Rebuilding the Military Comes With a Price Tag. But the Price of Waiting Is Higher.

The Congressional Budget Office estimates that it will cost an additional $295 billion over the next four years to execute President Donald Trump’s plans to rebuild the military.

Its calculation was done by comparing the current Budget Control Act defense caps with the Trump budget outline. Those budget caps, established in 2011, limit how much Congress may appropriate for defense and nondefense discretionary spending through 2021, regardless of need or strategy.

The analysis of the Congressional Budget Office is based on information published by the administration on its budget request as well as public statements from the White House.

It is common for defense budget requests to include a projection of the administration’s plans for the five or 10 years. But it is also common for the first budget of a new administration to omit these plans, as was the case with the 2018 budget.

While the Congressional Budget Office’s calculation gives some preliminary data on the administration’s defense trajectory, it is not the whole picture.

The administration is currently working to craft both its national security strategy and its national defense strategy. These documents will likely be released in the near future and will, undoubtedly, have budgetary implications in the next four years.

Since 2015, The Heritage Foundation’s Index of U.S. Military Strength has documented the current state of our military. When looking over all recent editions of the index, deteriorating readiness is the main theme that emerges. Every service has experienced deteriorated readiness.

This deterioration accelerated when the Budget Control Act disproportionately targeted the defense budget for reductions, amounting to over 40 percent of all cuts that were planned under the law. A heavy price tag.

A better approach would be for lawmakers to put in place a single cap for all spending priorities, both defense and nondefense.

Regardless of the actual cost, defending our nation is the most important function of the federal government and one of the main reasons it was created in the first place. Defense should not take a backseat to frivolous domestic programs that have no constitutional basis, like government-sponsored beer festivals.

The current erosion of military readiness is similar to a car that needs an oil change. Every day you delay the oil change, you are further eroding your engine. It might keep running for a while longer, but it will eventually grind to a halt. And in the meantime, it will make some warning noises.

In the case of the military, these warning noises are the training accidents that have taken the lives of some of our service members, as well as the two ship accidents this past year.

We need to start rebuilding our military in 2018. Delaying will only make the price tag higher.

COMMENTARY BY

Portrait of Frederico Bartels

Frederico Bartels is a policy analyst for defense budgeting at The Heritage Foundation’s Davis Institute for National Security and Foreign Policy. Twitter: .

5 Myths About Tax Reform, and Why They’re Wrong

Next week, the House and Senate will take their final votes on tax reform. The president’s goal is to sign the legislation into law before Christmas.

Although there are still some unknown details, the important parts of the bill for most Americans are already known and would greatly improve our current, woefully out-of-date tax code.

The bottom line is that taxpayers across America can expect a tax cut. The bill would lower tax rates for individuals and businesses, double the standard deduction, and significantly increase the child tax credit.

The bill is also pro-growth and pro-American worker. The economy could grow to be almost 3 percent larger at the end of 10 years. That translates to more than $4,000 dollars per household, per year. American families could finally get a real raise.

Americans deserve to know the truth about the proposed tax reform packages. There are several myths going around about what the proposed plan would do.

Here are a few of them, and why they’re wrong.

Myth 1: This is just a tax cut for the rich, and it will actually raise taxes for everyone else.

The truth is in fact the opposite. The Senate tax bill increases the amount of taxes paid by the rich and, according to the liberal Tax Policy Center, 93 percent of taxpayers would see a tax cut or no change in 2019. It found similar results for the House bill.

Both tax bills would actually increase the progressivity of the U.S. tax code. That means fewer people at the bottom will pay income taxes, and people at the top will see their share of taxes paid increase.

The Cato Institute’s Chris Edwards notes that the Senate tax bill cuts income taxes for people making $40,000 to $75,000 a year by about 37 percent. People making over $1 million see a cut of only 6 percent.

In two recent Daily Signal pieces, we calculated how 12 different taxpayers would fare under each of the tax plans. The results show that almost everyone will see a tax cut, and only the wealthiest families are at risk of their taxes going up.

Under the current tax code, the top 10 percent of income earners earn about 45 percent of all income and pay 70 percent of all federal income taxes. The U.S. tax code is already highly progressive, and these tax reforms will only increase the trend of the wealthy paying more than their share of income earned.

Myth 2: Repealing the individual mandate will raise taxes on the poor, raise insurance premiums, and kill 10,000 people a year.

Only in Washington can removing a tax penalty be considered a tax increase.

Tax reform will likely repeal Obamacare’s individual mandate, which imposes a tax penalty anywhere from $695 to upward of $10,000 for not purchasing the type of health insurance mandated by the federal government.

Depending on income and available health insurance options, the federally mandated health insurance comes with subsidies paid to the insurance company that can range from no more than a few dollars to over $12,000 a year per individual, and upward of $20,000 per year for families.

Repealing the mandate would not force anyone to give up their coverage or forego their current tax credits. It would just make the Obamacare insurance optional, and thus increase health care choices.

Eliminating the Obamacare individual mandate will not reduce any taxpayer’s income by a single cent. It will, however, reduce the tax bills of many individuals and families—based on their own choices—by hundreds, if not thousands, of dollars.

The individual mandate with its penalties is also not the “glue” that holds Obamacare together, as some have claimed. It never was.

“The lifeblood of the law is the generous taxpayer insurance subsidies, which attract and maintain the historically sluggish enrollment,” explains senior Heritage Foundation senior fellow Robert Moffit. Repealing the mandate will not precipitate doomsday for insurance premiums.

While it is extremely difficult to predict how insurance premiums would change without the individual mandate penalty, we do know that eliminating the penalty will prevent low- and middle-income individuals and families from having to subsidize the high medical costs of others.

One particularly outrageous claim is that due to people voluntarily choosing alternative health care solutions, 10,000 people will die each year because the government is no longer forcing Americans to buy health insurance.

Two economists reviewed these claims and found the exact opposite. They found that there is “poor evidence linking insurance coverage to mortality” and that “the mandate may in fact be elevating death rates in some populations.”

When you factor in the economic growth and higher wages from tax reform, the tax bill could actually save lives.

Myth 3: Corporations and their rich owners will receive a huge windfall.

Politicians who don’t want tax reform claim that cutting taxes for business will only help the rich.

Despite the name—“corporate” tax reform—the burden of the corporate income tax falls almost entirely on workers in the form of lower wages. Americans are undoubtedly skeptical about this claim, but the realities on the ground are actually quite simple.

When business taxes go down, workers’ wages go up.

That’s not just the result of corporate benevolence. Rather, wages rise because higher profits translate to additional investments that make workers more productive, and businesses that don’t pay workers what they are worth will lose them to competitors who do.

American corporations pay a federal income tax rate of 35 percent—one of the highest in the world. If tax reform can lower that rate to 21 percent, American businesses and the workers they employ will be globally competitive again. Businesses will invest more, hire more workers, and be forced by the laws of supply and demand to raise wages.

This is exactly what happened over the past decade and a half in neighboring Canada. In 2007, Canada began lowering its corporate tax rate. And guess what? Wages grew significantly faster in Canada than other comparable countries.

Most economic researchers agree. A recent review of 10 separate studies published between 2007 and 2015 concluded that when governments cut corporate taxes, workers receive almost all of the benefit through higher wages.

Myth 4: Tax reform will be bad for seniors.

Retirees may be the most concerned about what tax reform will mean for them, as most rely on relatively fixed incomes.

But, the proposed reforms are good news for retirees. For the most part, they would be less affected than other Americans, as the proposed reforms would not change the way Social Security and investment income are taxed.

Many retirees would in fact benefit from the tax bills’ doubling the size of the standard deduction.

While seniors’ earnings and pension income would be subject to new individual income tax brackets and rates, those changes would actually mean tax cuts—not increases—for an overwhelming majority of seniors and retirees.

