Tag Archive for: taxes

PODCAST: You Cannot Multiply Wealth By Dividing It

A sermon given in 1984 by Dr. Adrian Pierce Rogers, Baptist Pastor, Author, and Political Commentator titled, “God’s Way to Health, Wealth and Wisdom.”

“You cannot legislate the poor into freedom by legislating the industrious out of it. You don’t multiply wealth by dividing it. Government cannot give anything to anybody that it doesn’t first take from somebody else. Whenever somebody receives something without working for it, somebody else has to work for it without receiving. The worst thing that can happen to a nation is for half of the people to get the idea they don’t have to work because somebody else will work for them, and the other half to get the idea that it does no good to work because they don’t get to enjoy the fruits of their labor.”

Please listen to Dr. Roger’s entire sermon “God’s Way to Health, Wealth and Wisdom“:

Huckabee Hucksterism on Common Core?

Presidential candidate Mike Huckabee surprised many conservatives by sending a mailing asking them to “Endorse Mike’s Pledge to Kill Common Core.”  It reads, “I, Mike Huckabee, pledge allegiance to God, the Constitution, and the citizens of the United States: As President I will fight to kill Common Core and restore common sense.  Education is a family function—not a federal function.”

Huckabee then came out with another mailing in which he vowed not only to kill Common Core, but to abolish the Department of Education.

Huckabee declared his candidacy in May. Reporters and commentators questioned the motivations for his shift on Common Core. At the Daily Caller, Blake Neff called Huckabee’s “strong, total condemnation” a “relatively new trait” and questioned the governor’s explanation: “the unexpected involvement of the Obama administration.”  In January, at National Review Andrew Johnson noted that Huckabee had publicly praised Common Core standards that he claimed were developed by governors and state education officials.  A blog called “The Truth about Mike Huckabee” basically repeats these claims but in a heightened, defensive style, stating, “It is important to note that The National Governor’s Association Common Core IS NOT the same as the Common Core associated with the Department of Education Grants.  If you take the time to research this topic you will see that one of many differences is that the federal government requires those who administer the grant project meet certain diversity guidelines, which is completely foreign to the work done by the National Governor’s Association.  These are two completely different programs, begun by different organizations, with different implementation and operational objectives.”

Huckabee’s defense does not stand up to scrutiny.  Neff pointed to Huckabee’s 2011 book A Simple Government, in which Huckabee endorsed the role of the federal government, writing, “I fully endorse the new federal program Race to the Top, which has states compete for additional education funds, allowing them to decide what reforms to enact, rather than having specific reforms imposed on them from above.”  This was two years after the Race to the Top program required that states agree to adopt the federal Common Core guidelines as part of the application process.

As he contemplated his presidential run, Huckabee knew that his “complicated history with Common Core” could be the reason he’d lose a significant portion of the evangelical base that supported him in 2008, according to Johnson.  Conservatives already had a problem with Huckabee’s record as governor that included increases in taxes and pardons for criminals.

Furthermore, Huckabee’s efforts continued in 2013 and included sending a letter to Oklahoma lawmakers ahead of a vote to dump Common Core in that state; he encouraged them “to resist any attempt to delay implementation.”  That year, Huckabee also told the Council of Chief State School Officers to “rebrand” Common Core, and not “retreat.”

The authors of Common Core Report: Grading the 2016 GOP Candidates (by American Principles in Action and Cornerstone Policy Research Action) write that Huckabee’s “rebrand advice to the owners and supporters gut-stabbed the national grassroots movement right when it was gaining traction.” Rebranding, or renaming, the Common Core standards, while making superficial changes, has been a favorite strategy of politicians and bureaucrats trying to fool voters and legislators who really are trying to kill Common Core in their states.

Huckabee claimed his comments were “misconstrued.” By December of 2013, Huckabee was using his Fox News show to outline his concerns about “what Common Core has become” – a divisive issue.  He encouraged “activists on both sides of the issue to move past Common Core,” and “argued for a renewed, broader effort to improve education,” according to Johnson.

