When Ayn Rand’s “Atlas Shrugged” was published in 1957, it was considered a work of science fiction. The theme of “Atlas Shrugged”, as Rand described it, is "the role of man's mind in existence." The book explores a number of themes that Rand would subsequently develop into the philosophy of Objectivism. She was sharply criticized for her ideas and her philosophy of “Objectivism” was denigrated as selfish and regressive in the light of the needs of the general public.
Despite these charges, “Atlas Shrugged” achieved enduring popularity and has maintained consistent sales in the following decades. In the wake of the late 2000s recession, sales of Atlas Shrugged have sharply increased, according to The Economist magazine and The New York Times. The Economist reported that the fifty-two-year-old novel ranked #33 among Amazon's top-selling books on January 13, 2009.
What is the new-found interest in this book? “Atlas Shrugged”, originally called “The Strike” by its working title, portrays an America much like we see today. Overbearing government regulations, distributive policies and a generally accepted point of view held by public officials that radical progressive action must be taken for the good of all and anyone opposed to those policies are disgraced and openly chastised.
In the book, one by one, leaders of industry were disappearing, leaving their businesses deserted and their workers displaced. The book does take an odd turn when those business owners begin to reappear as Objectivist pirates seeking to topple the existing system to establish a new government that promotes the virtues self-reliance for the good of their progeny.
No one really believes that pirates will begin raiding the United States in retaliation for government intervention and oppressive taxation but Atlas is apparently beginning to shrug. New York and California have been seeing a trend of wealthy citizens fleeing the latest round of taxes that have been unfairly levied on them. The computer age no longer necessitates that these people congregate in major centers of commerce since the internet itself, has become the lifeline. The point is, there is no longer any status associated with a Park Avenue address, particularly if that address comes with a personal income tax rate of nearly 60%, now that Healthcare Reform has actually passed. Is it really that bad? Well, the latest figures show that out of eight and a half million people in New York City, a little over forty-three thousand pay more than forty percent of the City's tax revenues. That is obscene by anyone's standards.
The tax exodus not a new trend; in 2006, the rate at which college graduates were escaping New York had risen 127% and the same problems plague California as job prospects evaporate and taxes climb skyward. The real problem for these two bastions of liberal politics and “social responsibility” is that the vacuum created by those that are leaving is being filled by people that do not possess the same earning power so state and city tax revenues have been steadily falling as well. Heaven forbid these states would re-evaluate their commitment to redistributive policy. No, they would prefer to find new revenue sources to fill the void.
The next tax adding to the burden is the so-called “millionaires tax” to fund part of the healthcare reform bill. The truth is the millionaires tax kicks in at income levels well below a million dollars and when combined with the existing tax burden experienced by New York residents, the top marginal rate will effectively be 57%. Since the exodus has begun, New York Governor David Patterson has been insistent that New York must adopt a tax system that is at least competitive with neighboring states and in fact, should consider tax incentives that encourage businesses to relocate to New York, not flee in fear. These ideas have not met with much favor among the more liberal members of the elected elite in New York and in fact, have cost Patterson his position as Governor of New York as the power brokers in NY politics pushed him out of the race.
Anyone looking at the unemployment figures knows that the stimulus plan hasn’t produced the economic results the government had hoped for. The first mistake was the stimulus money was doled out to recipients that understand job creation as poorly as the Federal government does; the Cities and States. It was spent in the worst possible ways with New York again, leading the pack. When comparing the number of jobs that were claimed to have been created directly through stimulus expenditures against the amount of money that was spent, the national average was seventy-three thousand dollars per job with New York reportedly spending nine million per job. As with any short term infusion of capital, the results are bound to be short term as well so we can imagine that those extraordinarily expensive jobs will disappear when the money does.
So why has the stimulus plan failed to deliver? Once again, Atlas is shrugging. Business owners are cringing as they look at the antics and bribes used in Washington to pass healthcare that are now being dusted off to pass the climate bill. Back door meetings and massive spending bills with threats of more taxes, penalties and mandates do not encourage small business to expand, let alone re-hire those that were laid off in last year’s economic downturn. Additionally, if the mandate for private business participation under the current healthcare proposal is fifty employees, how many companies with forty-nine employees will resist expansion and stay right where they are? How many companies with fifty-two employees will downsize to escape the mandates and worse yet, how many will decide that the benefits of operating a business in America just don’t make sense anymore?
The stock market hasn’t rallied yet either. Not only have the threats of increased capital gains taxes dissuaded participation, with the Federal Reserve running the printing presses on overtime, not even Treasury Bills look safe anymore. We also have a new ominous specter; the threat of direct government interference in business. 60% of General Motors is now owned by the Federal government, which should make any advocate of capitalism nervous. There have been executive salary caps placed on banks that received Tarp money and while the legality of that was still under debate, the government announced its plan to cap the executive salaries of all financial institutions since they fall under the regulatory jurisdiction of the Federal government. Following that logic, who is safe? After all, don’t all corporations fall under the regulatory jurisdiction of the Federal government at one level or another?
So what happens if Atlas truly does shrug? What would happen if owning a business became a liability as the Federal government placed more of the burden of America’s social programs on their shoulders in the form of new mandates? What happens if the wealthy decide that leaving New York or California doesn’t offer enough protection against confiscatory taxes? Will they leave the country? The “top one percent” that the Obama regime keeps targeting certainly has the means to do just that. In fact, many have the resources to pull out of the game entirely and live quite comfortably for the rest of their lives on what they have already accumulated. What would happen to the great plans of progressive politics if the top one percent stopped earning a taxable income and just started living? What would happen if the “top one percent” suddenly became people with incomes of one-hundred thousand dollars, eighty-thousand dollars or maybe fifty-thousand dollars when the real wealth in America decides they are not playing anymore?
Some argue that Europe has had massive social programs and progressive taxes for years and business still thrives there. Really? Greece is now on fire because the bills have finally come due and the rest of Europe is now teetering on the brink of fiscal disaster since all of their economies are tied together. The only real advantages Europe has is that European trade agreements favor those at home as does their patent process. Also true is that much of the European infrastructure is fairly new when compared to America’s. Don’t forget that much of Europe was destroyed and rebuilt after World War II. We don’t have that luxury and our older industrial centers find it continually harder to compete with our modernized competitors. Most of Europe has never embarked on the self destructive path of paying its people to stay home that began with Johnson’s “Great Society”.
We have created a new class of subsidized dependents. These are people that have been subjugated by an unfair social services system that demands that you either collect all from the government or get nothing. Fear of losing housing, healthcare and a meager cash allowance keeps them neatly enrolled in the system and insures that they will continue to vote for the people that promise the money will keep coming. After all, when you rob Peter to pay Paul, you can always count on Paul’s support. As unemployment increases and the wealthy “shrug”, who will keep these programs in place? We cannot print much more money or the world financial institutions will lock American currency out of the global economy. What will we do if Atlas does shrug?
Paul
Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts
Tuesday, May 18, 2010
Thursday, April 22, 2010
The Obama Plan: Plenty of Change But Little Hope
As if the Obama administration wanted to help me make the point I was illustrating in yesterday’s article, a new flurry of regulatory threats are now emanating from the Food and Drug Administration and the Environmental Protection Agency. Apparently the government is taking its stance on healthcare very seriously now that they have made themselves a fixture in your health insurance and by virtue of that, a fixture in your health care decisions. In addition to everything we have already heard in the healthcare bill, the Food and Drug Administration (FDA) is now posturing itself to regulate the amount of salt in your foods. This is changing the focus of the agency from protecting you against tainted or diseased foods and assuming the role of deciding what you should eat because a bureaucrat can now decide it is not good for you.
Food without salt through government edict? Somehow I just don’t think that Washington is listening to us. We want government out of our lives; not taking control of our most basic choices. The people that should not have added salt in their foods because of a medical condition already know what they can and cannot have and have been making those decisions for themselves ever since doctors made the link between food and health. Necessarily, the regulation of salt would put some foods normally high in this once crucial condiment on the chopping block. I’m not sure you can even make bacon without salt and even if you could, would it be worth eating? Can you imagine a pretzel that didn’t have a healthy sprinkling of course salt or the summertime favorite, margaritas by the pool without salt encrusting the rim of the glass? New York is already going down this road and it is driving chefs crazy in the Big Apple. Professional cooks know there is nothing more basic to great tasting foods than the salt that enhances the natural flavor of nearly everything it touches.
Unfortunately, we now have a slew of radical advisors in positions of power within the White House and administrative agencies. Some, like Cass Sunstein, Obama’s regulatory Czar that also has a keen interest in animal rights, would prefer to see America abstain from eating meats as well. If we allow the FDA to pick our seasonings; can a government selection of our main course be that far behind? Sunstein’s beliefs are centered on government control of the masses, he also recognizes that direct regulatory actions can at times, be counter productive. Rather than risking confrontation with the people, Sunstein prefers a clandestine approach that would guide the actions of Americans while giving people the illusion of free choice. This would be accomplished by broadening government regulatory authority to limit the range of options people would be offered. Of course, those regulations would be imposed on manufacturers and industries so the resulting limits placed on American citizens would not be such an obvious intrusion of government.
In a 2008 book he co-authored with Richard Thaler titled: “Nudge: Improving Decisions about Health, Wealth, and Happiness”, Sunstein speculates that we should maintain an illusion of liberty where personal decisions are concerned by having the government “nudge” people to make better decisions. Obviously Mr. Sunstein believes that the learned scholars of his alma mater, Harvard, or the Washington agencies chock full of “deep thinkers” are in a far better position to make those critical choices for you. Sunstein’s book is not ashamed to mention that the regulatory power of government and a liberal application of the tax structure could easily be used to nudge people to make “correct” decisions based on the government definition of correct. Just the idea that he thinks that this coercion process is acceptable in a free society protected by unalienable rights deeply concerns me. Our freedoms and rights would have to be, at the very least, “trimmed” before any nudging could lawfully take place. Of course, if the nudge was gentle and hidden under the guise of the “regulation of commerce”, the question of government interference with personal liberties may never actually make headlines.
Even more insidious are the recent actions of the Environmental Protection Agency (EPA). EPA chief Lisa Jackson, recently declared an endangerment finding against Carbon Dioxide and several other so-called “greenhouse gases”. The finding allows the agency broad powers to regulate these gases under the existing authority granted to the agency under the Clean Air Act; avoiding the need for Congressional action all together. The purpose is clear. The President wants his Energy Bill (Cap and Trade) passed because of the enormous tax revenues that will be collected under the false premise of protecting the environment. Many in Congress recognize the dangers of this bill and the damage it will do to our economy so the passage of this bill is in question. Much of the resistance is due to the fact that the President’s Energy Bill offers absolutely no benefit to the environment. The general knowledge that the science behind global warming and climate change has been tainted with news of corrupt data and a concerted effort to silence dissent and debate has further complicated passage of the bill.
In the face of the uncertain future of the Energy Bill, the EPA has threatened to use their endangerment finding to impose regulatory sanctions on Carbon emissions in an attempt to blackmail Congress. Jackson argues that regulatory sanctions would be far more damaging to the US economy than the Cap and Trade Bill; in essence, telling Congress they must now pick the lesser of two evils but is climate change what this is really about? China, the world’s largest producer of CO2 and India, another mass producer of the questionable gas, have already said they will not sign an agreement to reduce their Carbon emissions. Best estimates say that the Carbon reduction proposed in the US energy bill will reduce global temperatures by a mere one tenth of one degree Celsius by the year 2050 and the cost factors to achieve this inconsequential reduction stagger the mind.
The implementation of the President’s Energy Bill may show a net decrease in the Carbon emission produced by US industries but the reality is that these Carbon emissions will only have been transferred to foreign nations that have not burdened themselves with self destructive legislative agreements to reduce their Carbon output. This will place the US at a disadvantage as business weighs the cost of these new regulations and that cost difference will drive manufacturers to nations where profitability is still possible. Curiously, this crucial Energy Bill does not place punitive taxes on goods coming from nations that have not agreed to reduce their Carbon output so how serious are we about actually reducing Carbon emissions to “save” the planet? This bill will only allow foreign nations to steal our few remaining industries, forcing millions more into unemployment while facing exponentially rising costs for electricity and fuels right here at home.
Lisa Jackson said something else in a recent speech that is crucial to deciphering the President’s interest in Cap and Trade. Radical Communist Van Jones, former Green Jobs Czar for the Obama administration, had once accused “white polluters” of intentionally steering poisons into minority communities; leaving many of us scratching our heads and wondering what the hell he was talking about. Now Lisa Jackson says that instances of pollution and environmental degradation are disproportionately higher in low income and minority communities across America and to combat this, the EPA is building up their “environmental justice” team. The United States Congress had passed the Clean Air Act in 1963 with major amendments added to strengthen it in 1970 and again, in 1990. Congress followed that with the Clean Water Act in 1972 which was also amended and strengthened in 1977 and 1987. Since we have already entrusted the government with monitoring pollution and gave them the teeth to aggressively fine violators of these comprehensive environmental laws how can there be such an alarming pollution problem in America, let alone a disparity in the distribution of that pollution if the EPA and other Federal agencies were actually doing their jobs?
If the legislation was impotent after two or more amendments or the EPA was disinterested or incapable of performing their duties with the strength of the legislation already at their disposal, then why should we believe that a multi-trillion dollar energy bill will make them any better at what they do? Secondly, if there is irrefutable evidence that there is a disproportionate amount of pollution being steered into low income and minority communities, then a hate crime has been committed and the Justice Department has also fallen down on the job as well. Since Lisa Jackson has been with the EPA for twenty years now….what is her part in this conspiracy? Carol Browner, Obama’s Climate Czar, was the head of the EPA under Bill Clinton so what did she know; when did she know it and does that mean indictments are on the way?
The truth is there is no conspiracy; there is no alarming disparity in the level of pollution by community and there is no climate change that isn’t a natural process of a dynamic earth. This is another attempt at the enactment of this administration’s redistributive wish list because, as Barack Obama said, “I don’t believe in reparations (for slavery) because reparations don’t go far enough.” This is not a redistribution of wealth to level some imaginary Progressive playing field. This is a massive redistribution scheme designed to overturn the entire wealth structure of the United States and any policy instituted by government that seeks to pit one segment of the populace against another, must be by its intent, unconstitutional.
Paul
Food without salt through government edict? Somehow I just don’t think that Washington is listening to us. We want government out of our lives; not taking control of our most basic choices. The people that should not have added salt in their foods because of a medical condition already know what they can and cannot have and have been making those decisions for themselves ever since doctors made the link between food and health. Necessarily, the regulation of salt would put some foods normally high in this once crucial condiment on the chopping block. I’m not sure you can even make bacon without salt and even if you could, would it be worth eating? Can you imagine a pretzel that didn’t have a healthy sprinkling of course salt or the summertime favorite, margaritas by the pool without salt encrusting the rim of the glass? New York is already going down this road and it is driving chefs crazy in the Big Apple. Professional cooks know there is nothing more basic to great tasting foods than the salt that enhances the natural flavor of nearly everything it touches.
Unfortunately, we now have a slew of radical advisors in positions of power within the White House and administrative agencies. Some, like Cass Sunstein, Obama’s regulatory Czar that also has a keen interest in animal rights, would prefer to see America abstain from eating meats as well. If we allow the FDA to pick our seasonings; can a government selection of our main course be that far behind? Sunstein’s beliefs are centered on government control of the masses, he also recognizes that direct regulatory actions can at times, be counter productive. Rather than risking confrontation with the people, Sunstein prefers a clandestine approach that would guide the actions of Americans while giving people the illusion of free choice. This would be accomplished by broadening government regulatory authority to limit the range of options people would be offered. Of course, those regulations would be imposed on manufacturers and industries so the resulting limits placed on American citizens would not be such an obvious intrusion of government.
