When Bernie Madoff made every scammer in history look like an amateur with his $50 billion haul, I’m not sure how many people wondered what positive effects he might have had.

But think about the argument for a stimulus program: let’s say we give Taxpayer A $1,000 right now, and saddle him with another $1,500 in higher taxes down the road. The $1,000 makes him feel richer, so he spends it — the $1,500 is a problem, but not just yet (and it’s a problem for a more robust, post-stimulus economy). The stimulus even works if it’s a different taxpayer: if taxpayer A gets the check and taxpayer B pays the consequences, B doesn’t spend less until the bill… Read more…

We hate losing money about twice as much as we like making it. Seriously. Several studies show that if you unexpectedly lose $1, you won’t be happy making just $1 back — you need $2 to reach an even keel. That’s one reason market volatility makes folks so nervous; when losses hurt more than gains help, a market that bounces around a particular level still makes people unhappy.

Here are a few ways you can ease the pain:

1. If you’re going to own stocks, own them forever. It’s not hard. Think about a company’s product. Ask yourself if people will still use it in fifty years. If yes, and the stock is fairly cheap, buy. If no, don’t. Sure,

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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…

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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… Read more…