What is the federal government’s role, and specifically a president’s role, in improving education?  On his campaign site page Huckabee pledges to abolish the Department of Education, while insisting, “We must demand results, accountability and success for every child in every classroom.  I oppose watering down our education standards or automatically promoting every student.”

The rationale behind federal education programs, including the No Child Left Behind initiative of the George W. Bush administration, is precisely the demand for “accountability.”  NCLB was built on the false notion that every child can achieve “success” and that it is the federal government’s role to see to it. Indeed, the current education reauthorization spending bill is called the “Every Child Achieves Act” (ECAA).  Common Core was hustled through on such pretexts of accountability and standards.

The Common Core Report: Grading the 2016 GOP Candidates gives Huckabee a “C,” in spite of his “checkered past.”  (Grades range from “A-” for Ted Cruz and Rand Paul to “F” for Jeb Bush.)

Raising his grade is Huckabee’s “forceful general argument” of late about the problem of special interests currying the favor of the federal executive branch, which then puts mandates on the states.  State departments of education, state boards of education, and governors then become “supplicants” to the U.S. Department of Education.

Real Clear Politics puts Huckabee in ninth position in a field of 15 candidates.  Four major polls show him garnering four percent of the support.  It appears that Huckabee will not be the candidate who ends the system of “supplication” to the Department of Education.  Let’s hope we get one, nevertheless.

RELATED ARTICLES:

Increasingly Uncommon Common Core

Immigration Lowers Educational Achievement, Survey finds

EDITORS NOTE: This column originally appeared on the Selous Foundation for Public Policy Research.

6 Things Paul Krugman Gets Wrong on Medicare by Charles Blahous

My usual custom when writing about Medicare and Social Security finances is to simply present the relevant data instead of discussing others’ commentaries about the programs.

After this year’s Medicare trustees’ report was released, however, a subsequent Paul Krugman column prompted a number of questions from his readers, suggesting it would be helpful to address Dr. Krugman’s specific assertions.

The essence of Dr. Krugman’s column was to cite the latest Medicare report as evidence that “there never was an entitlements crisis.”

Dr. Krugman’s view of the Medicare financing outlook differs with the trustees’ perspective as reflected in our joint message, which states, “Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation.” The difference between these two perspectives derives in part from problems of incomplete information and analysis.

Problem #1: Conflating expectations with reality.

Dr. Krugman’s piece points to long-term Medicare cost projections that now look less daunting than they did in 2009, and asserts that the entitlement cost problem is therefore “disappearing.”

That characterization, however, is incorrect. Comparing to prior projections is in this context a distraction, irrelevant to whether Medicare is now on a stable financial course (it is not).

The mistake is one of so-called “anchoring,” a behavioral economics concept referring to the powerful cognitive illusion whereby our perception of events is distorted by previous expectations.

Whether things are actually getting better or getting worse is not a function of the trend of expectations but of real-world data evolving in time. Medicare cost burdens are mounting, not easing, as the accompanying graph shows. Total program costs have been rising faster than our economic output, and are currently projected to continue to do so.

As many readers will intuit, it is highly problematic for any major spending program to grow significantly faster than the economy that must support it, as this can only lead to continually rising tax burdens, escalating debt, and/or crowding out other priorities.

Problem #2: Inconsistently measuring GDP

The graphs that Dr. Krugman reproduces to make his argument present projected Medicare spending as a percentage of GDP, contrasting this year’s projections with those of 2009. But in 2013 BEA redefined how GDP is measured, both historically and going forward. Adjusting the 2009 projections for this definitional change, one sees that a good portion of the apparent improvement to date is illusory.

Dr. Krugman’s piece does not as far as I can tell disclose this inconsistency. Correcting for it, the recent picture looks only slightly better than 2009 projections, and has actually been worse in some years.

Problem #3: The large apparent improvements are mostly projections that haven’t yet borne fruit.

