Eagle & Fein - March 2021

Eagle & Fein - March 2021

MARCH 2021

E AGLE A ND F EIN . COM

317-726-1714

What Do Time Capsules and Taxes Have in Common?

HINT: THE ANSWER IS A FOUNDING FATHER

Five years ago, my family and I donated $2,000 to the Central Indiana Community Foundation in honor of its 100th anniversary. But there was a catch. The foundation did not spend the money that year. Instead, it put the entire balance, along with hundreds of other donations, into an investment time capsule inspired by Founding Father Ben Franklin. In total, the foundation created two capsules, each worth $100,000. Once they were funded, it invested the full balance into the Central Indiana Community Foundation’s endowment investment pool and promised not to touch it for 100 years. In 2116, that money will be worth roughly $200 million! Then, The Central Indiana Community Foundation will use it to fund public projects and nonprofits to improve the city. This idea is called a “Franklin Fund,” and it dates back to 1790. That year, Ben Franklin died and left $2,000 to the city of Philadelphia and $2,000 to the city of Boston in his will. His directions stipulated that the funds could not be drawn for 100 years, and the cities had to wait 200 years to distribute them. This is just one of the many reasons I love Ben Franklin. His donations were a brilliant idea and a bold investment in the future of our country. In the years since Franklin’s trust ran out in 1990, cities across the nation have followed its example — including Indianapolis, where I happily joined in the fun. Because of initiatives like the Ben Franklin Fund, Franklin is often considered to have been ahead of his time. Another area where his foresight excelled was taxes. In a letter to a friend following the ratification of the U.S. constitution, Franklin famously penned this line: “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.”

been a part of American life?” The answer might surprise you. Here are a few of the most interesting income tax facts I discovered.

• The earliest form of U.S. income tax was created in 1861, when Congress passed it to help pay for the Civil War. That tax was repealed after 10 years.

• In 1894, Congress tried again. It passed a flat-rate federal income tax, but the Supreme Court ruled it unconstitutional the next year!

• The income tax system we have today was created in 1913, when the 16th Amendment was ratified.

• In that first year, the highest tax bracket paid just 7% on income over $500,000 ($11 million today), while the lowest paid 1% of total income. Today, rates range from 10%–37%.

• In the fiscal year 2021, Americans are expected to pay more than $1.9 trillion in income taxes.

Though its history is short compared to that of the Ben Franklin Fund, income taxes have a massive impact on our daily lives. To learn more about the changes coming with President Joe Biden’s new tax plan, turn to Pg. 2 of this newsletter. And to find out how many work days it takes to earn your annual income tax, turn to Pg. 3 — you might not believe what you read.

Wishing you a productive tax season,

Now that tax season is upon us, this quote has been stuck in my mind. A few days ago, I wondered, “Just how certain is income tax? And how long has it

– Brian Eagle

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A LITTLE DISTRACTION This One Small Thing Is Killing Your Productivity

When an email, text, or other random notification distracts you, it completely diverts attention away from what you were doing. If it’s spam, you may delete the email. Or, if you need to respond, it might take a few minutes or more. You may spend anywhere between 20 seconds to 20 minutes on any given email. However, this isn’t where time is lost. If you’re responding to a customer email, for instance, that is part of your productivity. The time is lost when you attempt to get back to what you were doing before checking your notifications. A University of California, Irvine study found that it takes an average of 23 minutes to get back to your task after every distraction, not just email. Over the course of a day, that adds up to a significant amount of wasted time. How do you overcome this? Your best bet is to turn off notifications. Most devices let you customize your notifications so you can turn them off during working hours. Here’s another quick tip: Set aside time during the day to check emails, texts, and other messages. You will significantly reduce the amount of time spent trying to refocus on the important tasks at hand.

Distractions in your workplace destroy your productivity, regardless of where you work. But here’s the kicker: Some distractions don’t always register as distractions because they’re often minor, like a knock at the door or a conversation you can hear from two cubicles over. However, even when a distraction doesn’t feel like a distraction, it still kills your productivity. But one distraction, in particular, can absolutely ruin productivity. It isn’t as obvious as an unexpected phone call or a meeting that could have been an email. It’s a small, normal part of our everyday lives: the notification . We get notifications on our phones, tablets, laptops, desktops, and even our smartwatches. Notifications are everywhere, and we’re conditioned to accept them. Take email, for example. You’re likely in the habit of checking email periodically — or whenever you get a notification. It can feel natural to quickly check your email and then get back to what you were doing. Except that never happens.

A Business Owner’s Guide to the Biden Tax Plan

Every time a new president takes up residence in the White House, they bring along a tax plan with the potential to change our daily lives. President Joe Biden is no different. When he took office in January, his tax plan — which differs significantly from the one in place under President Donald Trump — became a key talking point in the financial sphere. President Biden’s tax plan is focused on both stimulating the economy and repealing many of the measures in the Tax Cuts and Jobs Act of 2017. This will have a significant impact on almost everyone, but particularly businesses, entrepreneurs, and high-income individuals. Here are just a few of the key features our firm is watching.

As with all presidential tax plans, Biden’s will not go into effect until and unless it is enacted by Congress. If that happens, the Tax Foundation predicts Biden’s plan will raise tax revenue by $3.3 trillion over the next decade, and reduce GDP by 1.62% long term. As we write this, battling the COVID-19 pandemic is the administration’s No. 1 priority. But changes in the tax laws will not be far behind, and when they come, they will impact our firm and our clients. To read one entrepreneur’s analysis of the effect the Biden plan could have on small businesses, search “How Will the Biden Tax Plan Affect Your Small Business?” on Entrepreneur.com.

