The Facts About Who Pays the Most in Taxes in America

Politicians exploit public ignorance. Few areas of public ignorance provide as many opportunities for political demagoguery as taxation.

Today some politicians argue that the rich must pay their fair share and label the proposed changes in tax law as tax cuts for the rich.

Let’s look at who pays what, with an eye toward attempting to answer this question: Are the rich paying their fair share?

According to the latest IRS data, the payment of income taxes is as follows.

The top 1 percent of income earners, those having an adjusted annual gross income of $480,930 or higher, pay about 39 percent of federal income taxes. That means about 892,000 Americans are stuck with paying 39 percent of all federal taxes.

The top 10 percent of income earners, those having an adjusted gross income over $138,031, pay about 70.6 percent of federal income taxes.

About 1.7 million Americans, less than 1 percent of our population, pay 70.6 percent of federal income taxes. Is that fair, or do you think they should pay more?

By the way, earning $500,000 a year doesn’t make one rich. It’s not even yacht money.

But the fairness question goes further. The bottom 50 percent of income earners, those having an adjusted gross income of $39,275 or less, pay 2.83 percent of federal income taxes.

Thirty-seven million tax filers have no tax obligation at all. The Tax Policy Center estimates that 45.5 percent of households will not pay federal income tax this year.

There’s a severe political problem of so many Americans not having any skin in the game. These Americans become natural constituencies for big-spending politicians. After all, if you don’t pay federal taxes, what do you care about big spending?

Also, if you don’t pay federal taxes, why should you be happy about a tax cut? What’s in it for you? In fact, you might see tax cuts as threatening your handout programs.

Our nation has a 38.91 percent tax on corporate earnings, the fourth-highest in the world. The House of Representatives has proposed that it be cut to 20 percent—some members of Congress call for a 15 percent rate.

The nation’s political hustlers object, saying corporations should pay their fair share of taxes. The fact of the matter—which even leftist economists understand, though they might not publicly admit it—is corporations do not pay taxes.

An important subject area in economics is called tax incidence. It holds that the entity upon whom a tax is levied does not necessarily bear its full burden. Some of it can be shifted to another party.

If a tax is levied on a corporation, it will have one of four responses or some combination thereof. It will raise the price of its product, lower dividends, cut salaries, or lay off workers. In each case, a flesh-and-blood person bears the tax burden.

The important point is that corporations are legal fictions and as such do not pay taxes. Corporations are merely tax collectors for the government.

Politicians love to trick people by suggesting that they will impose taxes not on them but on some other entity instead. We can personalize the trick by talking about property taxes.

Imagine that you are a homeowner and a politician tells you he is not going to tax you. Instead, he’s going to tax your property and land.

You would easily see the political chicanery. Land and property cannot and do not pay taxes. Again, only people pay taxes. The same principle applies to corporations.

There’s another side to taxes that goes completely unappreciated. According to a 2013 study by the Virginia-based Mercatus Center, Americans spend up to $378 billion annually in tax-related accounting costs, and in 2011, Americans spent more than 6 billion hours complying with the tax code.

Those hours are equivalent to the annual hours of a workforce of 3.4 million, or the number of people employed by four of the largest U.S. companies—Wal-Mart, IBM, McDonald’s, and Target—combined.

Along with tax cuts, tax simplification should be on the agenda.

COMMENTARY BY

Portrait of Walter E. Williams

Walter E. Williams is a professor of economics at George Mason University

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All 9 federal refugee resettlement contractors support Oct. 18th #NoMuslimBanEver rally

That is a rally partially sponsored by the Council on American Islamic Relations (CAIR) to be held in Washington, D.C. this coming week. (As of this writing they have 847 confirmed planning to attend, here.)

I told you about it here when the Hebrew Immigrant Aid Society was pushing its groupies to attend.

Curious about whether the other eight federal refugee contractors (some receiving nearly all of their funding from the US Treasury)*** were involved, I asked in that post if anyone knew.

I got my answer just now at twitter when the lobbying arm of the refugee industry (Refugee Council USA) put out this message:

 

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So who are the members of the refugee lobbying consortium.  Here they are:

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***Check out those logos, below are the nine contractors. Where is Congress? Shouldn’t there be a law that if you take most of your funding from taxpayers, you shouldn’t be marching in the streets against the President and us!

Think about it!  All nine contractors (the Catholic church included!) are telling their people to march against the President and for CAIR! 

Why don’t they just take good care of the refugees they are being paid to care for!

LOL! I’m on a roll today, energized by Ms. Wolfe!

RELATED ARTICLES: 

US immigration population hits record 60 million, 1-of-5 in nation – Washington Examiner

City Mayors shirking responsibility regarding Refugee Admissions Program

JW: US Dept. of State says they have NO records on refugee travel loans/repayment (really?)

Australian Socialists march, want detainees admitted to Australia

We Hear You: The IRS, the Rich, the Nanny State, Republicans, Trump, and Tax Reform

Editor’s note: As you probably noticed, The Daily Signal has made tax reform a focus of our coverage and commentary. Here is some of what you’ve had to say on the topic in recent weeks. Be sure to write us at letters@dailysignal.com—Ken McIntyre

Dear Daily Signal: Regarding Rachel del Guidice’s story about the family of ranchers in North Dakota, I am a land surveyor and I get involved in forced sales because they need a survey to transfer property (“Tax Reform a ‘Big Deal’ to Mom Who Wants to Keep Ranch in the Family”).

I watched a farmer lose the farm he spent his childhood helping his parents build. They had over 400 acres, and when the government was finished they had 125 acres. The government set the value at $16,000 per acre because much of the surrounding land was sold as 5-acre tracts, never considering the capital investments to develop that 5-acre lot. When they sold, the land brought only $3,000 per acre, it’s proper value.

Talk about chasing your tail. And the attorneys told them it would cost just as much to fight the government in court. Hard to compete when the opposition sets all the rules and declares all the values. The government is not about doing the right thing; it is about gaining revenues so politicians can buy votes to stay in office and send along that criminal enterprise share to the elites. They will use whatever means possible.

You either pay the government or you pay that attorney friend of the government. All that matters is that they claim enough that they get their share. Washington has become a criminal enterprise. Extortion is their game, a game that includes being poverty pimps and accounting thugs.—Robert Joseph Shannon

If we were to return to a constitutional taxation system and forcing a runaway federal government to live within its means, we wouldn’t have this problem.  A “progressive” income tax is one of the 10 planks of the communist manifesto.—Richard Ely

I’m a tax CPA. I can come up with ideas to satisfy most concerns. As a staunch conservative, and one who recently paid out some estate (death) tax, I am actually not for elimination of it, as charity is a huge benefactor in estate planning.—Jim Fisher

This is a simple proposition: The estate/death tax amounts to double taxation. Anyone think that having to pay double taxes up front is fair or appropriate (aside from our communist/socialist/leftist comrades)? Of course not. The capital gains tax punishes everyone, and is again another form of double taxation.

Taxes to federal, state, and local entities should be based on a once-a-year assessment of income, without all the loopholes, etc. The government should downsize and live within its means (tax revenue) and eschew any further loans.—Derek Dubasik

Could someone please tell me why the government taxes an individual when he or she dies? Isn’t this a double tax on the property the individual had? Don’t people pay taxes on the income they make each year? How about the equipment they buy during that year? The land that is bought, is it not taxed each year by the government?

I’m curious because when my father-in-law passed in 1987, he was a teacher at a Christian university who had written some study guides. He was not classified as being rich, he was faithful to give unto Caesar that which was Caesar’s and unto the Lord that which was the Lord’s.

He was worth $750,000. We met with his lawyer after the funeral, and he told us everything was being handled by the firm: his savings and checking accounts at the bank for personal use, his accounts for his book income. All of which he already had paid taxes on. His house, the land it sat on, his car (a 1975 Dodge), his clothes, furniture, and lawn tools were all listed to be taxed by the government again, because he died.

We received a registered letter a short time later with a check for $35,000, which we had to pay taxes on, and a list of the worth the government had placed on everything.

