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DOJ Agrees: Healthcare MANDATE Means Huge TAX Increase–For EVERYONE

Monday, August 2nd, 2010

THE BIGGEST TAX INCREASE IN U.S. HISTORY?

President Obama has repeatedly asserted that the new health care reform’s individual mandate requiring everyone to have qualified health insurance coverage or pay a penalty is not a tax.  And yet the Department of Justice (DOJ) now claims the mandate is a tax, but not because the legislation refers to the mandate as a tax — it doesn’t.   Rather, the DOJ lawyers want the Supreme Court to confer its blessings on ObamaCare when the issue comes before the Court, and the lawyers are increasingly concerned that the 20-plus state challenge claiming the mandate is unconstitutional may hold up, says Merrill Matthews, a resident scholar with the Institute for Policy Innovation. 

The Democratic defense has morphed from the: “Of course we have the constitutional power to impose an individual mandate” defense to, “The Commerce Clause gives us the power to mandate coverage” defense, and now to their, “It’s a tax” defense.  

Many conservatives rejoiced at the flip-flop, proclaiming they have caught the president and his administration in one more broken promise: not to raise taxes on families making less than $250,000 a year.  If the mandate really is a tax, it could be the largest in history — and it affects everyone, says Matthews: 

  • A Kaiser Family Foundation survey of employers last year found that average premiums for an employer-provided family policy, which is more likely to be the type of comprehensive coverage required by ObamaCare, was $13,375, about 25 percent of the median household income of $52,000.
  • That $13,375 family policy costs the same for both lower- and higher-income workers; so if the mandate is a tax, it’s equivalent to a 50 percent income tax on a family making $25,000 a year but a 10 percent income tax on a family making $130,000 a year. Talk about regressive taxes! 

Of course, the Obama administration will argue that it is addressing the regressivity problem by providing a sliding scale subsidy, up to 400 percent of the federal poverty level (about $88,000 for a family of four in 2010), to insulate lower- and middle-income families.   But subsidies don’t negate the fact that ObamaCare imposes the tax on every individual in the country.  It simply means that someone else — i.e., either employers or other taxpayers — will be paying the tax for millions of Americans, says Matthews. 

Source:  Merrill Matthews, “The Biggest Tax Increase in U.S. History?” Forbes, July 26, 2010. 

For text:

http://www.forbes.com/2010/07/26/health-care-mandate-barack-obama-opinions-contributors-merrill-matthews.html

"This is Going to Hurt A Little..."

Today’s TEA Parties: A Historical Perspective

Friday, July 23rd, 2010

TEA PARTIES: SAME SONG, SECOND VERSE

by David Barton of www.wallbuilders.com

America’s first Tea Party in 1773 was not an act of wanton lawlessness but rather a deliberate protest against heavy-handed government and excessive taxation. Its leaders took great care to ensure that nothing but tea was thrown overboard – no other items were damaged. The “Indians” even swept the decks of the ships before they left.

Tea Parties occurred not only in Boston but also in numerous other locales. And those who participated were just ordinary citizens expressing their frustration over a government that had refused to listen to them for almost a decade. Their reasonable requests had fallen on deaf ears. Of course, the out-of-touch British claimed that the Tea Parties were lawless and violent, but such was not the case.

Interestingly, in many ways, today’s Tea Parties parallel those of long ago. But rather than protesting a tax on tea, today they are protesting dozens of taxes represented by what they call the Porkulus/Generational Theft Act of 2009 (officially called the “American Economic Recovery and Reinvestment Act”). For Tea Party members (and for most Americans), that act and the way it was passed epitomizes a broken system whose arrogant leaders often scorn the concerns of the citizens they purport to represent.

Tea Party folks agree with the economic logic of our Founders.

  • “To contract new debts is not the way to pay off old ones.” “Avoid occasions of expense…and avoid likewise the accumulation of debt not only by shunning occasions of expense but by vigorous exertions…to discharge the debts.” George Washington
  • “Nothing can more [affect] national credit and prosperity than a constant and systematic attention to…extinguish the present debt and to avoid as much as possible the incurring of any new debt.” Alexander Hamilton
  • “The maxim of buying nothing but what we have money in our pockets to pay for lays the broadest foundation for happiness.” “The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” Thomas Jefferson

These are not radical positions – nor are the others set forth in the Tea Party platform – that Congress should: (1) provide the constitutional basis for the bills it passes; (2) reduce intrusive government regulations; (3) balance the budget; (4) limit the increase of government spending to the rate of population growth; (5) and eliminate earmarks unless approved by 2/3rds of Congress. Are these positions dangerous or extreme? Certainly not. In fact, polling shows that while Americans differ on the way they view the Tea Parties, they support these Tea Party goals by a margin of two-to-one.

