Wecome to Dragonwood Chronicles

Tucked away deep in the woods at the southern edge of the Tug Hill region of New York. Dragonwood is our off-grid sanctuary. Six acres of pond and gardens bordered by forest on three sides.

The project began in 1995, when after a long search, Debe and I purchased the property from a local logger. To date we have built a cabin, a bridge, out house, two sheds in addition to expansive gardens and stone work. We have a generator, propane lights, refrigerator and grill, a wood stove and modest solar system. A dug well and small stream suitable for watering gardens and other needs and a nearby spring for drinking water.

The Dragonwood Chronicles will serve to document the project with photographs and notes. Future projects will include additions to the cabin, a root cellar and a studio building.

Comments and questions are always welcome.

We enjoy hearing from people who visit Dragonwood Chronicles. Please feel free to leave a comment or ask questions.

Wednesday, June 30, 2010

New Tax Laws Coming in 2012 - Buckle Your Seat Belts

The following article is from CNNMoney.com, hardly a "right wing" voice. If you own a small business, are self employed or even make a few extra dollars a year doing craft fairs or farmer's markets this effects you so I recommend reading this then talking with your accountant or tax advisor.

NEW YORK (CNNMoney.com) -- An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

Right now, the IRS Form 1099 is used to document income for individual workers other than wages and salaries. Freelancers receive them each year from their clients, and businesses issue them to the independent contractors they hire.

But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.

Taken together, the two seemingly small changes will require millions of additional forms to be sent out.

"It's a pretty heavy administrative burden," particularly for small businesses without large in-house accounting staffs, says Bill Rys, tax counsel for the National Federation of Independent Businesses.

Eliminating the goods exemption could launch an avalanche of paperwork, he says: "If you cater a lunch for other businesses every Wednesday, say, that's a lot of information to keep track of throughout the year."

The paper trail
Why did these tax code revisions get included in a health-care reform bill? Welcome to Washington. The idea seems to be that using 1099 forms to capture unreported income will generate more government revenue and help offset the cost of the health bill.

A Democratic aide for the Senate Finance Committee, which authored the changes, defended the move.

"Information reporting improves tax compliance without raising taxes on small businesses," the aide said. "Health care reform includes more than $35 billion in tax cuts for small businesses ... indicating that during these tough economic times, Congress is delivering the tax breaks small businesses need to thrive."

The new rules could drastically alter the tax-reporting landscape by spotlighting payments that previously went unreported. Freelancers and other independent operators typically write off stacks of business expenses; having to issue tax paperwork documenting each of them could cut down on fraudulent deductions.

More significantly, the 1099 trail would expose payments to small operators that might now be going unreported. If you buy a computer for your business from a major chain retailer, the seller almost certainly documents the revenue. But if you buy it from Tim's Computer Shack down the street, Tim might not report and pay taxes on his income from the sale.

The IRS estimates that the federal government loses more than $300 billion each year in tax revenue on income that goes unreported. Using 1099s to document millions of transactions that now go untracked is one way to begin to close the gap.

While all but unnoticed at the time -- a Pennsylvania business group issued the first warning last October as the idea emerged in draft Senate legislation -- the 1099 rule changes began sparking attention in the blogosphere in the last week. The libertarian Cato Institute called it a "costly, anti-business nightmare"; Rep. Dan Lungren, R-Calif., introduced legislation last week that would repeal the new 1099 requirements.

The notion of mailing a tax form to Costco or Staples each year to document purchases may seem absurd to small business owners, but that's not the worst of it, tax experts say.

Marianne Couch, a principal with the Cokala Tax Group in Michigan and former chair of a citizen advisory group to the IRS on small business and self-employed tax issues, thinks the bigger headache will be data collection: gathering names and taxpayer identification numbers for every payee and vendor that you do business with.

But she also sees a silver lining in the new law.

Her firm already recommends collecting tax data on all vendors, since the IRS requires that you have it on hand at the time of the transaction, not just at tax-filing time. And eliminating the corporate and goods exemptions at least means that businesses will no longer have to pour over every transaction to determine if it needs a 1099. The new rule is simpler: If it crosses the $600 threshold, it's in.

"There are probably going to be some hiccups along the way, because systems will need to be redesigned," says Couch. "But overall I believe it will make compliance on the payor end a lot more streamlined and easier."

