Posted on 10/09/2007 9:19:16 AM PDT by icwhatudo
Hello everyone, its been an interesting few days. I had no idea my post about the family used by democrats to push for expansion of the S-CHIP program would cause such a stir. There have been many questions and comments raised about me and my simple Google research that I thought I'd deal with them all on this post if it's ok with the Mods.
My interest in the S-CHIP issue came about because of the way it's portrayed in the media. President Bush's veto was of an EXPANSION of this health insurance program to include higher income families. It would not cut the program, (in fact Bush wants to increase funding), nor would it cause the Frost family to lose their coverage under it.
The Frost family choose to allow their son to give the democrat radio response to the president's veto. They choose to put their family story, picture of their home, and income information in the papers for all to see. Now that I look into the facts of that same story I'm accused of "invading their privacy" or "attacking a 12 year old boy". Could someone from Daily Kos, Think Progress, or Democratic Underground please cut and paste the part of my article that attacked the 12 year old boy?
The Baltimore Sun article about the family mentioned that the son attended Park school. I knew this was an expensive private school so I began to wonder why someone who could send their child there would need others to pay for their health insurance. It led to my use of Google to find out if there was information that the Baltimore Sun left out of the article. All the information I found I linked to in my post.
After posting my article a number of Freepers started emailing the story out to local papers and other blogs, talk show hosts, etc. It really exploded when Mark Steyn of National Review Online posted about it. From there it spread through the blogs including Michelle Malkin and even made it on the Rush Limbaugh's show. Last night ABC news online posted about the "firestorm in Washington" it was causing. Senate Majority Leader Harry Reid was accusing GOP leadership aides of "pushing falsehood" and complained that Republican staffers where passing the information out to reporters.
Left wing sites have begun to hit back, questioning my information. Many are linking to these 5 points from Thinkprogress.org that I will comment on:
"1) Graeme has a scholarship to a private school. The school costs $15K a year, but the family only pays $500 a year."
For all the claims my research was poor...where's your link? $15,000? From my link to the schools tuition page:
Tuition for 2007-2008
Lower School $19,530
Middle School $19,530
Upper School $21,080
Where did you get your information the family was paying $500 per year? Was this from the talking points memo you got from Harry Reid spokesman Jim Manley? Did he tell you how long they’ve had those scholarships? Any idea why the tenant in the commercial building they own, Mike Reilly (who has known the Frosts for 10 years) said See "Update 2:50pm"it was his understanding the children’s grandparents paid the bill?
We can debate the amount they are paying, or the amount the grandparents are contributing, or the amount that is earned through scholarships but the fact remains the family is paying to send their child to a private school while asking others to pay for their health insurance. Are you claiming otherwise?
"2) His sister Gemma attends another private school to help her with the brain injuries that occurred due to her accident. The school costs $23,000 a year, but the state pays the entire cost."
Again no link but I heard this as well. It was why I stated in my article that: "His sister Gemma, also severely injured in the accident, attended the same school PRIOR to the accident"
Its funny how the left wing echo chamber is seizing on this point to somehow show my information was bad. That somehow I was saying she was still attending the Park School. Will you concede that my statement "His sister Gemma, also severely injured in the accident, attended the same school PRIOR to the accident" is 100% true? At the time they choose to not purchase health insurance, prior to the accident, at least 2 of their kids attended Park school.
"3) They bought their “lavish house” sixteen years ago for $55,000 at a time when the neighborhood was less than safe."
Your information is incorrect (and again fails to provide a link). "They" did not buy the house 16 years ago, Mr. Frost bought the home on his own on 11/30/1990. The couple was married in 1992, and it appears his wife paid him $52,500 to be added to the deed on 09/06/2005. Interesting that on the Department of Assessments and Taxation form under "Principal Residence:" it states "NO". Do they own a second home in addition to the commercial property? Also, please cut and paste from my article where I said they lived in a "Lavish house". Large house-yes, and nice kitchen from the photo.
"4) Last year, the Frost’s made $45,000 combined. Over the past few years they have made no more than $50,000 combined.
Again no link. What is the source of this claim? Not saying their reported income was not as you state, but as Mr. Frost set up a LLC would you concede its possible that reported income could be different than actual access to financial resources? Maybe those more familiar on why people set up LLC's can tell us what creative things can be done with finances this way.
"5) The state of Maryland has found them eligible to participate in the CHIP program."
Exactly! Thanks for making my point. Even with the private school you admit they are partially paying for, even with the home that is not their primary residence, even with the LLC they set up and purchased commercial property with, even with a tenant in the building they own...they still qualify! So why then do we need to expand the program to families with even higher incomes than the Frosts?
I am also a father of 4 and I live in a waterfront house. We have 2 boats and go to the beach for 2 weeks each year. All 4 of my kids go to private school. If the S-CHIP program is expanded...WE WILL QUALIFY! I'd love to use the savings from others paying for my kids health insurance to buy a new motor for my bass boat but is that what we really want from S-CHIP?
A few other points:
Some blogs, radio shows, etc have incorrectly stated that I claimed their house was bought for $485,000 or was worth $500,000 etc. My actual quote on this was:
"The current market value of their improved 3,040 SF home at 104 S Collington Ave is unknown but 113 S COLLINGTON AVE, also an end unit, sold for $485,000 this past March and it was only 2,060 SF."