Myth 5: Tax reform won’t grow the economy, it will only add to the debt.

Congress rightly allowed the tax reform bill to decrease revenues over 10 years by $1.5 trillion—about 3.5 percent of projected revenue. But such “static” budget scores provide zero useful information about how the reform will actually affect the deficit.

Properly designed tax reform will lead to a larger economy and higher wages. Each of these economic benefits can result in more tax revenue.

A recent Heritage Foundation analysis shows that the Senate tax reform bill could boost the size of the U.S. economy by almost 3 percent over the long run.

Other estimates are even more optimistic. Nine leading economists recently described how the economy could see a boost of up to 4 percent due to tax reform. The President’s Council of Economic Advisers believes the economy could grow between 3 and 5 percent, a range that was independently verified by three economists from Boston University.

Tax reform that grows the economy could result in more than $130 billion of new federal revenue in every year outside the current budget window. And that’s using the most conservative of the estimates above.

More optimistic estimates would bring in well north of $200 billion, making up most—if not all—of the static tax cut once the economy reaches its new larger potential.

Congress’ spending addiction shouldn’t stop tax reform, but the tax cuts will be short lived if Congress continues to increase spending every year.

The fact remains that our deficit cannot be eliminated with tax increases. Believing it can denies the fundamental problem: The deficit is driven by out-of-control spending. Spending is where congressional deficit hawks should turn their attention.

It is true that the proposed tax reform packages would mean big changes for individuals, families, and businesses across the United States. Overwhelmingly, however, these changes would be resoundingly positive.

Lower- and middle-income families would receive the largest tax cuts, and they would be the primary beneficiaries of business tax reforms that would generate higher wages and more job opportunities across America.

COMMENTARY BY

Portrait of Adam Michel

Adam Michel focuses on tax policy and the federal budget as a policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Twitter: .

Portrait of Rachel Greszler

Rachel Greszler is a senior policy analyst in economics and entitlements at The Heritage Foundation’s Center for Data Analysis. Read her research.

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Contra Activist Judges, It’s Not Discriminatory to Prohibit Transgender Individuals From Joining Military

On Dec. 11, a federal lower court judge in Washington, D.C., refused to stay her earlier Oct. 30 order blocking President Donald Trump’s Aug. 25 directive regarding transgender military service.

That directive, transmitted to the departments of Defense and Homeland Security, put to a halt the Obama administration’s June 2016 plan to allow transgender individuals to serve openly in the U.S. armed forces, beginning in July 2017 (but put on hold until Jan. 1, 2018, by Defense Secretary James Mattis).

If allowed to stand, Judge Colleen Kollar-Kotelly’s decision—coupled with similar Nov.  21 and Dec. 11 holdings in separate case by federal judges in Maryland and Seattle—would have enormous negative consequences.

It would mean that effective Jan. 1, 2018, the U.S. armed services would have to begin admitting transgender individuals, subject to certain guidelines. The armed services also (based on the ruling by the Maryland judge) would have to fund sex reassignment surgical procedures for military personnel—on the taxpayer’s dime.

As a legal matter, these federal court decisions are deficient. Judges have no business displacing the reasoned decision of the president, under his constitutional authority as commander-in-chief, to promote military readiness by establishing sound principles for eligibility to serve in the armed forces.

The lower court decisions acknowledge this presidential authority, but nevertheless claim that, by being prevented from serving in the military, transgender individuals would be denied “equal protection of the law” guaranteed by the Constitution.

But equal protection prohibits invidious discrimination based on immutable characteristics such as race—discrimination lacking any rational justification. It does not apply to rationally based noninvidious differentiation among classes of individuals needed to advance national goals, such as a strong military.

Rules denying military service opportunities to individuals who have serious medical problems (for example, heart disease, chronic asthma, or cancer) are not invidious discrimination—they are fully rational efforts to promote well-run and effective military services. Because individuals suffering from significant medical difficulties drive up costs and tend to impair combat effectiveness, it is perfectly rational to bar them from military recruitment.

These medical considerations apply directly to transgender individuals, who often must cope with serious physical and psychological problems. As Heritage Foundation scholar Thomas Spoehr, a retired three-star general, has explained, transgender individuals allowed into the military “would need medical treatments—hormone therapies and often surgeries and the accompanying recovery times—throughout the duration of their service.” Moreover:

Some studies report that transgender individuals attempt suicide and experience psychological distress at rates many times the U.S. national average. To be clear, this is self-reported data, not data gleaned from rigorously controlled, clinical tests. But at this time, these survey results are the best available data. It would be both irresponsible and immoral to place such individuals in a position where they are exposed to the additional extraordinary stresses and pressures of the battlefield.

In short, admitting transgender individuals into the armed forces, even with the best of intentions, is highly problematic.

As Trump’s Aug. 25 directive explained, the Obama administration “failed to identify a sufficient basis to conclude that terminating the [Defense and Homeland Security] Departments’ longstanding policy and practice [regarding transgender service] would not hinder military effectiveness and lethality, disrupt unit cohesion, or tax military resources[.]” Thus, Trump concluded that “there remain meaningful concerns that further study is needed to ensure that continued implementation of last year’s policy change would not have those negative effects.”

Heritage Foundation scholars have detailed the problems service by transgender individuals poses for military preparedness here and here.

Summing up their concerns in a July 25 announcement, Heritage analysts Spoehr, director of the Center for National Defense; Emilie Kao, director of the DeVos Center for Religion and Civil Society; and Ryan Anderson, senior research fellow in the DeVos Center, stated:

At a time when growing foreign threats are stretching our military’s resources, our priority should be on maintaining military readiness and directing taxpayer funds towards mission-critical purposes. Respecting the dignity of all people does not mean subjecting taxpayers to the tremendous medical costs of sex reassignment and allowing the enlistment of individuals whose resilience to the rigors of combat is uncertain.

Let us hope that the federal courts of appeal—and, if necessary, the Supreme Court—expeditiously reverse the lower court decisions and make it clear that the president has full authority to establish the terms, if any, under which transgender individuals are given (or denied) the opportunity to serve in the United States armed forces.

COMMENTARY BY

Portrait of Alden Abbott

Alden Abbott is deputy director of the Edwin Meese III Center for Legal and Judicial Studies and the John, Barbara, and Victoria Rumpel Senior Legal Fellow. Read his research. Twitter: .

A Note for our Readers:

Trust in the mainstream media is at a historic low—and rightfully so given the behavior of many journalists in Washington, D.C.

Ever since Donald Trump was elected president, it is painfully clear that the mainstream media covers liberals glowingly and conservatives critically.

Now journalists spread false, negative rumors about President Trump before any evidence is even produced.

Americans need an alternative to the mainstream media. That’s why The Daily Signal exists.

The Daily Signal’s mission is to give Americans the real, unvarnished truth about what is happening in Washington and what must be done to save our country.

Our dedicated team of more than 100 journalists and policy experts rely on the financial support of patriots like you.

Your donation helps us fight for access to our nation’s leaders and report the facts.

You deserve the truth about what’s going on in Washington.

Please make a gift to support The Daily Signal.

SUPPORT THE DAILY SIGNAL

EDITORS NOTE: The featured image is of President Trump at a press conference in August announcing a directive put to halt the Obama administration’s June 2016 plan to allow transgender individuals to serve openly in the U.S. armed forces. (Photo: Ron Sachs/CNP/AdMedia/SIPA)

Illegal Immigration Costs U.S. Taxpayers a Stunning $134.9 Billion a Year

Illegal immigration costs American taxpayers a mind-boggling $134.9 billion annually, according to a detailed analysis of federal, state and local programs that include education, medical, law enforcement and welfare. Conducted by the Federation for American Immigration Reform (FAIR), a Washington D.C. nonprofit dedicated to studying immigration issues, the in-depth probe reveals that state and local taxpayers get stuck with an overwhelming chunk—$116 billion—of the burden. State and local expenditures for services provided to illegal aliens total $88.9 billion and federal expenditures $45.8 billion, the analysis found. For those who claim illegal immigrants contribute by paying taxes, government figures show that only $19 billion was recouped by Uncle Sam.

