Don’t Balance the Budget on My Back – Ken Gross

We all understand we have a massive deficit. The Iraq War was costly – but the rescue of the banking and financial industry from the economic recession along with the Economic Recovery Act and the trillion dollar bailout of Fannie Mae and Freddie Mac are, without question, the major causes why our country is so far in the red.

Having the benefit of over 2 years since the Great Recession tumbled Wall Street and our country in the latter half of 2008, it is commonly accepted that the cause of the debacle rests with the greed and avarice of the banking and financial institutions. Had President Bush and President Obama not rescued the banking industry at the pinnacle of the crisis, most economists agree that the world economy would have totally unraveled. So on this point, let’s give credit where credit is due and compliment our government for having the guts and willingness to take dramatic action in a short term  urgent situation.

That being said, let’s roll the clock forward to today. We just witnessed over the last two weeks Congress bogged down in gridlock on approving the budget so that a shutdown of the federal government could be avoided. In the end, they were fighting over $40 Billion of funding and the biggest event that occurred was Washington D.C’s right to spend its own funds on abortion funding was blocked in a compromise between the Republicans and Democrats to avoid the shutdown. Immediately after, the focus has now shifted to the fight over raising the $14.294 trillion debt ceiling and arriving at an acceptable agreement to resolve the budget deficit, which is currently estimated at $1.5 trillion for 2011.

So far – whether the discussion is about a State’s economic woes or the Federal deficit – every proposal I hear has one common thread. The cost of deficit reduction is to be borne by the U.S. citizen – through higher taxes (assuming the Bush tax cuts are not continued), Medicare, Medicaid, Social Security, Health Care and on and on. Now don’t get me wrong – somewhere and somehow you have to either increase revenue (i.e. taxes or and expanding economy) or cut spending to restore fiscal integrity to the system.

My question is this. If the Great Recession was caused by the greed of the Financial Industry, which was saved from economic death by the Government and the taxpayers and the recession is the cause of the deficit problem we now face, shouldn’t those responsible for the problem be called upon to bear the expense of resolving the problem? After all, as reported in The Wall Street Journal on March 25^th, U.S Finance Profits are soaring and have jumped back to $426.5 billion in the 4^th Quarter – nearing their high levels in 2006. Isn’t that nice? They get bailed out, saved from falling off the face of the earth – and now they are back to where they were before the recession. At the same time, the Administration and the Republican platforms are advocating budget restraints on the backs of the U.S taxpayer. My question is why us – and not them? Whatever happened to the notion of laying blame where blame belongs and making those at fault bear the cost of their actions? It doesn’t seem that difficult to me. The corporate profits of the Financial companies are presently running at an annual rate of $810 Billion. Here lies a simple solution. For the next 10 years, impose a 30% financial sector “Get Well Tax.” Assuming growth rates of 10% annually for the financial sector, the revenue increase would be $3.868 Trillion over 10 years. As a measure of protection so that the financial wizards that rule our great nation cannot weasel out from the tax, Congress needs to assess the tax on financial institution profits before officer compensation in excess of $250,000 per officer.

So what do you think – is it reasonable to make those responsible pay for resolving the problem – or should we just let our representatives continued to be influenced by the greed of Wall Street and saddle the U.S Taxpayer with the cost of resolving the problem created by the financial sector?

Ken Gross is an attorney with THAV GROSS PC (www.thavgross.com) and hosts The Financial Crisis Talk Center (www.fctalkcenter.com), a radio program that airs weekly at 9 AM on Saturday mornings on WDFN “The Fan” 1130 AM.Tweet

Catch Podcast of Saturday's Radio Show on Tax Problems

Jenny Lingl, Tax Manager at THAV GROSS joins Ken and David on The Financial Crisis Talk Center for an informative look at Tax Problem issues  – Part One, Two and Three

Thav Gross in the Wall Street Journal ..

By ROB JOHNSON

For many entrepreneurs, phoning an attorney summons images of a ticking clock and mounting bills. Now law firms are trying to win new customers by offering deep discounts for start-ups.

Some firms are offering small businesses a flat monthly fee rather than charging them by the hour. Others offer flat rates for certain services, such as handling the paperwork for starting a company.

Many small companies say the discounts are a big help at a time when budgets are tighter than ever. Ray Case, a plumbing contractor in Ann Arbor, Mich., says flat fees from attorney Ken Gross proved precious as he journeyed through bankruptcy court, folding one company and forming another. He paid $10,000 total for at least 100 hours of work, and estimates he saved at least $15,000 over typical hourly rates.

“When you’re basically out of money,” says Mr. Case, “you can’t give an attorney a blank check.”

Born of Necessity

The impetus for these deals is simple: Lawyers need to drum up more business, but many entrepreneurs can’t afford traditional payment plans these days. “The economy has melted down, and a lot of work we’re doing is for people on a tight financial budget who can’t commit to an hourly fee schedule,” says Mr. Gross, managing partner at Thav, Gross, Steinway & Bennett PC in suburban Detroit.

Mr. Gross, whose firm started offering flat rates to small businesses in 2005, says his small-business clientele in the first half of 2010 was quadruple that in the same period of 2005. “You have situations where people got buyouts and had little nest eggs of money,” he explains. “They’re trying to replace income from the jobs they lost.”

Sadly, he says, there’s another reason demand is booming: Many small-business clients, like Mr. Case, need help with debt resolution and bankruptcy-related matters, rather than with starting up.