In a 2008 book he co-authored with Richard Thaler titled: “Nudge: Improving Decisions about Health, Wealth, and Happiness”, Sunstein speculates that we should maintain an illusion of liberty where personal decisions are concerned by having the government “nudge” people to make better decisions. Obviously Mr. Sunstein believes that the learned scholars of his alma mater, Harvard, or the Washington agencies chock full of “deep thinkers” are in a far better position to make those critical choices for you. Sunstein’s book is not ashamed to mention that the regulatory power of government and a liberal application of the tax structure could easily be used to nudge people to make “correct” decisions based on the government definition of correct. Just the idea that he thinks that this coercion process is acceptable in a free society protected by unalienable rights deeply concerns me. Our freedoms and rights would have to be, at the very least, “trimmed” before any nudging could lawfully take place. Of course, if the nudge was gentle and hidden under the guise of the “regulation of commerce”, the question of government interference with personal liberties may never actually make headlines.
Even more insidious are the recent actions of the Environmental Protection Agency (EPA). EPA chief Lisa Jackson, recently declared an endangerment finding against Carbon Dioxide and several other so-called “greenhouse gases”. The finding allows the agency broad powers to regulate these gases under the existing authority granted to the agency under the Clean Air Act; avoiding the need for Congressional action all together. The purpose is clear. The President wants his Energy Bill (Cap and Trade) passed because of the enormous tax revenues that will be collected under the false premise of protecting the environment. Many in Congress recognize the dangers of this bill and the damage it will do to our economy so the passage of this bill is in question. Much of the resistance is due to the fact that the President’s Energy Bill offers absolutely no benefit to the environment. The general knowledge that the science behind global warming and climate change has been tainted with news of corrupt data and a concerted effort to silence dissent and debate has further complicated passage of the bill.
In the face of the uncertain future of the Energy Bill, the EPA has threatened to use their endangerment finding to impose regulatory sanctions on Carbon emissions in an attempt to blackmail Congress. Jackson argues that regulatory sanctions would be far more damaging to the US economy than the Cap and Trade Bill; in essence, telling Congress they must now pick the lesser of two evils but is climate change what this is really about? China, the world’s largest producer of CO2 and India, another mass producer of the questionable gas, have already said they will not sign an agreement to reduce their Carbon emissions. Best estimates say that the Carbon reduction proposed in the US energy bill will reduce global temperatures by a mere one tenth of one degree Celsius by the year 2050 and the cost factors to achieve this inconsequential reduction stagger the mind.
The implementation of the President’s Energy Bill may show a net decrease in the Carbon emission produced by US industries but the reality is that these Carbon emissions will only have been transferred to foreign nations that have not burdened themselves with self destructive legislative agreements to reduce their Carbon output. This will place the US at a disadvantage as business weighs the cost of these new regulations and that cost difference will drive manufacturers to nations where profitability is still possible. Curiously, this crucial Energy Bill does not place punitive taxes on goods coming from nations that have not agreed to reduce their Carbon output so how serious are we about actually reducing Carbon emissions to “save” the planet? This bill will only allow foreign nations to steal our few remaining industries, forcing millions more into unemployment while facing exponentially rising costs for electricity and fuels right here at home.
Lisa Jackson said something else in a recent speech that is crucial to deciphering the President’s interest in Cap and Trade. Radical Communist Van Jones, former Green Jobs Czar for the Obama administration, had once accused “white polluters” of intentionally steering poisons into minority communities; leaving many of us scratching our heads and wondering what the hell he was talking about. Now Lisa Jackson says that instances of pollution and environmental degradation are disproportionately higher in low income and minority communities across America and to combat this, the EPA is building up their “environmental justice” team. The United States Congress had passed the Clean Air Act in 1963 with major amendments added to strengthen it in 1970 and again, in 1990. Congress followed that with the Clean Water Act in 1972 which was also amended and strengthened in 1977 and 1987. Since we have already entrusted the government with monitoring pollution and gave them the teeth to aggressively fine violators of these comprehensive environmental laws how can there be such an alarming pollution problem in America, let alone a disparity in the distribution of that pollution if the EPA and other Federal agencies were actually doing their jobs?
If the legislation was impotent after two or more amendments or the EPA was disinterested or incapable of performing their duties with the strength of the legislation already at their disposal, then why should we believe that a multi-trillion dollar energy bill will make them any better at what they do? Secondly, if there is irrefutable evidence that there is a disproportionate amount of pollution being steered into low income and minority communities, then a hate crime has been committed and the Justice Department has also fallen down on the job as well. Since Lisa Jackson has been with the EPA for twenty years now….what is her part in this conspiracy? Carol Browner, Obama’s Climate Czar, was the head of the EPA under Bill Clinton so what did she know; when did she know it and does that mean indictments are on the way?
The truth is there is no conspiracy; there is no alarming disparity in the level of pollution by community and there is no climate change that isn’t a natural process of a dynamic earth. This is another attempt at the enactment of this administration’s redistributive wish list because, as Barack Obama said, “I don’t believe in reparations (for slavery) because reparations don’t go far enough.” This is not a redistribution of wealth to level some imaginary Progressive playing field. This is a massive redistribution scheme designed to overturn the entire wealth structure of the United States and any policy instituted by government that seeks to pit one segment of the populace against another, must be by its intent, unconstitutional.
Paul
Wednesday, April 21, 2010
America: Are We Still The Land of The Free?
One of the biggest questions that needs to be asked today is “Who are we?” I was raised to believe that America is the land of the free and the home of the brave. That freedom has become harder to find these days mostly because we, as a people, weren’t brave enough to stand up and protect our freedom. There is also a certain degree of selfishness. As long as the latest assault didn’t affect you personally…did you stand up and say “No, this is wrong”? Did you vote for people that proposed raising taxes on “millionaires” simply because you were not a millionaire or did you ask your government “what have you done with the trillions you have already spent?” Does it bother you to know that the millionaire’s tax you voted for kicks in at an annual income of $250,000 or is that still high enough that it doesn’t affect you? Better yet…do you really believe that as the revenue stream from these “quarter-of-a-millionaires” dries up that, eventually, the government won’t have to redefine a “millionaire” again as someone whose income is a little closer to your own?
I warned years ago when a slew of sin taxes were proposed on tobacco products that no matter where you stand on the habit of smoking, that this was a bad idea. The tobacco taxes weren’t really about forcing people to quit, they were about a new source of revenue. As more people realized the hazards associated with smoking, many quit and smoker’s numbers were steadily falling when these new sin taxes were proposed. When it came time to pass the tax, the smokers opposing the tax were in the minority and the tax passed easily. That really wasn’t a surprise because by then, government had already learned how to create support by labeling the target group. This time it wasn’t the greedy rich people we were going to tax but those inconsiderate smokers. In fact, this wasn’t about saving their lives anymore. The theory of second hand smoke had turned the issue away from using sin taxes to encourage healthy choices, into punishing smokers for engaging in a habit that could affect your heath, not to mention raise your health insurance costs because of their increased medical demands.
I said then that this was just the trial balloon. If we would authorize the government to use the tax system to force lifestyle changes where smoking was concerned, then we had just given them the authority to control any personal choice that government deemed unhealthy or dangerous. People thought I was being ridiculous then and some even said I was bordering on becoming a conspiracy theorist. Unfortunately, my vindication can be found in the pages of the healthcare bill and in local newspapers. The new healthcare bill adds a tax for sugary beverages and tanning salons because they are bad for you. California is now proposing a new “junk food” tax; and if you think that won’t become popular enough to be considered by every cash-strapped State and City government, then think again. I will bet you anything right now that it will even be considered as a new revenue source for the healthcare bill before the plan is fully implemented in 2014. After all, the healthcare bill has already changed the definition of a millionaire to be any individual that makes more that two-hundred thousand dollars or any married couple making more than two-hundred and fifty thousand dollars. Ink can be very powerful in Washington.
Now that we have vilified smokers, some would like to take that even further. Brooksville, Florida has just announced that it is looking at plans to crack down on smokers in the most egregious display of an abuse of power ever perpetrated by a municipality. During Monday's 5:30 p.m. meeting at City Hall, council members will consider a tobacco policy that forbids smoking or chewing the substance on city property, in city-owned vehicles and personal vehicles that are on city property or are being used for a city function. The policy would apply to city employees and the public alike.
City employees would have one year to quit smoking or chewing tobacco or face disciplinary action that includes termination "Depending on the facts and circumstances of each infraction." Employees could also pay to participate in a smoking cessation program on their own time. Applicants that admit to using tobacco would be denied employment altogether. This is an outrage and people that believe that America is still a free nation and that government has no business interfering in our personal choices should speak out loudly and without reservation. Just as the sin taxes are now being expanded to junk foods and sugary beverages; this is not as much about smoking as it is a direct assault on personal liberty that will more than likely be expanded as well.
The overweight contribute as mightily to the cost of healthcare as smokers do and in fact, as the high taxes on tobacco products reduce the number of people that smoke in this country, some have already claimed that obesity now exceeds smoking as the number one cause of preventable death in America. Those sources also state that obesity related illnesses have already reached parity with smoking in the amount of healthcare dollars used to treat the affects of bad personal choices. Is it a really absurd that one day Brooksville might decide the cost of providing health insurance for the obese had become too prohibitive? Does the American’s with Disabilities Act cover Americans that have “chosen” to become disabled because of their eating habits? Before anyone gets confused, I am not advocating that the obese should become the new target for government oppression but I have more than a sneaky feeling that your Federal government is about to open that door and the States will follow suit.
Don’t forget that after the healthcare bill was signed Nancy Pelosi said that “this is more about diet than diabetes.” Well, that isn’t possible unless Nancy knows that the new law intends to write your diet for you somewhere in the thousands of regulations and directives that have yet to be written by the healthcare advisory board created by the legislation. Michelle Obama has publicly made her cause the fight against childhood obesity and surely, the government will now reflect that battle in their new guidelines for school lunch and fitness programs. The healthcare bill already includes a hefty sum for play yard equipment designed specifically to promote healthy activities.
Again, health is something that should not be taken for granted. A healthy lifestyle can spell the difference between a long and productive life and a long and debilitating illness. The information is out there already and people, so far, have made choices based on their personal beliefs. If we allow government to make those choices for us, or if you believe government should have the power to exclude smokers from even earning a living, then where will it end? Will we have to surrender contact sports and motorcycles? Will high-heels and roller blades be banned? What about the potential for the spread of disease? Since the policy being considered by Brooksville reaches into people’s homes by saying if you use tobacco in any form, at any time and in any place, you cannot work for the City then is stands to reason that allowing this to stand invites the government into our homes to control even more behavior. The worst part about this is that the City and not society, would then establish what in safe and what is not. They would determine your health and welfare choices based on their criteria, not yours.
Suppose they determine that speech could be dangerous because of the anger it could possibly incite? There goes the First Amendment. Guns can be very dangerous depending on whose finger is on the trigger…should we ban guns because of the health implications….goodbye Second Amendment. Ridiculous? With this ban on smoking and the City of Brooksville already planning on testing people to make sure they aren’t smoking at home…where is your Fourth Amendment protection against illegal search and seizure? Where is the sovereignty of your person and property? Where the hell is the Constitution?
So the question again is “Who are we?” What is the America you believe in? Have we surrendered so many of our rights already that the government is already poised to take more based on the precedent set by our silence with sin taxes. After all if you can tax it, you can control it and if you control it, you can ban it and if you ban it….America just isn’t America anymore, now is it?
Paul
I warned years ago when a slew of sin taxes were proposed on tobacco products that no matter where you stand on the habit of smoking, that this was a bad idea. The tobacco taxes weren’t really about forcing people to quit, they were about a new source of revenue. As more people realized the hazards associated with smoking, many quit and smoker’s numbers were steadily falling when these new sin taxes were proposed. When it came time to pass the tax, the smokers opposing the tax were in the minority and the tax passed easily. That really wasn’t a surprise because by then, government had already learned how to create support by labeling the target group. This time it wasn’t the greedy rich people we were going to tax but those inconsiderate smokers. In fact, this wasn’t about saving their lives anymore. The theory of second hand smoke had turned the issue away from using sin taxes to encourage healthy choices, into punishing smokers for engaging in a habit that could affect your heath, not to mention raise your health insurance costs because of their increased medical demands.
I said then that this was just the trial balloon. If we would authorize the government to use the tax system to force lifestyle changes where smoking was concerned, then we had just given them the authority to control any personal choice that government deemed unhealthy or dangerous. People thought I was being ridiculous then and some even said I was bordering on becoming a conspiracy theorist. Unfortunately, my vindication can be found in the pages of the healthcare bill and in local newspapers. The new healthcare bill adds a tax for sugary beverages and tanning salons because they are bad for you. California is now proposing a new “junk food” tax; and if you think that won’t become popular enough to be considered by every cash-strapped State and City government, then think again. I will bet you anything right now that it will even be considered as a new revenue source for the healthcare bill before the plan is fully implemented in 2014. After all, the healthcare bill has already changed the definition of a millionaire to be any individual that makes more that two-hundred thousand dollars or any married couple making more than two-hundred and fifty thousand dollars. Ink can be very powerful in Washington.
Now that we have vilified smokers, some would like to take that even further. Brooksville, Florida has just announced that it is looking at plans to crack down on smokers in the most egregious display of an abuse of power ever perpetrated by a municipality. During Monday's 5:30 p.m. meeting at City Hall, council members will consider a tobacco policy that forbids smoking or chewing the substance on city property, in city-owned vehicles and personal vehicles that are on city property or are being used for a city function. The policy would apply to city employees and the public alike.
City employees would have one year to quit smoking or chewing tobacco or face disciplinary action that includes termination "Depending on the facts and circumstances of each infraction." Employees could also pay to participate in a smoking cessation program on their own time. Applicants that admit to using tobacco would be denied employment altogether. This is an outrage and people that believe that America is still a free nation and that government has no business interfering in our personal choices should speak out loudly and without reservation. Just as the sin taxes are now being expanded to junk foods and sugary beverages; this is not as much about smoking as it is a direct assault on personal liberty that will more than likely be expanded as well.
The overweight contribute as mightily to the cost of healthcare as smokers do and in fact, as the high taxes on tobacco products reduce the number of people that smoke in this country, some have already claimed that obesity now exceeds smoking as the number one cause of preventable death in America. Those sources also state that obesity related illnesses have already reached parity with smoking in the amount of healthcare dollars used to treat the affects of bad personal choices. Is it a really absurd that one day Brooksville might decide the cost of providing health insurance for the obese had become too prohibitive? Does the American’s with Disabilities Act cover Americans that have “chosen” to become disabled because of their eating habits? Before anyone gets confused, I am not advocating that the obese should become the new target for government oppression but I have more than a sneaky feeling that your Federal government is about to open that door and the States will follow suit.
Don’t forget that after the healthcare bill was signed Nancy Pelosi said that “this is more about diet than diabetes.” Well, that isn’t possible unless Nancy knows that the new law intends to write your diet for you somewhere in the thousands of regulations and directives that have yet to be written by the healthcare advisory board created by the legislation. Michelle Obama has publicly made her cause the fight against childhood obesity and surely, the government will now reflect that battle in their new guidelines for school lunch and fitness programs. The healthcare bill already includes a hefty sum for play yard equipment designed specifically to promote healthy activities.
Again, health is something that should not be taken for granted. A healthy lifestyle can spell the difference between a long and productive life and a long and debilitating illness. The information is out there already and people, so far, have made choices based on their personal beliefs. If we allow government to make those choices for us, or if you believe government should have the power to exclude smokers from even earning a living, then where will it end? Will we have to surrender contact sports and motorcycles? Will high-heels and roller blades be banned? What about the potential for the spread of disease? Since the policy being considered by Brooksville reaches into people’s homes by saying if you use tobacco in any form, at any time and in any place, you cannot work for the City then is stands to reason that allowing this to stand invites the government into our homes to control even more behavior. The worst part about this is that the City and not society, would then establish what in safe and what is not. They would determine your health and welfare choices based on their criteria, not yours.
Suppose they determine that speech could be dangerous because of the anger it could possibly incite? There goes the First Amendment. Guns can be very dangerous depending on whose finger is on the trigger…should we ban guns because of the health implications….goodbye Second Amendment. Ridiculous? With this ban on smoking and the City of Brooksville already planning on testing people to make sure they aren’t smoking at home…where is your Fourth Amendment protection against illegal search and seizure? Where is the sovereignty of your person and property? Where the hell is the Constitution?