Click on the image to read the full report.

“A continually growing population of illegal aliens, along with the federal government’s ineffective efforts to secure our borders, present significant national security and public safety threats to the United States,” the FAIR report states. “They also have a severely negative impact on the nation’s taxpayers at the local, state, and national levels. Illegal immigration costs Americans billions of dollars each year. Illegal aliens are net consumers of taxpayer-funded services and the limited taxes paid by some segments of the illegal alien population are, in no way, significant enough to offset the growing financial burdens imposed on U.S. taxpayers by massive numbers of uninvited guests.” This defies a myth, long promoted by influential open border groups, that illegal aliens pay their fair share of taxes.

More than 12.5 million illegal immigrants and their estimated 4.2 million citizen children benefit from the U.S. government’s generosity. The biggest expenditure ($17.14 billion) on the federal level is for medical services, which include uncompensated hospital costs, Medicaid births, Medicaid fraud and Medicaid benefits for U.S.-born children (anchor babies) of illegal immigrants. The second-largest federal expenditure is law enforcement and justice ($13.15 billion), which includes incarceration, Immigration and Customs Enforcement (ICE) operations and an alien assistance program. The feds spend $8 billion on general government programs and $5.85 billion on welfare, which consists of free school meals, food stamps, a supplemental nutrition program known as Women Infants and Children (WIC) and temporary assistance for needy families. FAIR points out the profound impact that illegal immigration has on programs intended to provide services exclusively to low-income Americans.

For state and local governments education is by far the largest expense, an eye-popping $44.4 billion that goes mostly to K-12 public schools nationwide, though over a billion of it is spent on college tuition assistance. General public services, described as expenses associated with garbage collection, fire departments and other locally-funded services total $18.5 billion for illegal aliens, the analysis found. Medical expenses came in third ($12.1 billion) for state and local governments and law enforcement ($10.8 billion) in fourth. FAIR researchers determined that a large percentage of illegal aliens work in the underground economy and frequently avoid paying income tax, leaving law-abiding, taxpaying Americans to foot the exorbitant tab for public services. The report also breaks down expenditures by state, with the top four spenders to provide illegal alien benefits California ($23 billion), Texas ($10.9 billion), New York ($7.5 billion) and Florida ($6.3 billion).

Over the years Judicial Watch has reported on a variety of studies and assessments involving the huge cost of supporting illegal immigrants, but this appears to be the most thorough and alarming in recent memory. The breakdown by category, state and federal services offers an incredibly detailed account of a major crisis perpetuated by a famously porous southern border. As FAIR writes in its report, it’s not just about money though the cost of supporting illegal immigrants should outrage every legal U.S. resident and American citizen. “A continually growing population of illegal aliens, along with the federal government’s ineffective efforts to secure our borders, present significant national security and public safety threats to the United States,” FAIR writes.

Judicial Watch has also extensively covered the dire national security crisis along the Mexican border, including an investigative series documenting how Islamic terrorists have joined forces with Mexican drug cartels to infiltrate—and attack—the United States.

RELATED ARTICLE: Latest ICE Operation Snaps Up 101 Illegal Immigrants, Mostly Criminals, in New Jersey

EDITORS NOTE: The cost of illegal aliens in Florida is estimated to be $6.3 billion. Democrat candidate for governor Andrew Gillum sent out the below answer to a tweet from Republican candidate for Governor Adam Putnam. Gillum has made statements that oppose President Trump’s immigration policies. As Tallahassee Mayor, according to Politifact, “was clear that local law enforcement agencies are not Immigration and Customs Enforcement agents. In other words, Gillum believes local law enforcement should be focused on enforcing the laws of their city, not deporting undocumented immigrants.” Putnam was given a Half True by Politifact on his charge that Gillum would make the Sunshine State into the Sanctuary State.

 

VIDEO: President Trump endorses Judge Roy Moore for the U.S. Senate

In an email to supporters Judge Roy Moore wrote:

This afternoon I had a great conversation with President Trump.

He called from Air Force One to offer his full support for me and my campaign in our all-out battle against Doug Jones and the forces of evil on December 12.

And earlier this morning, President Trump officially endorsed my campaign for U.S. Senate — slamming my opponent as just another “Pelosi/Schumer Liberal Puppet” who flat-out hates our conservative values.

If elected as the next U.S. Senator from Alabama, I pledge to fight with everything I’ve got to help President Trump Drain the Swamp in Washington — including repealing ObamaCare and building the wall!

I’m honored to have President Trump’s support.

And I’d be honored to know I’ve earned your support, too.

President Trump tweeted the following:

One America News published an exclusive two part interview by OANN journalist Emerald Robertson with Judge Moore.

One America Exclusive Interview with Alabama Senate Candidate Roy Moore: Part One

One America Exclusive Interview with Alabama Senate Candidate Roy Moore: Part Two

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In 1 Chart, the Differences Between the House and Senate Tax Reform Bills

The House and Senate have now each passed different versions of Tax Cuts and Jobs Act.

Both bills are a big improvement to America’s out-of-date tax code and could boost the economy by almost 3 percent, leading to more jobs and higher wages for working Americans.

Both bills cut taxes for individuals and businesses, largely repeal the state and local tax deduction, and allow businesses to invest more in the American economy through temporary expensing.

The bills now head to a conference committee where a unified bill will be crafted. Here are some of the major differences you need to know about:

In addition to these differences, the House bill repeals or scales back many credits and deductions that are largely left intact by the Senate.

For example, the House bill caps the mortgage interest deduction for future home buyers; repeals the deductions for medical expenses, private activity bonds, and student loan interest; and eliminates credits for historic rehabilitation, energy production, and orphan drugs. The Senate largely leaves each of these provisions intact.

The conference committee has a tough, but doable, job ahead of it. It has the opportunity to borrow the best components of each bill to further enhance the proposed reforms’ benefits for all Americans.

COMMENTARY BY

Portrait of Adam Michel

Adam Michel focuses on tax policy and the federal budget as a policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Twitter: .

RELATED ARTICLE: These 229 Businesses and Groups Support Tax Reform

A Note for our Readers:

Trust in the mainstream media is at a historic low—and rightfully so given the behavior of many journalists in Washington, D.C.

Ever since Donald Trump was elected president, it is painfully clear that the mainstream media covers liberals glowingly and conservatives critically.

Now journalists spread false, negative rumors about President Trump before any evidence is even produced.

Americans need an alternative to the mainstream media. That’s why The Daily Signal exists.

The Daily Signal’s mission is to give Americans the real, unvarnished truth about what is happening in Washington and what must be done to save our country.

Our dedicated team of more than 100 journalists and policy experts rely on the financial support of patriots like you.

Your donation helps us fight for access to our nation’s leaders and report the facts.

You deserve the truth about what’s going on in Washington.

Please make a gift to support The Daily Signal.

The Obamacare Mandate Is a Tax, So the Senate Bill Is Correct

The Supreme Court saved the program by calling it a tax. It should be repealed like a tax.

Jeffrey A. Tucker

by  Jeffrey A. Tucker

The Washington Post is outraged. The New York Times even more so.

Commentators are going nuts.

“Using a tax bill to abolish the individual mandate amounts to a backdoor way of sabotaging Obamacare,” writes John Cassidy.

“Republicans, and Donald Trump, have counted on that (as well as your limited outrage bandwidth) in slipping an Affordable Care Act mandate repeal inside their insidious tax bill,” writes Bridget Read.

