Bringing The Federal Budget Under Control

The Washington Examiner reported yesterday that one of the steps President Trump will be taking to help balance the budget next year will be reining in tax payments to illegal immigrants.

The article reports:

Trump’s fiscal 2018 budget, set to be released Tuesday, will set higher eligibility standards for the earned income tax credit and the child tax credit, Office of Management and Budget Director Mick Mulvaney said Monday. According to the administration, the measures will save $40 billion over 10 years.

In May 2014, The Washington Examiner reported:

The Treasury Department has released its latest report on the fight against widespread fraud in the Earned Income Tax Credit program. The problem is, fraud is still winning. And there’s not even much of a fight.

“The Internal Revenue Service continues to make little progress in reducing improper payments of Earned Income Tax Credits,” a press release from Treasury’s inspector general for Tax Administration says. “The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion.”

There is no reason to continue funding tax fraud.

The article concludes:

Some anti-illegal immigration groups have said that allowing workers to claim credits without providing a Social Security number amounts to paying illegal immigrants to stay in the country. Conservative lawmakers also have favored tightening the restrictions as a matter of fiscal conservatism.

Liberal groups, though, argue that illegal immigrants pay taxes, such as payroll taxes for Social Security, for which they won’t get benefits. More generally, the low-income tax credits generally benefit needy families, even if they technically did not qualify for the benefits they received.

Why are we running huge budget deficits to pay benefits to people who are not eligible to receive them? This doesn’t make sense to me. It would be nice to see that change.

It’s Not The Income–It’s The Spending

CNS News posted an article today about the tax revenue the government has received in the first six months of fiscal 2017 (Oct. 1, 2016 through the end of March). The government has collected $7,387,280,000 more in income tax revenue in the first six months of fiscal 2017 than were collected in the first six months of fiscal 2016.

The article reports:

The federal government also collected $547,491,000,000 in Social Security and other payroll taxes during the first six months of fiscal 2017. That is about $2,731,820,000 more than the $544,491,000,000 in Social Security and other payroll taxes (in constant 2017 dollars) that the government collected in the first six months of fiscal 2016.

Despite collecting record amounts of individual income taxes and payroll taxes, the Treasury still ran a deficit of $526,855,000,000 in the first six months of fiscal 2017. (The emphasis is mine)

No matter how much money we give them, it will never be enough. We need a budget (not continuing resolutions) that does the things that are constitutional for the federal government. All other functions need to be left for the states (as stated in the Tenth Amendment). Spending cuts are needed.

Remember The IRS Scandal? It Just Got Worse

Yesterday The Washington Free Beacon posted an article about the IRS Scandal of targeting tea party groups and their members.

The article reports:

The Internal Revenue Service has located 6,924 documents potentially related to the targeting of Tea Party conservatives, two years after the group Judicial Watch filed a Freedom of Information Act lawsuit for them.

The watchdog group intended to find records regarding how the IRS selected individuals and organizations for audits that were requesting nonprofit tax status.

The agency will not say when it will make the documents available to the public.

“At this time, the Service is unable to provide an estimate regarding when it will complete its review of the potentially responsive documents,” the agency said. “The Service will begin producing any non-exempt, responsive documents by March 10, 2017, and, if necessary, continue to produce non-responsive records on a bi-weekly basis.”

The IRS needs to be cleaned up from top to bottom. I am sure there are good people doing their job at the IRS, but it has become obvious that the agency has become politicized in recent years. The best solution would be to abolish the IRS and go to a use tax that did not require monitoring by the IRS.

Getting On Board With Building The Wall

Yesterday The Hill posted an article sharing some news about the wall Donald Trump plans to build on the southern border of America.

The article reports:

…The Hill reported late Tuesday that 225 companies — mainly construction and engineering firms — have voiced interest in building Trump’s proposed wall.

The list was compiled from a website for contractors interested in doing business with the federal government.

Contractors intrigued by the project have until March 10 to submit a prototype concept paper, followed by a formal request for proposal by March 24.

Interested parties so far include construction companies like Caddell and Raytheon, a top defense contractor.

A number of small businesses have also applied, including 20 owned by Hispanic-Americans who could come under scrutiny for helping create the structure.

…The Department of Homeland Security estimated last month that Trump’s could take 3.5 years to complete and cost up to $21.6 billion.

