 Safety features on autos have come a long way since 1922 when famed driver Barney Oldfield reportedly rigged up a parachute harness to be used as a seatbelt on an Indianapolis 500 race car.
Today, it’s common for vehicles to carry devices that automatically steer you back into the middle of your lane should you drift too much, or signal when someone is coming up on your blind side. They’ll correct your steering, stop your car a foot behind the guy in front of you, and deploy no end of air bags should you get struck. Volvo, the Swedish automaker, has a project it calls Vision 2020 whereby it intends that no one driving one of its new cars in the year will be killed or even seriously injured. Now that’s a vow for safe driving. I’m all for safety. But for the sake of curiosity, the money-minding wonk in me wondered; what’s the price for all these safety gadgets? That turns out to be a question without a precise answer. The government doesn’t keep any such current statistics. Nor does the Insurance Institute for Highway Safety. While automakers know the answers, for competitive reasons they keep the data under wraps. Still, we can look at some historical records to get an idea of what certain safety features cost when introduced. Then we can extrapolate to present day dollars. Basic safety features, such as those seat belts, or rear view mirror or safety-glass windshields, have been around for a long, long time. Starting in the 1960s, though, serious thought was given by regulators about raising safety and emissions standards. Some of this was prompted consumer advocate Ralph Nader’s 1965 indictment against the auto industry’s questionable safety record with his book, Unsafe At Any Speed. A 2004 study conducted by the Institute of Transportation Studies at the University of California-Davis estimated that in 1967 Detroit spent a measly $11 per vehicle on safety measures. Federal law mandated installation of seat belts in 1968 model year cars and between then and 2001 regulatory mandates ballooned, causing one-fifth to one-third of the total price increase of autos. The Institute further said that as much as one-fifth of the entire value of a car was tied to regulations. The National Highway Transportation Safety Administration was not nearly as generous, as it pegged the cost of safety equipment on a 2002 vehicle at $839, or 4 percent of the value. It ignored some stuff, such as windshields or padded dashboards. But it broke down the cost of many individual safety features; head restraints cost $31, safety belts cost $124, air bags added $397, and roof crush resistance was a bargain at just $3.47. This study needs to be updated to reflect today’s costs. And it needs to take into account the vast improvements in auto safety. Scan the sticker on a new car lot today and you’ll see that most of safety features are just rolled into the price as standard equipment. A 2016 model Mazda 6, for instance, listed no charge for items such as Anti-lock brakes (ABS), air bags, tire pressure and blind spot monitors, and what it called “smart city brake support.” This places a laser sensor in the windshield that detects the risk of a collision at speeds up to almost 20 mph and applies brakes if need be. Whether it’s standard equipment or an add-on, these features have made for some incredibly safer highways. In 2014, 32,675 people died in traffic accidents. That’s the lowest number since 1949, when total miles driven were just one-seventh as much. If automakers such as Volvo can hold to their pledge we’ll see even better results.  Article Highlights:
Many taxpayers prefer to care for ill or disabled family members in their homes as opposed to placing them in nursing homes, but doing this can be expensive, time-consuming, and exhausting. The government also recognizes home care as a means of reducing the government’s costs in terms of caring for individuals who otherwise would be institutionalized (because they require the type of care that is normally provided in a hospital, nursing facility, or intermediate care facility). To promote home care and reduce the government’s institutional care expenses, Medicaid (through state agencies) pays home caregivers a small wage (usually reported on Form W-2 but sometimes on Form 1099-MISC) referred to as a Medicaid waiver payment to care for an individual in the care provider’s home. The IRS historically has taken the position that these payments were taxable income to the caregiver. However, in a notice issued in 2014, the IRS announced that, if the care met certain requirements, it would no longer challenge the excludability of these wages and instead would treat them in the same manner as excludable difficulty-of-care payments under the foster care payments rule. This is the case even when the caregiver and the individual being cared for are related. Therefore, the exclusion can be applied to all future years and to all prior open years if the following requirements are met: The compensation must be required due to a physical, mental, or emotional handicap with respect to which the State has determined that there is a need for additional compensation. The care must be provided in the care provider’s home. The “provider’s home” may be the care recipient’s home if the care provider resides there and regularly performs the routines of the provider’s private life, such as sharing meals and holidays with family. In contrast a care provider who sleeps at the care recipient’s home several nights a week but on weekends and holidays resides with his or her own family in a separate home would not be providing the care in the care provider’s home and would not qualify to exclude the Medicaid