All this howling is due to how the GOP-controlled Senate used a tax bill to repeal a health bill. The implication is that this is something shady and duplicitous, like an exercise in false pretense.Actually, there is absolutely nothing shady about the repeal of the Obamacare mandate. There is no back door here. No bait and switch. Obamacare’s much-despised individual mandate is, in fact, a tax. It is properly dealt with in a tax bill.

Don’t take my word for it. This is precisely what the Supreme Court itself ruled in National Federation of Independent Business v. Sebelius (2012). It was widely seen as the ruling that codified Obamacare, giving it the constitutional gloss it needed to stay a law.

The law has been challenged on many grounds but one of which was that it is unconstitutional for Congress to force the people to purchase a service. The court said that this might not pass muster if that were what Congress was doing. Instead, ruled a 5 to 4 majority, the individual mandate should be considered a tax like any other. Taxes are permissible. Therefore Obamacare is completely fine.

Said the Court:

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

Further:

It is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity. A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are expressly contemplated by the Constitution. The Court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation, the Constitution has made no such promise with respect to taxes.

To be sure, the ruling was a bit of an embarrassment for Obamacare proponents because they never liked to talk about the mandate as a tax. It was a payment for wonderful services. The Court said it is true that forcing people to buy something would contradict precedent. So in order to beat back the challenge, the majority found a clever way of redefining the nature of the mandate itself.

At this, Obamacare proponents, while a bit red faced, expressed relief. At least the legislation gets to stay, thanks to an ideologically driven court majority.

The Senate is merely deferring to what the court said and nothing more. The highest court in the land said that the mandate – which is the heart of the legislation – should be regarded as a tax. Fine. The Senate couldn’t repeal the bill in healthcare legislation. So they listened to the court and did exactly what they were supposed to do all along: treat the monstrosity as a tax in a tax bill.The people who are outraged today are only tasting their own medicine, nothing more.

Thus should the repeal be seen as another way in which this legislation is a tax cut for the American people. Will it destabilize health insurance markets? Yes and no. Without the mandate, Obamacare might not survive. But Obamacare is not a real market. It is a fake market. You know this because the many mandates effectively abolish market signaling.

What this tax repeal does is begin to let the market function again. True, there are many more reforms that are necessary to make health insurance work properly again. But this is a good beginning. And it was done entirely properly, precisely as the Supreme Court itself said it should be done.

Jeffrey A. Tucker

Jeffrey A. Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, economics adviser to FreeSociety.com, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books, most recently Right-Wing Collectivism: The Other Threat to Liberty, with a preface by Deirdre McCloskey (FEE 2017). He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press. He is available for press interviews via his email.

VIDEO: Trump Frames Tax Vote as Swamp Drainers vs. Swamp Dwellers

As the Senate prepares to vote on a tax reform package, President Donald Trump called the vote a “moment of truth.”

“In the coming days, the American people will learn which politicians are part of the swamp and which politicians want to drain the swamp,” Trump said to a supportive crowd Wednesday in St. Charles, Missouri.

The president fired up the crowd as the Senate nears a vote on a bill that would lower income tax rates, simplify the tax code, and reduce the highest corporate rate in the industrialized world from 35 percent to 20 percent.

The House passed a similar package, but one that differs in its treatment of the corporate tax rate and the number of brackets. The Senate bill keeps seven brackets, though with lower rates, delays the corporate rate cut by a year, and eliminates the Obamacare individual mandate.

Trump put a holiday spin on the legislation.

“You don’t see ‘Merry Christmas’ anymore,” Trump said. “With Trump as your president, we are going to be celebrating ‘Merry Christmas’ again and it’s going to be celebrated with a big, beautiful tax cut.”

Trump talked about how the tax code has made America uncompetitive.

“We cannot sit idly by and see ourselves losing in competition to other countries as they continue to take away their jobs because their tax codes are more competitive and less burdensome than ours. That’s why we must cut our taxes, reduce economic burden, and restore America’s competitive edge.”

Throughout the speech, he hit themes familiar with what he said on the campaign trail.

“If we do this, then America will win again like never, ever before,” Trump said. “A vote to cut taxes is a vote to put America first again.”

During the 2016 presidential campaign, he frequently talked about how Americans would become “tired of winning” under his presidency.

Noting the declining unemployment rate and strong stock market, he joked with Republican Missouri Gov. Eric Greitens, who was on the stage, that this was already about to happen.

Trump said:

Now we are getting number that nobody thought [was] possible, certainly not at this time and the numbers going up are much better than anybody anticipated. In fact, they’re going to say that Trump is the exact opposite of an exaggerator. They are going to start saying that he ought to be a little bit more optimistic because his predictions were low. A year and a half ago they said, ‘He can’t do that.’ Now they’re saying, ‘That was quick.’ …

We are going to win so much that the people of Missouri are going to go to your governor, and say, ‘Governor, please go see the president. We can’t stand winning so much.’ I used to say that. That’s what’s happening. Then the governor is going to come to the beautiful, historical Oval Office, he’s going to say to me, ‘Mr. President, the people of Missouri cannot stand all this winning. They don’t want to win so much. They love the old way where they had lousy job numbers, lousy economic numbers, lousy, they loved it. And I’ll say, ‘Governor, I don’t care what they say in Missouri, we are going to keep winning and winning and winning.’ I used to say that, I had fun with that.

Trump, a billionaire, stressed that the tax reform plan is so targeted at working-class Americans that it won’t help him or his wealthy friends.

“It [the current tax code] is riddled with loopholes that let some special interests, including myself in all fairness,” Trump said. “It [the reform proposal] is going to cost me a fortune, this thing, believe me, believe me, this is not so good for me. I have some very wealthy friends, not so happy with me, but that’s OK. I keep hearing [Democrat Sen. Chuck] Schumer, ‘This is for the wealthy.’ If it is, my friends don’t know about it. I have to explain why. Now it is great for companies because companies are going to bring back jobs and we are lowering the rates very substantially.”

Trump talked about hitting other agenda items as well, such as taking another shot at repealing Obamacare, pushing for an infrastructure plan, building a border wall, and welfare reform.

“Does anyone want welfare reform?” Trump said, to cheers from the audience. “I know people that work three jobs and the person that is not working at all and has no intention of working at all is making more money and doing better than that person that is working his or her ass off. It’s not going to happen, not going to happen. So we are going to go into welfare reform.”

Portrait of Fred Lucas

Fred Lucas

Fred Lucas is the White House correspondent for The Daily Signal. Send an email to Fred. Twitter: @FredLucasWH.

RELATED ARTICLE: Don’t Believe the Democrat Attacks on Tax Reform. Here Are the Facts.

A Note for our Readers:

Trust in the mainstream media is at a historic low—and rightfully so given the behavior of many journalists in Washington, D.C.

Ever since Donald Trump was elected president, it is painfully clear that the mainstream media covers liberals glowingly and conservatives critically.

Now journalists spread false, negative rumors about President Trump before any evidence is even produced.

Americans need an alternative to the mainstream media. That’s why The Daily Signal exists.

The Daily Signal’s mission is to give Americans the real, unvarnished truth about what is happening in Washington and what must be done to save our country.

Our dedicated team of more than 100 journalists and policy experts rely on the financial support of patriots like you.

Your donation helps us fight for access to our nation’s leaders and report the facts.

You deserve the truth about what’s going on in Washington.

Please make a gift to support The Daily Signal.