In any case, the final impact of the law won't be known until the IRS issues its regulations on the new law, which aren't expected to arrive until sometime next year. The IRS has not yet commented on when it will release regulations or schedule public hearings, and an agency spokesman was unsure when it will do so. The new requirements kick in January 1, 2012.

Friday, June 25, 2010

Saturday, June 19, 2010

President Obama and The Jones Act

President Obama and the Jones Act
By Roland de Beque on Jun 14, 2010 in American History, Disaster Management, Economics, Energy, Environment, Land use, Property Rights, Trade, free market

Any vestiges of goodwill and support for President Obama that I hold are vanishing faster than the Gulf Coast wetlands. Our “green” president is directly responsible for the escalation of the worst man-made environmental disaster in American history.

The catastrophic explosion of Deepwater Horizon on April 20 was not directly caused by Obama, obviously. Does any rational person believe that Obama stands to gain by the situation in the gulf, either by causing it or by standing idly on the sidelines while oil continues to pour into the gulf? But standing idly by is precisely what this administration has done, when getting out of the way is what it needed to do.

According to ForeignPolicy.com, within two weeks of the rig explosion the governments of Canada, Croatia, France, Germany, Ireland, Mexico, the Netherlands, Norway, Romania, Republic of Korea, Spain, Sweden, the United Kingdom and even the United Nations offered assistance. The response of the Obama State Department:

“While there is no need right now that the U.S. cannot meet, the U.S. Coast Guard is assessing these offers of assistance to see if there will be something which we will need in the near future.”

Similarly, De Standaard, a Dutch news site, reports that Belgian and Dutch dredgers possess technology to combat the gigantic spill in the Gulf. Two Belgian companies, DEME and De Nul, and their Dutch competitors are set up to handle the task in part because construction of ships required to undertake a large-scale cleanup would cost twice as much to build in the U.S.

Why would the Obama administration refuse the help of foreign entities? Because of the Merchant Marine Act of 1920. Also known as the Jones Act, the federal legislation is a protectionist measure designed to support the U.S. merchant marine industry. It requires that all goods transported by water between U.S. ports be carried by ships flying the U.S. flag, constructed in the United States, and owned and crewed by U.S. citizens or permanent residents.

Written into the Jones Act are provisions that allow for waivers in cases of national emergency or strategic interest. Even President Bush, in his less-than-stellar response to Hurricane Katrina, did not hesitate to waive the Jones Act in order speed up the distribution of oil and gasoline to areas where pipeline transmission systems were damaged or destroyed.

Although I expect President Obama to waive the Jones Act eventually, why did he not act to do so when offers of assistance started coming in? Some have suggested it was a sense of pride, but I believe it stems from Obama’s belief that his administration—the federal government—is and should be the solver of all problems.

There will no doubt be plenty of blame for this catastrophe, but if there is anything that Obama could have done to forestall or lessen the amount of damage to the Gulf Coast he should have done it. His continuing failure to do so is contributing to an environmental nightmare beyond belief. This is an epic failure by the Obama Administration.

This is the time to waive the Jones Act. This is the time to issue a plea to anyone in private industry—foreign or domestic—who has a potential, even unproven, method to clean up afflicted coastline or to protect threatened areas to get to the Gulf as soon as possible and put it to work in a coordinated effort. This is the time to throw out the rulebook. This is the time for Obama to remove the roadblocks that keep Gulf Coast localities from receiving the supplies they have requested. This is the time to let local and state governments to do whatever they need to do and to do it right now.

The ecosystem of the Gulf Coast is going to be altered. Wetlands will disappear, likely to be replaced with open water. Life up and down the food chain will suffer and die. In some instances whole species face the possibility of extinction. How we respond will define us as a nation and, ultimately as a species.

Friday, June 18, 2010

Gov't Shares Blame for Oil Spill

Libertarians say government shares blame with BP for oil spill

WASHINGTON - Wes Benedict, executive director of the Libertarian Party, issued the following statement today:

"The federal government and BP share the blame for the large oil spill in the Gulf of Mexico.

"When the CEO of BP appeared at a Congressional hearing yesterday, Republicans and Democrats predictably engaged in finger-pointing and blame-ducking, trying to score political points. Their fingers should have been pointed at themselves.