So the question again is “Who are we?” What is the America you believe in? Have we surrendered so many of our rights already that the government is already poised to take more based on the precedent set by our silence with sin taxes. After all if you can tax it, you can control it and if you control it, you can ban it and if you ban it….America just isn’t America anymore, now is it?
Paul
Tuesday, April 20, 2010
More Tax and Spend But Where Are The Jobs?
So the news these days is that the stock market is rallying after the passage of healthcare and the stimulus bill is finally bringing us out of the recession. Newsweek (or is it News Weak? I never can remember) ran a story recently that America is back; claiming the recession is over. Well, if we are actually recovering from the recession, where are the jobs? The increase we see in the Dow has nothing to do with the stimulus bill and while it is on the rise, it is not because companies are hopeful about healthcare savings but because they are trying to mitigate the negative effects the tax increases will bring in the future.
There are massive new taxes on the way because of the healthcare bill in addition to the increases business will see after the Bush tax cuts expire at the end of 2010. Corporations operate under different tax rules than private citizens and are able to shift their losses around to offset earnings where it will provide the most benefit. In fact, corporations can amend previous returns and move losses back three years or use them as far as twenty years into the future to offset future income. That is what we are seeing this year in the Dow. Companies know their taxes will be substantially higher in 2011 and are posting their income in 2010 when the taxes aren’t great, but they aren’t as insane as they will be next year. Once the tax cuts disappear and the new tax impositions from the healthcare bill are in place, the losses and expenses from this year will be used to offset the tax liabilities in 2011 and that will have a drastic effect on the Dow Jones.
Reagan made the same mistake when he took office. He promised tax cuts to rouse the economy but rather than make them immediate, he phased the cuts in, which allowed companies to post losses during the years of higher taxes; biding their time until the tax cuts took affect. Once the tax cuts were in place, the economy soared, ushering in one of the largest peace-time expansions of the GDP in history but before those cuts were actually made, the economy lagged and jobs suffered. Conversely, businesses are now taking advantage of the temporarily lower tax rates knowing that those rates are guaranteed to rise sharply in 2011. Furthermore, business is counting on the November 2010 elections to restore some sanity to government. While the Republicans cannot secure enough seats to repeal healthcare, they can certainly block the funding needed to implement it; stalling the healthcare legislation until 2012 can bring in a new Congress and a new President.
The President can try to put a happy face on the prospects Democrats are facing this election but he knows that a vote for the healthcare bill was a vote for their own retirement. Going into the healthcare vote, Republicans were no more liked than Democrats were but the scandalous way this legislation was forced through Congress against the will of the people has severely damaged the Democrats. While people are not quite sure they can trust Republicans right now, Republicans do have the distinct advantage in not being Democrats. The President has been trying to label Republicans as “the Party of no” but the Democrats have labeled themselves “the Party of sit down and be quiet you silly people”. In the whole grand scheme of things there is an awful lot you can do to Americans before they get truly angry but ignoring them just isn’t an option.
The frightening part about the President’s predicament is that it has fostered another sense of urgency in the White House and now every program and policy the President really wants is going to be desperately rushed in much the same way that TARP, the Stimulus and Healthcare was. Don’t forget that TARP had to be done right then and there or banks were going to fail, throwing America into a new depression. Well, TARP passed and Tim Geithner, Ben Bernanke and the President claimed credit for averting financial disaster but isn’t it funny that as soon as executive salaries were capped in the companies that accepted TARP money, those silly companies discovered that they actually did have liquidity and paid the TARP money back as fast as humanly possible. Well, most of them did. Curiously, the only ones that couldn’t pay the taxpayers back, and in fact, still needed more money, were the government’s own Fannie Mae and Freddie Mac. Imagine that!
Then there was the Stimulus Bill. We had to pass that one without thinking about it because joblessness was on the rise and without this critical infusion of money, the unemployment rate would get as high as 8%. Well, we passed that without thinking about it and unemployment climbed above 10% before stagnating at a miserable 9.7%. Recovery.gov still has no idea how much of your money was wasted on frivolous projects like amphibian underpasses so that frogs and salamanders can safely cross the road or funding studies about the drinking habits of Indonesian transgender prostitutes. Billions are listed as being given to Congressional districts that do not exist and since the government cannot say with any accuracy how many (if any) jobs were actually created, the White House has had to claim that the Stimulus Bill saved two million jobs knowing full well there is no way to substantiate a “saved job”.
With the Healthcare Bill we all watched in horror as the legislative process was subverted into a corrupt and underhanded push to pass something nobody wanted. Harry Reid, Nancy Pelosi and Barack Obama all blamed the Republicans for trying to stonewall the legislation when the bare fact is that the resistance that nearly derailed the bill was entirely on the other side of the aisle. Reluctant Democrats had to be bullied, threatened and bought off just to get the votes they needed to push this through. Once Scott Brown had been elected to the Senate, it was thought that the bill would finally die the death it deserved but the Senate Bill was taken behind closed doors once more where Pelosi and Obama abused House Democrats. They would use the same tactics Harry Reid used, forcing them to vote for the Senate Bill so they could ram it through under reconciliation; requiring only a simple majority in the Senate, effectively negating Scott Brown’s vote.
Now that the healthcare bill has passed all the nasty little details are emerging. The Medicare cuts, the tax increases and the admission by Senate Finance Committee Chairman Max Baucus, that the healthcare bill is designed to “correct a mal-distribution” of wealth in America. For those of us that warned about the redistributive goals of the bill, a healthy “told you so” might certainly be warranted but what good would that do now? Then there are the unintended consequences to deal with. America’s largest corporations are reporting that they will loose hundreds of millions in profits because of the healthcare bill; something that Henry Waxman fumed over, demanding that these companies appear before his committee and explain themselves. Waxman claimed that a report prepared prior to the passage of the bill said these companies would see a decrease in healthcare costs amounting to roughly three-thousand dollars per employee and he insisted upon knowing why they were not taking those savings into consideration. As it turns out, the report to which Henry Waxman was referring had nothing to do with the Senate healthcare bill and was based on a limited and incremental approach to healthcare reform similar to what the Republicans had proposed.
I suppose the funniest story came out last week when the Congress found out that the healthcare bill they all told us they read contained a little secret none of them knew about. Unless they act to correct the bill, Congress and their staff members are all going to lose their health insurance and will be forced into the exchange market. The only problem for them is that the way the law is written, they must lose the insurance now and the market they have to purchase from won’t even exist until 2014.
Despite the President’s promise that jobs are going to be his priority in the coming year his next race to get something past the Senate is on the financial reform bill. This bill places drastic and dangerous limits on American financial institutions placing them at a severe disadvantage when competing against foreign banks that are curiously not mentioned in this “much needed” reform bill. Even though Harry Reid said it may not be possible in an election year, the President insists that immigration reform is right behind his Financial Reform Bill. Also tucking into the White House fast track to destroy the country is the infamous Cap and Trade massive energy tax. The Senate is threatening to unveil their copy of that scam as early as the end of next week. So I have to ask the same question I started this article with….Where are the jobs?
Paul
There are massive new taxes on the way because of the healthcare bill in addition to the increases business will see after the Bush tax cuts expire at the end of 2010. Corporations operate under different tax rules than private citizens and are able to shift their losses around to offset earnings where it will provide the most benefit. In fact, corporations can amend previous returns and move losses back three years or use them as far as twenty years into the future to offset future income. That is what we are seeing this year in the Dow. Companies know their taxes will be substantially higher in 2011 and are posting their income in 2010 when the taxes aren’t great, but they aren’t as insane as they will be next year. Once the tax cuts disappear and the new tax impositions from the healthcare bill are in place, the losses and expenses from this year will be used to offset the tax liabilities in 2011 and that will have a drastic effect on the Dow Jones.
Reagan made the same mistake when he took office. He promised tax cuts to rouse the economy but rather than make them immediate, he phased the cuts in, which allowed companies to post losses during the years of higher taxes; biding their time until the tax cuts took affect. Once the tax cuts were in place, the economy soared, ushering in one of the largest peace-time expansions of the GDP in history but before those cuts were actually made, the economy lagged and jobs suffered. Conversely, businesses are now taking advantage of the temporarily lower tax rates knowing that those rates are guaranteed to rise sharply in 2011. Furthermore, business is counting on the November 2010 elections to restore some sanity to government. While the Republicans cannot secure enough seats to repeal healthcare, they can certainly block the funding needed to implement it; stalling the healthcare legislation until 2012 can bring in a new Congress and a new President.
The President can try to put a happy face on the prospects Democrats are facing this election but he knows that a vote for the healthcare bill was a vote for their own retirement. Going into the healthcare vote, Republicans were no more liked than Democrats were but the scandalous way this legislation was forced through Congress against the will of the people has severely damaged the Democrats. While people are not quite sure they can trust Republicans right now, Republicans do have the distinct advantage in not being Democrats. The President has been trying to label Republicans as “the Party of no” but the Democrats have labeled themselves “the Party of sit down and be quiet you silly people”. In the whole grand scheme of things there is an awful lot you can do to Americans before they get truly angry but ignoring them just isn’t an option.
The frightening part about the President’s predicament is that it has fostered another sense of urgency in the White House and now every program and policy the President really wants is going to be desperately rushed in much the same way that TARP, the Stimulus and Healthcare was. Don’t forget that TARP had to be done right then and there or banks were going to fail, throwing America into a new depression. Well, TARP passed and Tim Geithner, Ben Bernanke and the President claimed credit for averting financial disaster but isn’t it funny that as soon as executive salaries were capped in the companies that accepted TARP money, those silly companies discovered that they actually did have liquidity and paid the TARP money back as fast as humanly possible. Well, most of them did. Curiously, the only ones that couldn’t pay the taxpayers back, and in fact, still needed more money, were the government’s own Fannie Mae and Freddie Mac. Imagine that!
Then there was the Stimulus Bill. We had to pass that one without thinking about it because joblessness was on the rise and without this critical infusion of money, the unemployment rate would get as high as 8%. Well, we passed that without thinking about it and unemployment climbed above 10% before stagnating at a miserable 9.7%. Recovery.gov still has no idea how much of your money was wasted on frivolous projects like amphibian underpasses so that frogs and salamanders can safely cross the road or funding studies about the drinking habits of Indonesian transgender prostitutes. Billions are listed as being given to Congressional districts that do not exist and since the government cannot say with any accuracy how many (if any) jobs were actually created, the White House has had to claim that the Stimulus Bill saved two million jobs knowing full well there is no way to substantiate a “saved job”.
With the Healthcare Bill we all watched in horror as the legislative process was subverted into a corrupt and underhanded push to pass something nobody wanted. Harry Reid, Nancy Pelosi and Barack Obama all blamed the Republicans for trying to stonewall the legislation when the bare fact is that the resistance that nearly derailed the bill was entirely on the other side of the aisle. Reluctant Democrats had to be bullied, threatened and bought off just to get the votes they needed to push this through. Once Scott Brown had been elected to the Senate, it was thought that the bill would finally die the death it deserved but the Senate Bill was taken behind closed doors once more where Pelosi and Obama abused House Democrats. They would use the same tactics Harry Reid used, forcing them to vote for the Senate Bill so they could ram it through under reconciliation; requiring only a simple majority in the Senate, effectively negating Scott Brown’s vote.
Now that the healthcare bill has passed all the nasty little details are emerging. The Medicare cuts, the tax increases and the admission by Senate Finance Committee Chairman Max Baucus, that the healthcare bill is designed to “correct a mal-distribution” of wealth in America. For those of us that warned about the redistributive goals of the bill, a healthy “told you so” might certainly be warranted but what good would that do now? Then there are the unintended consequences to deal with. America’s largest corporations are reporting that they will loose hundreds of millions in profits because of the healthcare bill; something that Henry Waxman fumed over, demanding that these companies appear before his committee and explain themselves. Waxman claimed that a report prepared prior to the passage of the bill said these companies would see a decrease in healthcare costs amounting to roughly three-thousand dollars per employee and he insisted upon knowing why they were not taking those savings into consideration. As it turns out, the report to which Henry Waxman was referring had nothing to do with the Senate healthcare bill and was based on a limited and incremental approach to healthcare reform similar to what the Republicans had proposed.
I suppose the funniest story came out last week when the Congress found out that the healthcare bill they all told us they read contained a little secret none of them knew about. Unless they act to correct the bill, Congress and their staff members are all going to lose their health insurance and will be forced into the exchange market. The only problem for them is that the way the law is written, they must lose the insurance now and the market they have to purchase from won’t even exist until 2014.
Despite the President’s promise that jobs are going to be his priority in the coming year his next race to get something past the Senate is on the financial reform bill. This bill places drastic and dangerous limits on American financial institutions placing them at a severe disadvantage when competing against foreign banks that are curiously not mentioned in this “much needed” reform bill. Even though Harry Reid said it may not be possible in an election year, the President insists that immigration reform is right behind his Financial Reform Bill. Also tucking into the White House fast track to destroy the country is the infamous Cap and Trade massive energy tax. The Senate is threatening to unveil their copy of that scam as early as the end of next week. So I have to ask the same question I started this article with….Where are the jobs?
Paul
Thursday, April 15, 2010
Tax Day 2010 - Getting Ready for the Next Depression
Tax Day is here and while protests are taking place all over the country, we would do well to realize that April 15, 2010 may be something to celebrate only because these will be the lowest tax rates you will see for the foreseeable future. The spending spree brought on by the election of Barack Obama has accelerated the American free-fall into debt and the lending machine we have been using to finance our deficits has finally warned us that they are about to pull the emergency brake handle; bringing it all to a screeching halt. Think of it…our nation has spent so much money that we have not only exhausted our own ability to finance it, but the ability for an entire pool of foreign nation’s to lend us the difference. That is quite a feat and certainly qualifies as the primary definition of Obama’s proclamation that he would “fundamentally transform” America.
What has happened here? In the timeline of human events it wasn’t all that long ago when we were a nation that innovated self-reliance; which was the catalyst that sparked the solutions to every one of our difficulties. There is a long history of financial cycles where business and employment waxed and waned but the free market responded with dynamic solutions; not under the watchful eye of government, but because government was not involved at all. Today, that dynamic structure is shackled by the heavy hand of government regulatory control.
As the Twentieth Century approached, America found itself allured by the false promises of European thinkers. Progressives had entered the scene armed with the teachings of Marx, Engels and Nietzsche hoping to create an America that could coalesce power under a strong central government with the authority to pool the nation’s resources together to provide a base standard of living for all. Our first truly Progressive President was Theodore Roosevelt and while he didn’t have the power to bring about the change that he wanted to see, he certainly planted the seeds of Marxism thinly veiled behind the uniquely American label of Progressivism. What Roosevelt did do was to create the precedent of creating administrative agencies under a loose interpretation of the Commerce Clause. After all, if you could tweak America’s understanding of the constitutional authority for Congress to “regulate” commerce, then nearly anything could be brought under Federal control.
Woodrow Wilson would be the next Progressive President to assault the Constitution and is in fact, the most damaging. As a man who considered himself a “Progressive intellectual”, Wilson began the process of radicalizing America and using the precedent established by Theodore Roosevelt, created the Federal Reserve, the Federal Trade Commission, the Federal Farm Loan Act and of course, the Progressive Income Tax to pay for it all. Curiously, there was no constitutional authority to create any of those programs but since Roosevelt had already started the vilification of the Corporation; it was an easy sale to convince America that it just needed to be done. Of course, since these programs added to the Federal budget that gave Wilson the ability to institute the Progressive Income Tax because the Constitution allows Congress to collect taxes to pay for the debts of government. Incidentally, when the Progressive Income Tax became law, it was promised that the top marginal rate would never exceed 10% and most Americans would accept a minor tax to provide for such important programs.
Wilson narrowly won his second term in 1916 by promising America that he would keep us out of the unpopular war that was raging in Europe; a promise that he would break less than a year later. The war expenditures created the economic conditions that would have Wilson break another promise in short order, when he raised the top marginal income tax rate to 77% to pay for America’s war debt. Wilson’s actions crippled business and investment and led directly to the unknown depression of 1920. The reason it is called the unknown depression is that while there is plenty of data available about this calamity; none of the facts are particularly flattering to Wilson or the Progressive movement so it is simply not discussed in schools, the press or academia. Worse news for our Progressive friends is that the facts surrounding our recovery from that depression soundly refute Progressive policy. President Warren Harding recognized the damage done by Wilson’s wild tax increases and responded by halving Federal spending and eventually reducing the top marginal tax rate to 25%. Within two years, the nation’s economy rebounded and the “Roaring Twenties” had been born.