In November 2014, I reported:

“The Internal Revenue Service continues to make little progress in reducing improper payments of Earned Income Tax Credits,” a press release from Treasury’s inspector general for Tax Administration says. “The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion.”

Fixing that problem would provide a major portion of the cost of building the wall. I am sure there are other costs to illegal immigration that could also be eliminated to pay for the wall.

Ronald Reagan said it best:

“A nation that cannot control its borders is not a nation.”
Ronald Reagan

Another Way To Interfere With The Profit Margins Of Businesses

What you are about to read is not the most ridiculous thing I have ever heard, but it is definitely close.

Yesterday The New York Post posted an article about a recent statement by Microsoft founder Bill Gates.

The article reports:

Bill Gates, the co-founder of Microsoft and world’s richest man, said in an interview Friday that robots that steal human jobs should pay their fair share of taxes.

“Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things,” he said. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

How do you tax a robot? If he doesn’t pay his taxes, do you take out his battery?

This is another example of the government interfering in the free market. As some people in the government push to raise the minimum wage, certain businesses will have no choice but to replace human workers with robots.

The article further reports:

Recode, citing a McKinsey report, said that 50 percent of jobs performed by humans are vulnerable to robots, which could result in the loss of about $2.7 trillion in the U.S. alone.

“Exactly how you’d do it, measure it, you know, it’s interesting for people to start talking about now,” Gates said. “Some of it can come on the profits that are generated by the labor-saving efficiency there. Some of it can come directly in some type of robot tax. I don’t think the robot companies are going to be outraged that there might be a tax. It’s OK.”

Another example of the government finding new ways to take money away from people who have earned it.

The Government Doesn’t Need More Tax Revenue–It Needs To Cut Spending

CNS News reported the following today:

The federal government brought in a record of approximately $213,300,000,000 in individual income tax revenues through the first two months of fiscal 2017 (Oct. 1, 2016 through the end of November), according to the Monthly Treasury Statement released today.

That is approximately 36 times the $5,966,000,000 the federal government brought in from customs duties imposed on foreign imports over the same two-month span.

In constant 2016 dollars (adjusted using the BLS inflation calculator), the record $213,300,000,000 in individual income taxes the Treasury raked in during October-November of this year was up $6,432,550,000 from the $206,867,450,000 it brought in October-November of last year.

Meanwhile the website usgovernmentdebt.com posted the following:

The tax revenue is going through the roof and the deficit is rising. Would you run your household budget this way?

Did You Know About The Belly Button Tax?

Yesterday the Wall Street Journal posted an article about the debate over the Belly-Button Tax in Obamacare. Yes, you read that right. There is a tax on every person covered by an insurance plan–policy holder, spouses, and children. This has become known as the belly-button tax.

The article reports:

It’s paid by every company that provides insurance — big businesses, organized labor, and insurance carriers. The likely beneficiaries of the compensation fund, though, are just the traditional insurance carriers, who will become required to sell coverage to everyone, regardless of their medical history.

Large employers and unions have fought hard to get an exemption, saying the levy is unfair because they don’t directly benefit from the fund. Insurers say it’s an important fee they need to keep.

If you are going to require insurance companies to insure everyone regardless of pre-existing conditions, you need to find a way to keep them from going bankrupt. We need to remember that companies are in businesses to make money. If they are not able to make money, why should they stay in business? The International Economic Development website reports that the profit margins for health insurance companies is about 3 percent. They rank about 88 among 215 industries as far as profit margins go. That profit margin is not overly large–these companies don’t have a lot of wiggle room to accommodate the federal government seriously impacting their profits. I don’t support ObamaCare, but if you are going to have ObamaCare, you need a belly-button tax.

ObamaCare does not make sense economically or otherwise. It will eventually collapse under its own weight. We just need to make sure it collapses before it totally destroys healthcare in America.

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Happening In Massachusetts

If you are upset that the gasoline tax in Massachusetts is now indexed to inflation, here is how you can change that:

TANK THE AUTOMATIC GAS TAX HIKES

 

FOR IMMEDIATE RELEASE                                               August 6, 2013Contact: Holly Robichaud
781-378-1798

 

TANK THE AUTOMATIC GAS TAX HIKES

 

Ballot Initiative Will Stop Taxation Without Representation

Boston, MA…Today a group of taxpayers gathered on the outside State House stairs to announce that they are filing a ballot initiative to cut the linkage between the gas tax and inflation which the legislature recently passed.