As shown above, to date the Medicare cost picture is not greatly different than projected in 2009. All that’s really different are the future projections, especially over the long term. These anticipated improvements are due primarily to aggressive cost-containment provisions in the Affordable Care Act (ACA, or so-called “Obamacare”) as well as, to a lesser extent, the MACRA legislation passed earlier this year.

The ACA provisions involve ambitious reductions in the rate of growth of Medicare provider payments, while MACRA’s involve reductions in the long-term growth of physician payments. Similar past efforts have not been adhered to, and some experts are skeptical that these new measures will be. This is why the CMS Medicare actuary has prepared an alternative projection scenario showing much higher future costs.

We should all hope, whether we supported or opposed these laws, that their cost-containment provisions prove successful and sustainable. Were they to be abandoned, other provisions would need to be enacted in their place to achieve equal or greater savings – otherwise taxes and/or premiums must be raised.

That said, we cannot declare victory unless and until these provisions produce the savings now projected from them.

Problem #4: We haven’t fixed the entitlement growth problem, only changed the mix of entitlements.

Dr. Krugman’s graphs show 2015’s Medicare cost projections well below 2009’s, prompting the conclusion that any supposed spending crisis has been solved or never existed. But this leaves out a defining part of the overall picture.

True, the ACA reduced projected Medicare growth — but it also expanded Medicaid as well as created a whole new system of health insurance exchange subsidies.

If the thesis is that changes in spending projections since 2009 illuminate whether we really have an entitlement spending problem, one can’t simply show the one large entitlement where projected spending has gone down, and omit the ones where projected spending has gone up. Unfortunately, we cannot analyze the whole picture using the trustees’ methodology because the trustees do not issue projections for the ACA’s health exchange subsidies.

But earlier this year CBO estimated that by 2025, the ACA would add roughly $210 billion a year in new Medicaid and exchange subsidy spending, or roughly 0.8% of GDP. As it happens, 0.8% of GDP (adjusted for the changed definition of GDP) is roughly the amount by which the trustees have lowered (between 2009 and 2015) our projections for Medicare spending through 2025.

Given that these two effects almost net each other out over the next decade it seems inappropriate to state, as Dr. Krugman does, that “most of that projected (spending) rise has gone away.”

Problem #5: Crediting the ACA For Effects It Didn’t Cause.

Dr. Krugman’s column states in one place, “health spending began moderating after the passage of the ACA.” This is incorrect. The health spending slowdown began several years prior to the ACA’s 2010 passage (see CRFB’s “Exhibit 2”).

Dr. Krugman’s phrasing also lends itself to the misreading that the ACA is a primary reason for recent spending moderation. The CMS actuaries find, to the contrary, that the ACA’s effect has been on balance to slightly increase national health spending.

Problem #6: Not Reflecting Current Law.

Less egregious because it involves a relatively arcane aspect of budgetary scoring, the graphs shown by Dr. Krugman reflect the trustees’ estimates of the costs of paying scheduled Medicare benefits, which is not the same thing as would occur under current law (because, over the long term, current law does not provide for the financing of these benefits).

The distinction does not by itself undermine and indeed could be said to support Dr. Krugman’s argument that the entitlement crisis is overstated. It is, however, another reason why it is incorrect to credit the ACA for fiscal improvements, because on a literal law basis the ACA added on balance to federal entitlement spending, as CBOCRFB and others including myself have explained.

Conclusion

Dr. Krugman’s piece reaches incorrect conclusions about entitlement spending challenges “disappearing” based on incomplete information and analysis. When critical missing information is taken into account, it is more readily seen that lawmakers still face a substantial challenge to address unsustainable spending growth in federal entitlement programs.

This post first appeared at e21.

Charles Blahous
Charles Blahous

Charles Blahous is a senior research fellow for the Mercatus Center, a research fellow for the Hoover Institution, a public trustee for Social Security and Medicare, and a contributor to e21.

Toronto: Disabled man told that taxpayer-subsidized housing is for Muslims only

“Here you have a building for Muslims, and normally that would be discriminatory because other religions could not be accommodated there. But the Human Rights Code says if it’s a special-interests organization — religious, philanthropic, educational or social — they can discriminate in that way.”

