An Idea To Replace ObamaCare

Paul Mirengoff at Power Line posted an article today about a plan to reform ObamaCare suggested by James Capretta and Scott Gotlieb of the American Enterprise Institute (AEI).

The article lists four suggestions to make healthcare affordable and practical for Americans:

1. Provide a path to catastrophic health insurance for all Americans.

2. Accommodate people with pre-existing health conditions.

3. Allow broad access to health-savings accounts.

4. Deregulate the market for medical services.

These reforms would bring healthcare closer to a free-market system. The suggestions would also take away the provisions in ObamaCare that require people to pay for healthcare coverage they do not need (most couples over the age of 50 don’t need maternity coverage).  The Little Sisters of the Poor should not be required to pay for birth control coverage–they are Catholic nuns. Under ObamaCare they were sued by the federal government to provide coverage for things that went against their Christian beliefs. The idea that the government can tell people what coverage they have to have needs to go away quickly.

President-elect Trump has promised to end ObamaCare. We have heard that promise before from Republicans–give us the House and we will repeal ObamaCare; give us the Senate and we will repeal ObamaCare; give us the White House and we will repeal ObamaCare. Well, President-elect Trump, I suspect you have less than two years to make good on your promise. The anger of the American voters did not disappear when you were elected–that anger is simply waiting to see if you will keep your promises. It is a pretty safe bet that if ObamaCare is still with us in two years, the Republicans will lose the House and the Senate. At that point the Republican Party will go the way of the whigs.

The Law Of Unintended Consequences At Work

One of the political discussion of late has focused on the minimum wage. What it is, what it should be, and should it be raised. One thing that is often not considered in the debate is who are the people who work at minimum wage jobs.

The Pew Research Center reported in 2014:

Perhaps surprisingly, not very many people earn minimum wage, and they make up a smaller share of the workforce than they used to. According to the Bureau of Labor Statistics, last year 1.532 million hourly workers earned the federal minimum of $7.25 an hour; nearly 1.8 million more earned less than that because they fell under one of several exemptions (tipped employees, full-time students, certain disabled workers and others), for a total of 3.3 million hourly workers at or below the federal minimum.

That group represents 4.3% of the nation’s 75.9 million hourly-paid workers and 2.6% of all wage and salary workers. In 1979, when the BLS began regularly studying minimum-wage workers, they represented 13.4% of hourly workers and 7.9% of all wage and salary workers. (Bear in mind that the 3.3 million figure doesn’t include salaried workers, although BLS says relatively few salaried workers are paid at what would translate into below-minimum hourly rates. Also, 23 states, as well as the District of Columbia, have higher minimum wages than the federal standard; people who earned the state minimum wage in those jurisdictions aren’t included in the 3.3 million total.)

People at or below the federal minimum are:

  • Disproportionately young: 50.4% are ages 16 to 24; 24% are teenagers (ages 16 to 19).
  • Mostly (77%) white; nearly half are white women.
  • Largely part-time workers (64% of the total).

Often minimum-wage jobs represent an opportunity for someone with little experience or job skills to enter the workforce. Minimum wage jobs teach workers to show up on time, be responsible employees, and be reliable employees. These are skills that are valued at all levels of employment.

So what happens when you raise the minimum wage? On Friday, Investor’s Business Daily posted an article on the subject.

The article reports:

 

  • IBD’s Jed Graham surveyed six big U.S. cities that hiked the minimum wage in 2015 and found they took a serious jobs hit. “Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years,” Graham wrote.
  • During the 1970s, Congress forced Puerto Rico to adopt the U.S. federal minimum wage. The result, according to a 1992 study by economists Alida Castillo-Freeman and Richard Freeman: “Imposing the U.S.-level minimum reduced total island employment by 8%-10%.” So Puerto Rico lost 1 out of every 11 jobs to the minimum wage.
  • A study by the American Enterprise Institute looked at Seattle’s recent minimum wage hike. After it began phasing in a series of hikes in 2014, Seattle lost 10,000 jobs between just September and November, and its unemployment rate jumped a full percentage point. As AEI economist Mark Perry notes, Seattle’s minimum wage hike from $9.32 an hour to $15 an hour amounts to a $11,360 tax on every minimum wage job.
  • A 2014 Congressional Budget Office study estimated that raising the federal minimum wage from $7.25 an hour to just $10.10 an hour would kill half a million jobs. Worst of all, those who suffer most are the young, minorities and those with little education or training.