“It is outrageous that Beacon Hill is increasing our gas tax every year for the rest of lives without a vote.  That’s taxation without representation.  It is wrong and we are going to stop it,” said Steve Aylward, who is the Republican State Committee man that ran the very successful signature drive for Mike Sullivan last winter.

The initial supporters of the ballot initiative include Marty Lamb, Chris Pinto, Republican National Committee woman Chanel Prunier, Les Gosule who passed Melissa’s law in 2012, Jeff Bailey, State Representative Leah Cole, Stephen Coulter, Alex Vispoli, State Representative Geoff Diehl, State Representative Jim Lyons, State Representative Marc Lombardo, Rick Gleason of the Massachusetts Motorcycle Association, Rich Howell, Paul Craney of Mass Fiscal, Desiree Awiszio, Jamie Kang, Mike Mosca, Marylou Daxland, Katie Regan, State Representative Shaunna O’Connell, John O’Mara of the Northborough Tea Party, Barbara Anderson of Citizens of Limited Taxation, and many more.

Last month the legislature passed the so-called transportation bill which included a gas tax hike, a new tax on computer software, and a cigarette tax increase. It also linked the gas tax to CPI which allows the gas tax to increase every year without a vote of the legislature.

“This year our state took in over $600 million above projections.  We don’t need this tax package.  I voted against this bill in the House and I am not going to sit on the sidelines now while the state reaches into our wallets every year for the rest of our lives for more and more money without an accountable vote being taken,” said State Representative Diehl.

“How much more will Beacon Hill take from our wallets?  We don’t know.  We just know it is going up automatically with no debate, no input and no oversight,” said Pinto. 

“Our elected officials have failed us.  Our only alternative is to pass a ballot question that will stop this taxation without representation,” said Marty Lamb. 

The attorney for the group is former U.S. Attorney Mike Sullivan.

Since launching the facebook page last week the group has over 695 friends.  The plan is to launch a website shortly in preparation for collecting  100,000 raw signatures. 

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The Tax Increases In Massachusetts Take Effect Today

CBS Boston reported today that Massachusetts is increasing taxes on gasoline and cigarettes (effective today) and adding a 6.25% sales tax on computer software services.

The gasoline tax in increasing 3 cents a gallon, it will now be 24 cents a gallon, and the cigarette tax will be increasing $1 to $3.51 per pack.

On Monday, The Examiner reported:

Massachusetts made state history July 29th by implementing a new gas tax increase that is pegged to inflation. The new tax that takes effect Wednesday, following an override of Governor Patrick’s veto, adds 3 cents to the state’s already relatively high 21 cents per gallon tax. Adding in federal taxes, the total tax on a gallon of gasoline in Massachusetts is now 42.4 cents per gallon. Depending upon which grade is chosen, drivers now pay about 11 percent in taxes for the gas they use. That is the highest tax rate of any product one can buy in Massachusetts except cigarettes. Smokers also saw a one dollar tax increase per pack in this new bill.

Please note–THE GAS TAX INCREASE IS PEGGED TO INFLATION. This means that elected officials in Boston can avoid responsibility for future tax increases. The tax on gasoline will automatically increase, and the legislators can say, “I didn’t do that–it was automatic.” Governor Patrick vetoed this bill–therefore he can claim that he did not vote for the tax increases in it (of course he knew that the Democrat legislature would override his veto and still be voted back into office in the next election).

Until the Massachusetts voters begin to vote the current legislators out of office, they can expect more of this kind of shenanigans. It’s time to wake up and put people in office who actually care about the burden they are placing on taxpayers.

 

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How Much Is Enough?

Will there ever come a time when the government feels that it has enough money to run the country, the state, or your town? I am beginning to wonder.

Holly Robichaud at the Boston Herald posted an article today about the tax bill passed by the Massachusetts House yesterday. While reading the details of this bill, please keep in mind that state revenue is presently $575 million above predictions. So what did the House do? They raised taxes!

The article reports:

How much are taxes going up?  Bacon Hill says $500 million.  Do you trust them?  $500 million is just the first year.  This is a tax package on steroids.  It gets bigger every year with no end in sight. 

Bacon Hill indexed the gas tax to inflation which means it will increase every year.  This year it is an additional 3 cents.  Next year it will increase again and the following year and the following year and the following year…..  It is the gas tax increase to infinity and beyond. 