Oh. Where is the taxpayer-funded housing for Christians only? For Jews only?

Ezra Levant weighs in on this travesty here. “Disabled man told subsidized housing is for Muslims only,” by Marco Chown Oved, Toronto Star, August 26, 2015 (thanks to Eli):

A young wheelchair user has been taken off the waiting list for a publicly subsidized apartment because he is not a member of the Muslim community that established the building — a practice that, while legal, raises concerns that accommodations for cultural and religious groups could be limiting access to affordable housing.

According to a letter that arrived at his mother’s house last week, Austin Lewis, 21, was removed from the waiting list at the Ahmadiyya Abode of Peace building on Finch Ave. W in North York because he is not a member of their faith.

“It was mostly confusing, more than anything else,” he said. “Why would a government segregate its own building?”

The 16-storey building, which provides a range of services to its residents including a prayer room that accommodates 250, was actually approved in the 1990s as part of a provincial program to encourage non-profits and religious groups to build affordable housing, according to its property manager.

Lewis, who has used a wheelchair since a disease attacked his spinal cord when he was 8, says he applied to more than 100 accessible buildings in Toronto, Brampton and Peel Region, and there was no notice that any of them were restricted to a certain community.

“We had no idea. The letter came as a complete shock,” he said.

The city provides a $1.7-million subsidy for 94 rent-geared-to-income units under a five-year agreement, which began Jan. 1, that restricts tenants to “members of the Muslim Jama’at.”

“The City’s mandate policy allows social housing providers to restrict their housing to individuals belonging to an identifiable ethnic or religious group if specific conditions are met,” says a statement provided by city spokesperson John Gosgnach.

There are eight such buildings in Toronto, catering to Muslims, Macedonians, Germans and seniors who are Christian, Chinese, Greek, Hungarian or Lithuanian.

Karin Tahir, Ahmadiyya Abode of Peace’s property manager, said the building does not discriminate on race, colour or ethnicity. “Ahmadiyya is in 200 countries,” he said.

“We’re not bumping anyone off the list,” Tahir added. “The real issue is the 90,000-person waiting list for an affordable unit. Where is the new stock?”

It’s already hard enough to find affordable housing in the GTA, Lewis says, but when you’re in a wheelchair, your options are limited even further.

“It does seem incredibly odd. There is housing for people 50 and over, but there is no housing specifically for people in chairs,” he said.

His mother, Laura Whiteway, is incensed that her son could be turned away from a wheelchair-accessible building.

“They’re being given a licence to discriminate. It’s just wrong,” she said.

Lawyer Barry Swadron, who has extensive experience in disability law, says the Ontario Human Rights Code allows for this kind of discrimination.

“Here you have a building for Muslims, and normally that would be discriminatory because other religions could not be accommodated there.

“But the Human Rights Code says if it’s a special-interests organization — religious, philanthropic, educational or social — they can discriminate in that way,” he said. “It’s very unfortunate, but that’s how the law was written.”

While the intention was to create safe spaces for minority communities, this kind of permissible “positive discrimination” inevitably produces collateral damage, Swadron said….

No kidding, really?

RELATED ARTICLE: Muslim “Breaking of the Crosses” in Syracuse, NY as Catholic Church converted to mosque

Federal Student Loans Make College More Expensive and Income Inequality Worse by George C. Leef

One day, Bill Bennett may be best remembered for saying (in 1987, while he was President Reagan’s education secretary) that government student aid was largely responsible for the fact that the cost of going to college kept rising. What is called the “Bennett Hypothesis” has been heavily debated ever since.

A recent report by the Federal Reserve Bank of New York lends support to the Bennett Hypothesis.

Authors David Lucca, Taylor Nadauld, and Karen Shen employed sophisticated statistical techniques to analyze the effects of the increasing availability of federal aid to undergraduates between 2008 and 2010. They conclude the institutions that were most exposed to the increases “experienced disproportionate tuition increases.”