The article at Investor’s Business Daily focused on Carl’s Jr. and Hardee’s CEO Andy Puzder, who has begun to automate his restaurants. Because the minimum wage has increased, his expenses have gone up, and he has used technology to keep expenses down.

Before anyone gets all up in arms about this, I would like to introduce a little history into the discussion. Back in the days of dinosaurs, I attended school in New York City. My family did not have a lot of money, but I did not have the option of taking lunch to school every day. We were expected to use our one hour lunchtime to find a place to buy and eat lunch near the school [which was located in the Pam Am Building (now the Met Life Building)]. Because my allowance was small, I often ate at the automat. I would put in 35¢ and get a ham and cheese sandwich. I would put in 10¢ and get a carton of milk. If I was feeling rich, I would spend 20¢ or so on a piece of pie or cake. No one was screaming about automation then. The automat eventually disappeared from the scene, but I am not sure why. It was a great place to eat lunch.

At any rate, actions have consequences. When you raise the minimum raise past the skill level of certain jobs, you eliminate people from the work place–generally those with limited skills or limited experience. Those are the people who with a little training and experience could go on to get good jobs that pay more than minimum wage. In trying to help them by raising their wages, you are actually preventing them from getting the foot in the door that they need to become successful.

 

I Am Definitely In The Wrong Business

The chart below is from a Daily Caller article posted this morning. It shows the salaries of the top executives of the ObamaCare state health exchanges:

2013SalariesofTopObamaCare

As you can see, these executives are paid very well for their efforts.

The article reports:

More than a million Americans have enrolled in the 23 non-profit Obamacare co-ops since they began in 2011. The co-ops were intended to be consumer-operated non-profits focused on delivering healthcare to the working poor and others needing health insurance.

Eighteen of the 23 co-ops paid their top executives prodigious salaries ranging from $263,000 to $587,000, according to 2013 IRS tax filings.

The high take-home pay for the “nonprofit” executives appears to violate both federal law and Obamacare rules prohibiting “excessive executive compensation.”

I strongly suggest that you follow the link above to read the entire article, but here are two examples of your tax dollars at work:

The top paid co-op executive was Thomas Policelli, CEO of Massachusetts’ Minuteman Health. He was awarded $587,000 in 2013, according to the co-op’s tax return. Minuteman was also among worst performing Obamacare co-ops, reporting only 1,700 enrollees at the end of 2014.

Minuteman’s cash-burn rate was 53 percent, with a net operating loss of $21 million last year, according to an analysis by Galen’s Turner and Thomas Miller, a senior health fellow at the American Enterprise Institute.

In nearby Connecticut, HealthyCT paid Kenneth Lalime $352,000. The co-op reported total enrollment of only 7,966 and suffered operating losses of $28 million. Standard & Poor’s estimated its cash-burn rate at 61 percent.

It is not news that the private sector runs things better than the government. You would think that after all the years that we have seen government waste and inefficiency, we would have learned that lesson by now. Healthcare needs to be part of the free market. There need to be things in place to help people who need assistance in obtaining health insurance because of their financial situation or because of a pre-existing condition, but generally speaking, healthcare needs to operate in a free market environment. It is obvious that ObamaCare has because a government money hole that will eventually provide poor quality healthcare to everyone who is enrolled in it. There is a reason that the Supreme Court, despite their obvious belief that ObamaCare should stand, is not enrolled in ObamaCare.

 

The Story Behind The Problem Of Income Inequality

Jeff Jacoby posted an article at Townhall.com in November of this year entitled, “The Real Cause of Rising Income Inequality.” Income inequality has increased under President Obama, and Mr. Jacoby points out a few reasons why.

Before I get to Mr. Jacoby’s article, I want to refer to Senator Daniel Patrick Moynihan’s 1965 report on “the breakdown of the Negro family.”

Senator Moynihan’s report stated:

The Breakdown of the Negro Family Has Led to a Startling Increase in Welfare Dependency.

The majority of Negro children receive public assistance under the AFDC program at one point or another in their childhood.

At present, 14 percent of Negro children are receiving AFDC assistance, as against 2 percent of white children. Eight percent of white children receive such assistance at some time, as against 56 percent of nonwhites, according to an extrapolation based on HEW data. (Let it be noted, however, that out of a total of 1.8 million nonwhite illegitimate children in the nation in 1961, 1.3 million were not receiving aid under the AFDC program, although a substantial number have, or will, receive aid at some time in their lives.)