Bacon Hill also tied the tax on underground storage tanks to inflation.

The cigarette tax is going up $1 per pack.  This is a direct attack on poor people. 

Unless the voters of Massachusetts change the way they vote, we can expect to see more of the same.

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Avoiding The Negative Political Consequences Of Raising Taxes

Marty Lamb, a Massachusetts small business owner, posted an article at the Holliston-Hopkinton Patch yesterday about the coming hikes in the Massachusetts gasoline tax. The article was entitled, “To Infinity and Beyond” and stated the following:

Just within the last week, the price of gas has increased 10 cents per gallon

The new normal is over $3.50 per gallon. This high price is stretching family budgets.  Whether it is filling up at the pump or buying food trucked to the market, we are getting hit hard in the wallets.

The situation is going to get worse if Beacon Hill lawmakers have their way.

Right now, a committee consisting of 3 House and 3 Senate members are meeting to negotiate the differences between the two tax bills. It is not a matter if the gas tax is increasing it is a matter of how much and how often.  

What do I mean?  

If the tax package is signed into law the gas tax will be forever linked to inflation.  It is the gas tax increase “to infinity and beyond.”  In other words, there will be an automatic gas tax increase every year. And the legislature never has to vote to raise it again.  How convenient.  But for the rest of us, it means taxation without representation.  

There is no need for higher taxes.  This week’s report from the Auditor shows close to $100 million in fraud just within the Department of Transitional assistance (welfare).  The crime lab scandal is costing us $332 million. Overall it is estimated $1.8 billion of waste.  

I urge readers to call the State House (617-722-2000) and express their opinion on the gas tax.  There is no need for the tax increase and it should not be automatic.  Taxation without representation should not be tolerated.

If the bill being discussed is passed, the State of Massachusetts can automatically raise gasoline taxes without a vote by the legislature. Therefore, no one has to go on the record and be held accountable for the tax increase. This is a liberal lawmaker’s dream and a taxpayer’s nightmare.

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I Guess This Shouldn’t Be A Surprise

On Friday, Forbes Magazine posted an article about the Affordable Care Act’s (ACA) health insurance tax. I hate to admit it, but this is news to me. I didn’t realize that there was an entire new group of taxes in Obamacare that will impact the middle class and the elderly.

The article reports:

…the tax increases that remain on the books will cost taxpayers more than $675 billion over the next ten years. Chief among these will be the sales tax on the purchase of health insurance, totaling $101.7 billion, and making it larger than all the other industry-specific taxes combined.

The article concludes:

In fact, Medicare Advantage beneficiaries will see costs rise from $16 to $20 per member per month in 2014 – increasing to between $32 and $42 by 2023. The costs for Medicare Advantage coverage over the next ten years is expected to reach $3,590. Individuals on Medicaid managed care will see increase costs on an average of $1,530 per enrollee between 2014 and 2023.

The Congressional Budget Office (CBO) supports Ignagni and Goodman’s warnings, stating that the health insurance sales tax will be “largely passed through to consumers in the form of higher premiums.” Unfortunately, as Goodman predicts, “this is only one example of many middle income taxes buried in ObamaCare.” The time to repeal and replace is narrowing, with just months now separating us from another massive tax hike that Americans cannot afford.

This is one more reason to repeal Obamacare. I suspect there may be a lot of Democrats at this point complaining that this is not what they signed up for. If it is what they signed up for, they should be voted out of office.

 

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Losing Revenue By Raising Taxes

Hot Air is reporting today that the Midland, Mich.-based Mackinac Center has released a report stating that in 2011 New York had the highest cigarette smuggling rate in America. In 2006, when the cigarette tax was $1.50 a pack, New York was the fifth highest. In 2008, the tax went to $2.75 a pack, in 2010 it went to $4.35 a pack. That increase was enough to move New York from fifth place to first place in the number of cigarettes smuggled into the state. It is now estimated that 60.9 percent of all cigarettes smoked in New York are not taxed there!

What can we learn from this? Simple. People don’t like to pay taxes and will do almost anything to avoid them. Some state is making money on the sale of these cigarettes–it’s just not New York. New Hampshire seems to be where most of the smuggled cigarettes are coming from–New Hampshire does tax cigarettes, but only $1.68 a pack. I suspect New Hampshire collects more revenue from its lower tax than New York does from its higher tax. Maybe we could learn from that.

