While employees of the former Washington Mutual and Wachovia are busy fixing embarrassingly apt broken signs and fairly awkward ads, their depositors are wondering: what next? Although their deposits are protected by the FDIC, many people would just prefer not to be a customer of JP Morgan Chase or Citigroup -- they want their old bank back! I can't offer that, but I can offer a few tips on choosing a new bank: Try to find someone a little less trendy. Wachovia bought one of the biggest providers of adjustable rate mortgages, at the peak of the property boom. And WaMu cleverly reasoned that, at a time when people are beginning to mistrust big financial institutions, and to worry that these companies were not exercising careful stewardship over their customers' money -- it was time to sink millions of dollars into an ad campaign associating WaMu with the phrase "Whoo hoo!". As in, "Whoo hoo, we lost $14 billion before before being taken over by the government and sold to a competitor!"To avoid this, try to find a bank that's un-trendy, or better yet, anti-trendy. Forget about subprime -- think about the last incredibly stupid financial bubble. A company like Crazy Woman ...

While yesterday, most people were (rightfully) concerned about the 777-point Dow crash, many stories were largely ignored, or at least, barely mentioned. Here is a list of those stories that you probably missed yesterday (in no particular order): 1. Canada Gets Hit by a Hurricane Hurricane Kyle went through parts of Maine and hit Canada, bringing heavy rain and wind. 2. Ron Paul says it how it is: corporatism - not free markets led to crash 3. For the past 2 weeks, people in Tenesse, George, & North Carolina have limited access to gas People in these states are getting ever more aggravated as they are being forced to wait in long lines to gas up their vehicules. This may encourage more to use alternative transportation on the other hand...only if there were more of it available. 4. Bob Herbert comes down on Palin In an editorial on Monday, Herbert says, "History has shown again and again that a vice president must be ready to assume command of the ship of state on a moment’s notice. But Ms. Palin has given no indication yet that she is capable of handling the monumental responsibilities of the presidency if she were called upon to do so." 5. Olmert says Israel ...

The taxosphere is abuzz with news as the bailout continues to be debated and revised. Meanwhile, day-to-day tax issues still dominate the discussion. Linda P on Yahoo! Answers has run into a stick tax situation: what do you do if someone was paid off the books for twenty years, and wants to settle things with the IRS? After a while, it can be tempting to try getting away with it for just one more year -- but as the answerers show, that's just a way to compound the problem. At Don't Mess With Taxes, Kay Bell wants to know if the home sale tax exclusion caused the housing bubble. As one linked source argues, Maybe it wasn't speculative mania... Maybe much of it was due to changes in public policy. An even more compelling answer: it was a speculative mania fueled by irresponsible policies, and the promise of further irresponsibility. Paul Caron of TaxProf has more. In case you were wondering about what happens when you don't file and don't fix it, Paul Caron of TaxProf writes about the sentencing of Milton Street, brother of a former Philadelphia mayor. Thirty months in prison for three years of missed filings? Probably not the typical ...

Whether you're sitting on an employee options grant or day-trading puts and calls, taxes play an important part in determining how much money you keep from every trade. Here are some quick tips to get you started: When you are granted employee stock options, you won't pay taxes on the initial grant. This is one of the reasons options have been so popular. They're a great way to show someone that their work is recognized, but to give them an incentive to stick around for the long term. Since they're valuable from day one, they provide a nice incentive, but unlike other forms of incentive, they don't burden anyone with a cash outlay. When you do cash in your options, tax liability may become a problem. The size of the problem depends on how you structure things: if you exercise and then sell right away, you're hit with normal taxes. It's often a better idea to exercise and then hold for a year, so you get long-term capital gains treatment. The problem here is holding on: for many people, the shares from a stock option exercise are by far the largest position in the account, and it's often difficult to exercise these ...

Tax evasion is usually less exciting than it might sound. Often, it just amounts to shuffling some papers to create fake losses or shift profits -- or, more often, 'forgetting' to do the paperwork that might cause a taxable gain. Not so with the case of Igor Olenicoff and Brad Birkenfeld. Everyone in this deal tells a different story (one thing every version has in common is that the narrator is innocent), but it looks like it went something like this: Birkenfeld was a middling banker at a very well-reputed bank, with exactly one great client. Igor Olenicoff was a billionaire with office space and apartments in Vegas, Arizona and Florida -- he wasn't exactly thrilled with the performance of his bankers. At some point, Birkenfeld started shifting assets offshore, presumably to keep Olenicoff happy. Unlike a normal tax cheat who might do this by wiring money around cleverly, or arranging dummy sales, Birkenfeld stuffed diamonds into a toothpaste tube and personally carried them overseas. A bad idea for several reasons, not the least of which is that X-rays see right through toothpaste tubes. Somehow, Birkenfeld wasn't caught for years -- but once he was, he helped nail Olenicoff for his role in ...