Again, the situation may be said to be worsening. The AFDC program, deriving from the long established Mothers’ Aid programs, was established in 1935 principally to care for widows and orphans, although the legislation covered all children in homes deprived of parental support because one or both of their parents are absent or incapacitated.

In the beginning, the number of AFDC families in which the father was absent because of desertion was less than a third of the total. Today it is two-thirds. HEW estimates “that between two-thirds and three-fourths of the 50 percent increase from 1948 to 1955 in the number of absent-father families receiving ADC may be explained by an increase in broken homes in the population.”10

A 1960 study of Aid to Dependent Children in Cook County, Ill. stated:
“The ‘typical’ ADC mother in Cook County was married and had children by her husband, who deserted; his whereabouts are unknown, and he does not contribute to the support of his children. She is not free to remarry and has had an illegitimate child since her husband left. (Almost 90 percent of the ADC families are Negro.)”11

The steady expansion of this welfare program, as of public assistance programs in general, can be taken as a measure of the steady disintegration of the Negro family structure over the past generation in the United States.

I would argue that the ADC program has actually encouraged the breakdown of families of all races. When the government subsidizes a behavior (in this case, fatherless families), that behavior increases. The welfare programs as currently written are a perfect example of this.

Now, back to Mr. Jacoby. The article states:

One report, aptly titled “For Richer, For Poorer,” is by sociologist W. Bradford Wilcox of the American Enterprise Institute and economist Robert I. Lerman of the Urban Institute. It documents the profound links that connect family structure and financial well-being, and underscores what decades of empirical data have shown: Families headed by married couples tend to be much stronger economically than those headed by unwed single parents.

“Anyone concerned about family inequality, men’s declining labor-force participation, and the vitality of the American dream should worry about the nation’s retreat from marriage,” the authors write. The steady fall in the percentage of married two-parent households — from 78 percent in 1980 to 66 percent in 2012 — goes a long way toward explaining why so many ordinary families have trouble climbing beyond the lower rungs on the economic ladder. Correlation isn’t proof of causation, of course. But there is no refuting the strong association between growing up with both parents in an intact family and achieving higher levels of education, work, and income as young adults.

Basically, intact families are economically stronger than broken families.

The article at Townhall.com concludes:

Income inequality may or may not be “the defining challenge of our time,” as Obama and others have proclaimed. But the most significant driver of that inequality — the biggest impediment to upward economic mobility — isn’t hard to identify. The higher the fraction of children not being raised by their married parents, the more of our fellow citizens for whom the American Dream is likely to remain beyond reach.

The family is one of the building blocks of our society. Unless we strengthen that building block, our society will crumble. Our compassion needs to be combined with wisdom. Children from broken families are more likely to commit crimes and less likely to finish their education. The government needs to find a way to strengthen marriage–not undermine it.

About Those Jobs Numbers

John Crudele at the New York Post has posted a few articles raising questions about how the Obama Administration is calculating unemployment numbers. He posted one yesterday. Mr. Crudele has pointed out that unemployment numbers are coming from the Census Bureau and that in 2010 one of its enumerators was caught fabricating interviews.

The article reports:

The Census Department surveys that went into the November jobless rate actually took place during the week that included Nov. 5 instead of the normal Nov. 12 week.

The Labor Department did put in a note about the survey week change in its November report.

But it should also have included another line that said: “The data for the unemployment rate may have been compromised. Lots of people are looking into the matter right now. We’ll get back to you on whether you should believe these numbers or not.”

John Hinderaker posted a story about the jobs numbers at Power Line today.

The article at Power Line includes the following chart:

120613-600x375

The chart shows what has happened to the labor participation rate since 2008–it dropped like a rock and stayed there.

The article at Power Line quotes James Pethokoukis of the American Enterprise Institute:

    1. There are still 1.1 million fewer employed Americans today than right before the recession started, despite a potential labor force that’s 14 million larger. And there are 3.6 million fewer full-time workers than back in 2007.

    2. The employment rate, the share of Americans with a job, is 58.6% — exactly where it was in November 2009.

    3. If the labor force participation rate were where it was a year ago, the jobless rate would be 7.9%, not 7% (and 11.3% if the LFPR were at prerecession levels, though closer to 9% if demographics-adjusted).

The article at Power Line concludes:

Back in the heady days of 2008 and 2009, the Democrats were universally confident that the economy would improve dramatically, as it always does after a recession, regardless of the policies the Democrats followed. All they would need to do was take credit when the time came. The bitter lesson of the last five years is that federal policies do matter. The American economy is diverse and resilient, but if our government’s policies are stupid enough, they can blight the prospects of an entire generation.