Progressive Herbert Hoover became President in 1929 and as though he had no recollection of the damages wrought by Woodrow Wilson, immediately sought to use his Presidency to bring about more transformative change. Hoover began by closing what he called “tax loopholes” for the rich and could probably be credited for creating the open war against wealth that modern Progressives use to sway the general population’s support for any program or policy that will punish evil wealth and better the lives of average Americans with the proceeds. Hoover also raised tariffs and farm subsidies while increasing Federal expenditures for public projects such as veteran’s hospitals that for the first time thrust our medical system into a direct an unfair competition with the Federal government. Hoover also cancelled oil leases on government lands (does that sound familiar?); chaired White House conferences on child health, protection, homebuilding and homeownership; created an anti-trust division within the department of justice and generally saw the presidency as a vehicle for improving the conditions of all Americans by regulation and by encouraging volunteerism.
It wasn’t a year before the nation slipped back into fiscal chaos as the bottom fell out of the stock market in 1929. Failing to learn the lessons set by Warren Harding in the early 1920’s, Hoover implemented huge public spending projects and raised the top marginal tax rate to 63% in 1932 throwing the nation into a full fledged depression. The Depression allowed the next great Progressive President his shot at transformative change; Franklin Delano Roosevelt. Although Roosevelt had accused Hoover of spending and taxing the nation into depression, FDR immediately began his bid to tax and spend the nation out of depression. Yeah, that didn’t make sense to me either but that is what happens when Progressives control what you read, hear and learn. The lessons of history become lost in the fog of “intellectual rhetoric”.
In the midst of a crippling depression, FDR created a huge new Federal entitlement program (Social Security) and saddled us with a labor relations act that would legitimize collective bargaining. He is also the first President that advocated the establishment of a second “bill of rights” that would enumerate certain economic rights that were unnervingly similar to the rights listed in the Constitution adopted by the Communist regime of the Soviet Union. Fortunate, we dodged that bullet or we may be a very different nation today. In a slight of hand, FDR balanced the regular budget but the “emergency budget” created to combat the depression had increased Federal spending from 8% of GDP under Hoover to 10.2% under Roosevelt. As a result, the National Debt increased more than 100% and was 40% of GDP by 1936. To pay for all this spending FDR raised the top tax rate to an insane 79% in 1936 and Truman would continue this ultimately topping out at 94% after World War II.
While FDR’s programs caused a brief drop in unemployment from 25% when he assumed office to 14% in 1937, the tax hikes and new government programs would take their toll and create a new depression within a depression, throwing more people out of work. FDR’s programs are widely credited for ending the depression, which is the white-washed and revised history offered by Progressive historians that again, want to conceal that Progressivism, like its Socialist sister; does not work. The Depression would not end until World War II when the American industrial base was the only untouched manufacturing center left standing and if you wanted to buy anything, you had to buy it here. Of course modern Progressive’s use the artificial manufacturing boom of the ‘50’s to justify higher income tax rates. After all, if the nation had economic expansion with a top marginal tax rate of 94%; doesn’t that negate the validity of the cuts imposed by Harding? Well, since the economic expansion was based on an artificial and temporary demand, those Progressive assumptions must be equally artificial.
So now it’s 2010 and we have another Progressive in the White House and this Progressive is as corrupt, evil and devious as Woodrow Wilson was. While Barack Obama is seemingly ignorant of the historic solutions that are proven to relieve financial problems on a national scale, this Progressive has a willing band of co-conspirators holding absolute control over the Congress making his regime particularly dangerous. Ronald Reagan understood what needed to be done but by then, the Federal agencies created by the Progressives of the early and mid- twentieth century had become so powerful, and the misinformation fed to the general population was so complete that not even the charismatic “great communicator” could restore the Federal government to its basic and most successful roots.
While 2010 may be the lowest taxes we will see in a long time history has taught us that we must now brace for a new “Great Depression” as Obama continues to make the same mistakes that all of his Progressive predecessors made. In his case, I sincerely question whether his actions are actually mistakes. We may be witnessing the only Progressive President that truly understands the history of his actions and is intent on using them to complete the work started by Theodore Roosevelt to create an America based on the principals of Marx, Engels and Nietzsche. God help us all.
Paul
What has happened here? In the timeline of human events it wasn’t all that long ago when we were a nation that innovated self-reliance; which was the catalyst that sparked the solutions to every one of our difficulties. There is a long history of financial cycles where business and employment waxed and waned but the free market responded with dynamic solutions; not under the watchful eye of government, but because government was not involved at all. Today, that dynamic structure is shackled by the heavy hand of government regulatory control.
As the Twentieth Century approached, America found itself allured by the false promises of European thinkers. Progressives had entered the scene armed with the teachings of Marx, Engels and Nietzsche hoping to create an America that could coalesce power under a strong central government with the authority to pool the nation’s resources together to provide a base standard of living for all. Our first truly Progressive President was Theodore Roosevelt and while he didn’t have the power to bring about the change that he wanted to see, he certainly planted the seeds of Marxism thinly veiled behind the uniquely American label of Progressivism. What Roosevelt did do was to create the precedent of creating administrative agencies under a loose interpretation of the Commerce Clause. After all, if you could tweak America’s understanding of the constitutional authority for Congress to “regulate” commerce, then nearly anything could be brought under Federal control.
Woodrow Wilson would be the next Progressive President to assault the Constitution and is in fact, the most damaging. As a man who considered himself a “Progressive intellectual”, Wilson began the process of radicalizing America and using the precedent established by Theodore Roosevelt, created the Federal Reserve, the Federal Trade Commission, the Federal Farm Loan Act and of course, the Progressive Income Tax to pay for it all. Curiously, there was no constitutional authority to create any of those programs but since Roosevelt had already started the vilification of the Corporation; it was an easy sale to convince America that it just needed to be done. Of course, since these programs added to the Federal budget that gave Wilson the ability to institute the Progressive Income Tax because the Constitution allows Congress to collect taxes to pay for the debts of government. Incidentally, when the Progressive Income Tax became law, it was promised that the top marginal rate would never exceed 10% and most Americans would accept a minor tax to provide for such important programs.
Wilson narrowly won his second term in 1916 by promising America that he would keep us out of the unpopular war that was raging in Europe; a promise that he would break less than a year later. The war expenditures created the economic conditions that would have Wilson break another promise in short order, when he raised the top marginal income tax rate to 77% to pay for America’s war debt. Wilson’s actions crippled business and investment and led directly to the unknown depression of 1920. The reason it is called the unknown depression is that while there is plenty of data available about this calamity; none of the facts are particularly flattering to Wilson or the Progressive movement so it is simply not discussed in schools, the press or academia. Worse news for our Progressive friends is that the facts surrounding our recovery from that depression soundly refute Progressive policy. President Warren Harding recognized the damage done by Wilson’s wild tax increases and responded by halving Federal spending and eventually reducing the top marginal tax rate to 25%. Within two years, the nation’s economy rebounded and the “Roaring Twenties” had been born.
Progressive Herbert Hoover became President in 1929 and as though he had no recollection of the damages wrought by Woodrow Wilson, immediately sought to use his Presidency to bring about more transformative change. Hoover began by closing what he called “tax loopholes” for the rich and could probably be credited for creating the open war against wealth that modern Progressives use to sway the general population’s support for any program or policy that will punish evil wealth and better the lives of average Americans with the proceeds. Hoover also raised tariffs and farm subsidies while increasing Federal expenditures for public projects such as veteran’s hospitals that for the first time thrust our medical system into a direct an unfair competition with the Federal government. Hoover also cancelled oil leases on government lands (does that sound familiar?); chaired White House conferences on child health, protection, homebuilding and homeownership; created an anti-trust division within the department of justice and generally saw the presidency as a vehicle for improving the conditions of all Americans by regulation and by encouraging volunteerism.
It wasn’t a year before the nation slipped back into fiscal chaos as the bottom fell out of the stock market in 1929. Failing to learn the lessons set by Warren Harding in the early 1920’s, Hoover implemented huge public spending projects and raised the top marginal tax rate to 63% in 1932 throwing the nation into a full fledged depression. The Depression allowed the next great Progressive President his shot at transformative change; Franklin Delano Roosevelt. Although Roosevelt had accused Hoover of spending and taxing the nation into depression, FDR immediately began his bid to tax and spend the nation out of depression. Yeah, that didn’t make sense to me either but that is what happens when Progressives control what you read, hear and learn. The lessons of history become lost in the fog of “intellectual rhetoric”.
In the midst of a crippling depression, FDR created a huge new Federal entitlement program (Social Security) and saddled us with a labor relations act that would legitimize collective bargaining. He is also the first President that advocated the establishment of a second “bill of rights” that would enumerate certain economic rights that were unnervingly similar to the rights listed in the Constitution adopted by the Communist regime of the Soviet Union. Fortunate, we dodged that bullet or we may be a very different nation today. In a slight of hand, FDR balanced the regular budget but the “emergency budget” created to combat the depression had increased Federal spending from 8% of GDP under Hoover to 10.2% under Roosevelt. As a result, the National Debt increased more than 100% and was 40% of GDP by 1936. To pay for all this spending FDR raised the top tax rate to an insane 79% in 1936 and Truman would continue this ultimately topping out at 94% after World War II.
While FDR’s programs caused a brief drop in unemployment from 25% when he assumed office to 14% in 1937, the tax hikes and new government programs would take their toll and create a new depression within a depression, throwing more people out of work. FDR’s programs are widely credited for ending the depression, which is the white-washed and revised history offered by Progressive historians that again, want to conceal that Progressivism, like its Socialist sister; does not work. The Depression would not end until World War II when the American industrial base was the only untouched manufacturing center left standing and if you wanted to buy anything, you had to buy it here. Of course modern Progressive’s use the artificial manufacturing boom of the ‘50’s to justify higher income tax rates. After all, if the nation had economic expansion with a top marginal tax rate of 94%; doesn’t that negate the validity of the cuts imposed by Harding? Well, since the economic expansion was based on an artificial and temporary demand, those Progressive assumptions must be equally artificial.
So now it’s 2010 and we have another Progressive in the White House and this Progressive is as corrupt, evil and devious as Woodrow Wilson was. While Barack Obama is seemingly ignorant of the historic solutions that are proven to relieve financial problems on a national scale, this Progressive has a willing band of co-conspirators holding absolute control over the Congress making his regime particularly dangerous. Ronald Reagan understood what needed to be done but by then, the Federal agencies created by the Progressives of the early and mid- twentieth century had become so powerful, and the misinformation fed to the general population was so complete that not even the charismatic “great communicator” could restore the Federal government to its basic and most successful roots.
While 2010 may be the lowest taxes we will see in a long time history has taught us that we must now brace for a new “Great Depression” as Obama continues to make the same mistakes that all of his Progressive predecessors made. In his case, I sincerely question whether his actions are actually mistakes. We may be witnessing the only Progressive President that truly understands the history of his actions and is intent on using them to complete the work started by Theodore Roosevelt to create an America based on the principals of Marx, Engels and Nietzsche. God help us all.
Paul
Monday, April 12, 2010
Obama Breaks the Record for Broken Promises - The VAT Tax
It must be Monday because here comes another broken promise from our fearless leader. Does anyone recall when Barack Obama was campaigning for President as a moderate? I know it’s hard to remember those days; especially since he has taken such a hard left since his inauguration but for those that know where to find the quotes, they are still out there. Try these on for size:
“You will not see any of your taxes increase one single dime.”
Barack Obama
“I will cut taxes - cut taxes - for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class.”
Barack Obama
Since late last week, a lot of focus has been placed on suggestions made by Obama’s economic advisors that the Federal government should consider a value added tax or “VAT” tax. The VAT tax was popularized in Europe as a means to raise revenues to fund a plethora of social programs such as nationalized healthcare and other redistributive policies developed in European nations lead by Socialist political Parties. It allowed those nations to raise vast amounts of cash without the complication of having a direct tax on the public; which makes it all the more appealing to sneaky politicians.
The VAT tax levies a tax on each stage of manufacture. For instance, if you consider a book, most people can not imagine how many stages actually go into the manufacture of a simple book. To make paper you must harvest pulp trees. That step adds value to the wood simply because it has been harvested and delivered to a processor so therefore, it would be taxed. Then the paper manufacturer grinds the wood into a pulp to make paper, but first, chemicals are added to bleach the pulp and stabilize it and each of those chemicals began life as a raw material that had to be processed and refined adding value (and a tax) to each stage of development. Of course the energy used to operate the equipment runs on electricity which is generated using fuels. Those fuels are not ready for consumption until they have been processed, adding a value and the corresponding tax to that as well so the energy they produce is more costly to the paper manufacturer.
Now that the finished paper has been delivered to the printer, the actual work of creating a book can begin. The paper must be cut to a size that is usable for the book that will be produced, an added value. Then the ink that is used is another chemical that was delivered to the printer with all the taxes that were applied at each step of manufacture. The act of applying ink to the paper is another step that adds value and let’s not forget that a book bound for reading is more valuable than one that is not, so that adds another tax. There are glues that must be made to bind the book; a tax. There is card material that must be made to form the cover; another tax. There is the lithograph and cover material that is applied to the card-stock cover for yet another tax. In the end, a simple $15.00 book now costs $20.95 because of all the taxes added at each stage of production and for each of the materials involved.
Most areas of the country have a sales tax of roughly 8% and that would net about $1.20 on the sale of a $15.00 book. That is why the government would love to sell you on the idea of a VAT tax. If they had to come directly to you for a national sales tax, what could they possibly get away with? 1% or maybe 2% would be the most they could start with and not enrage a nation already drowning in taxes. Governments that have a VAT tax love tell everyone that this is a tax on those evil corporations and that they are finally paying their fair share but they leave out one tiny little detail. Corporations never pay taxes. Did I say never? Yes, I said NEVER. All taxes assessed on corporations, manufacturers and retailers are immediately passed on to the consumer (you) through higher prices so the government gets to tax you indirectly using the corporations as the tax collector. Neat trick huh? Through this practice that $15.00 book will have to go up by about $6, the price of a Kindle would increase by roughly $100 and an automobile; roughly $3,000. Oh yes, then you still have the honor of paying your local sales tax of about 8% on the new, higher price.
A VAT tax is not the tax on the wealthiest 1% that Obama campaigned on; it is a tax on anyone that buys anything regardless of income. Of course you can avoid that tax provided you have property with trees that you can cut down and the mineral resources to create ink, glue and paper with. Then of course you would have to know how to make those products yourself and find the time after all of that to have written something worth putting in the blank pages of the book you just made. No, I’m not being silly. I am trying to illustrate the fact that this type of tax is insidious, hidden and unavoidable. Even the poor need food, shelter and clothing and they will be burdened by the price increases on all of that just as much as the wealthiest 1% is. The hardest hit will be new families and the young that are just trying to make it on their own. They are the largest consumers of manufactured goods and none of them even come close to being in that “top 1%”.
A recent report stated that a full 47% of the nation currently pays no Federal income tax because of the Progressive Tax system we use in the United States. I doubt anyone is short sighted enough to imagine that we can have a $3.8 trillion dollar Federal budget, avoid collecting taxes from nearly half the nation and still be able to afford it. Of course if Obama was an honest man, which he isn’t, he would have to tell America that the freebies are over; that we must end the earned income credits and reduce the current amount to be eligible for a tax exemption or begin shutting down essential government services and programs. Unfortunately, the Democrats and Progressives have quite a few people trained to believe that these programs are not government charities but entitlements that they have a right to collect. Since they can’t eliminate the programs without riots springing up all over the country they have moved on to considering a VAT tax that would allow them to give with one hand while taking it back with the other hand hidden safely behind the companies that will have to collect the tax for them.
