by Geal Fukumoto, Edward Jones (Kaneohe) When the dust finally settled, Congress agreed on landmark legislation that provides the biggest tax cut in 16 years and is projected to balance the budget by the year 2002. The legislation is good news for investors. The top rate for capital gains taxes was reduced from 28% to 20% for assets held longer than 18 months. For securities purchased after the 2001 and held at least five years, the top rate will be 18%. This break for assets held five years rewards investors who employ a buy-and-hold strategy.
And, the legislation increases the estate-tax exemption from $600,000 to $1million over 10 years. For the owners of qualified small businesses and family farms, the exemption is immediately raised to $1.3 million. The tax breaks associated with IRA's have expanded substantially. The package lifts the adjusted gross income (AGI) limits for tax-deductible contributions for those who are covered by a retirement plan at work. The new "phase out ranges" (the AGI range where deductibility is phased out) is $80,000-$100,000 for couples by year 2007 and from $50,000-$60,000 for individuals by year 2005. In addition, the legislation paves the way for some new IRAs. You'll now be able to make contributions to a Roth IRA. Although contributions to the Roth IRA are tax-free and penalty-free if they are taken five years following the first taxable year in which you made your first contribution and due to the death of the account holder, disability, age 59 1/2, and for first-time homebuyers (up to $10,000). Couples with AGI of less than $150,000 and individuals with AGI of less than $95,000 for individuals. And, you'll have greater flexibility. You will now be allowed to make penalty-free (no 10% penalty) withdrawals from your IRA for college expenses or up to $10,000 for first-time homebuyers. All in all, the combination of expanded income levels and new types of accounts makes IRAs more attractive than ever before. Middle-income families stand to benefit greatly because they will receive income-tax credits for having children and putting them through college. Single parents with incomes as low as $12,000 and two-parent families making up to $110,000 are eligible for the "kiddie tax credit." Parents will receive a $400 tax credit per child ages 16 and under for 1998; this will increase to $500 per child in 1999. Couples with incomes as low as $18,000 can take advantage of the credit. Even if they don't pay taxes, they'll receive a check from the government. Middle-income families also benefit from tax breaks designed to offset the costs of college tuition. Parents will receive a tax credit each year, and some middle-income families will be able to deduct interest on student loans up to a pre-set limit. In general, tax credits are more valuable than tax deductions because they are taken right off a person's tax bill. For example, if you owe $7000 in taxes and have two children, your tax bill would immediately be reduced to $6200.
 LETTERS TO THE EDITOR REPRISE ON HOME OFFICES This is in response to Carol Lee's Guest Commentary (September) lamenting the disparity of certain zoning laws. Ms. Lee's predicament is tragic and unfortunate; she is being punished for a violation that is perpetrated by so many residents. She is being pursued by the state because she told the truth. Most business owners who expand their homes to include an office identify the new space as a bedroom or "den" on blueprints submitted to the building department. That is, if they even get a permit for the work... There are so many others who would like to move their businesses home but don't because of this zoning law. There are even more who, whether they know or not, live and work in violation. The benefit of those in violation is they keep a tight lid on their activities so as to not alert the authorities. In other words; they do their best to keep quiet and remain innocuous and undetected. This is a vexing situation; the law was designed to preserve residential areas by preventing commercial establishments from creating a business district in a residential area. Babysitters, gardeners, and house cleaners are an integral part of a residential environment; few other businesses qualify. No one wants to live in a commercial district. I realize that Ms. Lee's typist may not be seen or heard by anyone; but other businesses may have larger crews, deliveries, vehicles, storage needs, and so on. Increased traffic, noise, pollution, and use of infrastructure; along with a decrease in safety and a peaceful atmosphere are viable concerns. Simply demanding that these laws be abolished may be an example of small businesses whining and complaining. We must draft an amendment to this law that will allow for quiet, non-trafficking businesses an opportunity to work at home and at the same time maintain residential zoning. Ms. Lee is on the right track in suggesting that she apply for a permit for a home employee. While I am no friend to over-regulation, this is one area where small business and the public could be served by an approval process at the State level. Get out your pen and paper, Sam; we've got work to do!