If you were planning to break out the champagne because of the 7 per cent unemployment rate, you might want to hold off for a little bit. If you want to turn this around, think before you vote.

 

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There Were Some Things Left Out In The Unemployment Numbers

Yesterday Breitbart posted some of the facts the media seems to have missed in reporting on the jobless numbers this week. The article quotes James Pethokoukis at the American Enterprise Institute (AEI):

The labor force participation rate fell again as potential workers stopped looking for work.  … [I]f the LFP rate was where it was in January 2009, the unemployment rate would be 10.8%. …

The share of the unemployed out of work for 27 weeks or longer increased to 40.2% from 38.1% in January.

The employment-population ratio is exactly where it was a year ago, at an almost rock-bottom 58.6%.

This really doesn’t look like much of an economic recovery to me.

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The President Who Cried ‘Wolf’

There really is a wolf, but it’s not in the sequester–it’s in the unsustainable spending which is creating an unmanageable deficit. But that ‘wolf’ is being ignored–to some extent by both sides of the aisle in Washington.

But back to the President crying ‘wolf.’ Marc Thiessen posted an article at the American Enterprise Institute on Monday entitled, “The president who cried ‘Sequester!’”

Mr. Thiessen points out that so far the biggest damage done by the sequester has been to President Obama’s credibility. The credibility problem began during the final debate with Mitt Romney when President Obama stated, “The sequester is not something that I’ve proposed. It is something that Congress has proposed.” I believe the Washington Post gave the President four pinocchio’s for that statement. The problem with the internet and YouTube is that it is very easy to look up past statements of people in office. The President also stated that the sequester would never happen. Oh well.

The discourse got worse. The sequester would bring plagues and pestilence; the sequester would mean that everything about America we know and love would be gone. The sky would fall, the glaciers would melt, etc. Secretary of education, Arne Duncan, claimed that teachers would get pink slips. Homeland Security began letting criminals out of jail. Children would lose the Head Start Program (which has been proven ineffective anyway). The janitors at the Capitol would take a pay cut. When investigated, all of these claims proved to be false.

The straw that broke the camel’s back for me was the answer given to Charles Brown of Raleigh, North Carolina, (see rightwinggranny.com) when he sent a memo to Washington asking how to implement the budget cuts in sequester. The bottom line of the answer he received was “make the cuts as painful to the public as possible.”

The posturing by the President and the Democrat Party on the sequester is not only bad politics, it is bad for the country. Can we please re-open the debate on term limits for Congress? That is probably not the total answer, but it would be a start.

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Introducing Common Sense Into Environmentalism

Today’s Washington Free Beacon posted a story with some background information on the recent fires in Colorado.

The article reports:

Robert Zubrin, a senior fellow at the Center for Security Policy and President of the aerospace engineering research and development firm Pioneer Astronautics, blamed environmentalists for the spread of these fires.

“They facilitated the spread of fire by keeping people from logging, adding firebreaks, and using pesticides,” he said.

Zubrin wrote a book on this subject, Merchants of Despair: Radical Environmentalists, Criminal Pseudo-Scientists, and the Fatal Cult of Antihumanism, which he will present today at the American Enterprise Institute.

Zubrin recently wrote that climate change does not explain these fires. “The culprits here … have not been humans, but Western Pine Beetles,” he wrote, which turned “over 60 million acres of formerly evergreen pine forests into dead red tinder, dry ammunition” for fires.

One of the things that would prevent this type of wildfire would be permitting logging in these forests to clean out the dead trees and underbrush.

Mr. Zubrin further stated:

Logging as part of a program of rational forest management” could decrease the risk of fire by “thinning out mature trees that are the pine beetles’ major targets,” and creating “gaps between forests, to act as firebreaks and beetle-breaks,” he said.

If “you turn that wood into furniture, it doesn’t turn into CO2,” Zubrin said. Green activists “don’t care if a billion tons of wood turns into CO2,” so long as people are not responsible.

Environmentalists, of course, dispute this claim, stating that the Western Pine Beetles are doing the job of thinning the forests. Just for the record, I would like to note that the beetles are not doing a very effective job.

Anthony Moore, Owner of the Independent Log Company, has stated:

“We do a firebreak on all jobs,” he said. As part of his logging, Moore even clears out landing zones for helicopters and action zones for firefighters.