Citizens are angry about the current direction of government. As John Zubly, a member of the Continental Congress in 1775, reminded the British: “My Lord, the Americans are no idiots, and they appear determined not to be slaves. Oppression will make wise men mad.” But does that anger automatically equate to violence? Of course not. It does equate to action, however; but instead of throwing tea overboard, modern Tea Parties are throwing out-of-touch politicians from both parties overboard.

The Tea Parties represent much of what is right in America – citizens reacquainting themselves with the Constitution and holding their elected officials accountable to its standards. Two centuries ago, Daniel Webster could have been talking to today’s Tea Party rallies when he said: “Hold on, my friends, to the Constitution and to the Republic for which it stands. Miracles do not cluster and what has happened once in 6,000 years may not happen again. Hold on to the Constitution!”

Government Spending Squeezing Out Personal Earnings

Wednesday, May 26th, 2010

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs…

Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. “People are paid for being rather than for producing,” he says.

~Dennis Cauchon, USA TODAY

Heavy Tax Burden = Higher Unemployment, Poorer Economies

Wednesday, April 28th, 2010

THE MOST TAX-BURDENED STATES

(Editor’s Note: The notion that any state or nation can simply tax its way out of debt and into prosperity demonstrates a profound ignorance of the most elementary principles of economics.  It only further cripples economies on every level.  Emphases added.)

Most Americans are bluntly aware that taxes matter.  Unfortunately, too many politicians and bureaucrats have forgotten that taxes change the incentives for people to work hard, save, invest and be entrepreneurial.  As the nation struggles with a sluggish recovery and deficits, it’s worth noting the tax differences across the states, says Forbes magazine. 

In “Taxifornia,” the new study by the Pacific Research Institute, the authors look at two distinct aspects of tax policy: burden and structure.  In other words, the study examines how many resources a government consumes from the economy and how, exactly, the state extracts those resources.  The premise is that both the tax burden and manner of imposition influence behavior and economic performance. 

For example, the total burden of government was calculated by comparing total state and local spending as a share of the state economy (gross state product): 

  • South Dakota had the lowest burden of government (11.6 percent of the state’s economy); other low-burden states include Delaware and Texas.
  • Alaska had the largest burden of government (20.2 percent of the state’s economy consumed by government spending); other large burden states are South Carolina, California, New York and New Mexico. 

The second component of the study looked at the structure or design of five major taxes:  personal income taxes, corporate income taxes, capital-based taxes, sales taxes and property taxes: 

  • Delaware ranked first overall for its structure of taxes with a score of 7.7 out of a possible 10.
  • Other high ranking states included South Dakota, Nevada and Alabama.
  • New Jersey ranked last for its tax design (score of 2.8); Maine, Vermont and Rhode Island also ranked low. 

When burden and structure are combined to calculate an overall score, South Dakota achieves the highest rank with a score of 8.8 (out of possible 10).  Delaware, Texas and Louisiana also rank high.  California (score of 3.1) along with South Carolina and New York are the lowest ranked states, combining a relatively large burden of government with a poorly structured tax system, says Forbes. 

It should not be surprising, then, to learn that both California and South Carolina are facing historically high unemployment with shockingly high underemployment.  Both are signs of a struggling economy, in many ways explained by the economic incentives embedded in the tax system, says Forbes. 

Source: Jason Clemens and Robert Murphy, “The Most Tax-Burdened States,” Forbes, April 26, 2010. 

For text:

http://www.forbes.com/2010/04/26/tax-burden-california-state-government-opinions-contributors-jason-clemens-robert-murphy.html  

Lower and Simplify Taxes!

Wednesday, April 14th, 2010

(Editor’s Note: This is an insightful excerpt of an essay by columnist and fiscal conservative, John Stossel.  Full article is linked below.)

Americans spend more than 7 billion hours trying to comply, according to a forthcoming study from the National Taxpayer Union (NTU) (www.ntu.org).

“That is the equivalent of 3.7 million employees working 40-hour weeks year-round without any vacation. That’s more workers than are employed at the five biggest employers among Fortune 500 companies,” writes David Keating in the NTU study.

This is insane. How dare a government that supposedly serves the people impose on us this way? Politicians who pass these tax laws aren’t our representatives. They’re our rulers! They increase the tax burden and its complexity, and then demand we pay them homage to get exemptions for little pieces of our lives.

www.townhall.com/columnists/JohnStossel/2010/04/14/lower_and_simplify_taxes!?page=full&comments=true