The institution of a VAT tax would be more than just another broken promise; it would be an outright lie. The tax would be collected from manufacturers that would, in turn, get the money from you while the President would still claim that he has not raised taxes on the middle class. Obama will still try to sell this to his base group of supporters as another tax on the rich and on those evil corporations knowing full well, by every example set in Europe, that the people that actually pay that tax are the ones that buy those products. To be able to claim that he is concerned about the deficit and debt, Obama has commissioned a debt reduction panel to investigate the problem and develop strategies for dealing with it. Every expert in the nation says that no plan will be effective without a meaningful reduction in government spending but that is where the agreement ends. The Progressive economists say those reductions must be coupled with massive new taxes dedicated to debt reduction while the ones that truly understand the power of a free market economy say we must slash taxes to attract foreign investment and to put money back into the hands of the consumer where it belongs. By the way, the report from Obama’s debt reduction panel is not due until December, well after the November election which is another neat little trick.
I know to those that have been raised in the era of class warfare, this idea seems ridiculous. You have been told since birth that the rich are too rich and the poor are getting poorer; that the rich must give more so that the playing field can be leveled to help the poor through these difficult times. I will be blunt. I have never sought out a poor man to apply for a job. While we all have different measures of what “filthy rich” actually is; the fact is that it is the wealthy that create jobs and I can think of no better way to help the poor out of poverty that to nurture a thriving economy that can support meaningful jobs for all of the people that are stuck in government projects now. The government has never created jobs. The best they can do is to steal from those that have to give to those that don’t. The only problem with that is the money they just stole was the money that would have been used to create businesses and new jobs.
Europe is about to implode under their mountainous debt and the wealthy in those countries are looking for a safe place to invest. They would much rather invest in the United States because we have the most stable society and government on the globe. Instead, they are seeking investments in China and others like China because America has gone wild with ideas of Socialism lately. If we can reign in our spending and slash taxes, money will pour into this country as never before. We can prosper and reemerge as a world leader if we have the strength to bite the bullet in the short term and grow our economy instead of sapping the last few drops of blood out of it. Of course we need leaders that understand the free market and wealth instead of those that despise it. This November will determine the course of America and if we don’t elect a roadblock to stop these runaway Progressive Socialists in Congress and in the Presidency, we may not get another chance to return America to prosperity and peace.
Paul
“You will not see any of your taxes increase one single dime.”
Barack Obama
“I will cut taxes - cut taxes - for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class.”
Barack Obama
Since late last week, a lot of focus has been placed on suggestions made by Obama’s economic advisors that the Federal government should consider a value added tax or “VAT” tax. The VAT tax was popularized in Europe as a means to raise revenues to fund a plethora of social programs such as nationalized healthcare and other redistributive policies developed in European nations lead by Socialist political Parties. It allowed those nations to raise vast amounts of cash without the complication of having a direct tax on the public; which makes it all the more appealing to sneaky politicians.
The VAT tax levies a tax on each stage of manufacture. For instance, if you consider a book, most people can not imagine how many stages actually go into the manufacture of a simple book. To make paper you must harvest pulp trees. That step adds value to the wood simply because it has been harvested and delivered to a processor so therefore, it would be taxed. Then the paper manufacturer grinds the wood into a pulp to make paper, but first, chemicals are added to bleach the pulp and stabilize it and each of those chemicals began life as a raw material that had to be processed and refined adding value (and a tax) to each stage of development. Of course the energy used to operate the equipment runs on electricity which is generated using fuels. Those fuels are not ready for consumption until they have been processed, adding a value and the corresponding tax to that as well so the energy they produce is more costly to the paper manufacturer.
Now that the finished paper has been delivered to the printer, the actual work of creating a book can begin. The paper must be cut to a size that is usable for the book that will be produced, an added value. Then the ink that is used is another chemical that was delivered to the printer with all the taxes that were applied at each step of manufacture. The act of applying ink to the paper is another step that adds value and let’s not forget that a book bound for reading is more valuable than one that is not, so that adds another tax. There are glues that must be made to bind the book; a tax. There is card material that must be made to form the cover; another tax. There is the lithograph and cover material that is applied to the card-stock cover for yet another tax. In the end, a simple $15.00 book now costs $20.95 because of all the taxes added at each stage of production and for each of the materials involved.
Most areas of the country have a sales tax of roughly 8% and that would net about $1.20 on the sale of a $15.00 book. That is why the government would love to sell you on the idea of a VAT tax. If they had to come directly to you for a national sales tax, what could they possibly get away with? 1% or maybe 2% would be the most they could start with and not enrage a nation already drowning in taxes. Governments that have a VAT tax love tell everyone that this is a tax on those evil corporations and that they are finally paying their fair share but they leave out one tiny little detail. Corporations never pay taxes. Did I say never? Yes, I said NEVER. All taxes assessed on corporations, manufacturers and retailers are immediately passed on to the consumer (you) through higher prices so the government gets to tax you indirectly using the corporations as the tax collector. Neat trick huh? Through this practice that $15.00 book will have to go up by about $6, the price of a Kindle would increase by roughly $100 and an automobile; roughly $3,000. Oh yes, then you still have the honor of paying your local sales tax of about 8% on the new, higher price.
A VAT tax is not the tax on the wealthiest 1% that Obama campaigned on; it is a tax on anyone that buys anything regardless of income. Of course you can avoid that tax provided you have property with trees that you can cut down and the mineral resources to create ink, glue and paper with. Then of course you would have to know how to make those products yourself and find the time after all of that to have written something worth putting in the blank pages of the book you just made. No, I’m not being silly. I am trying to illustrate the fact that this type of tax is insidious, hidden and unavoidable. Even the poor need food, shelter and clothing and they will be burdened by the price increases on all of that just as much as the wealthiest 1% is. The hardest hit will be new families and the young that are just trying to make it on their own. They are the largest consumers of manufactured goods and none of them even come close to being in that “top 1%”.
A recent report stated that a full 47% of the nation currently pays no Federal income tax because of the Progressive Tax system we use in the United States. I doubt anyone is short sighted enough to imagine that we can have a $3.8 trillion dollar Federal budget, avoid collecting taxes from nearly half the nation and still be able to afford it. Of course if Obama was an honest man, which he isn’t, he would have to tell America that the freebies are over; that we must end the earned income credits and reduce the current amount to be eligible for a tax exemption or begin shutting down essential government services and programs. Unfortunately, the Democrats and Progressives have quite a few people trained to believe that these programs are not government charities but entitlements that they have a right to collect. Since they can’t eliminate the programs without riots springing up all over the country they have moved on to considering a VAT tax that would allow them to give with one hand while taking it back with the other hand hidden safely behind the companies that will have to collect the tax for them.
The institution of a VAT tax would be more than just another broken promise; it would be an outright lie. The tax would be collected from manufacturers that would, in turn, get the money from you while the President would still claim that he has not raised taxes on the middle class. Obama will still try to sell this to his base group of supporters as another tax on the rich and on those evil corporations knowing full well, by every example set in Europe, that the people that actually pay that tax are the ones that buy those products. To be able to claim that he is concerned about the deficit and debt, Obama has commissioned a debt reduction panel to investigate the problem and develop strategies for dealing with it. Every expert in the nation says that no plan will be effective without a meaningful reduction in government spending but that is where the agreement ends. The Progressive economists say those reductions must be coupled with massive new taxes dedicated to debt reduction while the ones that truly understand the power of a free market economy say we must slash taxes to attract foreign investment and to put money back into the hands of the consumer where it belongs. By the way, the report from Obama’s debt reduction panel is not due until December, well after the November election which is another neat little trick.
I know to those that have been raised in the era of class warfare, this idea seems ridiculous. You have been told since birth that the rich are too rich and the poor are getting poorer; that the rich must give more so that the playing field can be leveled to help the poor through these difficult times. I will be blunt. I have never sought out a poor man to apply for a job. While we all have different measures of what “filthy rich” actually is; the fact is that it is the wealthy that create jobs and I can think of no better way to help the poor out of poverty that to nurture a thriving economy that can support meaningful jobs for all of the people that are stuck in government projects now. The government has never created jobs. The best they can do is to steal from those that have to give to those that don’t. The only problem with that is the money they just stole was the money that would have been used to create businesses and new jobs.
Europe is about to implode under their mountainous debt and the wealthy in those countries are looking for a safe place to invest. They would much rather invest in the United States because we have the most stable society and government on the globe. Instead, they are seeking investments in China and others like China because America has gone wild with ideas of Socialism lately. If we can reign in our spending and slash taxes, money will pour into this country as never before. We can prosper and reemerge as a world leader if we have the strength to bite the bullet in the short term and grow our economy instead of sapping the last few drops of blood out of it. Of course we need leaders that understand the free market and wealth instead of those that despise it. This November will determine the course of America and if we don’t elect a roadblock to stop these runaway Progressive Socialists in Congress and in the Presidency, we may not get another chance to return America to prosperity and peace.
Paul
Tuesday, February 23, 2010
The President's Healthcare Plan - Just More Things to Despise
To make good on his promise, or threat depending on how you look at it, the President released a summary of his healthcare proposal on Monday morning. I haven’t been able to find a full copy of the text as of yet and if all he intends to post to the internet is a summary / infomercial, then I am truly concerned. Considering what is in the summary, I can only imagine what horrors the full text of the proposal has in store for us. Bear in mind, this is not a full proposal designed to replace the bill that a majority of Americans would like to see tossed; this is yet another addition to the more than two thousand pages that already exist.
In essence, the President’s proposal has taken a bill Americans already hate and gave us even more to despise. There are more tax increases, higher penalties for not purchasing health insurance, a clever renaming of the medical device fee to an excise tax and a “millionaire’s tax” of 5.25% levied on people earning a quarter of what it takes to be a millionaire. Incidentally, the millionaire’s tax also contains a marriage penalty where tax is levied against single people earning more than $200,000 and couples earning more than $250,000.
The President’s plan still punishes health insurance companies, extorting $67 billion dollars in fees to help the enrollment process on the assumption that insurance companies are going to make so much money from all the new people that will be forced to purchase insurance. Well, if this plan is meant to allow access to health insurance for the 30 million Americans that are reportedly without insurance, then what are we talking about, a ten percent increase in business? But wait, the income assessment used to force people to purchase insurance doesn’t kick in until you earn more than $18,700 per year so you can hack off a healthy portion of that 10%. This does not take into consideration that once the exemptions for pre-existing conditions are removed from the equation, some will simply prefer to pay the penalty knowing that they can always get insurance later when it is an absolute necessity saving themselves thousands in premium costs.
The President couldn’t eliminate the additional tax on “Cadillac” healthcare plans to make his union friends happy without an uproar so he did the next best thing. He postponed that tax until 2018 and by then, private insurance should be a thing of the past. Oh yes, private insurance will be decimated by the President’s plan. His proposal includes capping premium costs knowing that the industry only has a 3.4% profit margin now; a margin that will not be able to keep up with rising health provider costs as more people are absorbed into Medicaid and Medicare. You see, it is the paltry amount that the Federal government reimburses doctors and hospitals for Medicare and Medicaid services that created the problem in the first place. Hospitals and doctors are forced to increase their charges to private insurance to make up the shortages and private insurance must pass that on to you in what is really, the largest hidden tax to fund those programs ever perpetrated on the American people.
The President’s plan has a “grandfather” clause that will allow people that like their current insurance to keep that plan. Hmmm? Why would we need a grandfather clause if their intention wasn’t to force people to accept certain plans that the government will choose for you? In fact, the grandfather clause isn’t worth much since the government will force changes to these plans that will no longer make them profitable. You see, you can’t get to the single payer system the President really wants if you get to keep a plan that will not go away. The changes that the providers of these plans will have to make will ensure they cannot remain competitive.
The President’s summary states: “Within months of legislation being enacted, it requires plans to cover adult dependents up to age 26, prohibits rescissions, mandates that plans have a stronger appeals process, and requires State insurance authorities to conduct annual rate review, backed up by the oversight of the HHS Secretary. When the exchanges begin in 2014, the President’s Proposal adds new protections that prohibit all annual and lifetime limits, ban pre-existing condition exclusions, and prohibit discrimination in favor of highly compensated individuals. Beginning in 2018, the President’s Proposal requires “grandfathered” plans to cover proven preventive services with no cost sharing.” In short, by 2018, these plans will either be eliminated by the provider or will be too expensive to purchase to all but a few.
Pharmaceutical companies will also be hit hard as official preference is given to generic drugs. Ignoring the companies that actually pioneered the creation of new drugs and had to fund the expense of clinical trials and Federal approval will create a stagnant climate within the pharmaceutical industry. This short sighted approach will have a detrimental limiting effect on research and development of new drugs and treatments. The President’s plan also increases the government theft of pharmaceutical company profits $10 billion dollars more than the Senate plan proposed for a total of $33 billion over ten years.
Medicare Advantage is also targeted by the President’s plan and while the summary makes a base assessment that Medicare overpays private plans by an average of 14% to provide the same services as the regular Medicare programs, his summary refuses to actually say what is going to be cut and where. His plan creates a set of benchmark payments at different percentages based on the current average fee-for-service costs in an area. Of course while his summary calls this section “Improving Medicare Advantage Payments” it could just as easily be called “good luck finding a doctor that will accept Medicare Advantage now”. The only reason people go through the expense of paying for Medicare Advantage is that many doctors simply do not take “traditional” Medicare because of the their miserable payment rates. Adjusting the rate structure to something more like Medicare will only make Medicare Advantage as unpopular with doctors as Medicare is currently.
There is the creation of what the President himself calls an “unprecedented array of aggressive new authorities to fight waste, fraud and abuse.” Ok, so we are expected to believe that the savings from the “waste, fraud and abuse” uncovered by this “array” of new authorities will not be consumed entirely by the “array” of new authorities. Call me silly but couldn’t fraud and abuse be adequately pursued and prosecuted by an already bloated and underutilized Justice Department? As far as fraud is concerned, that simply sounds like there needs to be a little house cleaning over at the existing Medicare and Medicaid administrations so that these people actually perform their jobs.
Of course nothing is more devastating than the employer mandates. The President insists that there are no employer mandates in his plans but there are fees that start with companies of 50 or more employees. A fee of $750 would be assessed for every one of that company’s employees even if only one of those employees should purchase insurance with taxpayer assistance; that my friends, is known as a job killer. The carrot of a tax credit is meaningless because the requirements outlive the credits and leave businesses holding the bag for all time. Companies with 55 or 60 employees will find a way to get the job done with 54 and many larger companies will just close their American plants and outsource to foreign companies in countries that were smart enough not to elect a socialist President. There is also an additional tax for employers that offer no insurance or insurance that does not meet “government standards”. The tax would roughly be an 8% payroll tax phased in for employers with annual payrolls from $500,000 to $750,000 which really doesn’t take that much to reach these days now does it?
Of course no plan ever crafted by a Progressive Democrat would be complete without a little bait and switch. The President’s proposal gives billions to Community based health centers and that just sounds like a big “Thank You” from the President to all of the Community organizations that helped him get elected. While the Nebraska deal is tossed out in the President’s plan, the Senate’s “working girl” from Louisiana, Mary Landrieu, gets to keep her $300 million bribe and other States will get a kickback of one degree or another to buy their silence. The President also plans on using this bill to close what he calls a tax loophole in an entirely unrelated clean energy tax credit bill and clearly states that some of the money you good people will be paying for the Healthcare reform bill will be diverted, if needed, to shore up Social Security.
This is nothing less than a nail gun to seal the coffin of private healthcare insurance in this country. Why would the President and Progressive Democrats want to cripple the healthcare system? Because they need to redirect all of the money spent on healthcare in this country into one massive entitlement program just to keep the failed programs of Medicare, Medicaid and Social Security on life support for the next ten or twelve years. This is a shameless attempt to trick the American people into believing that this about healthcare when it is just another attempt to funnel more power and money into the corrupt abyss of Washington.
Paul
In essence, the President’s proposal has taken a bill Americans already hate and gave us even more to despise. There are more tax increases, higher penalties for not purchasing health insurance, a clever renaming of the medical device fee to an excise tax and a “millionaire’s tax” of 5.25% levied on people earning a quarter of what it takes to be a millionaire. Incidentally, the millionaire’s tax also contains a marriage penalty where tax is levied against single people earning more than $200,000 and couples earning more than $250,000.
