Monday, July 26, 2010

Bush Tax Cuts Set to Expire

Amongst other things, President George W. Bush was famous for cutting taxes, spending money, and running up the deficit.

While his tax cuts reduced taxes on most if not all citizens, they really helped the super-rich with most of the benefits going to them. In fact, it could be argued that his tax cuts facilitated what might be the greatest transfer of wealth in our nation's history. Of course this transfer of wealth went upwards, from the lower- and middle-class to the upper class where we now have one of the highest concentrations of wealth in the world.

While President Bush certainly wanted his tax cuts to be permanent, passing temporary cuts made them appear less costly to the U.S. Treasury, and provided Republicans a future opportunity to make them permanent. That time is now. Most of those temporary tax cuts expire in 2010.

This is going to be a huge battle. The Republican talking points state that allowing the Bush tax cuts to lapse is the same thing as a tax increase while Obama's plan is to let the cuts expire on high income individuals while reducing taxes on average working families.

Who do you believe? How will these tax changes effect you?

The good folks over at the non-partisan Tax Foundation created the website MyTaxBurden where you can enter some tax information and see your tax obligation three ways:
  • pre-Bush tax cuts (the system we'll return to if Congress fails to act)
  • Bush tax cuts (what will happen if the tax cuts are extended)
  • Obama's budget plan (What he ran on and what he's proposed)
I hope you'll check it out and I'd love it if you posted your results here.

Sunday, July 18, 2010

Sustainable This and Sustainable That

A recent triple bottom line Google Alert I've set up led me to a blog about "Sustainable Museums." Additionally, the sponsored links (advertisements) on the email had a promotion for "Sustainable Post-it Notes" and another one for "Sustainable Jobs."

I'm not trying to disparage these folks though do you see the problem here?

Before some public speaking events I've been introduced as the founder of TriLibrium, a "sustainable" CPA firm.

Can a business or organization be sustainable inside an unsustainable culture? Are there sustainable jobs in an unsustainable civilization?

Because I'm a stickler for precise language when it matters, I've had to correct the well-meaning introduction calling TriLibrium sustainable. TriLibrium is sustainably-driven and eco-conscious but I have no idea whether we are sustainable.

I've heard people refer to certain farming practices as sustainable. Really? Over what time frame and under what circumstances. Will these "sustainable" farms hold up over 5 generations? What about 500 or 1000? If not, are they really "sustainable?"

I'm sick of hearing "sustainable" used as if it is a condition already achieved. We should all be driven towards sustainability since the problems with unsustainable practices will certainly wreck havoc on us and our offspring. However, I don't think anything inside our current system is "sustainable" since our cultural system clearly isn't.

I hope you'll join me in educating all the companies who call their products or services sustainable.

Friday, July 9, 2010

Reconcile and Review Bank Statements

Because cash is liquid and highly susceptible to theft and misappropriation, controls around cash should be appropriately strong.

One of the best control procedures for a small business or non-profit is the bank reconciliation. A bank statement will tell you a lot about the organization but only if you review the information in a timely manner.

You should examine cancelled checks and endorsements, track transactions between accounts, compare payroll checks with employee records, and ask questions about anything that looks unusual.

The bank reconciliation procedure is relatively easy and should be done monthly by someone independent of the accounting function. It doesn't make sense to have the accountant or bookkeeper perform the reconciliation because they'd be in a position to both commit the fraud or error and, cover up the problem. This is why you need a segregation of duties.

For a small non-profit, having the bank statements sent to an independent board member for monthly reconciliation may be one of the best and least expensive controls you can implement.