Taxes Archives - Page 68 of 104

Too Rich To Tax

October 26, 2017/in Commentary, Culture War, Policy, Politics, Regulation, Taxes/by Rod Eccles

There is an argument going on in Washington, D.C. that affects each and every one of us. I am not talking about Obamacare, although that does affect each and every one of us. And I am not talking about security issues such as the boarder wall or enhanced check points at air ports, although these, too, affect each and every one of us.

I am talking about taxes. Yes the talk about taxes has begun anew in D.C. Republicans say cut taxes. Democrats say any cut only benefits the rich. Both parties say tax cuts must be paid for. I don’t know how that is an actual tax cut if you have to “pay” for it with other taxes.

Republicans say, cut spending. Well some of the Republicans say cut spending. Democrats and many Republicans say raise other taxes to pay for income tax cuts. Again, that is a shell game and not a tax cut.

Government at every level simply tells the citizens of their jurisdiction that they must do with less because government refuses to do with less. In fact, government often says it cannot do with less. So they raise your taxes and then expect you to be grateful that they raised them by a small 2% instead of the 5% or 10% they really wanted.

Sometimes government is “nice”. They don’t raise taxes. They raise user fees, licenses, registrations, tags, etc. The reality is, if government is charging it, if government is collecting it, then it’s a tax. Name it whatever you wish but understand its still a tax. And a tax is a tax no matter what name you give it.

Not to mention the hidden taxes everywhere you turn. Fuel taxes. Cell phone taxes. Internet Service Provider taxes. Cable TV taxes. Electric power taxes. You get the point.

And sometimes there is a tax before the tax. Or a tax on top of the tax. Its usually known as a surcharge. Yea, gas for your car has surcharges. So does the heating oil for your home.

Oh, and lets not forget the behavior taxes. Tobacco taxes, for example. The government tells us these taxes are to get us to stop using tobacco. So when Americans stop using tobacco, the government says they are losing too much money that they got used to having when they first implemented those taxes.

So what do they do? They raise the tax on tobacco and then propose new taxes. Taxes on sugary soda’s. Taxes on sugary and salty snacks. You get the point.

How about your gas tax? You know the massive taxes you pay every time you fill up the gas tank on your motor vehicle. The federal rate is about 18 cents per gallon. By the way, oil companies usually earn less than that rate per gallon as profit. So right off the bat, the federal government earns more off every gallon of gas than the companies that drill, transport, refine, distribute and sell it.

Now don’t forget to add your state taxes to the mix. The combined federal and state rate on a gallon of gas goes from a low of about 26 cents in Alaska to a high of nearly 70 cents in New York. I bet you thought California was the highest. They are a very close second at about 69 cents. The Hawaii comes in at about 68 cents.

That does not include local taxes in some jurisdictions. And that does not include the taxes paid on crude oil. When you add up all the taxes that you pay when you put a gallon of gas in your gas tank, in some states you are paying over $1.00. So if gas in your area is selling for around $2.50 per gallon, understand the oil company is only getting about $1.50 or less.

And if you think you can get around this tax by using a more efficient vehicle or buying or using a vehicle that doesn’t even use gas, you better think again.

There are those in government that are putting out a call to tax you on the total miles you drive because gas tax revenue is falling due to more efficient vehicles on the road. You are pumping less gas. Which means you are keeping too much of your money.

Yet every time someone seriously proposes cutting taxes we all pay, someone else says its only a tax cut for the rich. What they are really saying is that they don’t want you to keep more of your own money. So they hide behind the false notion that only the rich will benefit.

Who cares? If the rich earn what they earn, how does it make my life better if government taxes them more? It doesn’t. But since they don’t get a tax cut, then neither do the rest of us poor slobs who more often than not open our wallets to find them empty.

Spread the misery right? How about we spread the prosperity for a change. Its time for government to do with less money for a change.

Don’t you agree?

Obamacare Subsidies Are Unconstitutional

October 24, 2017/in Economy, Healthcare, Policy, Taxes, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

The subsidies for Obamacare were never constitutional, and we shouldn’t ignore that just because Trump got rid of them.

by Gary M. Galles

Last week, President Trump issued an executive order instructing the heads of Health and Human Services and the Treasury to stop making ACA subsidy payments to 6 million people who qualified for them.

Calumny and challenges quickly followed. Attorneys general in 18 states quickly sued that the order was unjustified. That same group has now also asked for a restraining order to stop it. California Attorney General Xavier Becerra, one of the 18, called it irresponsible and illegal.