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Reaping The Rewards Of A Well-Run State

Reuters reported yesterday that Louisiana Governor Bobby Jindal has proposed a plan to simplify Louisiana’s tax code to make it more friendly to business. The Governor’s plan is to eliminate all corporate and personal income taxes in a way that would be revenue neutral.

The article reports:

But political analyst Maginnis (John Maginnis) questioned whether the Republican-majority Louisiana legislature would endorse Jindal’s ambitious plan.

“Any tax increase (such as sales tax) or elimination of exemptions would require a two-thirds vote, a form of legislative approval that would require (Republican) solidarity and significant Democratic support,” Maginnis said.

Jindal said his team will meet with lawmakers soon to discuss details of his tax reform plan.

“Eliminating personal income taxes will put more money back into the pockets of Louisiana families and will change a complex tax code into a more simple system that will make Louisiana more attractive to companies who want to invest here and create jobs,” he said.

There an important lesson in this idea. Raising taxes slows economic activity and does not necessarily result in an increase in tax revenue. Lowering taxes increases economic activity and often results in increased tax revenue.

During the 1980’s President Reagan lowered taxes. This resulted in an increase in revenue taken in by the government. Because the Democratic congress never kept their promise to cut spending, the federal deficit did not decrease, but federal revenue did increase.

Lower taxes mean more economic activity. Washington needs to learn that lesson.

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What Did The Fiscal Cliff Deal Really Accomplish ?

Investors.com posted an article today about what the deal reached on the fiscal cliff this week will actually accomplish. Not much.

The article states that the tax hikes will hurt the economy. Specifically:

Moody’s Analytics chief economist Mark Zandi says the higher taxes on the wealthy and the increase in payroll taxes will shave close to 1 point off GDP growth this year and result in 600,000 fewer new jobs.

Pantheon Macroeconomic Advisors chief economist Ian Shepherdson figures the deal will cut GDP by 1.5 points. And Gallup’s chief economist Dennis Jacobe says the deal has created a “higher probability of recession — just the opposite of what fixing the fiscal cliff was intended to do.”

The article also points out that the increased taxes will not actually help shrink the deficit. Included in the article is the following chart:

Any answer to the debt crisis must include cuts in government spending in order to work. Americans are waiting for the President to propose a plan to shrink government. If President Obama fails to do that, he will lose the support of the public. If he does propose a plan for smaller government, he will lose the support of his party (and a large part of the Republican establishment).

Tax hikes don’t necessarily raise the money that those who pass them think they will. For instance:

President George H.W. Bush‘s tax hikes in 1990 generated $135 billion less than expected. And revenues as a share of GDP came in lower than predicted after Clinton’s tax hikes went into effect.

The article concludes that because President Obama has added more brackets to the tax code, it will be harder to reform. I’m not sure that is an accident.

At any rate, we survived a Congress-created crisis and are about to face another one (the debt ceiling). It would be nice to believe that there are enough grown-ups in Congress to create a long-term solution to our overspending, rather than to simply put a band-aid on a broken arm.Enhanced by Zemanta

Borrowed From A Friend On Facebook

Alan Simpson, the Senator from Wyoming calls senior citizens the Greediest Generation as he compared “Social Security ” to a Milk Cow with 310 million teats. Here’s a response in a letter from PATTY MYERS in Montana … I think she is a little ticked off! She also tells it like it is! This goes for both the Democrats and the Republicans and is right on the money!!! (so to speak)
————————————

“Hey Alan, let’s get a few things straight!!!!!

1. As a career politician, you have been on the public dole (teat) for FIFTY YEARS.

2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63).

3. My Social Security payments, and those of millions of other Americans, were safely tucked away in an interest bearing account for decades until you political pukes decided to raid the account and give OUR money to a bunch of zero losers in return for votes, thus bankrupting the system and turning Social Security into a Ponzi scheme that would make Bernie Madoff proud.

4. Recently, just like Lucy & Charlie Brown, you and “your ilk” pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age, 67. NOW, you and your “shill commission” are proposing to move the goalposts YET AGAIN.

5. I, and millions of other Americans, have been paying into Medicare from Day One, and now “you morons” propose to change the rules of the game. Why? Because “you idiots” mismanaged other parts of the economy to such an extent that you need to steal our money from Medicare to pay the bills.