By the authors’ calculation, there is about a 65 percent pass-through effect on federal student loans. In other words, for every $3 increase in such loans, colleges and universities raise tuition by $2.

It is very good to have a study by so unimpeachable a source as the New York Fed supporting the conclusion that quite a few others have reached over the years: Increasing student aid to make college “more affordable” is something of an impossibility. The more “generous” the government becomes with grants and loans, the more schools raise their rates.

Other studies have reached the same conclusion.

In his 2009 paper Financial Aid in Theory and Practice, Andrew Gillen showed that the Bennett Hypothesis was true, although more so at some institutions than others. In their 2012 study, Stephanie Riegg Cellini and Claudia Goldin found that for-profit schools unquestionably raised tuitions to capture increases in federal aid.

Such analyses are amply supported by personal observations about the way college officials look at federal aid. Peter Wood, president of the National Association of Scholars writes that when he was in the administration at Boston University:

The regnant phrase was “Don’t leave money sitting on the table.” The metaphoric table in question was the one on which the government had laid out a sumptuous banquet of increases of financial aid. Our job was to figure out how to consume as much of it as possible in tuition increases.

Similarly, Robert Iosue, former president of York College, writes in his book College Tuition: Four Decades of Financial Deception (co-authored with Frank Mussano), “Common sense dictates a connection between government largess to the buyer and higher prices from the seller. For me it began in 1974 when grants and loans were given to students based on the cost of college. Higher cost: more aid from our government.”

It has always been difficult to defend the position that federal student aid has nothing to do with the steady increase in the cost of attending college; the publication of this study makes it much more so.

Despite their conclusion that financial aid increases costs, the authors of the New York Fed report suggest that aid is beneficial on the whole. They wrote, “[T]o the extent that greater access to credit increases access to postsecondary education, student aid programs may help to lower wage inequality by boosting the supply of skilled workers.” Now, while that is not a finding of the paper, it aligns with one of the justifications commonly given for policies meant to “expand access” to college — that it ameliorates the presumed problem of growing income inequality.

In this speech in 2008, for example, former Federal Reserve chairman Ben Bernanke said, “the best way to improve economic opportunity and reduce inequality is to increase the educational attainment and skills of American workers.”

That argument is grounded in basic economics: if college-educated workers are paid a lot and workers without college education are paid much less, then by increasing the supply of the former, we will lower their “price” and thereby reduce the earnings differential between the two groups.

That sounds plausible and egalitarians embrace the idea. In a recent paper published in the Cambridge journal Social Philosophy and Policy, however, Daniel Bennett and Richard Vedder argue that, after decades of government policy to “expand access,” we have reached the point where doing so now exacerbates income inequality.

“It has become an article of faith that higher education is a major vehicle for promoting a path to the middle class and income equality in America,” the authors write. The trouble, they argue, is that while policies to promote college enrollment had a tendency to do that in the past, we passed the point of diminishing returns.

Key to the Bennett/Vedder analysis is that fundamental economic concept — diminishing returns. As someone buys or enjoys more and more of something, the benefit from each marginal unit eventually starts to fall. That applies to education as well as other goods and services. It applies to individuals, since there is some point beyond which the benefit from additional time spent on education isn’t worth what it costs.

It also applies at the societal level. At first, Bennett and Vedder observe, the students drawn into college by government aid were overwhelmingly very able and ambitious. They benefited greatly from their postsecondary education. Society not only became more prosperous due to the heightened productivity of those individuals, but, the authors show, more equal. Measured by Gini coefficients, income became less dispersed in the early decades of federal policies to promote higher education.

But what was apparently a beneficial policy at first is producing increasingly bad results today. Not only is federal student aid making college more costly, it now leads to a growing income gap. “Additional increases in [college] attainment,” Bennett and Vedder write, “are associated with more income inequality.”

Why?

The reason is that subsidizing college has led to a glut of people holding college credentials. As a result, we have seen a huge displacement in the labor market — college-educated workers displacing those without degrees. I have often called that the “credentialitis”problem; workers who have the ability to do a job can’t get past the screening by educational credentials that is now widespread.