Blowing Constitutional Smoke

Trump’s challengers are blowing constitutional smoke. Every federal program requires two steps before it can spend money. Congress must authorize it and appropriate the money for it. Both steps are necessary. And the Constitution could not be clearer on the second step: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” However, the money for the ACA subsidy payments was never congressionally authorized.

So where did the subsidy money come from? President Obama simply ignored the constraints of the Constitution when it got in his way. He instructed the heads of Health and Human Services and the Treasury to divert money appropriated for other programs, but he left unspecified which programs were to be cut. Why leave that unspecified? If a specified program was raided, Congress and the beneficiaries of that program would have a clear cause of action to prevent it. It could be judicially enjoined immediately. But somehow, Obama’s failure to specify where funds would come from, even though every possible diversion would be unconstitutional, and delegation of the dirty work to cabinet members was supposed to shield the President and his signature legislation from constitutional scrutiny long enough (given the slow-grinding wheels of justice) to make it a fait accompli.After that, the bet was that the subsidies would be politically impossible to undo, even if the courts eventually ruled against them, because members of the House and Senate would then authorize the money to continue the subsidies, too afraid of the electoral consequences of taking away what millions of people had already been given unconstitutionally.

Supporters of that game plan to finalize getting around the Constitution also chimed in. For instance, law professor Nicolas Bagley (“Trump’s disastrous war on the ACA,” Los Angeles Times, 10/16) advocated that we should just ignore the violation of the Constitution. Even though the administrative decision to commit subsidy funds from other programs when Congress wouldn’t appropriate the money was known to be unconstitutional, he argued that we should ignore that, because he claimed Trump’s “constitutional rhetoric is pure pretext” to sabotage the ACA. That is, we should just fall in line with Obama’s illegal administrative commitments because Trump’s closer adherence to the Constitution than law lecturer Obama lines up with his belief ACA is a bad deal. In other words, Trump’s opposition to ACA justifies maintaining Obama’s constitutional violation in implementing the ACA.

Constraining Government

Such a conclusion may deserve a place in a “how not to interpret Constitutional law” illustration, but it does not deserve serious consideration. However, that argument, and the plan it supports, seems to be winning the day. The subsidies that millions have gotten used to having already hardened into a sense of entitlement, un-swayed by inconvenient Constitutional restraints, which, with the flames fanned by Democrats, have cowed many ACA opponents into proposals to provide the money (of course, “just temporarily,” even though, as Milton Friedman pointed out long ago about New York city’s “temporary” World War II rent controls, “there is nothing so permanent as a temporary government program”).What we are seeing is another lesson in the art of creating an end run around the Constitution’s protections for Americans against their government overstepping its enumerated powers. And it is hardly the first time, even for the ACA. Remember the penalties for not having insurance under the ACA plan? It was emphatically claimed to not be a tax, but a regulation (and hence not counted against the ACA in fiscal scoring), but Chief Justice Roberts’ 5-4 majority decision found the ACA constitutional only because it really was a tax, which Congress has the power to impose, when a regulation to mandate that Americans must purchase something would have been unconstitutional.

With such a vivid current illustration of the evisceration of the Constitution joining many more that we have already seen, Americans should be learning (or, perhaps better, re-, re-, re-, re-learning) a very important lesson on the importance of keeping government within its Constitutional powers to protect our freedoms from abuse at its hands. However, it remains to be seen whether we will.

Gary M. Galles

Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). He is a member of the FEE Faculty Network.

Ten Facts and Ten Myths on Climate Change

October 24, 2017/in Culture War, Environment, Policy, Politics, Science, Taxes, Waste, Fraud and Abuse/by Lyle J. Rapacki, Ph.D.

I believe each of us has a responsibility to NOT trash the earth and our joint environment. Think about this even with such small objects like throwing cigarette butts, gum wrappers, matches, gum, etc., etc. So all the more that our elected representatives should take caution with larger items that could truly adversely impact our environment.

But the Climate Change Acolytes who are very quick to shout “the sky is falling” and “the oceans are rising” are participants in one of the largest con-games ever produced.

The climate change debate was formulated by Globalists in the late 1970s for political and monetary reasons, not for concern about the air we (they) breathe. Orchestrating an emotional even hysterical response followed by the manipulated giving of funds leading to the creation of a political platform cultural Marxists could capitalize on is the real goal, the real purpose for producing climate scare.

When you review the easy to follow data below, the reality of the mass manipulation becomes all the more evident.