Many bloggers are still processing the effects of the recent financial meltdown and bailout. Here are a few fresh views on that and other matters: Five Cent Nickel explains what happens to your mortgage if your bank goes under. Part of the trouble with the mortgage boom was that the mortgage was disconnected from the people who originated it -- you might live a block away from your mortgage broker in Dubuque, and have no idea that your mortgage was being traded back and forth between hedge funds in Greenwich, bankers in London, and sovereign wealth funds in Dubai and Beijing. But that disconnect works out in your favor when the bank you have a relationship with collapses. An anonymous poster on Metafilter wants to know if he'll get audited because his family refuses to pay income taxes. Lots of good comments on how far the IRS will go to collect (and how far they won't go, too!). Linda Beale at A Taxing Matter lauds Rhode Island's new disclosure rules. We all know how much we pay, but in Rhode Island they're about to find out exactly what they get, too. The editorial staff at the Wall Street Journal launches a full-bore criticism of ...

Interesting Tax blog links from around the Internet: MauledAgain wants a "greed tax": The tax would apply when a person's or entity's attempt to accumulate wealth, rather than "trickling down" benefits to society generally, harms society. Since 'society' is made up of individuals, not all of whom are harmed by such actions, this sounds like a reinvention of the Tort system. David Zaring at Conglomerate is grudgingly happy that bailouts are playing by the rules again. He wonders if they might even get retroactive Congressional approval for earlier bailouts. I think the latter is likely -- once Congress says we should spend our tax dollars a certain way in the future, it should be easy to convince them that we should have spent that way in the past. alorasalia at AnswerBag wants to know if paying higher taxes is patriotic. The easy answer is the currently top-rated theory that if paying less taxes than you owe is bad, paying more taxes must be good. Of course, this theory allows you to conclude that if shoplifting is wrong, rampant consumerism is a moral imperative. Silicon Valley Blogger at the Digerati Life rhetorically asks where to invest after the stock market tanks and, refreshingly, says to ...

As part of their Presidential campaigns, Barack Obama and John McCain have both proposed serious revisions to health care taxes. Since health care is a large and growing expense, and one subject to fairly Byzantine tax treatment, it's interesting to consider how each candidate's proposals will affect the average taxpayer. Obama's proposal calls for grafting some new systems onto our existing health care system: in addition to employer-provided plans, he would offer extra guarantees for children. He'd also create a Federal insurance program offering a minimal level of coverage, and require that all health plans meet the same minimum criteria as the national option. This proposal would also require insurers to either provide insurance for their employees or pay into a general insurance fund. From a tax standpoint, Obama's plan is to finance this with higher taxes on the wealthiest tax payers, and lower taxes overall. It might work -- though there's a significant risk: if the problem with the health care business is too much money being spent, then a plan requiring more money to be spent won't exactly improve matters. And surely taxing doctors, surgeons, anesthesiologists, and other highly-paid medical specialists won't do much to defray those costs. Taxpayers could ...

Congress is debating a whole slew of new energy proposals, including adjusting or abandoning ANWR and coastal drilling restrictions, raising emissions standards, and adopting a new tax-and-credit scheme to encourage a shift from fossil fuels to alternative energy. It's all decent, well-meaning stuff, but the problem with these tax incentives is that they're just not as dramatic as the 'tax' Americans pay when oil prices rise. This tax creates a huge incentive to find alternative energy sources, with or without a subsidy -- and as long as no viable alternative is in sight, the prospect of using up oil reserves pushes prices that much higher. It's tricky to analyze a balanced situation like this, particularly when turmoil in the financial markets has had an effect on prices. But to anyone who dreams of building an electric car, an ultra-efficient solar panel, or a cost-effective geothermal system, every 1% increase in oil prices is a 1% larger market to sell to (and a market that's that much more angry at oil companies, and that much more willing to consider alternatives). The very goods Congress is taxing function as a 'tax' on consumers and a 'subsidy' for anyone with a better plan. With oil down ...

In retrospect, we'll view the last forty years as a bizarre aberration: during that time, speculation on an enormous scale was tolerated, celebrated, and even subsidized. The fact that this speculation occurred in residential real estate made it all the more insidious and dangerous. Looking over the last forty years (from when Fannie Mae was privatized to when it collapsed), it's clear that tax incentives played a huge role in creating the mortgage market, and in inflating the value of the real estate that fueled this market. The mortgage interest tax deduction made it seem smarter to invest money in a home rather than another means of savings. Of course, a tax exemption doesn't make homes any more comfortable, or improve the view: it just means that, relative to other investments, they're easier to borrow against. If they're easier for anyone to borrow against, their price will be higher than it otherwise could be -- so the interest tax exemption did not so much make homes a better investment as make them a worse investment you were compensated for making. That tax exemption alone would have been enough to inflate home prices, but only Fannie and Freddie could turn it into a self-sustaining ...