So it is not just the rich who are hit twice with a tax, it is every person who dies.—Paul Newnum

Dear Daily Signal: About Rachel del Guidice’s report, “Conservatives Call for Tax Reform to ‘Put Small Businesses Back at Heart of Economy’”: You are what you say—or tweet. We could believe in tax reform for small business if the evidence was pro-small business. It’s not.

The bill passed in the House by Speaker Paul Ryan repealing the Affordable Care Act showed no tax reform for health care, no tax reform for the middle class, only tax benefits for the superrich.

So excuse us progressives if we don’t believe tax reform will enhance middle class workers in any way, aside from sabotaging affordable health care through removing the tax penalty for not enrolling in any health program, and the unwarranted shift of $800 billion from states’ Medicaid funding to fat cats who don’t need it.

Consistency isn’t Trump’s strength, but we must believe what our “lying eyes” see—not small business tax reform by Republicans.—Bill Lemoine

Laws are equal for all citizens with the exception of tax law, which punish more the ones who produce more, simply because they have more. If every citizen pays the same amount of tax, there would be no overspending, open budget, waste, poor administration of resources, socialism or communism, permanent welfare, lazy people, Obamacare, Bernie Sanders, Obama, Hillary, or the Democratic Party.—Felipe Solanet

Dear Daily Signal: So, Mr. President, how many jobs are created by the middle class (“Trump: Rich Would Pay Same or More Under Tax Reform”)? Just asking. Time to ante up and fulfill all your campaign promises. Otherwise you are just another political blowhole being sucked into the swamp you pledged to drain. Don’t doubt me. Facts are stubborn things.—Jim Fuscaldo

It’s about time. Just because you live on dividends, it does not mean you’re wealthy. My dad was killed at 35; we lived on dividends from family savings. We paid the highest tax rate possible on $50-a-week income. We need a tax that treats everyone equal, as long as the source is legal.—Elaine Whitmore Cary

“The wealthy” is too vague a term for me to get my head around. Wealth is so relative. Living in the Northeast earning over $250,000 a year, you feel like you can barely keep all the plates spinning. That same figure out in central Idaho would be a fortune. No one pays $15,000 a year in local property taxes for their domicile on a few acres in central Idaho, but try owning a few acres in New Jersey and it’s a whole different thing.—Vladimir Petrovich

Ideally, there should not be an income tax on the people at all; it violates the Constitution as written. But since there is one, it should be equal across the board for everyone and businesses should all have the same tax rate. Otherwise we could consider it favoritism.—Taryl Gibson


Dear Daily Signal: Taxes have been out of control for a long time (“Tax Reform Will ‘Help Everyone,’ Small Business  Owner Says”). When a citizen has to hire professionals to fill out a “simple” tax return, something is wrong.—Jann Leger

Yes, if Congress ever gets it done. Abolish the IRS, have a flat tax. No one has what it takes to make that happen, so the richest and the poorest continue to win on taxes and the middle class pays.—Diana Vanvleet

Dear Daily Signal: Regarding Fred Lucas’ report, I agree that tax credits are a bad idea, even though the philosophy of credits was famously championed by Ronald Reagan (“Trump Says Tax Reform Could Create ‘Millions and Millions of Jobs’”).

I cannot see the IRS as being capable of handling welfare, and taxes are not the place for social engineering. It would work better to increase the personal deduction, remove all other deductions, and just charge a flat tax after that.

It is automatically progressive; you make more, you pay more. But it removes the incentive that so many high earners have for hiding income. For instance, the rental properties we own are worth more as a tax shelter than as an investment. If we pay off the loans, our income soars and we are screwed with taxes.—Bill Tanksley

Around 75 to 100 percent of the corporate tax rate is paid by workers through lower wages . The variation depends on the type of corporation, size, and so on. The personal income tax is a direct cut into American pockets, so how does lowering it not leave people with a bigger paycheck?

This would cause less favoritism through a simpler tax code and more fairness for small businesses and middle class Americans. Especially when most of the deductions, tax credits, and such are traded with a lower rate. The compliance cost and the sheer amount of evasion is already high.

Revenue neutrality is only 0.9 percent above baseline for the corporate tax cut.—Rune-André Tørresdal

Mr. President, we the people don’t wish to be disappointed by our government concerning tax reform either. We already enjoyed that surprise with Sen. John McCain concerning health care reform. If I was the president or a senator, I wouldn’t count on McCain not doing his maverick routine once again.—Cathy Ann Turner

God bless President Trump! There are far more of us with him than are not with him. The media lies, and that’s the simple truth.—Claire Montaina Larson

Didn’t Trump also state that he was going to build a wall and Mexico was going to pay for it, and he was going to fix health care and no one would be without, and he was going to be too busy working to play golf?  Sheep, keep on sheeping.—Chris Ori

Dear Daily Signal: You don’t value what you don’t pay for, is my thought in reading Rachel del Guidice’s report (“Paul Ryan Calls for Tax Reform, Letting Americans ‘Keep More of Your Own Money’”). Our tax system is the greatest teacher of irresponsibility we have. The 47 percent not paying taxes are plundering our country. The only fair outcome is to have everyone pay the same percentage of income tax.

Our socialist Congress can’t or won’t see that they are ruining America. They want their cut of the robbery more than they want to protect America.

Leaving the means of the successful in their own hands is the only intelligent way to lift the general welfare. This step of enlightenment and away from disrespect of personal property is before us.—Michael Watson

House Speaker Paul Ryan calls for tax reform? What does he think his president has been calling for? Ryan is a politically deaf RINO. Get rid of him at the midterm. Give us a flat tax, and take away that congressional power over those of us who they are supposed to be serving.—Aubrey Yancey

We don’t need tax reform. We need to dump the entire IRS code. We don’t need an income tax. A consumption, or  sales, tax is what is needed. I would much rather pay taxes on what I spend than what I earn.

HR 25 and SB 19 (the fair tax legislation in Congress) would rid us of the IRS and the lobbyists who have created the onerous tax code we now suffer with. It would benefit lower-income families with the prebate on the “necessities of life,” it would eliminate the corporate tax, it would eliminate the inheritance tax, it would eliminate filing taxes with the IRS.

There would no longer be 50 percent of the nation not paying their taxes. Read the plan before you criticize.—Robert Davis

Dear Daily Signal: Too many of our lawmakers in the House and Senate have been there way too long and think they have forever to get things done (“Conservative Leader Says Congress Must Make Good on ‘Bold’ Tax Reform”). They should have retired years ago. Term limits in Congress is the only way things will change.

Tax reform is so overdue. Don’t even consider the European or Canadian way of taxing. Get Obamacare repealed and get a basic tax reform pushed through as you know you will never get Democrats’ acceptance.—Bonnie Clarke

A flat tax is a mistake. We really should have some type of  progressive tax rate that imposes higher taxes on individuals and institutions that benefit greatly from public resources. How many companies would survive without access to an educated workforce?

Wealthy and successful European nations have high sales taxes/VAT taxes, which are regressive but seem to get the job done. I think the deduction for mortgage interest payments should be eliminated completely. It disproportionately benefits the wealthy and large borrowers, and promotes excessive investment in homes by those who are able to afford it.

It will be interesting to see what the Republican majority in Congress comes up with; they did such a good job with the repeal of Obamacare. But Trump promised us “the biggest tax cut ever,” so I have no doubt that is coming very soon. I’m not sure how they will square that with reducing the deficit, but I’m sure the Republican majority will figure out that part too.—John Levin

I wouldn’t mind a flat tax of 7 percent for individuals and corporations—and this includes welfare, which is income. Only deductions would be mortgage interest (legal residence) and contributions. We also need to eliminate government waste and reduce the deficit.

Do we really need the energy and education departments? State issues, so move them to the states. Eliminate red tape. Read former Sen. Tom Coburn’s book “Back in Black.” Interesting. We need more Dr. No’s in Congress.—Tony Jenkins


Dear Daily Signal: Unless the “reform” consists of implementing a flat tax or some form of the fair tax, first proposed by the advocacy group Americans for Fair Taxation, I don’t want to hear about it  (“Trump’s Treasury Secretary Says Tax Reform Will Happen Within the Year”).

Anything else is just more of the same: The government confiscating far too much of our hard-earned money to finance its ever more grandiose, ever more controlling, ever more irresponsible, delusional, and dangerous socio-political ambitions.