Global Warming: Ten Facts and Ten Myths on Climate Change

TEN FACTS ABOUT CLIMATE CHANGE:

Climate has always changed, and it always will. The assumption that prior to the industrial revolution the Earth had a “stable” climate is simply wrong. The only sensible thing to do about climate change is to prepare for it.
Accurate temperature measurements made from weather balloons and satellites since the late 1950s show no atmospheric warming since 1958. In contrast, averaged ground-based thermometers record a warming of about 0.40 C over the same time period. Many scientists believe that the thermometer record is biased by the Urban Heat Island effect and other artefacts.
Despite the expenditure of more than US$50 billion dollars looking for it since 1990, no unambiguous anthropogenic (human) signal has been identified in the global temperature pattern.
Without the greenhouse effect, the average surface temperature on Earth would be -180 C rather than the equable +150 C that has nurtured the development of life. Carbon dioxide is a minor greenhouse gas, responsible for ~26% (80 C) of the total greenhouse effect (330C), of which in turn at most 25% (~20C) can be attributed to carbon dioxide contributed by human activity. Water vapour, contributing at least 70% of the effect, is by far the most important atmospheric greenhouse gas.
On both annual (1 year) and geological (up to 100,000 year) time scales, changes in atmospheric temperature PRECEDE changes in CO2. Carbon dioxide therefore cannot be the primary forcing agent for temperature increase (though increasing CO2 does cause a diminishingly mild positive temperature feedback).
The UN Intergovernmental Panel on Climate Change (IPCC) has acted as the main scaremonger for the global warming lobby that led to the Kyoto Protocol. Fatally, the IPCC is a political, not scientific, body. Hendrik Tennekes, a retired Director of Research at the Royal Netherlands Meteorological Institute, says that “the IPCC review process is fatally flawed” and that “the IPCC wilfully ignores the paradigm shift created by the foremost meteorologist of the twentieth century, Edward Lorenz“.
The Kyoto Protocol will cost many trillions of dollars and exercises a significant impost those countries that signed it, but will deliver no significant cooling (less than .020 C by 2050, assuming that all commitments are met). The Russian Academy of Sciences says that Kyoto has no scientific basis; Andre Illarianov, senior advisor to Russian president Putin, calls Kyoto-ism “one of the most agressive, intrusive, destructive ideologies since the collapse of communism and fascism“. If Kyoto was a “first step” then it was in the same wrong direction as the later “Bali roadmap”.
Climate change is a non-linear (chaotic) process, some parts of which are only dimly or not at all understood. No deterministic computer model will ever be able to make an accurate prediction of climate 100 years into the future.
Not surprisingly, therefore, experts in computer modelling agree also that no current (or likely near-future) climate model is able to make accurate predictions of regional climate change.
The biggest untruth about human global warming is the assertion that nearly all scientists agree that it is occurring, and at a dangerous rate.

The reality is that almost every aspect of climate science is the subject of vigorous debate. Further, thousands of qualified scientists worldwide have signed declarations which (i) query the evidence for hypothetical human-caused warming and (ii) support a rational scientific (not emotional) approach to its study within the context of known natural climate change.

TEN GLOBAL WARMING MYTHS:

Myth 1 Average global temperature (AGT) has increased over the last few years.

Fact 1 Within error bounds, AGT has not increased since 1995 and has declined since 2002, despite an increase in atmospheric CO2 of 8% since 1995.

Myth 2 During the late 20th Century, AGT increased at a dangerously fast rate and reached an unprecedented magnitude.

Facts 2 The late 20th Century AGT rise was at a rate of 1-20 C/century, which lies well within natural rates of climate change for the last 10,000 yr. AGT has been several degrees warmer than today many times in the recent geological past.

Myth 3 AGT was relatively unchanging in pre-industrial times, has sky-rocketed since 1900, and will increase by several degrees more over the next 100 years (the Mann, Bradley & Hughes “hockey stick” curve and its computer extrapolation).

Facts 3 The Mann et al. curve has been exposed as a statistical contrivance. There is no convincing evidence that past climate was unchanging, nor that 20th century changes in AGT were unusual, nor that dangerous human warming is underway.

Myth 4 Computer models predict that AGT will increase by up to 60 C over the next 100 years.

Facts 4 Deterministic computer models do. Other equally valid (empirical) computer models predict cooling.

Myth 5 Warming of more than 20 C will have catastrophic effects on ecosystems and mankind alike.

Facts 5 A 20 C change would be well within previous natural bounds. Ecosystems have been adapting to such changes since time immemorial. The result is the process that we call evolution. Mankind can and does adapt to all climate extremes.