The President’s plan still punishes health insurance companies, extorting $67 billion dollars in fees to help the enrollment process on the assumption that insurance companies are going to make so much money from all the new people that will be forced to purchase insurance. Well, if this plan is meant to allow access to health insurance for the 30 million Americans that are reportedly without insurance, then what are we talking about, a ten percent increase in business? But wait, the income assessment used to force people to purchase insurance doesn’t kick in until you earn more than $18,700 per year so you can hack off a healthy portion of that 10%. This does not take into consideration that once the exemptions for pre-existing conditions are removed from the equation, some will simply prefer to pay the penalty knowing that they can always get insurance later when it is an absolute necessity saving themselves thousands in premium costs.
The President couldn’t eliminate the additional tax on “Cadillac” healthcare plans to make his union friends happy without an uproar so he did the next best thing. He postponed that tax until 2018 and by then, private insurance should be a thing of the past. Oh yes, private insurance will be decimated by the President’s plan. His proposal includes capping premium costs knowing that the industry only has a 3.4% profit margin now; a margin that will not be able to keep up with rising health provider costs as more people are absorbed into Medicaid and Medicare. You see, it is the paltry amount that the Federal government reimburses doctors and hospitals for Medicare and Medicaid services that created the problem in the first place. Hospitals and doctors are forced to increase their charges to private insurance to make up the shortages and private insurance must pass that on to you in what is really, the largest hidden tax to fund those programs ever perpetrated on the American people.
The President’s plan has a “grandfather” clause that will allow people that like their current insurance to keep that plan. Hmmm? Why would we need a grandfather clause if their intention wasn’t to force people to accept certain plans that the government will choose for you? In fact, the grandfather clause isn’t worth much since the government will force changes to these plans that will no longer make them profitable. You see, you can’t get to the single payer system the President really wants if you get to keep a plan that will not go away. The changes that the providers of these plans will have to make will ensure they cannot remain competitive.
The President’s summary states: “Within months of legislation being enacted, it requires plans to cover adult dependents up to age 26, prohibits rescissions, mandates that plans have a stronger appeals process, and requires State insurance authorities to conduct annual rate review, backed up by the oversight of the HHS Secretary. When the exchanges begin in 2014, the President’s Proposal adds new protections that prohibit all annual and lifetime limits, ban pre-existing condition exclusions, and prohibit discrimination in favor of highly compensated individuals. Beginning in 2018, the President’s Proposal requires “grandfathered” plans to cover proven preventive services with no cost sharing.” In short, by 2018, these plans will either be eliminated by the provider or will be too expensive to purchase to all but a few.
Pharmaceutical companies will also be hit hard as official preference is given to generic drugs. Ignoring the companies that actually pioneered the creation of new drugs and had to fund the expense of clinical trials and Federal approval will create a stagnant climate within the pharmaceutical industry. This short sighted approach will have a detrimental limiting effect on research and development of new drugs and treatments. The President’s plan also increases the government theft of pharmaceutical company profits $10 billion dollars more than the Senate plan proposed for a total of $33 billion over ten years.
Medicare Advantage is also targeted by the President’s plan and while the summary makes a base assessment that Medicare overpays private plans by an average of 14% to provide the same services as the regular Medicare programs, his summary refuses to actually say what is going to be cut and where. His plan creates a set of benchmark payments at different percentages based on the current average fee-for-service costs in an area. Of course while his summary calls this section “Improving Medicare Advantage Payments” it could just as easily be called “good luck finding a doctor that will accept Medicare Advantage now”. The only reason people go through the expense of paying for Medicare Advantage is that many doctors simply do not take “traditional” Medicare because of the their miserable payment rates. Adjusting the rate structure to something more like Medicare will only make Medicare Advantage as unpopular with doctors as Medicare is currently.
There is the creation of what the President himself calls an “unprecedented array of aggressive new authorities to fight waste, fraud and abuse.” Ok, so we are expected to believe that the savings from the “waste, fraud and abuse” uncovered by this “array” of new authorities will not be consumed entirely by the “array” of new authorities. Call me silly but couldn’t fraud and abuse be adequately pursued and prosecuted by an already bloated and underutilized Justice Department? As far as fraud is concerned, that simply sounds like there needs to be a little house cleaning over at the existing Medicare and Medicaid administrations so that these people actually perform their jobs.
Of course nothing is more devastating than the employer mandates. The President insists that there are no employer mandates in his plans but there are fees that start with companies of 50 or more employees. A fee of $750 would be assessed for every one of that company’s employees even if only one of those employees should purchase insurance with taxpayer assistance; that my friends, is known as a job killer. The carrot of a tax credit is meaningless because the requirements outlive the credits and leave businesses holding the bag for all time. Companies with 55 or 60 employees will find a way to get the job done with 54 and many larger companies will just close their American plants and outsource to foreign companies in countries that were smart enough not to elect a socialist President. There is also an additional tax for employers that offer no insurance or insurance that does not meet “government standards”. The tax would roughly be an 8% payroll tax phased in for employers with annual payrolls from $500,000 to $750,000 which really doesn’t take that much to reach these days now does it?
Of course no plan ever crafted by a Progressive Democrat would be complete without a little bait and switch. The President’s proposal gives billions to Community based health centers and that just sounds like a big “Thank You” from the President to all of the Community organizations that helped him get elected. While the Nebraska deal is tossed out in the President’s plan, the Senate’s “working girl” from Louisiana, Mary Landrieu, gets to keep her $300 million bribe and other States will get a kickback of one degree or another to buy their silence. The President also plans on using this bill to close what he calls a tax loophole in an entirely unrelated clean energy tax credit bill and clearly states that some of the money you good people will be paying for the Healthcare reform bill will be diverted, if needed, to shore up Social Security.
This is nothing less than a nail gun to seal the coffin of private healthcare insurance in this country. Why would the President and Progressive Democrats want to cripple the healthcare system? Because they need to redirect all of the money spent on healthcare in this country into one massive entitlement program just to keep the failed programs of Medicare, Medicaid and Social Security on life support for the next ten or twelve years. This is a shameless attempt to trick the American people into believing that this about healthcare when it is just another attempt to funnel more power and money into the corrupt abyss of Washington.
Paul
Wednesday, February 17, 2010
A Constitutional Government? What a Concept!
Let’s play a game! I’d like to pretend for a moment that the Progressive movement doesn’t exist; that the subsequent Liberals never discovered Karl Marx or Friedrich Nietzsche. Let’s imagine an America where we had the foresight and courage to block Soviet Russia’s attempts to demoralize America by infiltrating the American press, film industries and educational systems. Let’s ponder the future as if our past had followed a course that more closely resembled the government our founding fathers had meant for us to have. Before we can actually play that game, we must start at the beginning with a review of what that government was supposed to look like. Only then can we remap the last two hundred years and perhaps, speculate on the next two hundred.
The people that founded the American colonies were for the most part, British émigrés, people that sought to escape religious persecution or leave the crowded streets of England’s urban centers and seek new fortunes by settling a vast, new and relatively uninhabited land. There were spacious tracts of land and seemingly limitless resources to be exploited by adventurous men that were fit and industrious. Living in a pre-industrial, agrarian world, uses for many of the “new world’s” resources were still largely unknown but they would certainly come into play later. By the time the British colonies were firmly established in America, the Spanish myths about cities of gold had been disproven and fur trade, fertile lands and natural ports were considered to be America’s greatest assets.
While many still traveled back and forth to England, the American born descendants of the original settlers had mostly taken their father’s places by the turn of the 18th Century. They were beginning to create an identity separate from their British heritage mainly because the British Crown treated them as second class citizens. England had fought several skirmishes with Spain since the inception of the colonies and was actively sparring with France on the borders of the American colonies by the time the mid 1700’s had arrived. England had stationed a number of troops to guard the colonies against French incursion but the British Treasury was under pressure and the cost to maintain a protective force in numbers was becoming prohibitive. The English population was already overtaxed and on the verge of revolt so England turned to her second class citizens in America to carry the financial burden of her own protection.
For many, it may seem proper that the beneficiaries of that protection should pay for it but this story could not be written if Britain had not taken that principal too far. Strict limits were placed on the manufacture of American goods so that British made goods would still be in demand. While one new tax after another was levied on colonial trade, the colonies were continually denied the representation in Parliament that British citizens had enjoyed for centuries. The troops sent by England to guard the colonies were slowly assuming the duties of suppressing the anger that was slowly brewing against the unfair restrictions and tariffs. The troops themselves became the center of the controversy as colonists were forced to house and feed the soldiers at their own expense.
All of this would boil over into open insurrection and finally result in a bloody revolt against British rule. The Declaration of Independence would have had no more historical significance than an advertising poster for fertilizing manure had the colonies not defied all odds and emerged victorious. With their independence from England, the colonies would use their proclamation of natural rights and the list of grievances in that declaration to create an entirely new form of government.
The new government would be founded on the principal that man’s fundamental rights descended directly from God and were irrevocable; that these rights had always existed and were not an act of kindness granted by a beneficent government. The basic structure of the government they created borrowed the most historically successful parts from a variety of cultures. It would contain a body of civilian representatives as found in the British Parliament; a Senate as found in the Roman Empire and a democratically elected leader as part of the experiment. All of these would be restrained by law and for the first time in the history of the planet, the word of law shackled the reach government and the citizens retained supreme rule over all of it.
Central to the formation of the new government was the principal that the States remained sovereign and self governing. The Constitution created a governing body that would unify the States while each retained autonomy and that would not be an easy trick. They achieved this through a “bottom up” strategy. The people retained direct control over State government through the electoral process and the State would govern its citizens by laws enacted with the consent of the governed. The individual States would freely enter into a Union of States whose governing body would be comprised of elected representatives from each State and a President elected by the citizens of all of the States in the Union. It would be a Republic, with the electorate selecting representatives based on their principals and those representatives would vote for or against legislation on their behalf.
Each State would have to agree to abide by the United States Constitution in order to enter the Union. The Constitution is a document that not only reaffirms the State’s sovereign rule but clearly defines the powers that the States would delegate to the Federal government; strictly limiting the Federal government to those powers alone. As part of the Union, the States would agree to obey the laws passed by the Federal government so long as those laws pertained to the responsibilities delegated to the Federal government by the Constitution. A Supreme Court was established that would rule on any Federal law that was challenged by a State or citizen that could prove harm.
Curiously, the Bill of Rights were added as the first ten amendments to the Constitution and not written into the original document. It is not that the Founding Fathers considered those rights as an afterthought; indeed they considered those rights supreme. They did not add them because they did not feel they embodied the Federal government with any power sufficient to threaten those rights. We now know the confidence they had in the Constitutional limits placed on the Federal government was overstated and the Supreme Court spends much of its time hearing cases surrounding those sacred rights. While visionaries, the Founding Fathers saw that power is corruptible and did the best they could to see that the Federal government was correctly restrained. What they did not envision were the future generation of Constitutional scholars dedicated to finding pathways around those restraints and that would inevitably bring us to a point where the Federal government it threatening to become the master and not the servant of the people.
The Founding Fathers were geniuses but alas, they were still mere mortals. If they possessed the powers of clairvoyance perhaps they could have avoided the mess we are in today with a simple table of definitions added as an appendix to the Constitution. That would certainly have taken the wind out of the sails of those prominent Constitutional lawyers and closed the loopholes that they are now driving trucks through. Those definitions already exist in the Federalist Papers, a series of letters and correspondence penned by the founders that clearly detail their intent and place the language contained in the Constitution in context. Unfortunately, since those letters are not part of the actual Constitution they bear no weight in the actual review of the law as it is written. Armies of legalist attorneys now argue each and every word written in the Constitution and assign modern interpretations that shatter what were once considered iron chains on the power of the Federal government.
Tomorrow we begin our experiment in earnest. We will imagine that the Founders did include that table of definitions in the actual Constitution and that there is no longer any question as to the role of the Federal government. Make sure you wear a helmet and elbow pads because it’s going to be one hell of a ride!
Paul
The people that founded the American colonies were for the most part, British émigrés, people that sought to escape religious persecution or leave the crowded streets of England’s urban centers and seek new fortunes by settling a vast, new and relatively uninhabited land. There were spacious tracts of land and seemingly limitless resources to be exploited by adventurous men that were fit and industrious. Living in a pre-industrial, agrarian world, uses for many of the “new world’s” resources were still largely unknown but they would certainly come into play later. By the time the British colonies were firmly established in America, the Spanish myths about cities of gold had been disproven and fur trade, fertile lands and natural ports were considered to be America’s greatest assets.
While many still traveled back and forth to England, the American born descendants of the original settlers had mostly taken their father’s places by the turn of the 18th Century. They were beginning to create an identity separate from their British heritage mainly because the British Crown treated them as second class citizens. England had fought several skirmishes with Spain since the inception of the colonies and was actively sparring with France on the borders of the American colonies by the time the mid 1700’s had arrived. England had stationed a number of troops to guard the colonies against French incursion but the British Treasury was under pressure and the cost to maintain a protective force in numbers was becoming prohibitive. The English population was already overtaxed and on the verge of revolt so England turned to her second class citizens in America to carry the financial burden of her own protection.
For many, it may seem proper that the beneficiaries of that protection should pay for it but this story could not be written if Britain had not taken that principal too far. Strict limits were placed on the manufacture of American goods so that British made goods would still be in demand. While one new tax after another was levied on colonial trade, the colonies were continually denied the representation in Parliament that British citizens had enjoyed for centuries. The troops sent by England to guard the colonies were slowly assuming the duties of suppressing the anger that was slowly brewing against the unfair restrictions and tariffs. The troops themselves became the center of the controversy as colonists were forced to house and feed the soldiers at their own expense.
All of this would boil over into open insurrection and finally result in a bloody revolt against British rule. The Declaration of Independence would have had no more historical significance than an advertising poster for fertilizing manure had the colonies not defied all odds and emerged victorious. With their independence from England, the colonies would use their proclamation of natural rights and the list of grievances in that declaration to create an entirely new form of government.
The new government would be founded on the principal that man’s fundamental rights descended directly from God and were irrevocable; that these rights had always existed and were not an act of kindness granted by a beneficent government. The basic structure of the government they created borrowed the most historically successful parts from a variety of cultures. It would contain a body of civilian representatives as found in the British Parliament; a Senate as found in the Roman Empire and a democratically elected leader as part of the experiment. All of these would be restrained by law and for the first time in the history of the planet, the word of law shackled the reach government and the citizens retained supreme rule over all of it.
Central to the formation of the new government was the principal that the States remained sovereign and self governing. The Constitution created a governing body that would unify the States while each retained autonomy and that would not be an easy trick. They achieved this through a “bottom up” strategy. The people retained direct control over State government through the electoral process and the State would govern its citizens by laws enacted with the consent of the governed. The individual States would freely enter into a Union of States whose governing body would be comprised of elected representatives from each State and a President elected by the citizens of all of the States in the Union. It would be a Republic, with the electorate selecting representatives based on their principals and those representatives would vote for or against legislation on their behalf.
Each State would have to agree to abide by the United States Constitution in order to enter the Union. The Constitution is a document that not only reaffirms the State’s sovereign rule but clearly defines the powers that the States would delegate to the Federal government; strictly limiting the Federal government to those powers alone. As part of the Union, the States would agree to obey the laws passed by the Federal government so long as those laws pertained to the responsibilities delegated to the Federal government by the Constitution. A Supreme Court was established that would rule on any Federal law that was challenged by a State or citizen that could prove harm.
Curiously, the Bill of Rights were added as the first ten amendments to the Constitution and not written into the original document. It is not that the Founding Fathers considered those rights as an afterthought; indeed they considered those rights supreme. They did not add them because they did not feel they embodied the Federal government with any power sufficient to threaten those rights. We now know the confidence they had in the Constitutional limits placed on the Federal government was overstated and the Supreme Court spends much of its time hearing cases surrounding those sacred rights. While visionaries, the Founding Fathers saw that power is corruptible and did the best they could to see that the Federal government was correctly restrained. What they did not envision were the future generation of Constitutional scholars dedicated to finding pathways around those restraints and that would inevitably bring us to a point where the Federal government it threatening to become the master and not the servant of the people.