The fact that Marc Short, the White House director of legislative affairs, is touting another allegedly “bipartisan” congressional effort and saying he thinks Democrats are “excited for tax reform as well” is hardly reassuring to anyone with a brain and even a modicum of historical perspective. This latest attempt at tax reform may —if it ever gets off the ground—leave us slightly less enslaved. But slaves of the state we still will be.—Dale Allen Steinke

Dear Daily Signal: Regarding Adam Michel’s commentary, “Republicans Just Made Tax Reform More Difficult,” if our brave young soldiers waited for the perfect time to storm the hill, we would still be sitting on the beaches of Normandy. Grow a pair and move now, as we voted you the power to make bold moves.

As “Old Sarge” would say, “If you storm that hill, young men, you may get shot; but if you don’t, I certainly will shoot you.” The meaning of this story is move forward or we voters will certainly give you the ax.

We are bone-tired of your campaign double talk and excuses. We have itchy voting fingers. That isn’t thunder you hear all over America, it’s conservatives turning over every stone looking for honest conservatives to primary you cowards. To hell with you RINOs. We will find some true conservatives to take a stand if you will not.—Malcolm Harbison

As an extreme liberal, I can find little in Adam Michel’s commentary article on tax reform that I can disagree with. It certainly would be better than the current chaos the Trump administration is causing.

And no, there is nothing even socialistic about the Democrats’ agenda. Even extreme liberals like me do not even approach the classic definition of socialism: a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.—John Roberts

So there you have it. The GOP insists on playing by the rules (revenue neutral) and gets nothing done, while the Democrats move mountains with lies, fraud, bribery, extortion, and intimidation. So we will keep ratcheting left until we all are told to wear the hammer and sickle.—Anthony Alfero

Spending our hard-earned dollars was never the problem. Spending our hard-earned dollars on waste, special interests, and corruption is and was the problem. There has to be an expose on how the Senate and House govern themselves.

Exempting themselves from Obamacare is just the tip of the iceberg. Many consider themselves elitists: smarter, richer, and with more influence and control than you or I. And in many ways, they are just that. The rules and laws members of the House and Senate have passed to govern themselves are a disgrace. Reform taxes, please, but look to how any new tax laws will affect them and their cohorts.—Maureen McKenna

Congress is not about Democrats or Republicans; we have been taxed beyond human endurance to support illegal aliens, refugees, and welfare, and to make the majority of Congress richer, by taxing hardworking citizens. Enough is enough.—Charlie Pena

COMMENTARY BY

Portrait of Ken McIntyre

Ken McIntyre, a 30-year veteran of national and local newspapers, serves as senior editor at The Daily Signal and The Heritage Foundation’s Marilyn and Fred Guardabassi Fellow in Media and Public Policy Studies. Send an email to Ken. Twitter: .

The Scandalous Truth about Obamacare Is Laid Bare

A government program that is ruined by permitting more choice is not sustainable.

Jeffrey A. Tucker

by  Jeffrey A. Tucker

It’s not just that Obamacare is financially unsustainable. More seriously, it is intellectually unsustainable, even though this truth has been slow to emerge. This has come to an end with President Trump’s executive order.

What does it do? It cuts subsidies to failing providers, yes. It also redefines the meaning of “short term” policies from one year to 90 days. But more importantly–and this is what has the pundit class in total meltdown–it liberalizes the rules for providers to serve health-coverage consumers.

In the words of USA Today: the executive order permits a greater range of choice “by allowing more consumers to buy health insurance through association health plans across state lines.”

The key word here is “allowing” – not forcing, not compelling, not coercing. Allowing. Why would this be a problem? Because allowing choice defeats the core feature of Obamacare, which is about forcing risk pools to exist that the market would otherwise never have chosen. If you were to summarize the change in a phrase it is this: it allows more freedom.

The tenor of the critics’ comments on this move is that it is some sort of despotic act. But let’s be clear: no one is coerced by this executive order. It is exactly the reverse: it removes one source of coercion. It liberalizes, just slightly, the market for insurance carriers.

Here’s a good principle: a government program that is ruined by permitting more choice is not sustainable.

The New York Times predicts:

Employers that remain in the A.C.A. small-group market will offer plans that are more expensive than average, and they will see premiums increase. Only the sickest groups would remain in the A.C.A. regulated risk pool after several enrollment cycles.

Vox puts it this way:

The individuals likely to flee the Obamacare markets for association plans would probably be younger and healthier, leaving behind an older, sicker pool for the remaining ACA market. That has the makings of a death spiral, with ever-increasing premiums and insurers deciding to leave the market altogether.

The Atlantic makes the same point:

Both short-term and associated plans would likely be less costly than the more robust plans sold on Obamacare’s state-based insurance exchanges. But the concern, among critics, is that the plans would cherry-pick the healthiest customers out of the individual market, leaving those with serious health conditions stuck on the Obamacare exchanges. There, prices would rise, because the pool of people on the exchanges would be sicker. Small businesses who keep the more robust plans—perhaps because they have employees with serious health conditions—would also likely face higher costs.

CNBC puts the point about plan duration in the starkest and most ironic terms.

If the administration liberalizes rules about the duration of short-term health plans, and then also makes it easier for people to get hardship exemptions from Obamacare’s mandate, it could lead healthy people who don’t need comprehensive benefits to sign up in large numbers for short-term coverage.

Can you imagine? Letting people do things that are personally beneficial? Horror!

Once you break all this down, the ugly truth about Obamacare is laid bare. Obamacare didn’t create a market. It destroyed the market. Even the slightest bit of freedom wrecks the whole point.

Under the existing rules, healthy people were being forced (effectively taxed) to pay the premiums for unhealthy people, young people forced to pay for old people, anyone trying to live a healthy lifestyle required to cough up for those who do not.This is the great hidden truth about Obamacare. It was never a program for improved medical coverage. It was a program for redistributing wealth by force from the healthy to the sick. It did this by forcing nonmarket risk pools, countering the whole logic of insurance in the first place, which is supposed to calibrate premiums, risks, and payouts toward mutual profitability. Obamacare imagined that it would be easy to use coercion to undermine the whole point of insurance. It didn’t work.

And so the Trump executive order introduces a slight bit of liberality and choice. And the critics are screaming that this is a disaster in the making. You can’t allow choice! You can’t allow more freedom! You can’t allow producers and consumers to cobble together their own plans! After all, this defeats the point of Obamacare, which is all about forcing people to do things they otherwise would not do!

Freedom or coercion: these are the two paths.

This revelation is, as they say, somewhat awkward.What we should have learned from the failure of Obamacare is that no amount of coercion can substitute for the rationality and productivity of the competitive marketplace.

Even if the executive order successfully liberalizes the sector just a bit, we have a very long way to go. The entire medical marketplace needs massive liberalization. It needs government to play even less of a role, from insurance to prescriptions to all choice, over what is permitted to be called health care and who administers it.

Freedom or coercion: these are the two paths. The first works; the second doesn’t.

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.

Trump Pulls the Plug on Private Toll Roads, Centerpiece of Infrastructure Plan

Trump’s reversal on public-private partnerships (P3s) came suddenly to most folks, even inside the beltway, given that Transportation Secretary Elaine Chao was still pushing tax incentives to attract private investment as the core of the Trump infrastructure plan as of August 30. Now the focus becomes how to pay to fix the country’s infrastructure, absent P3s and tolls. While our focus should be on building freeways NOT tollways, let’s start by taking a look at the gas tax and why it hasn’t kept pace with the needs of the driving public; could this be due to political gas tax diversions combined with taxpayer distrust?

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By Terri Hall 

It’s big news for taxpayers, but for the special interests who have been pushing public-private partnerships (P3s) and toll roads as the way to fund $1 trillion in upgrades to America’s infrastructure, not so much. Maybe President Donald Trump realized the political consequences. In any event, he officially pulled the plug on P3s as the centerpiece to his infrastructure plan.

The president said simply, “They don’t work.”

Trump mentioned it in a meeting with members of the House Ways and Means Committee as he met with lawmakers to discuss tax reform. Citing the failure of the Interstate-69 P3 contract done under then-Governor of Indiana Mike Pence, the state recently had to sever the contract, take over the project, and issue its own debt to get it finished.