“We care for the forest just as much as the environmentalists,” he said. “I was born and raised on the mountains. They are my kids’ future and the public likes to see them.”

Patrick Donovan, receiver for Intermountain Resources, LLC, said of a beetle-killed tree: “It died, it stays in the forest—it’s fuel.”

Conservatives do not support dirty air and dirty water–what we do support is introducing common sense to environmentalism.

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James Pethokoukis On The Economy

James Pethokoukis, columnist for American Enterprise institute, was on the Bill Bennett radio show this morning talking about the economy.

Some of his statements:

Last year the economy grew at a rate of 1.1 and we generated about 150,000 jobs a month. No one thought that was a good year. …If anything goes wrong, we do go back into recession. …I think it’s a pretty fragile situation. …This is a very, very weak recovery. …We should be adding 250,000, 300,000, 400,000 jobs a month, which we would be if the economy was growing faster.

A caller remarked:

If President Obama is trying so hard, why have we not had a budget?

The President talks about saving the automobile industry.  What about the bond holders that were swept under the rug and lost all their money because all the money was given to the unions?

Mr. Pethokoukis commented that the President will be coming out with a plan today to extend the Bush tax cuts on taxpayers earning less than $250,000. Mr. Pethokoukis pointed out that the plan the President is proposing represents a $70 billion tax increase on those earners, many of which are small business owners. There is no way that helps the economy.

Mr. Pethokoukis also reminded us that during the 1983 recovery from the Jimmy Carter recession, we have one month where the economy gained one million jobs.  A recovery after a severe recession should post that kind of numbers—not the numbers we are currently seeing.

Don’t be fooled by the campaign rhetoric—the Obama economic plans have not worked.

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Some Thoughts On Recent Financial News

Peter Wallison writes on financial matters at the American Enterprise Institute. This morning he was interviewed on the Bill Bennett radio show about the recent trading losses suffered by JPMorgan Chase (as reported in USA Today). I don’t claim to understand this level of finance, but there were a few things I picked up along the way.

I am going to attempt to repeat what he said, because he clearly understood exactly what was going on and shed considerable light on the subject.

Mr. Wallison explained that the JPMorgan Chase trades had to do with something called “hedging,” a process that is legal. The bank was using “hedging” to protect itself from losses it felt would occur due to the unraveling of the financial situation in Europe. Mr. Wallison further explained that the loss represented a very small percentage of the total worth of the bank and was actually not as significant as it is being made out to be. Essentially, the news media is being part of the ‘silly season’ of an election year. The Volcker Rule (part of the Dodd-Frank bill that was supposed to reform Wall Street) would not have stopped this loss–“hedging” is legal under Dodd-Frank. What is not legal is the buying and selling securities by banks for their own accounts. Unfortunately, it is not always easy to tell the difference between “hedging” and trading for their own accounts. Because it is so difficult to differentiate between “hedging” and banks trading for their own accounts, Dodd-Frank is essentially an unworkable law that needs to be changed or overturned.

The link to the American Enterprise Instituteabove links to Peter Wallison’s article entitled, “Dissent from the Majority Report of the Financial Crisis Inquiry Commission.” I strongly suggest reading this in order to understand how politics has hindered, rather than helped, America in solving the financial crisis that we have been in for the past four years.

 

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An Amazing Quote

I missed this when it happened, so I am posting it now. The American, the online magazine of the American Enterprise Institute, posted the following on March 29th:

Gov. Jerry Brown defended his new campaign website’s characterization of his proposed tax increase as “a millionaires’ tax,” even though it hikes levies on people who make more than $250,000 per year.

“Anybody who makes $250,000 becomes a millionaire very quickly, if you save,” Brown told reporters in Sacramento on Wednesday.

Brown said he had not yet seen the site, although it was promoted by his Twitter feed earlier in the day. The site calls his plan “a millionaires’ tax that asks the richest Californians to pay their fair share to help fund public education and vital public services, pays down the debt we owe to schools, and does not raise income taxes on the poor or middle class.”

The proposal, which Brown wants to place on the November ballot, would hike levies on incomes of more than $250,000 for seven years, and include a quarter-cent sales tax increase for four years.

“It is a millionaires’ tax. It taxes millionaires,” Brown said, but assured reporters he would check on the campaign’s assertion. “I’ll take a look at it and make sure that it’s the most accurate it can be.”

This is an amazing quote–the only place $250,000 equals $1,000,000 is in the minds of government officials who want to take more money away from the people who earn it! Giving more money to government will not solve deficit problems–those in power will simply spend more and continue to go deeper in debt. At some point we need to realize–IT’S THE SPENDING, STUPID!!!!!!!