waiver payments received. The payments must be designated as compensation for qualified foster care or difficulty of care. To be excludable, the care payments are limited to a maximum of five individuals age 19 and older or ten individuals age 18 and younger. Since these payments are now treated the same as qualified foster care difficulty-of-care payments, and since compensation for qualified foster care payments is mandatorily excluded, Medicaid waiver payments are also mandatorily excluded. That is, the care provider receiving these payments may not choose to include them in income. This change is a double-edged sword, as some lower-income caregivers were previously able to qualify for the earned income tax credit (EITC) based upon this income. The EITC is a refundable federal tax credit for lower-income taxpayers with earned income. The amount of credit is based on income and increases based on the number of children that the taxpayer has (qualified children include those under age 19 and full-time students under the age of 24; there is no age limit when the child is permanently and totally disabled). Now, since these Medicaid payments are mandatorily excludable, the compensation no longer counts as earned income for the EITC. On the other hand, those with substantial other income will welcome the IRS policy change, as it reduces their income and thus their income tax. Still other care providers—those with earned income from other sources—may benefit from both the reduction of income and the EITC. The EITC phases out for higher-income individuals, so with the Medicaid waiver payment excluded, these individuals’ modified adjusted gross incomes may be reduced enough to qualify for the EITC based on their other earned income. These individuals also may benefit from a lower income tax based upon the exclusion. As you can see, the impact of the exclusion can be quite different depending upon your particular circumstances. If you are receiving Medicaid waiver payments and have not yet dealt with the exclusion, please call this office to see how excluding these payments might affect you. This article was written by: The TMA Small Business Accounting, P.C. Their staff has been delivering professional services to small businesses in Central Indiana for over 20 years. Having worked with hundreds of small business clients, we have significant expertise with a wide variety of service businesses in Indiana. We have especially strong experience and expertise in working with businesses in the healthcare (medical, dental, etc.) and foodservice (restaurants, caterers, etc.)  I was sitting on the deck at our beach house in South Carolina gazing at the beautiful, blue Atlantic Ocean. It was a wonderful May day with a temperature of 77 degrees, blue skies with just a few whispering clouds and a light breeze. It just doesn’t get any better. When I view the palm trees, vegetation, and the dolphins playing, it just doesn’t seem like anything is out of place or in harm’s way. But, I know that we have protection problems. The beach has been eroding over the last few years and has lost some of the its strength. The winter storms have taken their toll on the sand dunes. Hurricanes did not reach the low country, but their powerful winds and storm surges made their presence felt. Some of the more recent storms are doing likewise.
These dunes are very important for all, including the human population. You see, the dunes must be at least three feet tall with an area of 10 to 20 yards of vegetation followed by another set of dunes at the sea wall. The concept is that vegetation and wildlife will inhabit the center portion and strengthen the area. The dunes behind this area will help stop the waves from entering our homes and flooding the island which is below sea level. Of course, a hurricane would be too much for these dunes to handle, so evacuation plans are always a necessity. Finally, we must repair the beach. The state of South Carolina will begin what it calls a “beach renourishment program” soon. It is very precise work to replace sand, and not just any sand will work. Let me explain: Sand basically has its own DNA. It has its own “blood type.” So, it must be matched perfectly. The Army Corps of Engineers will take barges and drill three to five miles offshore. They will then dredge portions of the beach and prepare for an onslaught of perfectly matched sand. They will blow it through large pipes and the Palmetto state will look like it is having a Midwestern snow storm! Sand fences (like snow fences in the north) will have already been erected, the sand will stick, the tide will harden the dunes, sea oats will be planted, and we will be okay for another ten to fifteen years. However, protection and security is not a one time job. We must review it constantly and take action before disaster strikes. The same is true for us. We may think that our financial plans are solid and “flood proof.” But, the ravages of inflation and taxation and the looming threat of long term care needs can threaten our security. Our longevity is a double-edged sword. We are fortunate to enjoy more life on our great earth, but we may come up short on the dollars we need to sustain our lifestyle. So, it’s time to get out of our deck chairs and get to work. You may be in a future storm’s path. Give your Safe Money Places™ professional a call and schedule a “renourishment” review. Assure yourself that you will be safe in both sunny and stormy times. Have a great summer. Hope to see you on the beach. This article was written by: Raymond J. Ohlson , CLU, CRC, LACP President and CEO of SMP International LLC |
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