Nick Pettus, CPA &Associates

Individual Tax Form 1040	Employment Tax	Partnership & Tax	C & S Corporate Tax	Capital Gains Tax	Estate Tax
Sch A (Deductions)	Employee or Contracted Laobr	Form 1065	Form 1120/1120S	Buy Sell Partnership	Form 706 & 709
Sch B (Interest & Dividends)	Basic Employee Tax	Partnership formed	Corp Formation	Buy Sell Corp	Gift Tax
Sch C (Sm Biz)	Basic Employer Tax	Operation	Operation	Personal Residence	Estate Tax Overview
Sch D (Capital Gains)	Employee & Employer Reports	Partner Dealings	Shareholde/Officer	1031 exchange	Charity Giving
Sch E (Rents & Royalties)	Fringe Benefits	K-1 Reporting	K-1 vs Double Tax	installment sale	Lifetime Exemption
Sch F (Farm Biz)	Non-Cash Comp: MSA , HSA etc.	Debt Obligations	Subsidiaries	Foreign Investment	Lifetime Deductions
Basic Tax Planning	Deferred Comp (IRA)	Basis	Dissolution	Asset Sale/Disposal	Tax Rates
Retirement IRA Planning	Defined Contribution Plan (401k)	Partial Liquidation	Int'l Taxation	Listed Propety	Use of AB Trusts
	Defined Benefits Plan (Pension)	Complete Liquidation	esop & sesop	Form 4797	ILITS & Legacies

"Taxes are the price we pay for civilization." - Justice Oliver Wendell Holmes .

What does this mean? Well, simply put, capitalism cannot provide for everything in modern society. It is true that everything costs, but many things cannot be provided for strictly through an open market. Why? Because by definition some things cannot be provided for at a reasonable price. In addition, if all things were provided to the public based on the laws of suppy and demand, by definition there would be scarcity and some would go without. A good example is education. Imagine if education were not provided for by the state goverment - that the government was not in essence redistributing the wealth by taking monies from the upper classes that can pay taxes and tranfering that wealth into education for less fortunate. Many children would go without learning to read and write and those children's chance at a decent life and moreover society itself chance to continue in a mondern civil manner would be in jeopardy. By the way, this example and just expressed argument was the central reasoning behind the famous case, Brown vs. Board of Education, 1954 . Similar arguments could be made for the Police, Fireman, Hospitals & Healthcare, Roads, Freeways & Interstates, Court Systems, National Defense, Consumer Protection and so on. So the question isn't if taxation is necessary for modern society, but how much, and how should the tax be allocated, administered.

- Honorable Learned Hand, U.S. Appeals Court Judge, Helvering v. Gregory, 69 F.2d 809 (1934).

So in plain English yes, you are allowed to reduce taxes to the lowest possible within the limits of the law!!!! Our job as your Tax Preparer, Advocate, Advisor, Tax & Financial Planner is to make sure you not only pay the least tax now but over the whole of your life. This would seem contrary to what the Governement would want but this is not so because the more you take financial responsibility the less chance you will need the government in your life and the less tax the Government will ask of you. So, tax planning, especially for those who are accumulating net worth especially for business owners is vital to preserve wealth.

Why not a flat tax or a simple Value Added Tax? Because our tax system is progressive. What does that mean? It means two things at least. Firstly, the more money you make, theoretically the more tax you should pay. Secondly, certain economic activities, as a public policy, we want to encourage and certain economic activities we want to discourage. As noted by Adam Smith, considered the father of Capitalism, certain activities and products cannot be brought to the market at a profit and indeed must be paid for by reallocation of wealth from the more well-to-do to the working poor including such things as education, healthcare, public safety, infrastructure, housing, even food. And a flat tax or VAT - regressive tax - would not acheive this. To try to acheive this redistribution of wealth we have had the Greath Society, the Earned Income Credit, and even Affirmative Action. But the outcome of these social experiments has been mixed at best. Just recently, the Wall Street Journal reported the number of people now in poverty in America is the same as it was at the beginning of "Great Society" in the 1960's. On the the other end of the spectrum is the argument of those with capital ie. land, resources, labor, & management skills. They argue, as does Geither our U.S. Secretary of the Treasury, that to tax the means of production actually slows the growth of the economy and the ability of Capitalism to provide as much as possible for as many as possible. This was the reasoning behind the reduction in capital gains tax rates first reset during the Bush, Jr. Administration. Recently, Geithner has even suggested a 0% capital gains tax on property employed as capital investment for 10 to 15 year or more. These very argument will ensue in the months ahead and we will see what the outcome will be. But in the end it must be remembered that all sides, rich and poor, of every persuation, are stake holders in this system. And as such, probably none will act first to give up their advantage for the "greater good". And therefore, instead of becoming simpler, with the inevitable further negotiations, our Tax System will probably become more complex.