 

 

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Actions Speak Louder Than Words

The American (the online magazine of the American Enterprise Institute) posted an article yesterday by Marc Theissen about some recent actions by President Obama regarding the Supreme Court.

The article reported some events this week in a Boston, Massachusetts, court:

On Wednesday, oral arguments took place over another law passed by a “strong majority of a democratically elected Congress” — the Defense of Marriage Act (DOMA). Indeed, both cases feature the same lawyer — former solicitor general Paul Clement — who delivered the argument against Obamacare before the Supreme Court last week and in defense of DOMA before the U.S. Court of Appeals for the First Circuit this week.

Why is Clement, and not the Justice Department, defending this law in federal court? Because the Obama administration announced last year that it had decided that it would no longer defend DOMA in court. Quite the opposite, the Justice Department is actively urging district courts around the country to … you guessed it … overturn this law.

The irony here is that DOMA was passed by a “strong majority of a democratically elected Congress.” In the House the vote was 342-67, and in the Senate the vote was 85-14. That actually is a strong majority.

Last year in a letter to Speaker of the House John Boehner, Attorney General Eric Holder stated:

After careful consideration, including a review of my recommendation, the President has concluded that given a number of factors, including a documented history of discrimination, classifications based on sexual orientation should be subject to a more heightened standard of scrutiny. The President has also concluded that Section 3 of DOMA, as applied to legally married same-sex couples, fails to meet that standard and is therefore unconstitutional. Given that conclusion, the President has instructed the Department not to defend the statute in such cases. I fully concur with the President’s determination.

So the President and the Attorney General have decided only to uphold those laws that they happen to agree with.

Has anyone in this administration read the U. S. Constitution?

 

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Closing Your Eyes To Danger Does Not Make It Go Away

Yesterday at rightwinggranny.com I posted excerpts from the American Enterprise Institute report on the increased activities of Hezbollah terrorists in Latin America. Last Sunday I reported at rightwinggranny.com on a speech given by Brigitte Gabriel in Massachusetts that night. Ms. Gabriel spoke of the Muslim Brotherhood’s infiltration into the American government.

Today the Daily Caller reported:

Deputy U.S. Attorney General James Cole confirmed on Wednesday that the Obama administration was pulling back all training materials used for the law enforcement and national security communities, in order to eliminate all references to Islam that some Muslim groups have claimed are offensive.

The article further reports:

In a Wednesday Los Angeles Times op-ed, Muslim Public Affairs Council (MPAC) president Salam al-Marayati threatened the FBI with a total cutoff of cooperation between American Muslims and law enforcement if the agency failed to revise its law enforcement training materials.

…Specifically, al-Marayati called for a new “interagency task force” to review the training materials — a task force including representatives of the Islamist organizations the FBI is tasked with monitoring.

We are in serious peril if this sort of thinking continues. I just hope we can hold on until 2012 and elect people who will at least recognize the fact that the number one threat to America at this time is Islamic terrorism. Hezbollah is financed and backed by Iran–they are not Baptists. We need to wake up and pay attention.

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Tax Hikes Under Any Other Name

Planet Washington, a McClatchy blog, posted a quick note today stating that the Obama administration is planning to pay for its proposed jobs bill entirely by tax increases. The thing to remember here is that companies (or corporations) do not pay taxes–consumers do. Any increase in corporate taxes will be passed on to the American consumer. This will raise prices and fuel inflation, decreasing the amount of money Americans have to spend and slowing down the economy rather than stimulating it. The plan suggested by President Obama will raise taxes on oil and gas companies by approximately $ 40 billion. Those tax increases will be passed on to the American consumer in the form of increased energy prices, which in turn will increase prices across the board. This is not a wise move at this time.

Reuters describes the plan as targeting tax breaks (an expression that probably did better in the focus groups than increasing taxes). The tax breaks being targeted are generally in line with the class warfare that this administration is known for. It is never mentioned that half of all Americans do not pay income tax. None of the tax breaks targeted are aimed at this group.

This is a chart from 2007 from the Journal of the American Enterprise Institute:

Who Pays How Much in Taxes

It seems to me that the problem of taxes is not that the rich are not taxed enough. First of all, the problem is the spending–not the income. Second of all, half the people in America have no interest in whether or not taxes are increased–they do not pay them. Therefore, they do not care if the spending is out of control.

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