6. I, and millions of other Americans, have been paying income taxes our entire lives, and now you propose to increase our taxes yet again. Why? Because you “incompetent b*******s” spent our money so profligately that you just kept on spending even after you ran out of money. Now, you come to the American taxpayers and say you need more to pay off YOUR debt. To add insult to injury, you label us “greedy” for calling “bulls***t” to your incompetence. Well, Captain Bulls***t, I have a few questions for YOU:

1. How much money have you earned from the American taxpayers during your pathetic 50-year political career?

2. At what age did you retire from your pathetic political career, and how much are you receiving in annual retirement benefits from the American taxpayers?

3. How much do you pay for YOUR government provided health insurance?

4. What cuts in YOUR retirement and healthcare benefits are you proposing in your disgusting deficit reduction proposal, or as usual, have you exempted yourself and your political cronies?
It is you, Captain Bulls***t, and your political co-conspirators called Congress who are the “greedy” ones. It is you and your fellow nutcase thieves who have bankrupted America and stolen the American dream from millions of loyal, patriotic taxpayers.
And for what? Votes and your job and retirement security at our expense, you lunk-headed, leech.

That’s right, sir. You and yours have bankrupted America for the sole purpose of advancing your pathetic, political careers. You know it, we know it, and you know that we know it.

And you can take that to the bank, you miserable son of a b****h. NO, I did not stutter.

EVERYONE!!!

If you like the way things are in America delete this.

If you agree with what a Montana citizen, Patty Myers, says, please PASS IT ON!!!!

P.S. And stop calling Social Security benefits “entitlements”. WHAT AN INSULT!!!!

I have been paying in to the SS system for 45 years “It’s my money” – give it back to me the way the system was designed and stop patting yourself on the back like you are being generous by doling out these monthly checks!”

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Hollywood Gets Rewarded For Its Support Of President Obama

Money talks. I hate to be cynical, but money talks. Breitbart.com reported yesterday that the production tax incentives favorable to the domestic entertainment industry enacted by Congress in 2004, extended in 2008 and scheduled to expire in 2011, have been extended through 2013. The bill passed to avoid the fiscal cliff increases taxes on 77 percent of Americans, but Hollywood gets a tax break.

The article reports:

The original tax incentive applied to productions costing less than $15 million to make ($20 million in low-income areas). The 2008 extension applies to all films, up to a deduction of $15 million (or $20 million in low-income areas). The incentive is especially generous to television series; it applies to each TV episode.

Hollywood players routinely beg the government to raise their taxes so they can pay their “fair share.” 

Yet the industry moves new productions to places where existing tax breaks help its bottom line. That means plenty of shows and films are shot in states like New Mexico, which feature highly favorable tax rates, as well as destinations north of the border with similar perks.

It really is time to find some honest legislators to redo the tax code. I believe that there are a few men of principle in our government; unfortunately there are too few of them to accomplish what needs to be done.

Why Repealing ObamaCare Is Still A Good Idea

As we approach the fiscal cliff and some of us realize that no matter what happens taxes on all Americans will be going up, we are forgetting what Obamacare is going to do to our taxes. Before I go into the details, I would like to remind everyone that the Medieval surfs only paid 10 percent of their crops to the lord of the manor. They were allowed to keep more of the fruit of their labor than Americans are currently keeping.

The Daily Caller posted an article yesterday listing some of the new taxes that will be imposed by Obamacare. The new ‘taxes on the rich’ are expected to average approximately $700 billion over 10 years.

The article lists some of these new taxes. Here are a few:

Upper-income households. Starting Jan. 1, individuals making more than $200,000 per year, and couples making more than $250,000 will face a 0.9 percent Medicare tax increase on wages above those threshold amounts. They’ll also face an additional 3.8 percent tax on investment income. Together these are the biggest tax increase in the health care law.

Employer penalties. Starting in 2014, companies with 50 or more employees that do not offer coverage will face penalties if at least one of their employees receives government-subsidized coverage. The penalty is $2,000 per employee, but a company’s first 30 workers don’t count toward the total.

Health care industries. Insurers, drug companies and medical device manufacturers face new fees and taxes. Companies that make medical equipment sold chiefly through doctors and hospitals, such as pacemakers, artificial hips and coronary stents, will pay a 2.3 percent excise tax on their sales, expected to total $1.7 billion in its first year, 2013. They’re trying to get it repealed.