I found a similar (actually smaller) home a few doors down that recently sold for $485,000. A Freeper early on in my original post linked a zillow estimate of $360,000. The taxation page assesses the home at $263,140 and we all know assessed values for taxes are lower than market price(at least in Maryland). Are there cheaper homes in the area that have not been renovated yet? Sure, but lets not miss the point here. This is not a family of renters, they own not only a 3,040 SF home but a commercial property as well. I'm not faulting them for it, I'm not trying to say they are rich, I'm trying to make people aware of what types of families are CURRENTLY covered by S-CHIP so we can honestly debate if the income ceiling should be raised.
Hmmmm, I really could use that new bass boat motor and the kids really would like a Nintendo Wii ... maybe I'll change my position.
Great job, icwhatudo!
I’m not a CPA nor do I play one on TV, nor did I sleep at a Holiday Inn last night. In fact, I didn’t sleep at all!
We have a disagreement, but it is based on our experiences and the what varying situations have dictated.
Hubby however is a CPA, and his experience tells him that the type of business that you have, its size and limitations and needs dictate what is a better deal for owners.
Not to have a battle of opinions on this, I respect your opinion and your experience and the diplomatic manner with which you have presented your information. Thank you.
As far as a gift, yes it is a gift. I assumed incorrectly concerning the recipient. Yes, the giver pays taxes if necessary under the law, but note that the amount is now 12,000, rather than 11,000. I was completely wrong about the recipient. You know what happens when I assume! How often to we escape double and triple taxation?
I am always happy to get facts and stand corrected, in the pursuit of truth.
Thanks.
The overall point I was making remains in tact. You can have multiple business and each one can be structured differently and that dealing in cash is the fastest way to hide income, which is of course illegal.
These folks are pretty slick and know how to work the system obviously, so the so called facts in the Baltimore Sun article remain at the very very LEAST, in question.
Is everyone asleep now?
The LLC was formed in 1998 (if I remember correctly). In 2001, they failed to file a property tax report with the Maryland Department of Taxation. As a result of that failure, the LLC's charter was forfeited (revoked). The LLC did not file any reports thereafter, either.
Under Maryland law, the LLC can be reinstated if the reports are filed, all taxes (plus penalties and interest) are paid and the owner of the LLC requests reinstatement (along with the payment of a filing fee). Until this is done, the LLC does not exist as a separate legal entity. Mr. Frost has no protection from personal liability for work done under the name of the LLC (*this is the main reason you form an LLC, to protect your personal assets!).
The left wing blogs are saying that you are mean! How dare you fact check this kid’s story. LOL
Seriously though, Great Job.
That’s OK. It’s actually quite plausible that he might misspell his own name.
Excellent Work!!
You are correct. The decision as to which form of business entity to use is based on the client’s needs and expectations. For some clients, an S corp is appropriate, for others a C corp or an LLC would be better. It is tailored to a client’s particular needs and tax situation.
Now, to really put everyone to sleep, the main differences between an S corp and an LLC are as follows:
S corporations are pass through entities, as are LLCs. There is no tax paid at the corporate level. Instead, profits and losses are passed through to the shareholders (or members).
In order to be an S corporation, you can not have more than 75 shareholders and all must be US citizens or legal residents. You can only have one class of stock with identical voting rights, dividend rights, etc. Profits and losses are passed through to the shareholders pro rata based on ownership percentages.
In an LLC, you must elect how you want to be taxed. If you elect to be taxed as a corporation, you can be taxed as a C corp (and pay tax on the corporate level as well as sharehoilder level) or an S corp, in which case you have to follow the S corp rules. In the alternative, you can elect to be taxed as a partnership. (This is the attraction of the LLC form of entity). If you elect partnership tax status, you can have more than 75 members and there is no citizenship requirement. You can have multiple classes of stock with different payment rights, payment priority, voting rights, etc. You can also specially allocate profits and losses. For instance, if you have one member who has a lot of passive investments and can use the losses as a write-off, and other members have no need or use for the losses, you can allocate all of the losses to the guy who can use them.
So, as you can see, the special circumstances of the client dictates which form of business is to be used.
If you’re takin’ flak it means you’re over the target!
great work, you socialism soboteur!
seriously...great job.
Stand strong.
Excellent work, icwhatudo. You have done us proud. :-)
ABC News’ Rick Klein: who ‘reported’ the talking points for the left.
WELL!!! Sounds like a job for the IRS!!! Oh, I forgot....he’s a Democrat....laws are ONLY for Republicans to follow!
Keep in mind that while this argument is ongoing the government is working to take medical coverage away from retired US soldiers who served full careers in the defense of this nation.
They probably don’t have medical payments coverage on their auto insurance to get a lower rate. Why not if they can get the state to pick up the tab.
If the grandparents are paying it, they can jointly gift $22,000 to each kid ($11,000 each for GM and GF). If they give more, they must pay gift tax or utilize a portion of their unified credit.
Thanks for doing the media’s job.
This could be the catalyst of the democratic/liberal party implosion.
Ouch, that hurts. Not her attack but the fact I didn't get to go.
It's BYOP time. Bring Your Own Pitchfork...
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