Why Capitalism is a fundamental Right of Man

Thomas Paine wrote a book titled Rights of Man. The Rights of Man posits that popular political revolution is permissible when a government does not safeguard the natural rights of its people. The Rights of Man begins thusly:

To

GEORGE WASHINGTON

PRESIDENT OF THE UNITED STATES OF AMERICA

SIR,

I PRESENT you a small Treatise in defense of those Principles of Freedom which your exemplary Virtue hath so eminently contributed to establish.–That the Rights of Man may become as universal as your Benevolence can wish, and that you may enjoy the Happiness of seeing the New World regenerated the Old, is the Prayer of

SIR,

Your much obliged, and Obedient humble Servant,

THOMAS PAINE

Paine was addressing the Declaration of the Rights of Man and of the Citizen written in France after their revolution. The basic principle of the Declaration was that all “men are born and remain free and equal in rights” (Article 1), which were specified as the rights of liberty, private property, the inviolability of the person, and resistance to oppression (Article 2).

Capitalism is defined as:

A social system based on the principle of individual rights. Politically, it is the system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its result is the free-market.

Therefore capitalism is a basic right of man or in more modern terminology a human right.

To take away one’s property is to take away their ability to survive. Take away a farmer’s land and you take away a farmer’s ability to reap what he has sown. The farmer can no longer feed his family nor sell what he has reaped to feed others. If the state (government) controls the dirt (land) then it controls the people.

This is what the American Revolution was all about. Unchaining the people from serfdom to the King of England. 

As Friedrich A. Hayek, in his book The Road to Serfdom wrote:

It is true that the virtues which are less esteemed and practiced now–independence, self-reliance, and the willingness to bear risks, the readiness to back one’s own conviction against a majority, and the willingness to voluntary cooperation with one’s neighbors–are essentially those on which the of an individualist society rests.

Collectivism has nothing to put in their place, and in so far as it already has destroyed then it has left a void filled by nothing but the demand for obedience and the compulsion of the individual to what is collectively decided to be good.

Capitalism is the opposite of obedience and compulsion.

Capitalism can exist even in the most repressive societies, such as in Communist Cuba. In my column My Visit to Cuba — An American in Havana I wrote:

What I observed is that the Cuban people have great potential if they are unleashed and allowed to earn what they are truly worth. Socialismo (socialism) is slowly but surely killing their lives and doing them great harm. I noticed on the ride West of Havana through the rural areas of Cuba hundreds of people waiting along the road trying to get a ride. Some were nurses in their white uniforms thumbing rides to the hospital where they are needed. I saw horse drawn carriages along the major highway carrying people because the public transportation system cannot keep up with the demand. The horses and cattle we saw were emaciated. The roads were in poor shape including the national highway system.

As one Cuban man put it, “the people have no love for their work.” They have no love for their work because Cuba needs a change in direction.

A love for work comes from the rewards of one’s efforts. Take that away and you remove the soul of the individual. You remove his purpose in life. You remove the one of the fundamental rights of man.

There are those who believe the polar opposite. There are those who believe that central control trumps individual freedom. There are those who are being taught that capitalism is evil, until the time that they must earn enough to feed themselves.

There was a time in America when there were only two classes of citizens, the working class and the non-working class. The working class took care of the non-working class. Economic classification is identity politics (a.k.a. Cultural Marxism) writ large. It is designed to put the poor (those earning below a certain wage determined by government) against the rich (those earning above a certain wage determined by the government).

During his inaugural address President Trump stated:

Today’s ceremony, however, has very special meaning. Because today we are not merely transferring power from one Administration to another, or from one party to another – but we are transferring power from Washington, D.C. and giving it back to you, the American People.

For too long, a small group in our nation’s Capital has reaped the rewards of government while the people have borne the cost.

[ … ]

The establishment protected itself, but not the citizens of our country.

[ … ]

That all changes – starting right here, and right now, because this moment is your moment: it belongs to you.

President Trump is an American. He believes in the rights of man. He is a capitalist. He is everything that Washington, D.C. hates.

RELATED ARTICLE: The Origins of the ‘Cult of Political Correctness’ [a.k.a. Cultural Marxism]

Planned Parenthood Is in Deep Trouble With the Law. This Could Be a Turning Point.

We are living through a remarkable time in history. Almost daily, those in influential positions who once appeared untouchable are falling out of popular favor as their abuses are exposed.

Earlier this month, one particularly corrupt institution was dealt back-to-back blows: Planned Parenthood, the nation’s largest abortion business.

On Nov. 13, The Hill reported that the FBI may be investigating Planned Parenthood and its associates for the sale of aborted babies’ body parts for profit. It’s the latest development yet in a scandal that began in 2015 with the release of explosive undercover videos.

Those videos showed abortion industry executives haggling over the price of hearts, livers, brains, and kidneys and describing, in chilling detail, their techniques for crushing late-term babies to get the freshest organs.

The Senate Judiciary Committee and the House Select Investigative Panel on Infant Lives spent almost one-and-a-half years conducting a national investigation, reviewing 30,000 pages of documents, and hearing hours of testimony.

They found enough evidence to refer several Planned Parenthood affiliates and tissue procurement companies for potential prosecution. Attorney General Jeff Sessions suggested that if the FBI concurs, charges might be filed.

Then came the second punch.

Just as news of the FBI inquiry broke, the 8th Circuit U.S. Court of Appeals declined to revisit its ruling that the state of Arkansas can redirect Medicaid funds away from abortion businesses like Planned Parenthood, which the state is completely justified in doing considering the ongoing baby parts scandal.

These two major breakthroughs would have been inconceivable under the Obama administration, which repeatedly abused federal power to prop up the abortion industry.

President Barack Obama’s aggressively pro-abortion administration put the “bully” in “bully pulpit.” Under Obama, the Justice Department became a tool to harass and intimidate pro-life advocates, labeling them domestic terrorists alongside groups like the Ku Klux Klan.

Instead of investigating Planned Parenthood for the shocking, potentially illegal practices exposed in the videos, pro-abortion Attorney General Loretta Lynch decided to investigate the whistleblowers.

The Obama administration also actively interfered with state efforts to defund Planned Parenthood. KansasTennesseeIndianaTexasNew HampshireNew Jersey, North Carolina—all these states tried to get taxpayers out of the abortion industry, only to have the federal government bypass local officials to directly award lucrative contracts to Planned Parenthood or threaten to withhold federal Medicaid funds unless they kept tax dollars flowing.

As one last parting gift, during Obama’s final weeks in office, his administration issued an order banning states from defunding Planned Parenthood under Title X, which took effect two days before President Donald Trump’s inauguration.

Through it all, Obama’s court appointees have generally been reliable backers of abortion. One Obama appointee even compared an abortion to a tonsillectomy in a recent case that would have created new “rights” to abortion on demand for illegal immigrants.

But there’s a new sheriff in Washington now, and a palpable sense of terror is gripping Planned Parenthood and its camp. Without their defender-in-chief or the courts to bail them out, they are finally being held accountable.

Trump has busily set about undoing his predecessor’s destructive pro-abortion legacy. He has filled his Cabinet with pro-life officials, and has filled court vacancies with outstanding judges like Neil Gorsuch who faithfully interpret the Constitution.

Right away, Trump signed legislation (H.J. Res. 43) rolling back Obama’s parting gift to the abortion industry—something that, on a personal note, I was proud to witness in the Oval Office.

Trump’s strong commitment to pro-life policies has helped embolden state governors and legislatures. Texas has now applied to reclaim the federal funding it was denied under the last administration. South Carolina Gov. Henry McMaster in August successfully defunded Planned Parenthood and requested a waiver from the Trump administration so that the state can do the same with Medicaid, which is where the abortion business gets most of its taxpayer funding.

The next step is for the Trump administration to issue new guidance to the states restoring their freedom to prioritize Medicaid funds the way they believe will best serve their citizens. The administration must be prepared to defend that policy vigorously should the case go to the Supreme Court.

The pro-life majorities in both houses of Congress should also fulfill their promise to redirect half a billion dollars in annual taxpayer funding away from Planned Parenthood using budget reconciliation, where they have the best chance of succeeding.