Interstates like I-69 were conceived as thoroughfare-legs to facilitate the NAFTA Superhighway to enhance global trade routes in North America through the U.S., Canada, and Mexico.

There were a host of problems relying on P3s and federal incentives to attract private investors. First, only projects that generate some sort of revenue attract private investors — hence ‘toll roads’. Second, giving out further federal tax incentives was likely to benefit projects that were already underway, not generate new investment. Plus, the feds have been generously doling out taxpayer-backed loans and bonds to guarantee the private investors’ losses and the track record of failure is well-documented.

P3s also give private investors exclusive, long-term monopolies designed to extract the highest possible toll from the traveling public, while requiring taxpayers to foot the bill for most potential threats to private entity’s profits. For instance, such contracts contain non-compete provisions that limit or prohibit the expansion of free routes surrounding the privatized toll lanes, deliberately slow speeds on the free routes and increase speeds on the toll lanes, force taxpayers to pay the private operators for any uncollectable tolls, and most P3 contracts used public funds to subsidize them (including every single P3 toll project in Texas).

But that’s just the tip of the iceberg.

To read Terri Hall’s full column please click here.

Terri Hall

Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of ten turned citizen activist. Ms. Hall is also a contribuutor to SFPPR News & Analysis of the Conservative-Online-Journalism Center at the Washington-based Selous Foundation for Public Policy Research.

The Numbers Are in: Social Security Robs the Working Poor

The Social Security Administration’s own numbers reveal that a private investment pays more than Social Security.

Tom Eddlem

by  Tom Eddlem

Back in 2011, investment guru Warren Buffett famously complained in the New York Times that his secretaries were paying higher federal payroll tax rates than he was:

Our leaders have asked for ‘shared sacrifice.’ But when they did the asking, they spared me…. what I paid was only 17.4 percent of my taxable income – and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

Buffett used some creative accounting for his numbers; he used only “taxable income,” which means he didn’t count all the deductions his employees were using to write off their income taxes. For middle-class workers making about $75,000 per year, that’s typically a heavy percentage of their income. Moreover, for the tax rates Buffett claimed applied to his assistants, they must have been paid in the range of $200,000 per year or more.

Despite Buffett’s accounting trickery, there was a level of truth to his complaint: the burden of Social Security and Medicare payroll taxes does fall almost exclusively upon the poor and middle classes. And Buffett acknowledged this fact in his New York Times op-ed:

The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.”

The Questionable Benefit of Paying Those Heavy Taxes

Buffett was correct to claim the poor and middle class pay heavy payroll taxes for the Social Security program. But do the poor and middle classes receive benefits from Social Security compared to the “investment” the federal government requires they make?

The Social Security Administration’s website now allows its “customers” to enter income numbers over a career and pull out a precise benefit level. So it’s relatively easy today for anyone to contrast private investments with Social Security benefit levels with an unprecedented level of precision. (This author has run the numbers several times before in the past few decades using the SSA’s PIA calculator application.)

While it has long been known that middle class and wealthy people do not profit by “investing” their money in Social Security compared with a private retirement fund, the impact of Social Security upon a worker trapped in a minimum wage job throughout his career has been left uncalculated – until now.Thus, the following question can be answered authoritatively:

Is it possible for a minimum wage worker to do better putting his money into Social Security than if he were allowed to invest his money in a private fund earning interest at the same rate as the S&P 500?

And the answer is this: No, it’s not possible. In every conceivable scenario, the private fund pays more than Social Security to the minimum wage worker.

The Numbers Don’t Lie

Consider the case of a person who works 50 weeks per year, 40 hours per week at the legal minimum wage, beginning in 1970 and retiring at the end of 2017.

Only the Old Age and Survivors’ Assistance proportion of the Social Security tax can be added to the private fund, not Disability Insurance or Medicare, which in 2017 is 10.6 percent of total income (out of the 15.3 percent total tax imposed upon the self-employed). The worker must purchase a term insurance policy with a private fund to cover the “survivors” part of the risk in the Social Security program, and (to keep things fair) a 0.75 percent “management fee” is deducted from the retirement account annually.

Most couples in that salary range are actually two-income families.

At the end of his career, the minimum wage worker ends up with a retirement fund of $262,551.02 from the wages he otherwise would have paid into the Social Security “trust fund.”

From this account, a person could safely withdraw just over seven percent per year, with the fund replenishing itself in perpetuity without losing value – meanwhile, the S&P has grown at just over 11 percent annually, and inflation has been a little less than four percent during the same last 50 years. That’s an average monthly income of over $1,500, adjusted upwards for inflation over time, it is far more than the $974.00 that the Social Security Administration’s website claims it will pay its customers.

The numbers favor a private account even if one uses favorable circumstances for receiving Social Security, with a single income earner in a two-couple household where the spouse gets half the Social Security benefit of the wage-earner. The spousal benefit increases the monthly Social Security payment to $1,461.00, while the private fund remains the same at $1,579.68.

And this scenario is highly unlikely: A couple with just one worker making the legal federal minimum wage is a rarity; most couples in that salary range are two-income families. In a two-income minimum wage family, the private fund pays $3,159.36 versus a $1,948 monthly benefit from Social Security. In every family scenario, whether single, married with one income or married with two incomes, the difference is that Social Security is cheating poor retirees out of several hundred thousand dollars in benefits (see table below).

Single or Married, Alike

All three family scenarios assume a 2017 bull market with earnings of 10.62 percent increase in S&P 500-based private fund for 2017 (based upon YTD as of August 23). But what if the retirement date is at the bottom of a 2008-level stock market crash? Even in that scenario (in calendar year 2008, nearly 37 percent of the S&P 500’s value was erased by the bear market), every possible permutation of family arrangement makes more total money from the private fund than from Social Security. Whether single earners, two-income couples, and one-income couples, all make more than Social Security in a private fund.

There’s only one artificial scenario that could be constructed where Social Security could claim to be of partial benefit to a poor family. If:

  1. The minimum wage worker retires at the bottom of a 2008-style recession, and
  2. One were to count only monthly payments (not discounting a death benefit of the value of $166,588.62 in the recession-reduced private fund), and
  3. It is a single-income married family.

Then, Social Security pays a slightly higher monthly benefit. Over a typical benefit lifespan – 256 months for women and 215 months for men – Social Security’s monthly payments make up for nearly two-thirds of the death benefit in a private fund.

When the leftist mainstream media reported about Warren Buffett’s column, they focused exclusively upon the income tax proportion of the tax burden. They ignored how Buffett’s column acknowledges that Social Security and Medicare payroll taxes are not “contributions” to a “trust fund” to care for workers, akin to private sector 401k plans, but are instead regressive taxes imposed upon the working classes.

This admission belies a political establish core tenet of faith that goes back to the New Deal, that Social Security serves as an investment to protect poor and middle-class workers and is not as a general revenue tax. Buffett’s essay busted that myth by correctly claiming that Social Security impoverishes working people with general revenue taxation.

But even if one assumes Social Security taxes are an “investment” made by the poor for their retirement like a 401k plan, the numbers provided by the Social Security Administration itself reveal it’s still a financial rip-off for the very poorest of the working poor.

Tom Eddlem

Tom Eddlem

Thomas R. Eddlem is a freelance writer who has been published in more than 20 periodicals, and a high school history and economics teacher. He’s the author of Primary Source American History, available on TeachersPayTeachers.com and his blog is located at teddlem.blogspot.com.

Undo Obama’s Massive Land Grabs

President Obama infamously said, “I’ve got a pen and I’ve got a phone – and I can use that pen to sign executive orders and take executive actions.”

This he did with a vengeance.

One of the most egregious areas he wielded his menacing pen was in expanding federal control over wilderness areas with use of the “Antiquities Act.”