The insurance industry faces an annual fee that starts at $8 billion in its first year, 2014.

The article also lists pharmaceutical companies, which are already paying fees; people who don’t have insurance, who will be fined; and people who use tanning salons. It is no wonder that the only gains in employment that have resulted from Obamacare are in the Internal Revenue Service.

The prospect of a fiscal cliff is looming right now. The prospect of a serious recession brought on by the taxes of Obamacare is also looming, but has somehow been lost in the shuffle. If America is to survive economically, we need a Congress who will deal with both in a way that is good for the country–not simply good for their re-election campaigns.

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The Problem With Arithmetic

The problem with arithmetic is that if you always use the same numbers you always get the same answers. You can’t change the answer (solution) without changing the numbers. It’s just too rigid! Unfortunately, America is about to fall victim to the rigidness of arithmetic. It won’t be obvious until after it happens, but it is coming.

John Hinderaker at Power Line posted an article yesterday about the arithmetic involved in solving America’s financial problems. He points out that what is happening in America is also happening around the world.

The article states:

American voters accepted Obama’s claim that no change is necessary, that $16 trillion of debt is nothing to worry about. In France, voters put socialists into office, vowing not to give an inch on government benefits, ever. In Spain, Greece, and elsewhere around the world, politicians promise their constituents that nothing has to change, more money can be found somewhere. They are all lying.

The article cites an article by Janet Daley that appeared in the U.K. Telegraph on Saturday. The opening paragraph of the article asks:

Was 2012 the year when the democratic world lost its grip on reality? Must we assume now that no party that speaks the truth about the economic future has a chance of winning power in a national election? With the results of presidential contests in the United States and France as evidence, this would seem to be the only possible conclusion. Any political leader prepared to deceive the electorate into believing that government spending, and the vast system of services that it provides, can go on as before – or that they will be able to resume as soon as this momentary emergency is over – was propelled into office virtually by acclamation.

After France raised the taxes on millionaires, the millionaires began leaving the country. As California continues to raise its taxes on ‘the rich,’ the exodus of the wealthy from that state continues. After Maryland raised taxes on millionaires, the number of millionaires in the state declined, and state tax revenue declined. There is a lesson here, and America needs to learn it.

The article in the Telegraph points out:

Barack Obama knows that a tax rise of those proportions in the US would be politically suicidal, so he proposes a much more modest increase – an income tax rate of around 40 per cent on the highest earners sounds very modest indeed to British ears. But that is precisely the problem. If a tax rise is modest enough to be politically acceptable to much of the electorate, it will not produce anything like enough to finance the universal American entitlement programmes, social security and Medicare, into a future with an ageing population. There is no way that “taxing the rich” – that irresistibly glib Left-wing solution to everything – can make present and projected levels of government spending affordable. That is why Britain and almost all the countries of the EU have redefined the word “rich” to mean those who are earning scarcely twice the average wage, and pulled more and more middle-income people into high tax bands. Not only are there vastly more of them but they are far more likely to stand still and be fleeced, because they do not have the mobility of the truly rich.

As the debate on the fiscal cliff continues, we need to keep our perspective on exactly what is going on.

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Does This Make Sense ?

A website called 24/7 Wall St posted an article yesterday stating that hourly workers for General Motors will receive bonuses this year of between $5,500 and $7,000 each.

The article reports:

The payments are based on a formula that gives workers a $1 bonus for every $1 million in North American operating profit at the two companies.

On Wednesday (as reported at rightwinggranny.com) the Detroit News reported:

Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion.

It just seems odd to me that the taxpayers are out $13 billion and the workers are getting bonuses of up to $7,000. Why isn’t some of the bonus money being used to pay back the taxpayers for what they were forced to invest?

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Twisting The Numbers To Change The Story

Yesterday the Daily Caller posted a story about Bloomberg News and its reporting of a poll it conducted last week. The poll was taken by an Iowa-based firm and asked Americans how they felt about the coming ‘fiscal cliff.’

The article states:

A poll conducted last week by an Iowa-based firm showed Americans are conflicted about whether or not to support raising tax rates on wealthy Americans to avert the so-called “fiscal cliff.” But that’s not how Bloomberg News, which commissioned the poll, reported the results Thursday.

