GOOD NEWS FOR THE “LITTLE GUY”
Next year, as we've mentioned before in this space, is an election year. And you're going to get a tax cut — maybe you'll even get one this year, but for sure, for sure, for sure, you're going to get one next year, no matter how many times Washington denies it. Their urge to "buy" votes is overwhelming.
It now looks like Washington has a plan to help smaller taxpayers. Washington is considering a so-called "personal investment retirement account" for millions of Americans; using a $300 tax credit, the government will then match the taxpayers' savings with government funds. The plan would offer 401(k)-style accounts for middle and lower income families least likely to have them through an employer.
The White House proposal is specifically for those filing singly with a gross income of less than $40,000 a year, and those filing jointly with $80,000 or less. Individuals could choose among a number of investment options, such as stock and bond mutual funds, but like many IRAs, no money could be withdrawn until age 65. It is estimated that 124 million Americans would be eligible; the annual cost of the Treasury is estimated at 38 billion. Again, whether by this or some other plan, count on it — you're going to get a tax cut, definitely next year, and probably this year.
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Do ATM fees irritate you? You know, the $1 or $1.50 they tack on to the money you withdraw at an automated teller machine. As I remember, initially most people, myself included, were turned off by ATMs. It was dealing with an impersonal robot — and it was scary. It took a while to build myself up to be able to take money out, but it was a long, long while before I could actually put money into the thing.
The banking community, in the meantime, sold us all on the idea that it would hold costs down; after all, an ATM doesn't require two weeks' vacation, get pregnant, or break its leg in a softball game, and it doesn't have fights with its significant other. You get the picture — it's there, it's always there, and it's cheap. Well, now all of a sudden, it's expensive and there are fees.
So, where do we go? Out to the land of the loony tunes again, and the seeming capitol of Loonytuneville, i.e., Berkeley, California, where a battle over ATM surcharges is actually going to court! The city of Berkeley is attempting to be the first in our country to ban — yes, ban — fees at cash machines within its city limits. Believe it or not (and I guess anything's believable when it comes from California), a controversial ordinance won preliminary approval recently at a city council meeting. This puts the northern California city at the center of a legal struggle between consumer groups seeking to outlaw automated teller surcharges, and the banking industry which argues that cities have no authority over Federally regulated financial institutions.
Perhaps predictably, consumer groups say the fees are excessive, and anti-competitive; the banks say the surcharges are needed to pay for installation and operation of the machines. Efforts to ban the machines have failed in about 25 states, and a federal proposal died last year. Currently only Ohio and Connecticut have succeeded in banning the surcharges, and court challenges are underway in both of those states.
Under the proposed ordinance the city would not be responsible for enforcing the surcharge ban-instead, customers would be entitled to file a lawsuit against the financial institutions for punitive damages of up to $5,000 and legal costs, as well as collect a $250 fine.
I tell you, in this day and age when everybody wants to sue everybody else for everything, it seems to me that the legal system is clearly out of control. Then again, that dollar or so is irritating.
(Tom Butenhoff is a First Vice President with J. E. Liss & Company in Milwaukee. The views are his and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)