This Act was established in 1906 under President Theodore Roosevelt and was never intended to be a tool used by Uncle Sam to swipe up massive amounts of territory from states and private citizens. As CFACT senior policy analyst Bonner Cohen explains at CFACT.org:

It is easily forgotten that the original intent of the Antiquities Act was to protect archaeological artifacts and sacred sites of Native Americans located on federal land from poaching and other unnatural disturbances. Indeed, the Antiquities Act calls for monuments to be limited to the “smallest area compatible” with protecting the site or object. It what is a complete distortion of the law’s original intent, monuments designations – whether on land or at sea – frequently involve thousands of square miles that are permanently off-limits to almost any form of economic activity.”

Yes, Obama had “the pen,” but now it has been turned over to President Trump … and he should use it to right these wrongs.

Fortunately, there are indications he may be willing to do so. Recently the President’s Interior Secretary Ryan Zinke signaled he’s taking a few positive first steps to roll back the excessive use of the Antiquities Act, but he needs to go much further.

Again from Cohen:

“It was disappointing that Interior Secretary Ryan Zinke’s plans for dealing with national monuments created by previous administrations fell well short of what needs to be done to undo these abuses of the Antiquities Act of 1906. Zinke has proposed eliminating no monuments at all, modifying ten monuments, and narrowing the boundaries of six monuments: the 1.35-million-acre Bears Ears and the 1.9-million-acre Grand Staircase Escalante (both in Utah), the 98,000-acre Cascade-Siskiyou in Oregon, and the nearly 300,000-acre Gold Butte in Nevada, as well as two marine monuments: Pacific Remote Islands and Ross Atoll.”

To step up efforts at reforming the Antiquities Act, CFACT recently joined a coalition of free market organizations in co-signing a letter to President Trump urging him to have Secretary Zinke act more decisively to eliminate and reign in Obama’s national monument land grabs.  We posted it at CFACT.org.

The letter concludes:

Federal law has also been circumvented by the executive branch in designating national monuments.   It is time for this unconstitutional practice to end.”

Some Say GOP Tax Plan Would Raise Taxes. Here’s What They’re Missing.

Since the release of the GOP’s long-awaited tax reform plan, a flurry of commentators have criticized it, saying it is a regressive plan that will raise taxes on a sizable portion of Americans.

What they often fail to mention is that their estimates depend on details of the plan that have yet to be released. As it turns out, different assumptions about those details can dramatically alter the projections of who gets a tax cut under the GOP plan.

For a vast majority of Americans, the main changes they would experience from the plan would be to their income tax rate, the standard deduction, the personal and dependent exemption, and the Child Tax Credit.

So what do we know about how the GOP plan will affect these variables?

1. It would lower individual tax rates.

The GOP’s framework would lower rates and consolidate tax brackets for individuals. The three new income tax brackets (down from seven) are 12, 25, and 35 percent, but the framework does not specify what the income thresholds will be.

The plan also mentions that an additional fourth top rate may be added.

2. It would double the standard deduction.

The framework would almost double the standard deduction. It would do so by collapsing the additional standard deduction and personal exemptions into the one larger deduction available to everyone.

For married joint filers the deduction would be $24,000, and for single filers it would be $12,000. This means taxes would become much easier for many people because they won’t need to itemize or check frivolous boxes.

3. It would expand the Child Tax Credit.

The framework would repeal the personal exemption for dependents, “significantly increase” the Child Tax Credit, and increase the income limits at which the credit currently begins to phase out.

The framework gives no further details on these items.

Taken together, it is still uncertain how these changes will ultimately alter any individual or family’s tax liability. There are other proposed reforms that could also interact with these changes, but that hasn’t stopped commentators from projecting winners and losers.

Other analyses have simply mapped the current tax brackets on to the new rates so that the current 15 percent bracket would now pay 12 percent, the current 25 and 28 percent brackets make up the new 25 percent bracket, and the 33-39.6 percent brackets are consolidated into the 35 percent bracket.

These assumptions are often biased. They keep many Americans paying the same tax rate and actually project an increase in some people’s rate. It’s very unlikely that these conservative lawmakers intend to do that.

If we assume different income thresholds that are entirely reasonable, we find very different results.

One could, for instance, raise the new income thresholds by 15 percent so that more people would pay a lower tax rate. Lower taxes are, after all, a key stated goal of the plan.

Using The Heritage Foundation Individual Income Tax Model, we estimated what these changes—along with the other details released thus far—would mean for taxpayers. In particular, we modeled:

  • 15 percent higher income thresholds for the new brackets.
  • Doubling of the standard deduction.
  • Elimination of all personal exemptions.

With these three changes, some of our modeled income groups would end up paying slightly more in taxes because the lower rates and higher standard deductions don’t fully compensate for getting rid of the dependent exemption.

But increasing the Child Tax Credit by a modest $100 flips all of our income groups into the black. And that’s even without increasing the credit’s income limits.

Pairing this with the new larger standard deduction and lower tax rates, most families would end up paying less in taxes than they currently do. In fact, every income group would pay a lower tax bill.

Those households with adjusted gross income between $100,000 and $125,000, for example, would see a significant drop in their tax bill of about 6 percent.

Those with adjusted gross income below $50,000 would receive the smallest tax savings because they already pay very little in taxes. However, the Child Tax Credit would likely increase by $500 or more, which would largely benefit this group.

Moreover, other changes to state and local tax deductions and other provisions would likely shift some of the gains for upper-income earners toward middle- and lower-income earners.

(Of course, it is near impossible to enact pro-growth tax reform without some positive benefits for the individuals and small business that pay the majority of taxes, and the top 5 percent of taxpayers pay 60 percent of all federal income taxes.)

These are perfectly reasonable assumptions to make about the details of the GOP plan, given the political promises that have been made. Tax cuts for middle-class Americans are going to be real.

There are also several other possible changes that would alter our analysis, such as eliminating the state and local tax and municipal bond interest deductions (along with some other itemized deductions), creating the newly proposed nonrefundable credit of $500 for non-child dependent care, and nixing the alternative minimum tax.

Regardless of whether these changes occur, the GOP plan makes a huge stride by expanding the standard deduction. Given that 70 percent of Americans already take this deduction, our results show that the GOP plan may very likely result in a tax cut for Americans across the board.

COMMENTARY BY

Portrait of Kevin Dayaratna

Kevin D. Dayaratna specializes in tax, energy and health policy issues as senior statistician and research programmer in The Heritage Foundation’s Center for Data Analysis. Read his research. Twitter: 

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.

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 of House Speaker Paul Ryan, R-Wis., making remarks as the GOP introduces its tax reform framework is by Ron Sachs/CNP/AdMedia/Newscom)

Taxpayer funded resettlement contractor helps organize march opposing Trump ‘Muslim ban’

I continue to be amazed that a quasi-government agency receiving millions of dollars from the US taxpayer is a leading agitator in marches against the hand that feeds them—in this case the Trump Administration.  Chutzpah! I suppose!

The Hebrew Immigrant Aid Society is helping get people out to the #NoMuslimBanEver rally scheduled for a week from tomorrow—October 18th—in Washington, DC.

mark-hetfield-hias logo

Before I get to their latest appeal for marching bodies, here is just a reminder of their financial position.

According to the most recent Form 990 for 2016, they had income from government grants to the tune of $24,493,763 in a category (p. 9) of contributions, gifts and grants of $41,855,465 putting them at 58% funded by the US taxpayer.

58% of course isn’t as bad as some contractors***Episcopal Migration Ministries is 99.5% funded from the US Treasury, but it is still a significant chunk of change.

According to that same Form 990, CEO Mark Hetfield pulls down a salary, benefits and other compensation package of $343,630 (p. 8).

If the nine contractors*** were truly private non-profit charitable organizations, salaries would not be any of our business, but when organizations like these (really quasi-government agencies) receive taxpayer dollars, it becomes our business.

It seems to me that HIAS is always out as the leader of the pack when it comes to demonstrating against the Trump Administration and filing lawsuits to stop them, all the while taking money from Washington (from us!).

Here they are again!

Screenshot (942)

Screenshot (943)

Screenshot (944)

You should know that HIAS has long supported a ‘religious test’ known as the Lautenberg Amendment that gave preferential treatment to Jews and other religious minorities coming from places like Russia and Iran.

The above is a screenshot so the links are not ‘hot.’  Go to Facebook to learn more about the #NoMuslimBanEver event.