Myth 6 Further human addition of CO2 to the atmosphere will cause dangerous warming, and is generally harmful.

Facts 6 No human-caused warming can yet be detected that is distinct from natural system variation and noise. Any additional human-caused warming which occurs will probably amount to less than 10 C. Atmospheric CO2 is a beneficial fertilizer for plants, including especially cereal crops, and also aids efficient evapo-transpiration.

Myth 7 Changes in solar activity cannot explain recent changes in AGT.

Facts 7 The sun’s output varies in several ways on many time scales (including the 11-, 22 and 80-year solar cycles), with concomitant effects on Earth’s climate. While changes in visible radiation are small, changes in particle flux and magnetic field are known to exercise a strong climatic effect. More than 50% of the 0.80 C rise in AGT observed during the 20th century can be attributed to solar change.

Myth 8 Unprecedented melting of ice is taking place in both the north and south polar regions.

Facts 8 Both the Greenland and Antarctic ice sheets are growing in thickness and cooling at their summit. Sea ice around Antarctica attained a record area in 2007. Temperatures in the Arctic region are just now achieving the levels of natural warmth experienced during the early 1940s, and the region was warmer still (sea-ice free) during earlier times.

Myth 9 Human-caused global warming is causing dangerous global sea-level (SL) rise.

Facts 9 SL change differs from time to time and place to place; between 1955 and 1996, for example, SL at Tuvalu fell by 105 mm (2.5 mm/yr). Global average SL is a statistical measure of no value for environmental planning purposes. A global average SL rise of 1-2 mm/yr occurred naturally over the last 150 years, and shows no sign of human-influenced increase.

Myth 10 The late 20th Century increase in AGT caused an increase in the number of severe storms (cyclones), or in storm intensity.

Facts 10 Meteorological experts are agreed that no increase in storms has occurred beyond that associated with natural variation of the climate system.

ABOUT ROBERT M. CARTER

The late Robert M. Carter was a Research Professor at James Cook University (Queensland) and the University of Adelaide (South Australia). He is a palaeontologist, stratigrapher, marine geologist and environmental scientist with more than thirty years professional experience.

EDITORS NOTE: The original source of this article is James Cook University, Queensland, Australia and Global Research. Copyright © Prof. Robert M. Carter, James Cook University, Queensland, Australia and Global Research, 2017

My Bill Would Stop Tax Dollars from Subsidizing the NFL

October 24, 2017/in Featured, Policy, Politics, Taxes, Waste, Fraud and Abuse/by The Daily Signal

NFL players have protested the national anthem for a little over a year now.

First, they kneeled for Black Lives Matter, then against “police brutality.” Now, they’re kneeling to protest racial injustice.

But has kneeling helped them raise awareness? Has their weekly spectacle changed any policies or laws? No. If anything, their protest has backfired spectacularly—it’s simply made a lot of Americans stop watching football.

No one should be surprised—kneeling during the national anthem isn’t a good way to focus attention on a topic. The gesture is a broad, overgeneralized indictment of America. It is not a critique of injustice, nor does it pave the way for meaningful reform.

There are better ways to protest, and better venues for protest than football games.

It’s easy to have strong, visceral feelings about disrespecting America. It’s harder to get passionate about tax law. But if there was ever a time to feel outraged over the tax code (other than Tax Day), that time is now.

Section 501 (c)(6) of the Internal Revenue Code provides a list of tax-exempt trade organizations: business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues. Which one of these things is not like the others?

I call a brief timeout for a history lesson.

The NFL was first granted tax-exempt status in 1942. When the NFL and AFL merged in 1966, Commissioner Pete Rozelle wanted the NFL’s tax exemption made permanent. Meanwhile, two Louisiana Democrats wanted a football team, and an only-in-Washington opportunity presented itself.

In a swampy tit-for-tat, House Majority Whip Hale Boggs, D-La., and Senate Finance Committee Chairman Russell Long, D-La., permanently codified the NFL’s tax exemption.

According to Michael MacCambridge, author of “America’s Game: The Epic Story of How Pro Football Captured a Nation,” Rozelle was so delighted to hear the tax news that he said, “Congressman Boggs, I don’t know how I can ever thank you enough for this.”

Boggs immediately countered with, “What do you mean you don’t know how to thank me? New Orleans gets an immediate franchise in the NFL.”

Sure enough, one year later, the Saints came marching in.