Sometimes justice is a long time coming, but as two of our nation’s greatest thinkers—Thomas Jefferson and Martin Luther King, Jr.—pointed out, it “cannot sleep forever” and “the arc of the moral universe … bends toward justice.”

There are good reasons to hope that for America’s abortion giant, justice is right around the corner.

COMMENTARY BY

Portrait of Marjorie Dannenfelser

Marjorie Dannenfelser is president of the national pro-life group Susan B. Anthony List. Twitter: 

A Note for our Readers:

Trust in the mainstream media is at a historic low—and rightfully so given the behavior of many journalists in Washington, D.C.

Ever since Donald Trump was elected president, it is painfully clear that the mainstream media covers liberals glowingly and conservatives critically.

Now journalists spread false, negative rumors about President Trump before any evidence is even produced.

Americans need an alternative to the mainstream media. That’s why The Daily Signal exists.

The Daily Signal’s mission is to give Americans the real, unvarnished truth about what is happening in Washington and what must be done to save our country.

Our dedicated team of more than 100 journalists and policy experts rely on the financial support of patriots like you.

Your donation helps us fight for access to our nation’s leaders and report the facts.

You deserve the truth about what’s going on in Washington.

Please make a gift to support The Daily Signal.

No U.S. data on financial/social impact of refugee resettlement on communities

And, I think the refugee industry wants to keep it that way! (Think about the enormous stonewalling going on in St. Cloud for instance!).

How many times over the years have I struggled to try to answer your questions about how much all of this is costing state and federal taxpayers? Now, I have a better understanding of why the facts are so elusive thanks to some researchers who sound like they do want to resettle refugees, but want answers too!

Caren Jean Frost and her fellow researchers are clearly not right-wingers. They are on to something, but will Trump’s Office of Refugee Resettlement listen?

Opinion from The Salt Lake Tribune:

Before you read know that “service providers” is the polite word for resettlement “contractors.”

Resettling refugees has become harder to justify, but not for the reasons you may expect. Lost in the passionate rhetoric of lobbyists, politicians and humanitarian agencies are statistics and evidence.

Appeals to forestall resettlement efforts speak to fears of terrorists infiltrating refugee flows, notwithstanding evidence that suggests otherwise. Advocates of resettlement reference duty, morality and hospitality, but don’t provide compelling evidence to justify the financial and social strains resettlement places on host communities.

Proponents on both sides struggle to support their reasoning with evidence, and this is the real issue. The absence of consistent data collection and measurement by service providers and government agencies has impaired policy makers’ ability to craft effective policy. Furthermore, resettlement data is full of holes and redundancies because service delivery agencies do not coordinate their data collection efforts. Additionally, service providers are unable to answer basic questions about the effectiveness of their programs and current resettlement trends because their data are not structured in an analyzable format.

Standardizing refugee resettlement data collection could revolutionize the resettlement process. It would facilitate analysis, enabling service providers and those interested in refugee statistics to more easily understand what is happening in real time. This information would also enable service providers to better serve refugee communities and educate policymakers on current trends, potential issues and policy gaps.

[….]

CCSLogo

Without meaningful data standards, agencies and organizations may struggle to evaluate their work and share information. Because funding is typically tied to defined performance or outcome measures, evaluation is a crucial element of program design. The absence of data standards makes evaluation problematic and makes comparisons across programs nearly impossible. The University of Utah’s Center for Research on Migration and Refugee Integration’s recently attempted to evaluate Catholic Community Services’ refugee case management program but was stymied before it even began because the case data were not collected in an analysis-friendly format; moreover, it is impossible to track refugee outcomes as individuals pass from one agency’s stewardship to another’s. Service providers and policymakers across the country face similar challenges.

[…..]

Data standardization can only happen if the United States’ Office of Refugee Resettlement takes the lead on this issue.Access to federal funding is already conditional on reporting to the office. The simple solution is this: tie federal funds to data standardization and formatting.

So why isn’t it being done?—surely reform doesn’t require the lazy lunks in Congress. ORR can require this before it throws more of your money at the US Refugee contractors. So why aren’t they doing it? I think I have a guess!

In Charts, How These 7 Taxpayers’ Bills Would Change If Tax Reform Were Enacted

How will you fare if the GOP tax plan is enacted?

Well, on net, most Americans will see a significant tax cut under the proposed plans from Republican lawmakers, including virtually all lower- and middle-income workers and a majority of upper-income earners.

Both the House and Senate versions of the Tax Cuts and Jobs Act would, on average, provide immediate tax cuts across all income groups, according to analysis from Congress’ Joint Committee on Taxation.

This analysis does not, however, show how those tax cuts would vary based on factors such as total income, type of income, number of children, and itemized deductions.

While the plans lack a pro-growth cut to the top marginal tax rate (the Senate plan slightly lowers the top rate, but the House keeps the top rate and adds a higher bubble rate), both bills achieve significant reductions in business tax rates. This will help make America more competitive with the rest of the world, and will result in more and better jobs as well as higher incomes for all Americans.

To get a better idea of how some workers, families, and small businesses would fare under the proposed tax reform, The Heritage Foundation has estimated the tax bills of a range of taxpayers under current tax law, the House’s Tax Cuts and Jobs Act, and the Senate’s modified mark of that bill.

Tom Wong: Single teacher with median earnings of $50,000 per year. Under the current tax code, Tom pays $5,474 each year in federal income taxes. His tax bill would decline by $914, or 17 percent, (to $4,560) under the House’s plan and by $1,104, or 20 percent, (to $4,370) under the Senate’s plan.

These tax cuts come primarily from a higher standard deduction of $12,000 and from lower marginal tax rates. Currently, Tom’s marginal tax rate is 25 percent. But under both the House and Senate plans, his tax rate would become 12 percent.

John and Sarah Jones: Married couple with three children, homeowners, and $75,000 in annual income. John is a sales representative and earns an average of $55,000 a year. Sarah is a registered nurse. After having children, Sarah cut back to part-time work and she earns $20,000 a year. Under the current tax code, John and Sarah pay $1,753 each year in federal income taxes.

But under the House’s tax plan, their tax bill would decline by $1,033, or 59 percent, (to $720). Under the Senate’s plan, their bill would be reduced by $2,014, or 115 percent, (to $0, plus a refundable credit of $261).

Even though John and Sarah would have more taxable income under the proposed plans (as a result of not being able to deduct all of their state and local taxes and not being able to claim personal exemptions), they would still receive a tax cut because they would face lower marginal tax rates and receive larger child tax credits.

Their current marginal tax rate would decline from 15 percent to 12 percent under both the House and Senate plans. Their current child tax credits of $1,000 each would increase to $1,600 each under the House plan and $2,000 each under the Senate plan. The House plan would also provide $600 in family credits to John and Sarah.

The numbers listed in the above example for John and Sarah’s current tax payments assumes John and Sarah own a home and live in a state with average tax levels. Under the current tax code, if they did not own a home but instead rented, their federal tax bill would be higher ($2,375 instead of their current $1,753 tax bill).

This would mean that their subsequent tax cuts—as renters—would be larger: $1,655, or 70 percent, under the House plan and $2,636, or 111 percent, under the Senate plan. The House plan would partially eliminate and the Senate plan would fully eliminate an inequity in the current tax code that provides bigger tax breaks to homeowners, wealthy individuals, and people who live in high-tax states.

If the John and Sarah rent, their new tax bills would remain the same under both the House and Senate plans (because the larger standard deduction would mean they would not itemize regardless of whether they owned a home or rented).

Peter and Paige Smith: Married couple with two children, homeowners, $1.5 million annual income. Peter works for a technology startup company and Paige is an accountant. Although Peter’s income fluctuates significantly from year-to-year, this was a big year for his company and he received a very large bonus, bringing his total earnings to $1.4 million. Paige’s stable income of $100,000 provided their family the financial stability they needed for Peter to take a risk and follow his dreams.