I sure would like to know who is behind this event??? Muslim Brotherhood? CAIR?

***For new readers, these are the nine major federal refugee resettlement contractors. There are over 350 subcontractors working for them throughout the country.  Basically they pass federal grant money through their headquarters to their subcontractors and keep a certain amount of it for their headquarters/office/travel/salaries etc.

HIAS has 20 subcontractors, here they are.

It would be important to find out if the other eight contractors (besides HIAS) will be marching next Wednesday.

RELATED ARTICLES:

Scranton, PA school district struggling under weight of needy immigrant students, working poor

New York Times spins Twin Falls rape case story

Refugee resettlement contractors get platform to complain at Christian Post, but….

Donors of Anti-Trump ‘Resistance’ Group Revealed

First 98 of President Trump’s refugees have arrived, see where they went

The new fiscal year (2018) is now ten days old and we see that the first of Secretary of State Rex Tillerson’s and President Trump’s proposed 45,000 refugees have arrived!

According to Wrapsnet:

Top ethnic groups arriving in the group of 98 are from the DR Congo (25), Bhutan (21) and Somalia (16).  For our friends in Minnesota know this: the Somalis were distributed to Missouri, New Hampshire, Washington and Wisconsin, but, as you know, they can and often do move within months to be with larger groups of Somalis in Minnesota, Ohio and in San Diego.

NOTE: 26 of the 98 (34%) are Muslims if you count the 4 Ahmadiyya from Pakistan who went to Maryland.

Here is where the first 98 were placed:

Screenshot (947)

Screenshot (948)

States in light blue received refugees.

Top five refugee resettlement states are Michigan, Ohio, Iowa, Missouri and New Hampshire.

Alaska and Hawaii received no refugees.

RELATED ARTICLES: 

Concerned citizens in St. Cloud, MN ask for a moratorium on refugee resettlement to their city

Supreme Court won’t hear ‘travel ban’ case, but refugee portion not addressed

Scranton, PA school district struggling under weight of needy immigrant students, working poor

New York Times spins Twin Falls rape case story

Refugee resettlement contractors get platform to complain at Christian Post, but….

Donors of Anti-Trump ‘Resistance’ Group Revealed

EDITORS NOTE: The featured image of Secretary of State Rex Tillerson and President Trump is by AP Photo/Alex Brando.

Refugee Admissions Report: U.S. tops list in permanent resettlements costing $1 trillion

Screenshot (913)

Click on the image to read the full Refugee Admissions Report to Congress.

I have to admit, I haven’t read it yet, but, for diehard grassroots investigators, know that the report is a treasure trove of information on the US Refugee Admissions Program and Trump’s 45,000 refugee ceiling *** for the year that began this past Sunday.

Don’t miss the tables at the end, often more useful than all the verbiage about why we need to save this or that ethnic group by hauling them to your town.

Here is the table that shows that the US admits the vast majority of permanent refugees.

Screenshot (914)

Be sure to keep this so that the next time some Open Borders pusher says that Lebanon, Turkey, Germany and Jordan are doing more, remind them that ours are PERMANENT, not temporary residents. (note that this table uses calendar year numbers when we usually use fiscal year)
And, here is a table showing the costs of just the resettlement (this year, FY18, for up to 45,000 refugees).

Come to think of it, when those economic studies are done to ostensibly show how much refugees benefit America, do they ever show that it will cost the US taxpayer over $1 BILLION just to get 45,000 bodies in here?

Screenshot (915)

Read the footnotes!

Please note that the anticipated costs do not include taxpayer funding for: educating the kids, Medicaid, some forms of cash assistance, food stamps, housing subsidies, interpreter costs, criminal justice system costs, etc.

Again, go here for the full report.  One of the things I’ve noted over the years is that the report has no date on the cover.  I can only guess that is because it is always very late and they don’t want any record of the fact that they skirt the law always on the whole determination/consultation process.

***Did you see that the Federation for American Immigration Reform called this a “responsible” number!  Have friends like these been in the swamp too long?

Readers should know, that until very recently FAIR has not taken much interest in the UN/US Refugee Admissions Program.

Trump’s Picks for Fed Chief, Governors an Opportunity to ‘Drain Swamp’

President Trump can immediately reshape Federal Reserve policy in a way that most presidents simply cannot. 

When President Donald Trump took office, there were three vacancies on the Federal Reserve’s Board of Governors. Then, unexpectedly, Fed Vice Chairman Stanley Fischer resigned, effective “on or around October 13, 2017.”

Throw in the fact that Fed Chair Janet Yellen’s term as chairman expires Feb. 3, 2018, and it’s very easy to see why so many conservatives have been excited about Trump fighting the cabal of elites running Washington.

Trump could easily appoint five of the seven Fed board members, including the chairman, during a single term in office. That sort of influence means the president can immediately reshape Federal Reserve policy in a way that most presidents simply cannot.

Because the Fed has been navigating one of the most controversial periods in its history—a fivefold increase in its balance sheet, massive credit allocation to the housing and government sectorsand a major expansion of its regulatory reachconservatives are paying particularly close attention to the pick for the next Fed chairman.

On Friday, the president told reporters he expects to nominate the next Fed chairman in two to three weeks, so conservatives may not have to wait much longer to see how serious the president is about “draining the swamp.”

When it comes to the Fed, a president who talks about draining the swamp and transferring power from Washington, D.C., back to the American people makes many folks­—especially moderate politicians—a bit nervous. And caution is certainly in order, because the Fed exerts so much control on the flow of money, the means of payment for virtually all goods and services.

But one of the main reasons conservatives care about a change in direction is that decades of monetary policy experiments have failed to rid the U.S. of financial crises or to appreciably tame the business cycle. Yet, through it all, politicians have remained content to give the Fed more power and authority. (Dodd-Frank is only the latest example.)

Continuing on this path is the polar opposite of giving power back to the American people.

If the president is serious about transferring power out of Washington, so that people can better control their own lives, he has many well-known scholars to pick from who would signal a shift in direction.

The ideal candidates for the Fed board are those who had nothing to do with creating the Troubled Asset Relief Program, or implementing the Fed’s so-called “emergency” loans during the 2008 crisis. They are those who have openly acknowledged Dodd-Frank did virtually nothing to address the real causes of the 2008 crisis and that more top-down regulation from Washington is the wrong approach.

These candidates would believe in most, if not all, of the following ideas:

On Bailouts

On Accountability

On the Limits of Monetary Policy

On Optimal Monetary Policy

On Maintaining Neutrality in the Economy

If Trump really wants to transfer power away from Washington and give it back to the American people, he will infuse the Fed’s Board of Governors with a major dose of new thinking.

If the president uses this opportunity wisely, he can ensure that the Fed board puts less faith in the government’s ability to fine-tune the economy and ensure the safety and soundness of financial markets. He can prove to conservatives that his campaign promises were more than rhetoric.

COMMENTARY BY

Portrait of Norbert Michel

Norbert Michel studies and writes about housing finance, including the reform of Fannie Mae and Freddie Mac, as The Heritage Foundation’s research fellow in financial regulations. 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 modified featured image of President Trump is by Chris Kleponis – Pool via CNP/Newscom. Americans need an alternative to the mainstream media. But this can’t be done alone. Find out more >>

Massive $20 million food stamp fraud bust in Florida, this time…

There is so much that could be done to stop the fraud including disallowing ‘mom and pop’ convenience stores from accepting EBT cards.

If you are a longtime reader, you know that following food stamp fraud cases is a side interest of mine. Go here to my large archive on past cases.  I haven’t written much lately on the topic because reporting on the refugee program is about all I can handle.

I continue to urge one of you to write a blog solely on the topic of immigrant fraud such as food stamp fraud and other welfare fraud—a topic that could keep you busy every day and do our country a great service.

And, besides, your blog could be hopping (and fun to write!) because I suspect we will see more crackdowns now that the Justice Department is run by Jeff Sessions.

The type of fraud mentioned here in the Breitbart story (called trafficking) works like this: Customer with SNAP benefits comes in to store wanting cash (for drugs?). Manager or owner pays customer 50 cents on the dollar in cash and then seeks reimbursement from the government (you!) for the full $1 dollar supposedly spent on food.

