DATE: June, 2003
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| "There are lots of young men and women we would love to have as students, the Nobel Prize winners, the Lasker Award winners of the future," said Bloomberg. "It would be a sin if society is deprived of the fruits of their work down the road because those of us, today, who could have helped, didn't." Michael Bloomberg |
American Council on Gift Annuities Announces New Rates
At its regular Spring meeting on May 12, 2003, the Board of the American Council on Gift Annuities approved a reduction in the recommended maximum gift annuity rates, effective July 1, 2003. The reduction varies from .2% to .3%, depending on the age of the annuitants.
The new schedule of rates and an explanation of the assumptions underlying those rates will appear on the ACGA website (http://www.acga-web.org/) within the next few days.
The Gift Annuity Rates Committee conducts an annual review of gift annuity rates each spring and makes its recommendations to the ACGA Board. Any adjustment in the rates approved by the Board becomes effective on July 1, 2003.
During the past twelve months, commercial, fixed-annuity rates have decreased by approximately 10%. The new gift annuity rates will likewise be about 10% lower than the ACGA rates in effect a year ago, except that at the oldest ages the decrease in the ACGA rates will be less than 10%.
As the CMFR has dipped below 4.0%, the charitable deduction resulting from use of the current ACGA rates for immediate gift annuities at certain younger ages, and from the use of current ACGA rates for deferred gift annuities at certain ages and deferral periods, will not be more than 10% as required by IRC Sec. 514(c)(5). The reduction in rates will cause most gift annuities that are based on those rates to pass the 10% test.
Given
interest rates in the marketplace, gift annuities, even with the rate reduction,
should continue to be quite attractive to philanthropically-inclined individuals.
Taken from ACGA E-mail Announcement to Supporters
Fed chief: Signs Point To Turnaround - Greenspan Expresses Optimism
Federal Reserve chairman Alan Greenspan said yesterday that he sees ''the makings of a turnaround'' for the struggling US economy, but left open the possibility that the central bank could cut interest rates again should the economy need another boost or deflation become a greater threat.
Speaking at an international monetary conference in Berlin, Greenspan pointed to a number of positive factors suggesting that the US economy is rebounding from the weakness it experienced as the nation prepared for and went to war with Iraq. Those factors include falling oil prices, rising consumer confidence, increasing manufacturing activity, and strengthening financial markets -- all against the backdrop of low inflation.
In addition, he said, the recently enacted $330 billion federal tax cut, which takes effect July 1, could provide another boost to consumer spending and demand, which in turn could help reduce unemployment. ''Fortuitously, this particular cut in taxes is happening at the right time,'' he said.
''What we have is the makings of a turnaround in economic activity which in the past has almost always been signaled by improvement in financial conditions,'' Greenspan told the monetary conference. But, with influence of the Iraq war just dissipating, he cautioned, ''It is too early to get any real fix on the American economy in the period ahead. We do know that the economy did weaken in March and April; the data from May to date suggests it has stabilized.''
While
economists noted Greenspan's optimistic tone, they said he gave no real hint of
whether the Fed will cut interest rates -- already at a 41-year low -- when its
rate-setting Federal Open Market Committee meets June 24-25. Wall Street, however,
was cheered by the news, pushing up both stock and bond prices as investors expressed
hopes for further cuts.
By Robert Gavin, Boston Globe Staff
President Bush Signs $350 Billion Tax Cut
At a White House conference on May 28, 2003, President Bush signed the $350 billion "Jobs and Growth" tax cut.
President Bush was clearly pleased with the bill and stated, "By insuring that Americans have more to spend, to save, and to invest, this legislation is adding fuel to an economic recovery."
This tax cut is the second major tax reduction of his administration. It now complements the Economic Growth and Tax Relief Reconciliation Act of 2001. The two bills together equal a reduction of $1.7 trillion in taxes.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 includes the following:
- Child credit raised from $600 to $1,000 for 2003-2004. Checks for $400 will be sent to families later this summer.
- Married couple relief-standard deduction doubled and 15% bracket doubled.
- Marginal rates lowered January 1, 2003 to 25%, 28%, 33% and 35%.
- Alternative minimum tax exemption raised to $40,254 individuals and $58,000 for married couples.
- Bonus depreciation for businesses increased from 30% to 50%.
- Capital gains tax reduced from 20% to 15% until 2008, with a rate of 5% for lower-income taxpayers; the tax rate is reduced to 0 in 2008.
- Dividend tax rate is reduced from 38.6% to 15%. Lower-income taxpayers' rate is reduced to 5%.
From GiftLaw
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Revised: July 2, 2003 17:14.