Somehow, when the story was reported, the headline read, “Americans Back Obama Tax-Rate Boost Tied to Entitlements.” So what did the poll actually show? The article reported that fifty-eight percent of the people polled thought President Obama was right to insist on raising taxes on the wealthy as a precondition for talks about the fiscal cliff. However, when you take a closer look at the numbers, you find that fifty-two percent responded that they preferred limited tax breaks to a tax-rate hike. Thirty nine percent said that they wanted to see tax rates on the wealthy increase, and nine percent said they were not sure.

Please follow the link above to read the entire story. There is also an attempt in the story to convince the reader that raising taxes to increase government spending is a solution to our current economic problems.

Bloomberg news is a respected financial news source. They do a disservice to themselves and the American people when they do not accurately report the news..

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A Chart That Tells It All

From the Weekly Standard today:

The Senate Budget Committee has stated that $1.2 trillion of the proposed $1.6 trillion in tax hikes would go toward new spending, while only $400 billion would go toward deficit reduction. We don’t need more taxes or more spending–we need to cut both taxes and spending.

President Obama has stated that ‘taxing the rich’ will solve our budget problems. Taxing the rich in order to spend more money will simply create more budget problems. Until we deal with the spending, there will be no solution.

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Playing Numbers To Keep Americans In The Dark

Breitbart.com reported yesterday that there is a plan being considered by the Obama Administration to keep American workers in the dark about the consequences of going over the ‘fiscal cliff.’ According to the article, the idea is that Treasury Secretary Tim Geithner will simply adjust the tax withholding tables so that Americans do not see the results of going over the cliff in their paychecks. Politically this might work for a short time, but practically, it could easily be a disaster.

The article reports:

This idea is being floated now. Bill Hoagland, senior vice president at the Bipartisan Policy Center, explained, “If we were to, say, go over the cliff and the rates go up, he could modify those withholding tables such that the average employee out there would not effectively see any more or less taken out of his paycheck.”

As Treasury Secretary, Geithner is responsible for setting withholding tables “most appropriate” in implementing tax law. Joseph Minarek, senior vice president and director of research at the Committee for Economic Development, said that Obama could use Geithner’s power as leverage in forcing Republicans to come to a deal on the fiscal cliff.

The article also points out that this strategy could result in a lot of angry taxpayers next April when they realize that they have to write checks to the IRS.

The article concludes:

But the Obama Administration knows that if the fiscal cliff is hit, other taxes, such as the alternative minimum tax, the estate tax and taxes on capital gains and dividends will rise precipitously, so they are considering the withholding plan as a way to fool the middle-class long enough so they forget who was responsible for raising their taxes.

It’s not about who is responsible for what–it is about what is best for America. It would be nice if more people in Washington understood that.

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Was Obamacare About Healthcare Or Taxes ?

Reuters reported on Monday that the Internal Revenue Service has released new rules concerning dividends and capital gains as part of the 2010 healthcare law. The obvious questions here is, “What do dividends and capital gains have to do with healthcare?” Evidently more than we knew.

The article reports:

The tax affects only individuals with more than $200,000 in modified adjusted gross income (MAGI), and married couples filing jointly with more than $250,000 of MAGI.

The tax applies to a broad range of investment securities ranging from stocks and bonds to commodity securities and specialized derivatives.

The 159 pages of rules spell out when the tax applies to trusts and annuities, as well as to individual securities traders.

Released late on Friday, the new regulations include a 0.9 percent healthcare tax on wages for high-income individuals.

Please keep in mind that the AMT (Alternative Minimum Tax) was originally enacted to impact only the wealthy. As of 2011, a single person who made $48,450 was impacted by that tax. I really don’t consider $48,450 wealthy. How long will it be before the new healthcare taxes begin to impact the middle class?

The article further points out:

The IRS plans to release a new form for taxpayers to fill out for this tax when filing 2013 returns.

Oh joy.

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The Charts Tell The Story

Steven Hayward posted a story at Power Line including the following charts:

The article points out:

Second, raising rates on the rich has always been a liberal cover for raising taxes on everyone.  Obama doesn’t seem to know much about economics, but he certainly knows that taxing the rich alone won’t begin to resolve the deficit.  The real money has always been found in taxing the middle class.  The great jump in federal revenues began in World War II when the income tax was changed to reach much further down the income ladder of the middle class.  (See Figure 4.)  This is why I think Obama actually wants to go over the fiscal cliff, slam the middle class, and blame it on Republicans.

Hang on to your hats. We are going to get what we voted for!

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