Here is Breitbart:

Twelve Floridians have been charged with running an alleged $20 million food stamp fraud scheme in one of the “largest” food stamp fraud crackdowns in history, according to the Justice Department.

Federal prosecutors told the Miami Herald that the 12 defendants who reportedly defrauded the federal government of $20 million were charged with food stamp fraud, wire fraud, and conspiracy to commit wire fraud.

The list of those charged include Mohammed Alobaisi, 37; Mohammad Alteen, 33; Joe Ann Baker, 56; Reynold Francois, 38; Omar Hajje, 43; Jalal Hajyousef, 42; Andy Javier Herrera, 24, and his father, Javier Herrera, 49; Ihab Hassouna, 44; Maria Jerdana, 36; Hasan Saleh, 59; and Yousef “Joe” Homedan Zahran, 60.

“In this instance, eight small convenience stores in South Florida committed a staggering amount of fraud in a relatively short amount of time,” said Karen Citizen-Wilcox, special agent in charge, U.S. Department of Agriculture-Office of the Inspector General, in a press release.

[….]

Store owners and employees who commit food stamp fraud face steep consequences.

Continue here.

No, I would not call a few months in jail “steep consequences.”  And, how does someone pay restitution when they have sent your tax dollars out of the country (which is often the case)?

RELATED ARTICLE: Austria: Burqa ban promotes ‘acceptance and respect of Austrian values’

Give Everyone a Raise through Payroll Tax Cuts

Income tax cuts are great, but it’s not the best way to help lower- and middle-class workers.

James Capretta

by  James Capretta

Republicans are just getting started with their effort to reform individual and corporate taxes, but already it is possible to see warning signs ahead. Opponents of reform say the effort will mainly benefit high-income households, who don’t need the help. They ignore the effect lower marginal rates will have on economic growth and job creation.

Tax reform could falter if the public perceives it as a giveaway to the rich. Republicans can partially blunt the effectiveness of these attacks by including in their plan a reduction in payroll tax rates, which would directly help the middle class.

Why Payroll Taxes?

The payroll tax is a much heavier burden on the middle class than income taxes. According to the Tax Policy Center, 62 percent of all taxpaying households paid more in payroll taxes than income taxes in 2017; and 67 percent of households with incomes below $100,000 in annual income paid more in payroll taxes. The average effective payroll tax rate for households in the middle quintile of the income distribution was 8 percent in 2016, well above the average effective rate of 3.5 percent for income taxes.

In the past, policymakers have been wary of cutting payroll taxes because the revenue is used to pay for Social Security and Medicare Hospital Insurance (HI) benefits, and both programs are projected to run short of funds in the future. The current tax rate for Social Security is 12.4 percent of wages, split evenly between workers and their employers, up to a maximum of $127,200 in 2017. Social Security has an unfunded liability of $12.5 trillion over the next 75 years.Workers and employers also pay a combined 2.9 percent tax for Medicare, and there is no limit on the amount of wages subject to the tax. High earners — individuals who earn above $200,000 and couples who earn above $250,000 — pay an additional Medicare tax of 0.9 percent.  The Medicare HI trust fund has an unfunded liability of $3.3 trillion over the next 75 years.

In 2011 and 2012, President Obama supported and Congress enacted a 2 percentage point reduction in the employee portion of the Social Security payroll tax, reducing revenue by about $100 billion in 2011 and slightly more in 2012. The law transferred an identical amount of funds from the general fund of the Treasury to Social Security to prevent depletion of the program’s trust funds.

Congress could enact another payroll tax rate cut of 1.5 to 2 percentage points without depleting the Social Security or Medicare trust funds and without relying on another transfer of funds from the Treasury. Tax reform is supposed to be about cutting tax rates as well as broadening the tax base by closing loopholes and limiting tax breaks. There are a number of tax breaks that reduce the amount of payroll tax revenue collected by the government that could be narrowed to help pay for a cut in the payroll tax rate.

How to Do It

For starters, the exclusion of employer-paid health-insurance premiums from taxation will reduce payroll taxes by $1.8 trillion over the period 2017 to 2026. Capping the amount that is tax-free at the 75th percentile of plan premiums would increase payroll tax revenue by about $72 billion over 10 years. In addition, employer-paid premiums for disability and other income-replacement programs are excluded from the taxable compensation of workers.  Limiting that exclusion could provide at least another $100 billion in payroll tax revenue over 10 years. In a large tax reform package, there are likely to be additional opportunities to increase payroll tax collections by broadening the tax base.

Further, the full benefits of a payroll tax cut could be limited to households with incomes below a certain threshold, such as $75,000 per year. (The income tax system could gradually recapture lost payroll tax revenue from households with higher incomes.) The tax cut could also be time-limited in the initial legislation, so as to fit within available offsetting revenue increases, and then extended later as more offsets were identified.A cut in the payroll tax rate would be good for workers. A 2 percentage point reduction in the total tax would increase the after-tax income of a household with $50,000 in earned income by $1,000. Cutting payroll taxes would also boost economic growth by encouraging more work. A cut in the tax rate could, at least in theory, reduce the supply of labor by boosting the income of workers who could then substitute more time off for time at work. But there is substantial evidence that high marginal tax rates on labor generally have the opposite effect: discouraging work by reducing its value to workers with high taxes.

Some skeptics of cutting payroll taxes argue that because Social Security and Medicare benefits are partly based on what an individual earns while working, the economic value of such a cut is lessened, as workers equate payroll taxes with contributions toward their retirement. But the benefits owed to workers under Social Security are based on the amount of wages earned by the worker, not the taxes paid on those wages. Consequently, a cut in the payroll tax rate would in no way lessen future Social Security benefits. Further, the opaqueness and complexity of the Social Security benefit formula make it near impossible for the average worker to make a sensible connection between what he earns and what he will get in retirement. (There is often very little connection, anyway.) Medicare benefits are in no way tied to the amount of taxes paid or even to overall earnings. Instead, workers must meet a minimum threshold of wages over a 10-year period to become eligible for coverage at age 65.

By focusing tax reform on the individual and corporate income tax systems, Republicans have made their task more difficult than it should be. The federal income tax is already progressive; low and moderate wage households pay little in income taxes. But, in relative terms, they still pay a lot of payroll taxes. Cutting that tax is the best way to deliver real tax relief to families that need it most as well as to increase the value of their work effort.

Reprinted from American Enterprise Institute

James Capretta

James Capretta

James C. Capretta is a resident fellow and holds the Milton Friedman Chair at the American Enterprise Institute, where he studies health care, entitlement, and US budgetary policy, as well as global trends in aging, health, and retirement programs. In 2015 and 2016, he directed two major studies: one on reforming US health care according to market principles and consumer choice, and the second on reforming major federal entitlement programs to promote greater personal responsibility, focus limited resources on those most in need, and lower long-term federal expenditures.

The Humanitarian Hoax of Sanctuary Cities: Killing America With Kindness

The Humanitarian Hoax is a deliberate and deceitful tactic of presenting a destructive policy as altruistic. The humanitarian huckster presents himself as a compassionate advocate when in fact he is the disguised enemy.

Obama, the humanitarian huckster-in-chief, weakened the United States for eight years by persuading America to accept his crippling politically correct sanctuary city policies as altruistic when in fact they were designed to destabilize and destroy civil society. His legacy, the Leftist Democratic Party and its “resistance” movement, is the party of the Humanitarian Hoax attempting to destroy American democracy and replace it with socialism.

The term “sanctuary city” originated in the 1980’s when San Francisco passed a city ordinance forbidding city police or city magistrates from assisting federal immigration officers in enforcing immigration policies that denied asylum to refugees from Guatemala and El Salvador. The mission of the sanctuary city was to protect innocent refugees from deportation – although these immigrants were in the U.S. illegally they had not committed any other crimes.

Today sanctuary cities are actually sanctuary jurisdictions because they include cities counties and states. Over 300 sanctuary jurisdictions exist in America today actively hindering federal authorities from seizing illegal criminal aliens, rapists, murderers, terrorists, and drug dealers for deportation.