GOVERNOR'S ECONOMIC TASK FORCE A SHAM! The Honorable Governor Ben Cayetano: The best suggestion that could be made would be for you to appoint some Republicans to your "task force". But, who is kidding who? You have not made a Task Force, you have made a sham. The times are changing here in Hawaii allright. Soon you will no longer be able to "pull the wool over everyones eyes". Do you really think it's appropriate and acceptable to your constituency to appoint only union bosses and Democrats to your task force. As an aside, I can only wonder how much of the "task forces" money you felt it necessary to spend on your web site? But why not spend it, the Government in Hawaii has no accountablity to anyone. Why don't you see if your counterpart from New Jersey, Governor Christie Todd Whitman would be willing to share some ideas with you. I am not intending to be offensive by my comments. I only can tell you that I, like many of your constituents have had enough with a Governor and a Government that feels it can spend its way thru every problem. Spending more money, hiring move government employees, preventing privitization of contracts and the like, are a sure way to continue the 6 year recession that we are in. You should be embarrased by the worst/last place ratings Hawaii continually receives for its fiscal irresponsibility and horrible business climate. Do you continue to turn a blind eye to the ever increasing numbers of bankruptcy filings here and the numbers of businesses leaving the state every month? I guess that Mahalo Airlines couldn't run it's company as well as your wife runs hers. Another Hawaii bankruptcy filing today. No disrespect directed at your wife or her success. You said all it takes is hard work to succeed in Hawaii. Maybe it takes something else. There are more of us opening our eyes every day and we will show our numbers at the ballot box. I can be reached at 395-7910 if you would care to discuss my thoughts.
Mark A. Nannis via the internet
Apple's Alive and Kicking By Melvin Ah Ching, Desktop Publisher & Mac Consultant The past 12 months have been a tumultuous time for Apple computer. It started with their buyout of Steve Jobs' (and Apple founder) NEXT Computer company and recently crested with a $150 million stock investment by Bill Gates' Microsoft Corporation and the buyout of Power Computing's Mac OS (operating system) license for $100 million. In-between, Apple lost hundreds of millions of dollars in several quarters, saw the marketshare of Macintosh computers dip from 15% in 1995 to just 5% this year, and went through an executive reorganization after CEO Gil Amelio and several board members were let go.
APPLE'S ALIVE! Steve Jobs is running the entire show at Cupertino as defacto CEO until a new one is hired. The Microsoft deal which purportedly commits the giant monolith to support the Macintosh platform will insure Apple's viability for at least 5 years. The company is also going ahead with plans on introducing new system software including development of the Rhapsody OS which is supposed to run on both Power PC Macs and Intel platforms. Still, a dark cloud looms on the horizon. APPLE'S KICKING BUTT! The biggest issue that has drawn storm clouds of protest from the Macintosh community has been that of third party licensing. Up until 1994, Apple was the only computer company that sold Macintosh computers. This changed late that year when Apple decided to license its Macintosh technology to other computer manufacturers. Several companies jumped on the Mac bandwagon and before Apple knew it, some of them were doing a better job of selling Macs. The most notable success story in the Mac clone market was that of Power Computing. The Texas based firm started up as a Mac clone manufacturer and sold hundreds of thousands of Macs through its direct mail channel over the next 2 1/2 years. Customers could order Macs directly from Power and have their computers custom configured to their hearts' content. Power also offered superb service and lifetime technical support at a time when Apple's customer service was going downhill. Their prices undercut Apple by a few hundred dollars per machine. The whole issue came to a head early this year when Apple decided that their latest system release would be OS 8. According to the original license, cloners could only sell Macs bundled with Mac OS 7.x. After many weeks of heated negotiations, a near agreement and many disagreements shortly after, the whole cloning issue came crashing down when Apple announced that it was buying out Power's license on September 2nd. Apple's reasoning for buying Power's license was that Power and other cloners did not want to pay a higher fee to Apple in order to sell the latest technology. Power and the other cloners were also accused of not developing new markets for the Macintosh and instead sold and cut into Apple's core markets. Now it seems like Power was singled out as the latest news to break over the internet at press time indicate that clone companies like Umax will be able to sell their machines with Mac OS 8. The decision came as a major disappointment to many in the Macintosh community. Several industry and media types say that this decision will eventually kill Apple. Macintosh users are split on the issue, though many echo the sentiment that killing the clone market eliminates consumer choice. History has shown that no company has survived selling a proprietary technology. Others however are cautiously optimistic and say that killing off the clone market will be a good move for Apple. Time will only tell. If you are a Macintosh user, what should you do? Now may be a good time to actually buy a Macintosh computer. Prices are as low as they ever could be. Power has already cut the prices on their Mac clones as they are bound by the agreement to be out of the Mac market by December 31. Power's Macs have consistently been excellent machines per dollar invested and have won numerous awards in the Macintosh press. I own one and am very happy with it. If you are not considering a Mac clone and want to remain true to Apple, now may be a good time to buy since without the clones prices for Macintoshes may increase.
More articles about computers can be read at Mel's Computer Corner webpage.
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In addition, the package contains a break for homeowners. You now won't have to pay capital gains on the sale of your home if the profit is $500,000 and you file jointly. Single individuals may exclude up to $250,000 of gain upon the sale of a home.
Despite this, Apple has cut costs through elimination and consolidation of several divisions and product lines, introduced new Macintosh computers and released three major updates of its system software on time. The most recent release, Mac OS 8, is a major revision. It is a bonafide hit for Apple, selling 2 million copies in the first month of release.