Under the current tax code, Pater and Paige pay $439,275 in federal income taxes. Their tax bill would increase by $87,993, or 20 percent, (to $527,268) under the House plan and would remain relatively the same, decreasing by just $1,313, or 0.3 percent, (to $437,962) under the Senate plan.

Peter and Paige’s taxable income would increase under both the House and Senate plans because they would lose some or all of their state and local tax deductions. Their total exemptions and child tax credits would remain the same—at zero—as their income is too high to claim any exemptions or credits under the current code or the proposed plans.

Under the current tax code, Peter and Paige face a top marginal tax rate of 42.5 percent (39.6 percent, plus the 2.9 percent Obamacare surtax). Under the House plan, their top rate would rise to 48.5 percent (39.6 percent, plus the 6 percent “bubble” tax, plus the 2.9 percent Obamacare tax), and under the Senate plan, it would fall to 41.4 percent (38.5 percent, plus the 2.9 percent Obamacare tax).

Those marginal tax rates do not include Social Security’s 12.4 percent payroll tax, which can lead to extremely high combined marginal tax rates for second earners that are part of a high-income family like Peter and Paige. Because Paige makes less than Social Security current taxable maximum income of $127,200, her combined federal income and payroll tax rate is 54.9 percent under current law and would be 60.8 percent under the House plan and 53.8 percent under the Senate plan.

Although Peter and Paige would have the most taxable income under the Senate plan, the Senate plan’s lower top marginal tax rate does the most to remove the tax penalty on work and investment. The more Peter and Paige work and invest, the more jobs and income growth they help create across all income groups.  Peter and Paige would also benefit under the Senate plan’s lower marginal tax rates in the bottom brackets.

The above example assumes Peter and Paige live in a state with average taxes. Currently, however, their federal tax bill could be tens of thousands of dollars higher or lower, depending on whether they live in a state with higher- or lower-than-average taxes for them to write off. This is not the case under the proposed House and Senate tax plans, because the Senate plan fully eliminates the state and local tax deduction and the House plan eliminates all but a $10,000 property tax deduction (and at their income level, they would likely claim that full amount in any state).

Jose and Marie Fernandez: Married couple with two children, owners of JM Blinds and Shades LLC, homeowners, $250,000 annual income. Jose owns and manages JM Blinds and Shades manufacturing company. Marie primarily stays home with their young children, but she also helps out significantly with the business when needed. Under the current tax code, Jose and Marie pay $35,588, which is their alternative minimum tax (AMT) amount.

The AMT is a separate tax system, created back in 1982 to make sure that millionaires paid their “fair share” in taxes. However, because the AMT was not indexed for inflation until 30 years after it was enacted, it now hits a significant number of middle- to upper-income Americans with a higher tax bill than they would otherwise pay. That’s because under the current tax code, taxpayers pay the larger of what they owe under the regular income tax system and the AMT.

Both the House and Senate plans eliminate the AMT. Under the House plan, Jose and Marie’s federal tax bill would increase by $799, or 2.3 percent, (to $36,387) and under the Senate plan, their federal tax bill would decrease by $9,325, or 26 percent, (to $26,263).

Jose and Marie’s marginal income tax rates would vary significantly under the different tax plans. Their current marginal tax rate of 35 percent would decline to 30 percent under the House plan and 19.8 percent under the Senate plan.

Under the House tax plan, Jose and Marie would face a good deal more complexity. As a small business, they would face the top rate of 25 percent, but only on 30 percent of their income. The other 70 percent (counted as wages) would be taxed at the regular income tax rates (which range from 12 percent to 46.5 percent). At their current income level, that top rate would also be 25 percent. However, on top of that, Jose and Marie would face an additional 5 percent tax due to the phaseout of their child tax credits.

Under current law, Jose and Marie make too much to claim the $1,000 per child tax credits. Under the House plan, they would be able to claim $1,100 of each $1,600 child tax credit, and under the Senate plan, they would receive the full $2,000 credit per child.

Also, because Jose and Marie make $250,000, their next dollar of income would be subject to the 2.9 percent Obamacare tax under both the current and proposed tax plans. That would bring their marginal tax rate on any additional income to 37.9 percent under the current tax code, 32.9 percent under the House plan, and 22.7 percent under the Senate plan.

The above examples seek to show how some common taxpayers—including some wealthy individuals who are less common—would fare under the proposed tax reforms. Actual individuals’, families’, and businesses’ tax bills could vary significantly.

On net, however, most taxpayers—particularly lower- and middle-income taxpayers and businesses—will pay less in total taxes. Even more important than total taxes paid, however, is marginal tax rates. That’s because a lot of decisions are made at the margin.

For example, a worker is far more likely to work an additional hour if it counts as overtime and provides the equivalent of 1.5 hours’ worth of pay. And an individual is more likely to make a $1,000 contribution to his retirement savings account if that savings goes tax-free and means he can put all $1,000 away, instead of first having to pay between $100 and $400 in taxes on the savings.

Lower marginal tax rates are a big driver of economic growth, and the lower the rates, the higher the growth. Under the House bill, lower- and middle-income earners and businesses face lower marginal tax rates, but some high-income earners face higher marginal tax rates. The Senate proposal reduces the top marginal tax rate for an overwhelming majority of taxpayers, with the largest reductions occurring for businesses and for lower- and middle-income Americans.

While the proposed tax reforms do not achieve 100 percent of the potential pro-growth impacts that they could, they go a long way in helping to jump-start America’s struggling economy and put it on a pathway toward higher long-term growth.

Portrait of Rachel Greszler

Rachel Greszler

Rachel Greszler is a senior policy analyst in economics and entitlements at The Heritage Foundation’s Center for Data Analysis. Read her research.

A Note for our Readers:

Trust in the mainstream media is at a historic low—and rightfully so given the behavior of many journalists in Washington, D.C.

Ever since Donald Trump was elected president, it is painfully clear that the mainstream media covers liberals glowingly and conservatives critically.

Now journalists spread false, negative rumors about President Trump before any evidence is even produced.

Americans need an alternative to the mainstream media. That’s why The Daily Signal exists.

The Daily Signal’s mission is to give Americans the real, unvarnished truth about what is happening in Washington and what must be done to save our country.

Our dedicated team of more than 100 journalists and policy experts rely on the financial support of patriots like you.

Your donation helps us fight for access to our nation’s leaders and report the facts.

You deserve the truth about what’s going on in Washington.

Please make a gift to support The Daily Signal.

Rep. Vern Buchanan Wrong on Sea Levels Rising, Wrong on the Paris Accord

Florida  Representative Vern Buchanan is running for reelection in 2018. He is now officially a career politician first elected in 2006. Buchanan has sadly learned how to pander to certain constituencies, like environmentalists, for political gain.

Recently Buchanan sent out the following in an email with an accompanying ABC Channel 7 video:

Climate change is a serious issue for a state like Florida that has two coastlines vulnerable to rising waters. That’s why I am again calling on President Trump to reconsider his decision to withdraw the U.S. from the landmark Paris Climate Accord.

Take a look at the video below and let me know what you think by replying to this email.

Vern

The greatest problem facing Florida is saltwater intrusion not rising sea levels.

Dr. Roger Bezdek has found that salt water intrusion is caused by land subsidence due to groundwater withdrawal from subsurface shale and sandstone formations, and to “glacial isostatic adjustments” that have been ongoing since the last glaciers melted.