To be clear, the tax exemption does not apply to teams. Teams and players both pay taxes. The status applies solely to the NFL League Office.

This special treat would be a little more palatable—though still unfair—if the League Office simply handled paperwork and pensions. Unfortunately, the NFL League Office’s main duty is negotiating stadium deals.

Stadiums are funded primarily by taxpayer dollars, brought in through increased taxes and municipal bond financing schemes. Over the past decade, $7 billion in taxpayer dollars were spent on stadiums. In some egregious cases, cities built new stadiums even while their citizens were still paying off old stadiums that had since closed.

This is corporate welfare run amok, and a gross misuse of American citizens’ tax money—something the government must treat with respect.

As many pundits have noted, the NFL League Office voluntarily gave up its tax-exempt status in 2015. Until the tax code changes, however, it can revert to being tax-exempt whenever it chooses.

Equally importantly, the NHL, PGA Tour, and LPGA are also currently tax-exempt, despite earning over $2 billion per year in gross revenue.

These are truly “tax breaks for billionaires,” to quote Sen. Bernie Sanders, I-Vt., and the textbook definition of a special-interest loophole. It’s time to revoke this unnecessary, undeserved tax break. Why should “big sports” get tax breaks that businesses and families across America don’t get?

That’s why I’ve decided to be the lead sponsor of H.R. 296, the PRO Sports Act, a bill that would end the tax-exempt status for sports leagues making over $10 million annually.

I’ve sent a letter to Rep. Kevin Brady, R-Texas, chairman of the Ways and Means Committee, asking for this to be included in the tax overhaul.

With tax reform currently one of the highest priorities of Congress, it’s time to end this unjustified, unjustifiable provision.

In 2016, the Joint Committee on Taxation estimated that the PRO Sports Act would bring in over $150 million in new revenue. With America $20 trillion in debt, every dollar helps—and, more importantly, it restores some fairness to the tax code.

If players choose to protest, then I can choose not to watch. It’s as easy as turning off the television. But the tax code means that all taxpaying Americans are financially supporting pro sports, whether they want to or not.

Ending this tax break would change things. If players want to protest, let them do it on their own time, and on their own dime. The American people shouldn’t have to pay for it.

COMMENTARY BY

Rep. Matt Gaetz

Rep. Matt Gaetz is the U.S. representative for Florida’s 1st congressional district. He serves on the House Budget Committee, the House Judiciary Committee, and the House Armed Services Committee. Twitter: @RepMattGaetz.

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

RELATED ARTICLE: Justice Thomas Denounces Anthem Protests

EDITORS NOTE: The featured image is of New Orleans Saints players kneeling down before the national anthem prior to playing the Miami Dolphins. (Photo: Hugo Philpott/UPI/Newscom)

The Facts About Who Pays the Most in Taxes in America

October 18, 2017/in Economy, Policy, Politics, Regulation, Taxes/by The Daily Signal

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

Walter E. Williams

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

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

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

October 16, 2017/in Featured, Policy, Politics, Taxes, Waste, Fraud and Abuse/by Ann Corcoran

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:

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

***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

October 16, 2017/in Economy, Policy, Politics, Taxes, Waste, Fraud and Abuse/by The Daily Signal

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

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: @KenMac55.

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

The Scandalous Truth about Obamacare Is Laid Bare

October 16, 2017/in Culture War, Healthcare, Must Read, Policy, Politics, Taxes, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

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

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 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

October 15, 2017/in Economy, Policy, Politics, Taxes/by Selous Foundation For Public Policy Research

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?

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

October 14, 2017/in Culture War, Economy, Policy, Politics, Regulation, Taxes, Waste, Fraud and Abuse/by Foundation for Economic Education (FEE)

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

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:

The minimum wage worker retires at the bottom of a 2008-style recession, and
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
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

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

October 13, 2017/in Environment, Policy, Politics, Taxes, Waste, Fraud and Abuse/by Committee For A Constructive Tomorrow

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.

October 11, 2017/in Economy, Policy, Regulation, Taxes/by The Daily Signal

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

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: @kdd0211

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: @adamnmichel

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’

October 10, 2017/in Culture War, Featured, Immigration, National Security, Policy, Politics, Taxes, Waste, Fraud and Abuse/by Ann Corcoran

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.

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!

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

October 10, 2017/in Culture War, Immigration, National Security, Policy, Politics, Taxes/by Ann Corcoran

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:

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

October 8, 2017/in Immigration, National Security, Policy, Politics, Taxes/by Ann Corcoran

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.

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?

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.