Biden’s ideal tax plan would ...

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Reduce the estate tax exemption by 50%.

• Increase the corporate tax rate from 21% to 28%, and apply an alternative minimum corporate tax of 15% to corporate book income of $100 million and higher. • Increase the payroll tax by applying the 12.4% FICA Tax to wages greater than $400,000. • Phase out the Qualified Business Income Deduction (QBID). • Eliminate the basis step-up on death.



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How Many Days of Work Does It Take to Pay Off Your Taxes?

SUDOKU

The Story Behind America’s Infamous ‘Tax Freedom Day’

Green Goddess Smoothie

Have you ever heard of Tax Freedom Day? We came across it not long ago and were immediately intrigued, because this roving holiday is not really a “holiday” at all.

The date of Tax Freedom Day changes almost every year, because it cannot be celebrated until Americans have collectively worked enough hours to pay off the year’s taxes. Think of it this way. Imagine you have to pay your taxes at the start of the year before you can take home any of the money in your paycheck. How many days of work do you think it will take before you see a penny? Now, expand that scenario to encompass the whole country. The answer changes every year, but in 2019, Tax Freedom Day did not appear until April 16. It took 105 days of hard work for Americans to earn enough money to pay our collective tax burden, including …

If you’re looking to get your green on, why not try this light smoothie?

• • • • • •

42 days to pay off income taxes 26 days to pay off payroll taxes

INGREDIENTS

15 days to pay off sales and excise taxes

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1 1/4 cup unsweetened vanilla almond milk

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1 1/2 cups fresh organic spinach

11 days to pay off property taxes

5 days to pay off corporate income taxes 6 days to pay off all other tax burdens

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1 organic apple, peeled and chopped

•

1 tbsp chia seeds

In short, just under one-third of the money we make every year goes to Uncle Sam. According to the Tax Foundation, in 2019 Americans paid “$3.4 trillion in federal taxes and $1.8 trillion in state and local taxes, for a total bill of over $5.2 trillion, or 29% of the nation’s income.” When taxes go up, Tax Freedom Day is pushed later, and when they go down, it lands earlier. The earliest national Tax Freedom Day on record fell on Jan. 22, 1900, when the tax burden was just 5.9% of Americans’ total income. The latest fell on May 1, 2000, when the tax burden was 33%. Interestingly, each state has its own individual Tax Freedom Day as well, running from March 25 for Alaska to May 3 for New York in 2019. If you are interested, you can even calculate your own personal Tax Freedom Day with the equations below. Unfortunately, you may not like what you find!

•

1/2 medium avocado

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1 medium frozen banana

DIRECTIONS

1. In a large, high-powered blender, add in all ingredients.

2. Blend on high for 1–2 minutes, or until all ingredients are well combined.

3. If necessary, add in more almond milk to thin the smoothie.

4. Serve immediately and enjoy!

Total State Taxes + Total Federal Taxes / Adjusted Gross Income = X% X% / 365 = Total Days Worked Before Tax Freedom

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INSIDE THIS ISSUE

1 What Do Time Capsules and Taxes Have in Common? 2 Don’t Let This Tiny Distraction Destroy Your Productivity The Biden Tax Plan’s Potential Impact on Business Owners 3 The Story Behind America’s Infamous ‘Tax Freedom Day’ Green Goddess Smoothie 4 3 Irish Travel Destinations for Your Bucket List

3 IRISH TRAVEL DESTINATIONS FOR YOUR BUCKET LIST

Traveling to Ireland might not be an option for you right now, but like a leprechaun hoarding gold, you can still fill up your bucket list with all of the pubs, rolling hills, and lucky sites you’d love to see. This month when you’re planning your trip to Dublin, Galway, or Cork, add these spots to your itinerary. THE OLDEST BAR IN THE WORLD – ATHLONE, COUNTY WESTMEATH

of nearby Athlone Castle shared drinks in the 12th century. Find more historical tidbits at SeansBar.ie.

IRELAND’S SPOOKIEST CASTLE – COOLDERRY, COUNTY OFFALY

If you’re a fan of thrillers and true crime podcasts, you won’t want to leave Ireland without visiting Leap Castle. This 16th-century haunt was built by the fierce O’Bannon clan, who famously ordered two brothers to throw themselves off a rocky cliff as a test of strength. The survivor was named clan chief, and later Leap Castle was built on that very site — beginning its long and bloody history. Read more about its haunted priest’s house, murder hole room, and bloody chapel at LeapCastle.net and meet the many ghosts that haunt its halls.

DON’T MISS THESE

HISTORIC SPOTS!

A FAMOUS SMUGGLERS’ SHORTCUT – NEWCASTLE, COUNTY DOWN

Get ready to tie up your hiking boots! This roughly 2-mile hike, called Hare’s Gap, is one of the most famous and beautiful routes in Ireland. When you climb through this pass in the Mourne Mountains, you’ll be rewarded with views of glacial cliffs, boulder fields, and ancient-looking stone walls. Legend has it that the pass was part of the Brandy Pad smuggling route, used to ferry goods like soap, leather, spices, and coffee.

When Sean’s Bar closed because of the COVID-19 pandemic, the entire country of Ireland groaned. The pub is famous for its Irish whiskey, music, and history, which stretches back to 900 A.D., far enough to earn it the title of “Oldest Bar in the World.” As of this writing, Sean’s is slated to reopen when it’s safe again, and considering it has already survived the bubonic plague and the Spanish flu, odds are good that it will make it through this, too! Soon, you’ll be able to raise a glass in the same rooms where the noblemen

Safe travels, and ádh mór (good luck)!

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