The shocking murder of 21 year old Kate Steinle on July 1, 2015 publicized the danger of sanctuary jurisdictions. The shooter, Juan Francisco Lopez-Sanchez, an illegal immigrant from Mexico with seven felony convictions had been deported five times and intentionally sought shelter in San Francisco. Yet officials in “sanctuary city” San Francisco refused to turn him over to federal authorities for deportation and instead released him into society enabling him to kill Kate Steinle.

The three young Muslim migrant boys who savagely raped and urinated in the mouth of an innocent five year old girl in Twin Falls, Idaho last year were protected as well. No jail, no deportation, in fact these monsters were shielded by the mainstream media and local city officials who tried to cover up the case and pretend that Twin Falls was a model for multiculturalism. Wendy Olson, Obama-appointed U.S. attorney for Idaho stunned the country by threatening to prosecute Idahoans who spoke out about the heinous crime in ways SHE considered “false or inflammatory.” Judge Thomas Borresen issued an equally stunning gag order that denied the right of anyone in the courtroom to speak about the sentencing even AFTER the case ended.

Twin Falls is one of two Muslim refugee relocation centers in Idaho. Rather than identifying themselves as a “sanctuary city” Twin Falls has chosen the equally disingenuous name of “welcoming city” and declared themselves to be a “neighborly community.” REALLY? Protecting rapists and censoring free speech is definitely not neighborly for the victims!

The word sanctuary implies safety from a threat – it does not mean shelter for immigrant criminal felons, rapists, murderers and terrorists who threaten the safety of law abiding citizens. Why would any law abiding citizen endorse the protection of these criminals whether they are illegal aliens or legal citizens? The answer lies in the active participation by the mainstream media in the humanitarian hoax of sanctuary cities. The media has deliberately romanticized sanctuary cities as humanitarian havens for the oppressed instead of honestly reporting them as despicable safety zones for criminal aliens. The colluding media has duped the trusting American public and exploited their compassion and good will.

The original mission of sanctuary cities has been perverted from the protection of innocent refugees into the protection of guilty criminal aliens at the expense of public safety. Sanctuary cities in America continue to flagrantly defy the law. Thirty years after San Francisco became the first sanctuary city California seeks to become the first sanctuary state.

The protection of illegal aliens from deportation incentivizes illegal entry into the U.S. which has enormous economic consequences as well. Illegal aliens overload our welfare system, cost American taxpayers a whopping $116 BILLION, and rob legal citizens of their jobs.

Obama gave sanctuary cities the freedom to ignore detention orders from ICE through his own Priority Enforcement Program which allowed local agencies to ignore ICE notifications of deportable aliens in their custody. Why? The Leftist Democrat Party under Obama supported sanctuary cities by ignoring the 1996 law 8 U.S.C. § 1373 that repealed sanctuary city policies? Why?

If you want to know the motive look at the result. Increasing the number of illegal aliens:

  • Secures more Democrat legal and illegal votes for the Leftist agenda through chain migration.
  • Creates social chaos by importing populations with hostile cultural norms.
  • Creates divisiveness by taking American jobs.
  • Alienates legal citizens who receive far fewer government benefits.
  • Eventually collapse the economy of sanctuary jurisdictions.

Finally, in July, 2016 Republican Representative John Culberson-TX, Chairman of the Commerce, Justice, and Science Committee on Appropriations took action against the danger and sent a letter to the DOJ demanding federal law enforcement grants be denied to cities not in compliance with the 1996 law 8 U.S.C. § 1373 that repealed sanctuary city policies.

During the five years from 2011-2016 local and state governments had received over $3.4 BILLION in federal law enforcement grants. The Culberson choice was between receiving billions of dollars in federal law enforcement grant money or protecting dangerous illegal criminal aliens. Sanctuary jurisdictions could no longer do both.

Sanctuary jurisdictions doubled down and continue to defy the law.

No-go zones are geographic areas within a country that flagrantly disregard the laws of the country. No-go zones establish a two-tier system of justice within a country because they observe a different set of laws. All across Europe Islamists have established religious no-go zones that recognize Islamic sharia law exclusively. All across America Leftists have created lawless sanctuary jurisdiction that flagrantly defy federal law.

People will stand quietly and peacefully in long lines until one person jumps the line. It is a fascinating social dynamic that as long as members of a group abide by the same rules the consequence is harmony. It is the unfairness of the line-jumper that creates anger and social chaos. Social chaos is the goal of the Leftist/Islamist axis that supports the two-tier system of justice created by secular sanctuary jurisdictions and religious no-go zones.

The goal and the underlying motive of the globalist elite’s campaign to destroy America from within is the imposition of one-world government. Obama is the primary globalist huckster. American democracy is the single greatest existential threat to one-world government and President Donald Trump is America’s leader. The globalist elite are desperate to stop Trump because if Obama’s Leftist/Islamist resistance movement is exposed as their deliberate political tactic to destabilize and destroy America it leaves the globalist elite without their primetime huckster to continue marching America toward anarchy and social chaos.

If the globalists are successful the world will be returned to the dystopian existence of masters and slaves because a willfully blind American public was seduced by the Humanitarian Hoax of sanctuary cities. The Humanitarian Hoax will have succeeded in killing America with “kindness.”

Sanctuary List

States

California
Connecticut
New Mexico
Colorado

Cities and Counties

California

Alameda County
Berkley
Contra Costa County
Los Angeles County
Los Angeles
Monterey County
Napa County
Orange County
Orange County
Riverside County
Sacramento County
San Bernardino County
San Diego County
San Francisco County
San Mateo County
Santa Ana
Santa Clara County
Santa Cruz County
Sonoma County

Colorado

Arapahoe County
Aurora
Boulder County
Denver County
Garfield County
Grand County
Jefferson County
Larimer County
Mesa County
Pitkin County
Pueblo County
Routt County
San Miguel County
Weld County

Connecticut

East Haven
Hartford

District Of Columbia

Washington

Florida

Alachua County
Clay County
Hernando County

Georgia

Clayton County
DeKalb County

Iowa

Benton County
Cass County
Franklin County
Fremont County
Greene County
Ida County
Iowa City
Iowa City, Johnson County
Jefferson County
Marion County
Monona County
Montgomery County
Pottawattamie County
Sioux County

Illinois

Chicago
Cook County

Kansas

Butler County
Harvey County
Sedgwick County
Shawnee County

Louisiana

New Orleans

Massachusetts

Amherst
Boston
Cambridge
Lawrence
Northhampton
Somerville

Maryland

Baltimore
Montgomery County
Prince George’s County

Minnesota

Hennepin County

Nebraska

Hall County
Sarpy County

New Jersey

Middlesex County
Newark
Ocean County
Union County

New Mexico

Benalillo
New Mexico County Jails
San Miguel

Nevada

Washoe County

New York

Franklin County
Ithaca
Nassau County
New York City
Omondaga County
St. Lawrence County
Wayne County

Oregon

Baker County
Clackamas County
Clatsop County
Coos County
Crook County
Curry County
Deschutes County
Douglas County
Gilliam County
Grant County
Hood River County
Jackson County
Jefferson County
Josephine County
Lane Countyn
Lincoln County
Linn County
Malheur County
Marion County
Marlon County
Multnomah County
Polk County
Sherman County
Springfield
Tillamok County
Umatilla County
Union County
Wallowa County
Wasco County
Washington County
Wheeler County
Yamhill County

Pennsylvania

Bradford County
Bucks County
Butler County
Chester County
Clarion County
Delaware County
Eerie County
Franklin County
Lebanon County
Lehigh County
Lycoming County
Montgomery County
Montour County
Perry County
Philadelphia
Pike County
Westmoreland County

Rhode Island

Providence, Rhode Island
Rhode Island Department of Corrections

Texas

Dallas County
Travis County

Virginia

Arlington County
Chesterfield County

Vermont

Monteplier
Winooski

Washington

Chelan County
Clallam County
Clark County
Cowlitz County
Franklin County
Jefferson County
King County
Kitsap County
Pierce County
San Juan County
Skagit County
Snohomish County
Spokane County
Thurston County
Walla Walla County
Wallowa County
Whatcom County
Yakima County

Wisconsin

Milwaukee

EDITORS NOTE: This column originally appeared on Goudsmit Pundicity