The deals are springing up across the country. In New York, MasurLaw offers small businesses a flat rate, starting at $500, for services such as help with launching a company. Senior partner Steven Masur says that “when the recession hit, we felt that predictable pricing would take the guesswork out of legal fees,” raising the comfort level of potential clients and fostering continuing relationships with them through their early days.

In Blacksburg, Va., Creekmore Law Firm PC introduced a plan last year that charges small businesses a flat rate of $75 a month, after an initial fee of $750. “Some small-business owners would come in for an initial consultation, find out our hourly fees and wouldn’t come back,” says Keith Finch, an associate at Creekmore. “They’d just disappear.”

Proceed With Caution

To be sure, there are some potential hazards for small businesses in going this route. Joseph DeWoskin, chair of the American Bar Association division that specializes in issues facing small law firms, advises entrepreneurs to check references and get promises in writing. Be careful, he says, of “the bait and switch, where they tell you they can do it for this price and then say they can’t.”

What’s more, you can’t expect attorneys to do everything for a flat rate. Most lawyers who offer these deals set limits for what the discounts cover. For example, Mr. Finch excludes some potentially time-consuming legal work from his small-business price, such as suing or defending against litigation, and giving tax advice.

Further, some law firms insist that their discounted services for entrepreneurs be conducted on the phone, rather than consultations in their offices, to speed up the conversations. Others want much of the work to be done via email. That might make for a distant relationship between lawyers and clients.

Some entrepreneurs, however, say that they don’t mind, since they’ve gotten used to dealing with customers that way to save time. Rafe Steinhauer, president of Benefeast LLC, a White Plains, N.Y., company that raises funds for nonprofit organizations, says long-distance contact works fine once a sound relationship is established.

“You don’t have to keep making special trips to the lawyer’s office,” he says.

Mr. Johnson is a writer in Roanoke County, Va. He can be reached at reports@wsj.com.

Thav Gross Steinway & Bennett's Financial Crisis Talk Center Launches Resource Website for Consumers and Business

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BINGHAM FARMS, Mich., Feb. 22 /PRNewswire/ — The Financial Crisis Talk Center (FCTC), a weekly radio talk show hosted by Financial Crisis Experts Ken Gross and David Einstandig of Thav, Gross, Steinway & Bennett, PC. on Detroit Sports Talk Radio 1130 AM has launched a new website, www.FCTalkCenter.com.

The new web-based financial crisis resource was created by the firm for consumers and businesses that are searching for help and need answers regarding their vital financial concerns.  Visitors to the site can find discussion forums, podcasts and in-depth information on issues relating to loan modifications, debt resolution, bankruptcy protection and tax relief.

“We created the Financial Crisis Talk Center website because we know first-hand how confusing it is for people, who are already overwhelmed by their financial situation, to find resources, information and options to help them,” said Ken Gross, Firm Shareholder.  ”We designed this site to provide comprehensive information they need to formulate a ‘go forward plan’ for a successful financial future.”

In addition, visitors can provide their e-mail address and subscribe sign for breaking news alerts relating to the country’s financial crisis, along with updates to attend free seminars offered by the Financial Crisis Talk Center team throughout SE Michigan.

Leveraging their 28 years of experience in resolving business and personal financial and tax problems, The FCTC specializes in meeting the needs of business and individual clients by providing Financial Crisis Management. For businesses, this means crafting a strategy to address delinquent taxes and the problems imposed by banks that are refusing to continue to extend credit to the business. For individuals, the firm designs strategies that include exit strategies from homes underwater, loan modifications, debt resolution, bankruptcy protection and tax relief.

Local organizations are encouraged to contact Ken Gross if they’d like the FCTC to conduct a free seminar for their members.

About Financial Crisis Talk Center

The Financial Crisis Talk Center, sponsored by Thav, Gross, Steinway & Bennett PC and hosted by Ken Gross & David Einstandig, began airing in November, 2008. The FCTC’s goal is to provide the forum and resources needed to advance forward in this difficult time and succeed. FCTC airs on Saturdays at 8:30 AM on Detroit Sports Talk Radio 1130 AM.  For more information about the Financial Crisis Talk Center, please visit, www.FCTalkCenter.com.

What Do You Think of Your New Tax Assessment .. I'll Tell You What I Think ..

Dear National Banker Association and Persons Responsible for Maintaining Fiscal Policy in the United States during the 1990’s and 2000’s:

Well where do I begin. How about with my Notice of Assessment that I received Thursday from the City of Farmington Hills, Assessor’s Office.

Thank you, thank you, thank you. I’m so happy to see that my taxable value of my home, as well as my Assessed Valiue declined $11,930 this year, which represents a 8% decline in value. I’m down to $127,560, which means a FMV of $255,120. In 2006, my Assessed Value was $198,640, which means the equivalent of $397,280. Well, well, I’m sooooo happy. I’m only down $142,160 in value since 2006, 4years. A measely 35% decline in value.

Not bad. I did pay $250,000 for the home in 1989. And now, after maintaining it, improving it, caring for it and even loving it (or at least my wife) I’m so happy to see its worth $255,120. Thank you, thank you.

I’m so glad that your view on things is that I have a moral oblgation to pay my $400,000 mortgage even though my house is now only worth $255,000. I guess you have a point. But don’t morals run both ways – isn’t it a two way street? If I have a moral obligation to stick with a investment that has turned bad, don’t you have a moral obligation to step up to the plate and bear financial responsibility for the financial meltdown you caused?

I know. You don’t see it that way. You know what. I don’t give a rats ass as to what you see. Maybe its time you wake up, look in the mirror and see what we see. A self righteous, arrogant pig that has rapped our country and people of the good which it deserves –  and that’s the way it is.

Ken Gross

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