The Founding Fathers were geniuses but alas, they were still mere mortals. If they possessed the powers of clairvoyance perhaps they could have avoided the mess we are in today with a simple table of definitions added as an appendix to the Constitution. That would certainly have taken the wind out of the sails of those prominent Constitutional lawyers and closed the loopholes that they are now driving trucks through. Those definitions already exist in the Federalist Papers, a series of letters and correspondence penned by the founders that clearly detail their intent and place the language contained in the Constitution in context. Unfortunately, since those letters are not part of the actual Constitution they bear no weight in the actual review of the law as it is written. Armies of legalist attorneys now argue each and every word written in the Constitution and assign modern interpretations that shatter what were once considered iron chains on the power of the Federal government.
Tomorrow we begin our experiment in earnest. We will imagine that the Founders did include that table of definitions in the actual Constitution and that there is no longer any question as to the role of the Federal government. Make sure you wear a helmet and elbow pads because it’s going to be one hell of a ride!
Paul
Monday, February 15, 2010
Obama Didn't Inherit the Recession - He Hired It
In continuation of Friday’s article, we were discussing whether or not the Obama administration could continue to call this recession the “Bush” recession. The answer is no and the Obama administration has to face the fact that the statute of limitations for blaming Bush has run out and he now owns the economy; especially since his administration has already used all of their “Ivy League” experimental theories to correct it. As much as they would like to enter the 2010 campaign cycle with as much emphasis as possible on the “mess” that Obama inherited, there are several of those pesky little facts out there that all of Obama’s rhetoric will not change. As it turns out, Obama didn’t just inherit the recession, he hired it.
#1- President Obama has retained people within his administration that were previously key policy makers whose actions contributed to the current recession.
#2- Much of the small business community has sited major parts of Obama’s agenda that have shaken the confidence of business in the health of the economy under Obama’s leadership and in their ability to remain profitable should those agenda items become law.
#3- The actions taken by this administration to correct the faltering economy were, and continue to be, centered on government control, government spending, and the monetization of debt complicated by the dangerous misreporting of economic indicators.
We already discussed Tim “Turbo-Tax” Geithner, Obama’s current Treasury Director; specifically how his actions while he was Chairman of the New York Federal Reserve and a member of the Washington “Group of Thirty” have been considered by many economists as directly impacting the economy in ways that have severely damaged the banking industry. We also discussed that Rahm Emmanuel, Obama’s current Chief of Staff was on the board of Freddie Mac during the period that Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities. Obama torpedoed a Freedom of Information Act request to obtain communication and e-mail records that might have helped an investigation implicate his dear friend and Chief of Staff.
Let’s talk about some new people. Barack Obama’s choice for Director of the Office of Budget and Management (OMB) is Peter “Loverboy” Orszag. If you recall, the OMB gave the Senate Healthcare Bill a failing grade on maintaining the “budget neutrality” that the President required of any bill he would sign. Of course a quick closed door meeting between Obama and his Budget Director fixed that and within days, the OMB reevaluated the plan and Viola! It was budget neutral! Thank God for Orszag! It is critically important to economic recovery that the business community can trust the estimates of government. After all, to be able to expand and chance the hire of new employees, business must be able to accurately estimate little things like future tax liabilities and the burden that new regulations will have on the cost of manufacture, labor and energy. Can you imagine if people began to mistrust the government; especially in the area of official reports and estimates? The ramifications would be astounding. Why you could dump hundreds of billions into the economy and never create a single job!
Orszag is another one of those intellectual theorists that has never held a real job. While he was not a “Rhodes” Scholar like Bill Clinton, he was a Marshal Scholar and after earning a degree in economics from Princeton, Orszag traveled to England where he obtained his Masters Degree and Doctorate in economics from the London School of Economics. He sites several people that he considers “Mentors” including Joseph Stiglitz. Stiglitz was not your average apple pie and baseball American and was himself, a proponent of globalist economic policy, market socialism and what he called a “more sustainable and just global economic order”. In addition to Stiglitz, Orszag also considered Robert Rubin an important influence in his life.
Yes, that is the same Rubin that spent 26 years at Goldman Sachs as a board member and Co-Chairman before joining the Clinton administration as Assistant to the President for Economic Policy. After leaving the Clinton administration, Rubin became Director and Senior Counselor of Citigroup and would eventually serve as interim Chairman between November and December 2007. In January of 2009, Citigroup announced his resignation after having been criticized for his performance. Rubin became one more name on the list of individuals that had brought the financial system to ruin before leaving with more than $100 million dollars in cash and stocks.
The current Director of the White House's National Economic Council for President Barack Obama is Lawrence Summers. “Larry” began his academic career at MIT where he studied physics but soon switched to economics, earning an B.S. in 1975. He attended graduate classes at Harvard where he earned his Ph.D. in 1982. At age 28, Summers became one of the youngest tenured professors in Harvard’s history. Like Orszag, Summers is a theoretician when it comes to work and has spent his life either teaching, in government or governmental organizations like the dreaded World Bank. While all of that sounds impressive, I still don’t know how we let people teach what they have never been involved in….like where business actually fits into a market economy. Summers early career was as an “academic economist” and he was responsible for providing research data for economic studies.
As a researcher, Summers has made important contributions in many areas of economics, primarily public finance, labor economics, financial economics, and macroeconomics. Some of Summers' early papers concluded that corporate and capital gains taxes are an inefficient form of taxation. Cutting the capital gains tax rate, Summers found, could help the economy grow. One of Summers' prominent findings in labor economics is that unemployment insurance and welfare payments are a major contributor to unemployment, and therefore should be scaled back. Since the Obama administration has taken a course contrary to these proven economic strategies, it is apparent that Larry’s career in politics and as a professor at Harvard, has caused him to trade his lust for truth for the comfort of being part of the ruling elite.
Of course there is a down side to losing your “religion” and Summers would find out that when you ignore what you know is right and true because it is unfashionable, bad things are bound to happen. As Treasury Secretary, Summers led the Clinton Administration's opposition to tax cuts proposed by the Republican Congress in 1999; a 180 degree reversal from the data he provided for other economists earlier in his career. Summers supported the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act). After passage, Summers announced: "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," "This historic legislation will better enable American companies to compete in the new economy. Unfortunately for Summers, the deregulation under the Glass-Steagall Act is widely known to have created the conditions that directly led to the sub-prime mortgage crisis; the precursor to the financial meltdown of 2008.
Summers also testified before Congress that there was no need to require additional regulation of the institutional OTC derivatives market, a move that would later lead to the near collapse of AIG. The work that Summers did for the Clinton administration in fact, created the conditions that would nearly drive the nation into depression a mere ten years later. Upon leaving the Clinton administration, Summers became the President of Harvard University. He decided to invest University funds using the loopholes he created through deregulation. Of course interest swaps and hedge funds can’t be maintained forever and his financial wheeling and dealing would end up costing the University over $1 billion dollars and cost him his job, forcing his resignation in 2006.
Now the Obama administration is shaping the financial direction of the nation under the advice of the actual architects of the financial meltdown that nearly bankrupted the entire financial system of the United States if not the world. One could argue that the Bush administration should have taken reasonable steps to restore the needed regulations which could have prevented the crisis and he probably would have if his administration hadn’t received the assurances of the Federal Reserve and Congress that everything was fine.
So in summary, the Obama administration is blaming the Bush administration for a recession that was brought on by financial deregulation enacted by the Clinton administration under the advice of people that Obama just rehired to direct the financial direction of the country under his administration. The question that remains unanswered is why Obama thinks that any of this is a good idea.
Paul
#1- President Obama has retained people within his administration that were previously key policy makers whose actions contributed to the current recession.
#2- Much of the small business community has sited major parts of Obama’s agenda that have shaken the confidence of business in the health of the economy under Obama’s leadership and in their ability to remain profitable should those agenda items become law.
#3- The actions taken by this administration to correct the faltering economy were, and continue to be, centered on government control, government spending, and the monetization of debt complicated by the dangerous misreporting of economic indicators.
We already discussed Tim “Turbo-Tax” Geithner, Obama’s current Treasury Director; specifically how his actions while he was Chairman of the New York Federal Reserve and a member of the Washington “Group of Thirty” have been considered by many economists as directly impacting the economy in ways that have severely damaged the banking industry. We also discussed that Rahm Emmanuel, Obama’s current Chief of Staff was on the board of Freddie Mac during the period that Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities. Obama torpedoed a Freedom of Information Act request to obtain communication and e-mail records that might have helped an investigation implicate his dear friend and Chief of Staff.
Let’s talk about some new people. Barack Obama’s choice for Director of the Office of Budget and Management (OMB) is Peter “Loverboy” Orszag. If you recall, the OMB gave the Senate Healthcare Bill a failing grade on maintaining the “budget neutrality” that the President required of any bill he would sign. Of course a quick closed door meeting between Obama and his Budget Director fixed that and within days, the OMB reevaluated the plan and Viola! It was budget neutral! Thank God for Orszag! It is critically important to economic recovery that the business community can trust the estimates of government. After all, to be able to expand and chance the hire of new employees, business must be able to accurately estimate little things like future tax liabilities and the burden that new regulations will have on the cost of manufacture, labor and energy. Can you imagine if people began to mistrust the government; especially in the area of official reports and estimates? The ramifications would be astounding. Why you could dump hundreds of billions into the economy and never create a single job!
Orszag is another one of those intellectual theorists that has never held a real job. While he was not a “Rhodes” Scholar like Bill Clinton, he was a Marshal Scholar and after earning a degree in economics from Princeton, Orszag traveled to England where he obtained his Masters Degree and Doctorate in economics from the London School of Economics. He sites several people that he considers “Mentors” including Joseph Stiglitz. Stiglitz was not your average apple pie and baseball American and was himself, a proponent of globalist economic policy, market socialism and what he called a “more sustainable and just global economic order”. In addition to Stiglitz, Orszag also considered Robert Rubin an important influence in his life.
Yes, that is the same Rubin that spent 26 years at Goldman Sachs as a board member and Co-Chairman before joining the Clinton administration as Assistant to the President for Economic Policy. After leaving the Clinton administration, Rubin became Director and Senior Counselor of Citigroup and would eventually serve as interim Chairman between November and December 2007. In January of 2009, Citigroup announced his resignation after having been criticized for his performance. Rubin became one more name on the list of individuals that had brought the financial system to ruin before leaving with more than $100 million dollars in cash and stocks.
The current Director of the White House's National Economic Council for President Barack Obama is Lawrence Summers. “Larry” began his academic career at MIT where he studied physics but soon switched to economics, earning an B.S. in 1975. He attended graduate classes at Harvard where he earned his Ph.D. in 1982. At age 28, Summers became one of the youngest tenured professors in Harvard’s history. Like Orszag, Summers is a theoretician when it comes to work and has spent his life either teaching, in government or governmental organizations like the dreaded World Bank. While all of that sounds impressive, I still don’t know how we let people teach what they have never been involved in….like where business actually fits into a market economy. Summers early career was as an “academic economist” and he was responsible for providing research data for economic studies.
As a researcher, Summers has made important contributions in many areas of economics, primarily public finance, labor economics, financial economics, and macroeconomics. Some of Summers' early papers concluded that corporate and capital gains taxes are an inefficient form of taxation. Cutting the capital gains tax rate, Summers found, could help the economy grow. One of Summers' prominent findings in labor economics is that unemployment insurance and welfare payments are a major contributor to unemployment, and therefore should be scaled back. Since the Obama administration has taken a course contrary to these proven economic strategies, it is apparent that Larry’s career in politics and as a professor at Harvard, has caused him to trade his lust for truth for the comfort of being part of the ruling elite.
Of course there is a down side to losing your “religion” and Summers would find out that when you ignore what you know is right and true because it is unfashionable, bad things are bound to happen. As Treasury Secretary, Summers led the Clinton Administration's opposition to tax cuts proposed by the Republican Congress in 1999; a 180 degree reversal from the data he provided for other economists earlier in his career. Summers supported the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act). After passage, Summers announced: "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," "This historic legislation will better enable American companies to compete in the new economy. Unfortunately for Summers, the deregulation under the Glass-Steagall Act is widely known to have created the conditions that directly led to the sub-prime mortgage crisis; the precursor to the financial meltdown of 2008.
Summers also testified before Congress that there was no need to require additional regulation of the institutional OTC derivatives market, a move that would later lead to the near collapse of AIG. The work that Summers did for the Clinton administration in fact, created the conditions that would nearly drive the nation into depression a mere ten years later. Upon leaving the Clinton administration, Summers became the President of Harvard University. He decided to invest University funds using the loopholes he created through deregulation. Of course interest swaps and hedge funds can’t be maintained forever and his financial wheeling and dealing would end up costing the University over $1 billion dollars and cost him his job, forcing his resignation in 2006.
Now the Obama administration is shaping the financial direction of the nation under the advice of the actual architects of the financial meltdown that nearly bankrupted the entire financial system of the United States if not the world. One could argue that the Bush administration should have taken reasonable steps to restore the needed regulations which could have prevented the crisis and he probably would have if his administration hadn’t received the assurances of the Federal Reserve and Congress that everything was fine.
So in summary, the Obama administration is blaming the Bush administration for a recession that was brought on by financial deregulation enacted by the Clinton administration under the advice of people that Obama just rehired to direct the financial direction of the country under his administration. The question that remains unanswered is why Obama thinks that any of this is a good idea.
Paul
Tuesday, December 22, 2009
Healthcare Reform and the Constitution
About the only thing that the Democrats and the President have said about the Healthcare Bill that isn’t an outright lie is that it is comprehensive. In fact, that is probably understated since this will give our Federal government unprecedented control over every facet of health, including some very personal decisions.
The bill contains a tax on sugary beverages since sugary beverages have been deemed bad for you. Anything bad for you will raise healthcare costs and this bill gives the government the authority to regulate anything that will affect your health. When government began its crusade to steer behavior under what is widely known know as a “sin” tax on cigarettes, I warned that this was only the beginning. No one argues that cigarettes are bad for one’s health but the same argument can be made for nearly the entire fast food industry. As cigarette taxes climb and people quit smoking, the number of cigarette related illnesses will also decline. When illness related to obesity ranks as the number one cause of death in the United States, the same argument will be used to regulate that behavior too.
We all know the number play in Washington. We saw it all through the debate as some figures were issued in real numbers and some were issued as percentages, whichever made the case for healthcare reform stronger. The industry profits for healthcare insurance were given in real dollars since the amount appeared staggering. Even though the industry-wide profits were stated in the hundreds of billions of dollars, the fact is it represented an industry profit of only two percent. See how that works? Two percent wouldn’t make the people paying high insurance premiums angry but hundreds of billions of dollars would.
Choosing the right set of numbers, the Liberal think tanks can now establish a cause to intervene in our lives. The hundreds of billions of dollars that cheeseburger and fries sap from the health insurance industry is certainly enough to warrant government regulation and that regulation will come in the form of an additional tax. Part of the healthcare bill also requires restaurants to list the caloric content of their meal items. How convenient! That would give us an easy factor by which we can calculate a “progressive” tax on foods that cause obesity. Of course, like any tax it will probably start with some thing barely noticeable as in the sugary beverage tax which was to be one penny per ounce, the last time I looked. But as the paradigm shifts and obesity overtakes cigarettes as the number one killer in the US, they will just have to raise unhealthy food taxes in order to save lives.
Why there are all sorts of things that contribute to skyrocketing healthcare costs; things that progressives would love to eliminate but that the Constitution has prevented until now. Several cities have an incredible amount of healthcare money devoted to treating the victims of weapons related crimes. Using the EPA’s recent announcement that they will being regulating CO2 emissions without Congressional approval using the existing Clean Air Act as a guide, is it really beyond the scope of possibility that our Second Amendment Rights could vanish as a regulatory casualty of controlling healthcare costs? Of course the number crunchers would site the dollar and cents cost for that care as the justification and just ignore the facts that gun related crime is the highest in cities that already possess the harshest gun laws in the nation or that crimes committed with lawfully obtained and owned weapons is less than one half of one percent of all weapons related crimes.