"When President Obama gave his Oval Office speech on Tuesday, there was one important word missing: the word 'liability.' The president never mentioned that, thanks to liability caps provided by the federal government, BP was able to engage in riskier activities than it would have otherwise. If BP had known in advance that it would be fully liable for all damages related to an oil spill, it probably would have taken greater safeguards. When you know that your liability will be strictly limited, cutting corners becomes a lot more attractive.

"The spill will cause a lot of damage to the property and livelihood of people living along the Gulf. We have a well-developed system of civil courts to help people obtain compensation. Unfortunately, the legislative and executive branches have inappropriately trampled on this territory, and they seem to be trying to take the place of the courts.

"The president has apparently convinced BP to put $20 billion in some kind of compensation account. He said in his speech that it will be 'administered by an independent third party.' Will this third party be able to decide what 'legitimate claims' are, and how much they should receive? Assessing damages should be done by courts, not by political bureaucrats appointed in backroom deals between the president and a large corporation.

"The president could have taken the opportunity to talk about getting government out of the energy industry, and allowing the free market to guide the future of energy production. Unfortunately, he instead blamed the free market for government failures, and discussed his hopes of increasing government interference in the energy industry.

"For decades, Libertarians have warned against putting trust in government regulatory bureaucracies like the Minerals Management Service (MMS). While costing the taxpayers a lot of money, these agencies generally fail to deliver the kind of protections they promise, they tend to become corrupt, and they discourage vigilance on the part of citizens by lulling them into a false sense of security.

"When large companies and the government start working together, the results can be disastrous. Congressional liability caps, the MMS bureaucracy, and BP have all cooperated to create a costly disaster that should never have happened."

For more information, or to arrange an interview, call LP Executive Director Wes Benedict at 202-333-0008 ext. 222.

The LP is America's third-largest political party, founded in 1971. The Libertarian Party stands for free markets and civil liberties. You can find more information on the Libertarian Party at our website. http://www.lp.org/

Saturday, June 12, 2010

Blue Angel Hosta

Our Hosta collection is ever growing. We now have well over 30 different varieties and Deb is always looking for more. She has become obsessed, a real "Hosta Freak". I even see a series of paintings in the near future.

This Blue Angel above is one of my favorites. I especially like the blue foliage. Other favorites include Orange Marmalade, Yellow River, Dream Weaver, Sum and Substance, Katie Q, June, as well as some of the variegated varieties like Patriot, Minuteman, Whirlwind, Wide Brim and Francis William.

At some point I will photograph and document them all.

Saturday, June 5, 2010

The Consumer Price Index is a Lie

The following is an excerpt from an interview with Jim Rogers by Ron Hera.

HRN: You mentioned that the US is the largest debtor nation in the history of the world. Do you think that will lead to high inflation or hyperinflation in the US?

Jim Rogers: Well, there will be inflation. First, you have to have inflation before you can have hyperinflation. I mean, we have inflation now. If you go to the shop, whether it's groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don't: Australia, China, India and Norway. Many countries don't lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

HRN: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

Jim Rogers: In my opinion, yes, of course it is. Have you looked at it? They've changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn't count it, saying rents weren't going up, and then when home prices started going down, they counted it. It's the same with many things. It's staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it's not really going up because it's better gasoline, better quality, therefore you're getting more for your money. I mean, it's endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says. As I said, in other countries, they acknowledge that there's inflation. I don't know how there could be inflation in Australia and not in the US; how you can have inflation in Norway or India and not in the US, but the US says there's no inflation.

To read the entire inerview go to
http://www.lewrockwell.com/rogers-j/rogers-j99.1.html or click on the link below for Lew Rockwell

Jim Rogers' English language books include Investment Biker: On the Road with Jim Rogers (1994), Adventure Capitalist: The Ultimate Road Trip (2003), Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market (2007), A Bull in China (2008), and A Gift to My Children: A Father's Lessons for Life and Investing (2009).

Friday, June 4, 2010

Some Photos from this Spring

A Luna Moth paid a visit and hung out clinging to the cabin one day. They are common visitors this time of year.

The second photo is our granddaughter helping water the garden. The garlic is taller than she is.


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