa.com

July 2003

A. R. Kakhsaz Company

an accountancy corporation

Member
American Institute of
Certified Public Accountants

International associates:

Tavana & Co.
Chartered Accountants
Toronto, Canada
Tel.416-229-2221

THE NEW FEDERAL TAX-CUT LAW:

Cuts top rate on dividends to 15% from 38.6%.

Cuts top rate on capital-gains to 15% from 20%.

Accelerates income-tax-rate cuts across the board.

Boosts per-child credit to $1,000 from $600.

Reduces tax penalty on married couples.

Enlarges temporary tax break for business spending.

Boosts small-business write-off to $100,000 from $25,000.

Gives $20 billion aid to states.

Has a mouthful official title: "The Jobs and Growth Tax Relief Reconciliation Act of 2003."

THE WALL STREET embraces the new tax cuts. Not just the nearly 50% reduction in the top dividend-tax rate, but also the unexpected gift of a 25% slice off the capital-gains tax rate.

FIVE EXAMPLES of the effect of the new tax-cut law:

(1) Single individuals with no children, total income of $126,000 including $6,000 of dividends and long-term capital-gain pay $1,900 less.

(2) Married individuals with two children under 17:

(a) total income of $126,000 including $6,000 of dividends and long-term capital-gain pay $3,000 less.

(b) total income of $170,000 including $10,000 of dividends and long-term capital-gain pay $3,100 less.

(d) total income of $530,000 including $30,000 of dividends and long-term capital-gain pay $13,000 less.

FOR MORE OF the Generalists, visit our Website at ARKCPA.COM

Abigail Van Buren (Dear Abby) said she was at a total loss to reply to the following actual letter:

Dear Abby:

I suspect that my husband had been fooling around, and when I confronted him with the evidence he denied every thing and said it would never happen again. Should I believe him?

THE MARITAL ENDURANCE ETHIC: Some of the most successful couples don't solve their problems -- they outlast them.

MORE DIVORCES HAPPEN IN THE FOURTH YEAR of marriage than any other.

ARABS WILL OUTNUMBER JEWS BY 2020 if Israel and the Palestinian territories are counted together.

THE U.S. RESTAURANT INDUSTRY is suffering its most prolonged downturn in more than 20 years. The good news is that it's easier to get a table. On eBay, listings for used restaurant equipment are up by 34% during the past six months. Much of such equipment comes from restaurant liquidations.

theGeneralist, a one-page monthly publication of the accounting firm of A. R. Kakhsaz Company, is in its ninth year of providing information, presented fairly and accurately, from sources we can depend upon and trust.

ECONOMIST: "An expert who will know tomorrow why that which he predicted yesterday didn't happen today."

FEDERAL INCOME-TAX BRACKETS FOR 2003 at the reduced rates under the tax-cut law:

On taxable income of more than		Income-
Joint filers	Single filers	tax rate
$ 0	$ 0	10%
14,000	7,000	15
57,000	28,000	25
115,000	69,000	28
175,000	144,000	33
312,000	312,000	35

The above is effective for the entire year of 2003.

PESSIMIST: "An optimist with experience."

President George W. Bush has been quoted as saying:

"The vast majority of our imports come from outside the country."

THE NEW TAX-CUT LAW is an important political victory for the President. He sold his tax-cut plan in spite of public apathy, White House divisions, war in Iraq that demanded much of his attention, rebellious Republicans and fights between Senate and House leaders. He even managed to sell the tax-cut on dividends that was nowhere on the agenda before he put it there. He did it in much the way he makes policy, particularly economic policy. He tends to go by his instincts, offer bold proposals and resist compromise until the last moment. The $350 billion tax-cut will likely provide a short-term boost to the tepid U.S. economy, but it would drive up federal budget deficits and long-term interest rates and widen the income gap between rich and poor.

WE SEE MORE IN NUMBERS than just numbers…

Ali R. Kakhsaz, CPA, MAcc

www.arkpca.com