In a column titled “Sea level rise – or land subsidence? Excessive groundwater pumping is the real culprit” CFACT reports:

[T]he Intergovernmental Panel on Climate Change estimated in 2007 that seas might rise up to only 2 feet by 2107. By comparison, oceans have risen nearly 400 feet since the last ice age ended, reflecting how much water was trapped in mile-thick glaciers that buried much of North America, Europe, and Asia. In recent decades, though, global sea level rise has averaged just 7 inches per century…

[ … ]

As a new report by Dr. Roger Bezdek explains, reality is much different. (His report awaits publication in a scientific journal.) At least for the Chesapeake region, Houston-Galveston, Texas, area, Santa Clara Valley, California, and other places around the globe, the primary cause of seawater intrusions is not rising oceans – but land subsidence due to groundwater withdrawal from subsurface shale and sandstone formations, and to “glacial isostatic adjustments” that have been ongoing since the last glaciers melted.

The solution therefore is not to continue trying to control Earth’s climate – an impossible, economy-busting task that would further impede fossil fuel use, economic development, job creation, and human health and welfare. The solution requires reducing groundwater removal in these coastal areas. 

President Trump was right to leave the Paris Accord. It is nothing more than a massive $100 billion annual “climate finance” transfer of money from the United States to third world countries. Also understand that China, Russia and India are paying nothing.

Clearly Representative Buchanan needs to understand that mankind cannot control either the weather or sea levels. But Florida can control the removal of groundwater in our coastal areas.

The real issue with Buchanan is drilling off of Florida’s coastlines, not the Paris Accord. He is against drilling while President Trump is opening up vast areas to energy exploration and fast tracking environmental processes and removing regulatory hindrances to energy exploration and drilling.

Buchanan is anti-President Trump’s policies of economic growth via increased energy production. That’s the real issue facing Floridians. Cheap reliable power or sending billions in U.S. tax dollars to third world nations. You choose.

RELATED ARTICLES: 

Europe Squanders Money on Green Dreams

Another Obama Legacy: Americans Will Pay Billions for a Useless Climate Agreement

President Obama’s Climate-Change Agenda Costs American Lives

China caused a two percent surge in global CO2 emissions after joining the UN climate pact

Alarmists feverish over sea levels

BankThink: Mortgage deduction helps housing lobby, but not homeowner

The battle lines are drawn between those seeking to protect the mortgage interest deduction (MID) and a legislative effort to greatly reduce the use of the MID. Hopefully, this is a battle that taxpayers will win over the housing lobby — the loudest supporter of keeping the deduction intact.

The housing lobby’s effectiveness is measured by its success at garnering subsidies. But the proposed House bill, the Tax Cuts and Jobs Act, would be a shot across the industry’s bow. The stage is now set for a crucial debate between two competing visions: the House plan — which would disincentivize the MID by raising the standard deduction and capping loans qualifying for the MID at $500,000 — and Senate tax reform legislation that effectively would leave the deduction intact.

From the perspective of taxpayer cost and federal budgeting, it’s no contest which plan is better. Since 1994, the cost of the MID, the separate real estate tax deduction (also downsized in the House plan), and other single-family tax subsidies has totaled over $2.5 trillion and in fiscal year 2017 were estimated to cost $141 billion. This does not include the many hundreds of billions in subsidies over the same period provided to or by Fannie Mae, Freddie Mac, the Federal Housing Administration, Ginnie Mae and others, and the $6.7 trillion in taxpayer mortgage debt guaranteed by these same agencies.

What did the U.S. taxpayer get for this massive level of rent-seeking? First, the U.S. homeownership rate today is 63.9% — statistically no different than the average rate of 64.3% since 1964 (excluding the bubble years). Second, these policies directly caused the 2008 financial crisis — a catastrophe for the U.S. and world economies.

True to their past positions, both NAR and the NAHB are opposing the House tax reform plan, favoring the Senate version. NAR had previously released a study it commissioned that found that a doubling of the standard deduction, elimination of the state and local tax deduction, and lower marginal tax rates would cause home prices to fall by 10.2%. On the other side are supporters of tax reform and lower marginal rates. Gary Cohn, President Trump’s head of the National Economic Council, stated in September: “People don’t buy homes because of the mortgage deduction.”

Before getting to the merits of these positions, it is worth noting the “man bites dog” nature of NAR’s admission that the MID drives home prices up higher than they otherwise would be. While this certainly explains the NAR’s past and current support for the MID, it is a damning admission for a group that purports to promote homeownership and “affordable housing.”

In terms of the merits, federal subsidies for homeownership like the MID get capitalized into higher prices, encourage the taking out of more debt, promote the buying of larger, more expensive homes, and price homes out of reach of lower-income buyers. Recent research at the Federal Reserve confirmed these points and found “when house prices are allowed to adjust in response to the elimination of mortgage interest deductions, the homeownership rate actually increases.”

One could end the argument here. However, this would leave NAR’s claim about a 10.2% price reduction unaddressed. First, a common sense reading of “a fall in home prices” is that prices would actually drop from current levels. This conflates a drop in price level and a slowing of the rate of increase. High-end home prices in 16 large metropolitan areas were up about 5% in July compared to a year earlier. A slowing of the rate of increase for high-end homes to the inflation level of 2% would, over three years, result in high-end home prices ending up about 10% lower than they otherwise would have been, but without an actual drop in prices.

Why is a slowing in the rate of increase, not an outright drop, the likely result? According to NAR, existing home sales have been in a seller’s market for 61 straight months and there are no signs of this abating anytime soon. A seller’s market is commonplace even at the higher price end of the home market. This includes San Francisco, where homes selling for more than $4.6 million have less than 2.5 months inventory along with similar conditions for the highest price points for metro areas such as Seattle and Los Angeles. Areas like Boston, Denver, New York City and Washington D.C. have a seller’s market except for price points in excess of $1.5 million to $2 million.

Jerry Howard, chief executive of the homebuilder association, told The Wall Street Journal that the House legislation is “a bad bill for housing.” In reality, it’s a good bill for American taxpayers and homebuyers.

Refugee Resettlement Agency comes Out-of-the-Closet as a Political Agitation Group

Thanks to several readers who sent it, here is yet another reason for the U.S. government to cut off funding for refugee resettlement groups who have become out-of-the-closet political agitation groups. 

mark-hetfield

Mark Hetfield

Longtime readers know that HIAS receives millions of taxpayer dollars to place refugees in unsuspecting towns and cities and they have led the charge in the courts against Donald Trump’s efforts to keep us safe by limiting certain migrants entry in to the US.

HIAS also recently helped organize an anti-Trump rally along with CAIR in Washington, DC, here.

And, they invited Rep. Keith Ellison to speak at an anti-Trump rally here.

(Sure hope HIAS is keeping its pots of federal and private money separate! Is there a funding firewall at HIAS?)

Here is Greenfield on Mark Hetfield’s latest:

Is this the moment when Mark Hetfield and HIAS officially joined the anti-Israel lobby?

Mark Hetfield had already hijacked HIAS and transformed it from a Jewish organization to a radical left-wing group concerned entirely with Muslim migration.

Hetfield’s HIAS had already attacked Israel and collaborated with the anti-Israel group, J Street.

But signing a statement in support of Linda Sarsour, an Islamic anti-Semitic activist who celebrated throwing stones at Jews, is Mark Hetfield’s official coming out party.

The immediate trigger for this was having Sarsour head a New School panel accusing Jews of exploiting anti-Semitism. That’s quite a show for a woman who is quite comfortable with Louie Farrakhan and the Nation of Islam.

[….]

Previously, Mark Hetfield had avoided getting his hands dirty. Now he no longer seems to care.

Continue here for more and to follow links.

Go here to see my ever-expanding file on HIAS (aka Hebrew Immigrant Aid Society) one of the U.S. State Department’s nine federal resettlement contractors.

Here are the nine (LOL! I haven’t named them often enough lately). I sure hope all of them have built firewalls between their federal funding and the money they use for political activities.

RELATED ARTICLE: US Catholic Bishops Thanksgiving message: we thank the US taxpayers for so generously supporting our good works