What other rights could be swept away by this bill? Well, we didn’t have to wait for the passage of the bill for our right to free speech to be assaulted. Humana advised its customers about the potential loss of Medicare Advantage under the Healthcare Bill and the White House immediately attacked, threatening legal action even though Medicare advantage was indeed, on the chopping block. Where Humana is concerned, the White House acted with total disregard to the Supreme Court ruling that Corporations are considered individuals where Constitutional protections, including the First Amendment right to Free Speech is concerned. If that wasn't enough, the White House went as far as to establish an Orwellian e-mail account so individuals could report anyone that was spreading lies (opposing information) about the healthcare bill. The apparent message was that Big Brother is indeed watching. Of course that site was dismantled when there was an outcry over this clear abuse of power and the danger it represented.
How about our right to privacy? The administration claims that medical records will be specially secured and kept from prying eyes; really? When Social Security was enacted opponents railed against the loss of privacy and again, the government issued assurances that our privacy would be protected. Social Security numbers were never supposed to be used as a means of identification and the original cards were issued with the statement “For Social Security Purposes, Not for Identification” printed on the face of the card to allay those fears.
So what do we have now? Our Social Security number became our primary form of identification and is needed to secure employment, pay taxes and even to open a bank account. It is the only piece of identity needed in conjunction with your name to get a comprehensive credit report containing all of your financial dealings and as such, has become the primary instrument used by thieves to steal your identity and do irreparable harm to your credit and good name. Considering that the Federal government, with all of the technology and computerization available to them today, could not accurately track the stimulus expenditures with even a modest degree of accuracy, how could we believe that they can secure our medical records any better than they did our Social Security information?
The privacy issue may be further impinged if the final bill contains the same provisions for community based services that were in the House Bill. Under that, community base health providers would come to your home to offer solutions and advice on everything from child rearing to care for the elderly. We already know from past experience that once the government gets a toe in the door, it isn’t long before the whole proverbial 600 lb gorilla is in the living room.
Progressives may be for the most part, a Godless bunch while some Democrats like Ben Nelson are comfortable with placing their religious beliefs and morals on the same auction block with their votes; but American’s are a faithful people with 85% professing belief in one religion or another. The use of public funds for abortion, for many of these people, places them at odds with their faith. Intellectually, there is no difference in using their taxes to pay for abortion as it would be for them to pay for it themselves and that is something their conscience will not allow. Even soldiers have the ability to opt out of fighting in a war if they have a strong and historically verifiable religious objection. Those that object to abortion on religious grounds have no such “opt-out” provision available to them where taxes are concerned. Since tax money all goes into the same pot, if abortion is funded by any provision of the bill no one can offer a reasonable assurance that their money will not eventually end up funding abortion.
Let’s not forget that this is the first time the Federal government has levied a tax on us just because we are alive. The mandate that we purchase health care insurance or else, is as unconstitutional as it gets. There are those that say it’s no different than the mandate to have car insurance, but that mandate only applies if you choose to drive a car. Those that do not own a car are not required to have auto insurance to drive the costs down for those that do. Also, this healthcare bill is not actually insurance, but rather a whole life, cradle to grave intrusion on your life and liberty. It is pre-paid medical care and that is where the outrageous expense comes from. Do you file an insurance claim at every oil change or fill up? Does your auto insurance cover consumable items like brake pads and wiper blades? Does auto insurance cover pre-existent conditions or allow high risk drivers to purchase a low cost policy? No, the comparison to auto insurance is idiotic at best and only confirms the irrational lengths at which these people will go to sell you on this miserable idea.
Paul
The bill contains a tax on sugary beverages since sugary beverages have been deemed bad for you. Anything bad for you will raise healthcare costs and this bill gives the government the authority to regulate anything that will affect your health. When government began its crusade to steer behavior under what is widely known know as a “sin” tax on cigarettes, I warned that this was only the beginning. No one argues that cigarettes are bad for one’s health but the same argument can be made for nearly the entire fast food industry. As cigarette taxes climb and people quit smoking, the number of cigarette related illnesses will also decline. When illness related to obesity ranks as the number one cause of death in the United States, the same argument will be used to regulate that behavior too.
We all know the number play in Washington. We saw it all through the debate as some figures were issued in real numbers and some were issued as percentages, whichever made the case for healthcare reform stronger. The industry profits for healthcare insurance were given in real dollars since the amount appeared staggering. Even though the industry-wide profits were stated in the hundreds of billions of dollars, the fact is it represented an industry profit of only two percent. See how that works? Two percent wouldn’t make the people paying high insurance premiums angry but hundreds of billions of dollars would.
Choosing the right set of numbers, the Liberal think tanks can now establish a cause to intervene in our lives. The hundreds of billions of dollars that cheeseburger and fries sap from the health insurance industry is certainly enough to warrant government regulation and that regulation will come in the form of an additional tax. Part of the healthcare bill also requires restaurants to list the caloric content of their meal items. How convenient! That would give us an easy factor by which we can calculate a “progressive” tax on foods that cause obesity. Of course, like any tax it will probably start with some thing barely noticeable as in the sugary beverage tax which was to be one penny per ounce, the last time I looked. But as the paradigm shifts and obesity overtakes cigarettes as the number one killer in the US, they will just have to raise unhealthy food taxes in order to save lives.
Why there are all sorts of things that contribute to skyrocketing healthcare costs; things that progressives would love to eliminate but that the Constitution has prevented until now. Several cities have an incredible amount of healthcare money devoted to treating the victims of weapons related crimes. Using the EPA’s recent announcement that they will being regulating CO2 emissions without Congressional approval using the existing Clean Air Act as a guide, is it really beyond the scope of possibility that our Second Amendment Rights could vanish as a regulatory casualty of controlling healthcare costs? Of course the number crunchers would site the dollar and cents cost for that care as the justification and just ignore the facts that gun related crime is the highest in cities that already possess the harshest gun laws in the nation or that crimes committed with lawfully obtained and owned weapons is less than one half of one percent of all weapons related crimes.
What other rights could be swept away by this bill? Well, we didn’t have to wait for the passage of the bill for our right to free speech to be assaulted. Humana advised its customers about the potential loss of Medicare Advantage under the Healthcare Bill and the White House immediately attacked, threatening legal action even though Medicare advantage was indeed, on the chopping block. Where Humana is concerned, the White House acted with total disregard to the Supreme Court ruling that Corporations are considered individuals where Constitutional protections, including the First Amendment right to Free Speech is concerned. If that wasn't enough, the White House went as far as to establish an Orwellian e-mail account so individuals could report anyone that was spreading lies (opposing information) about the healthcare bill. The apparent message was that Big Brother is indeed watching. Of course that site was dismantled when there was an outcry over this clear abuse of power and the danger it represented.
How about our right to privacy? The administration claims that medical records will be specially secured and kept from prying eyes; really? When Social Security was enacted opponents railed against the loss of privacy and again, the government issued assurances that our privacy would be protected. Social Security numbers were never supposed to be used as a means of identification and the original cards were issued with the statement “For Social Security Purposes, Not for Identification” printed on the face of the card to allay those fears.
So what do we have now? Our Social Security number became our primary form of identification and is needed to secure employment, pay taxes and even to open a bank account. It is the only piece of identity needed in conjunction with your name to get a comprehensive credit report containing all of your financial dealings and as such, has become the primary instrument used by thieves to steal your identity and do irreparable harm to your credit and good name. Considering that the Federal government, with all of the technology and computerization available to them today, could not accurately track the stimulus expenditures with even a modest degree of accuracy, how could we believe that they can secure our medical records any better than they did our Social Security information?
The privacy issue may be further impinged if the final bill contains the same provisions for community based services that were in the House Bill. Under that, community base health providers would come to your home to offer solutions and advice on everything from child rearing to care for the elderly. We already know from past experience that once the government gets a toe in the door, it isn’t long before the whole proverbial 600 lb gorilla is in the living room.
Progressives may be for the most part, a Godless bunch while some Democrats like Ben Nelson are comfortable with placing their religious beliefs and morals on the same auction block with their votes; but American’s are a faithful people with 85% professing belief in one religion or another. The use of public funds for abortion, for many of these people, places them at odds with their faith. Intellectually, there is no difference in using their taxes to pay for abortion as it would be for them to pay for it themselves and that is something their conscience will not allow. Even soldiers have the ability to opt out of fighting in a war if they have a strong and historically verifiable religious objection. Those that object to abortion on religious grounds have no such “opt-out” provision available to them where taxes are concerned. Since tax money all goes into the same pot, if abortion is funded by any provision of the bill no one can offer a reasonable assurance that their money will not eventually end up funding abortion.
Let’s not forget that this is the first time the Federal government has levied a tax on us just because we are alive. The mandate that we purchase health care insurance or else, is as unconstitutional as it gets. There are those that say it’s no different than the mandate to have car insurance, but that mandate only applies if you choose to drive a car. Those that do not own a car are not required to have auto insurance to drive the costs down for those that do. Also, this healthcare bill is not actually insurance, but rather a whole life, cradle to grave intrusion on your life and liberty. It is pre-paid medical care and that is where the outrageous expense comes from. Do you file an insurance claim at every oil change or fill up? Does your auto insurance cover consumable items like brake pads and wiper blades? Does auto insurance cover pre-existent conditions or allow high risk drivers to purchase a low cost policy? No, the comparison to auto insurance is idiotic at best and only confirms the irrational lengths at which these people will go to sell you on this miserable idea.
Paul
Monday, November 9, 2009
The Real Healthcare Crisis
Unemployment has reached 10.2%, more than 2% higher than the administration promised we would see if the Stimulus bill were passed. The Stimulus bill has been a dismal failure and the government agency monitoring the funds that were spent has been accused of misreporting job data in an attempt to allow the President to save face as the economy continues to stall. But 10.2% doesn’t tell the whole story. When adjusted to add those that have exhausted their benefits or have taken part time work or minimum wage jobs outside of their regular industry to stave off financial ruin, the unemployment figure is a frightening 17.5%.
Job creation is something that government cannot do. Only thriving industries and businesses create jobs; particularly, the jobs worth having. The best thing government can do to help a stagnant economy is to place more money in the hands of consumers and to create an environment that business can grow in. Only tax relief and the elimination of meaningless over-regulation can provide real economic stimulus. Unfortunately, the President and the radicals he has surrounded himself with do not believe in free market solutions because they do not believe in the free market. A healthy and successful free market diminishes the importance of government so neo-socialist bureaucrats will always take actions that bridle the free market if for no other reason than to preserve their own power.
The last thing any government with a basic understanding of economic principals would do in a recession is add more taxes and more regulations to a faltering economy. Yet, that is exactly what they plan to do and more. If the House healthcare bill becomes law, small businesses and the wealthiest, most productive Americans can expect to pay massive new taxes. The bill also includes hidden fees and “excise” taxes that will fall heavily on the elderly.
Under the bill that passed Saturday night, citizens reporting income over $500,000 and married couples earning more than $1 million would be slapped with a 5.4% surtax on all income above those thresholds. After taking into account the expiration of the Bush tax cuts, those people would face a marginal tax rate of 45%.
Despite the President’s promise that small business will not suffer, very small companies, companies with payrolls with less than $500,000, will be exempted. All other companies will be slammed with new taxes adding up to 8% of their payroll if they don’t offer insurance as dictated by the Pelosi bill. The Joint Committee on taxation says that the surtaxes will raise $460.5 billion over 10 years, with almost a third of that amount coming from small business.
The Washington-based Americans for Tax Reform outlines other taxes the will result if the Pelosi bill is passed:
Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services. Managers' amendment delays until 2012
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Repeal in Worldwide Allocation of Interest (Page 345): Repeals the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act. Original bill merely delayed for nine years
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
Deny Cellulosic Biofuel Producer Tax Credit to “Black Liquor” Resulting from Wood Pulp in Paper Production (Managers’ Amendment Page 14)
It is clear there are far more pages in this bill devoted to taxes than are devoted to healthcare. If this bill is passed into law the taxes take effect immediately but the majority of the legislation actually dealing with healthcare does not go into force until 2013 and beyond. These taxes will further cripple the economy and independent estimates place the cost of this bill beyond mere dollars and cents as an additional 5 million jobs will be lost as a direct result of its passage.
The next assault on America is the Cap and Trade or “Climate Bill”. The taxes imposed on energy and business will spell the death of the American economy and the loss of personal property rights. Thanks to the banking crisis, the Federal Government already owns 40% of home mortgages in this nation. During the dark days between World War I and World War II, the Weimar Republic of Germany was faced with a collapsed economy and an explosion of their national debt. They monetized their debt by printing enough cash to cover it which caused a 10,000% rise in inflation as the gold reserves were no longer sufficient to cover the currency. The Republic created a new form of money backed by the only thing they had left….land.
Is this where we are heading? Will the Federal Government attempt to print us out of debt and as the economy crashes and more mortgages become the property of the United States; will we find ourselves in the service of the government or lose our homes? The government has already proposed the forgiveness of student loans for a ten year commitment to public service. The last time something like that was the routine order of business it was the dark ages and the “public servants” were called serfs.
Paul
Job creation is something that government cannot do. Only thriving industries and businesses create jobs; particularly, the jobs worth having. The best thing government can do to help a stagnant economy is to place more money in the hands of consumers and to create an environment that business can grow in. Only tax relief and the elimination of meaningless over-regulation can provide real economic stimulus. Unfortunately, the President and the radicals he has surrounded himself with do not believe in free market solutions because they do not believe in the free market. A healthy and successful free market diminishes the importance of government so neo-socialist bureaucrats will always take actions that bridle the free market if for no other reason than to preserve their own power.
The last thing any government with a basic understanding of economic principals would do in a recession is add more taxes and more regulations to a faltering economy. Yet, that is exactly what they plan to do and more. If the House healthcare bill becomes law, small businesses and the wealthiest, most productive Americans can expect to pay massive new taxes. The bill also includes hidden fees and “excise” taxes that will fall heavily on the elderly.
Under the bill that passed Saturday night, citizens reporting income over $500,000 and married couples earning more than $1 million would be slapped with a 5.4% surtax on all income above those thresholds. After taking into account the expiration of the Bush tax cuts, those people would face a marginal tax rate of 45%.
Despite the President’s promise that small business will not suffer, very small companies, companies with payrolls with less than $500,000, will be exempted. All other companies will be slammed with new taxes adding up to 8% of their payroll if they don’t offer insurance as dictated by the Pelosi bill. The Joint Committee on taxation says that the surtaxes will raise $460.5 billion over 10 years, with almost a third of that amount coming from small business.
The Washington-based Americans for Tax Reform outlines other taxes the will result if the Pelosi bill is passed:
Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).
Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.
Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.
Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).
Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)
Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services. Managers' amendment delays until 2012
Surtax on Individuals and Small Businesses (Page 336): Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.
Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.
Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.
Repeal in Worldwide Allocation of Interest (Page 345): Repeals the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act. Original bill merely delayed for nine years
Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.
Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.
Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.
Deny Cellulosic Biofuel Producer Tax Credit to “Black Liquor” Resulting from Wood Pulp in Paper Production (Managers’ Amendment Page 14)
It is clear there are far more pages in this bill devoted to taxes than are devoted to healthcare. If this bill is passed into law the taxes take effect immediately but the majority of the legislation actually dealing with healthcare does not go into force until 2013 and beyond. These taxes will further cripple the economy and independent estimates place the cost of this bill beyond mere dollars and cents as an additional 5 million jobs will be lost as a direct result of its passage.
The next assault on America is the Cap and Trade or “Climate Bill”. The taxes imposed on energy and business will spell the death of the American economy and the loss of personal property rights. Thanks to the banking crisis, the Federal Government already owns 40% of home mortgages in this nation. During the dark days between World War I and World War II, the Weimar Republic of Germany was faced with a collapsed economy and an explosion of their national debt. They monetized their debt by printing enough cash to cover it which caused a 10,000% rise in inflation as the gold reserves were no longer sufficient to cover the currency. The Republic created a new form of money backed by the only thing they had left….land.
Is this where we are heading? Will the Federal Government attempt to print us out of debt and as the economy crashes and more mortgages become the property of the United States; will we find ourselves in the service of the government or lose our homes? The government has already proposed the forgiveness of student loans for a ten year commitment to public service. The last time something like that was the routine order of business it was the dark ages and the “public servants” were called serfs.
Paul
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