Consequently, the latter group — the working poor — now faces increasing difficulty finding jobs in fields that used to be open to them.

Federal student aid programs were expected to have nothing but good economic and social consequences for America. Instead, however, they are simultaneously making higher education more costly (that is, soaking up more of our limited resources) and, owing to credentialitis, making the distribution of income more unequal.

Of course, the politicians who started us on this path meant well. Most of those who keep pushing us further down the college for everyone path probably believe that they’re pursuing greater equality and productivity. The truth of the matter, as studies like the two I have discussed here show, is that continuing to push the “college access” agenda is making America worse off.

This post first appeared at the Pope Center.

George C. Leef

George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.

Economists Steve Forbes, Larry Kudlow, Dr. Arthur B. Laffer, Steve Moore Launch the Committee to Unleash Prosperity

NEW YORK /PRNewswire-USNewswire/ — Economists Steve Forbes, Larry Kudlow, Dr. Arthur B. Laffer, and Steve Moore have launched the Committee to Unleash Prosperity. This group aims to end America’s growth slump and restore faith in the American Dream.

The Committee to Unleash Prosperity was founded to combat America’s “growth gap” by promoting an agenda that will revitalize America’s economy. In the past decade and a half, under both Republican and Democratic presidents, U.S. economic growth has diminished to roughly 2% annually—a significant decrease from its Post-World War II average of 3.5%.

This subpar growth rate has come at tremendous cost to American families, household incomes, employment opportunities, investment, and poverty levels. Above all, the lack of growth has led some to doubt the attainability of the American Dream and to wonder if our current economic climate is the new norm.

The Committee to Unleash Prosperity is working to change this. In pursuit of rapid growth, the Committee promotes the following six economic principles:

  1. A broad-based, low rate, flat tax
  2. Limited government spending
  3. Decreased regulation
  4. Sound money
  5. Free trade
  6. Rule of constitutional law

Thus far, the Committee has hosted several Presidential candidates to discuss their economic platforms including Governor Scott Walker, Governor Bobby Jindal, Governor John Kasich, Governor Mike Huckabee, Senator Ted Cruz, Senator Lindsey Graham, and Carly Fiorina. The Committee has invited other Republican and Democrat presidential candidates to attend future events.

Today, the Committee will host a luncheon with former Texas Governor Rick Perry to discuss how to restore economic growth and opportunity for all Americans. The event is sponsored by Margo and John Catsimatidis.

Prominent thought leaders have joined the four founders in their mission:

David L. Bahnsen
Richard Breeden
Travis H. Brown
Andrea Catsimatidis
John Catsimatidis, Sr.
John Catsimatidis, Jr.
Margo Catsimatidis
Veronique de Rugy
Steve Elieff
Dr. Edwin Feulner, Jr.
Harold Hamm
Kevin A. Hassett
Roger Hertog
James Kemp
Lewis E. Lehrman
Adele Malpass
David Malpass
Betsy McCaughey
Dan Mitchell
Georgette Mosbacher
David Mullins
Mary Ann Mullins
Deroy Murdock
Liz Peek
Alexandra V. Preate
Andrew F. Puzder
Avik Roy
Rex Sinquefield
David Webb

The Executive Director is political strategist Jon Decker. The Committee to Unleash Prosperity looks forward to promoting its optimistic vision for America’s economic future.

STEVE FORBES

Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. In both 1996 and 2000, Mr. Forbes campaigned vigorously for the Republican nomination for the Presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits, and a strong national defense.

LARRY KUDLOW

Larry Kudlow is CNBC’s Senior Contributor. He was previously host of CNBC’s primetime “The Kudlow Report.” He is also the host of “The Larry Kudlow Show,” which broadcasts each Saturday from 10:00 a.m.–1:00 p.m. on WABC Radio and is syndicated nationally by Cumulus Media.  Kudlow is the author of “American Abundance: The New Economic and Moral Prosperity,” published by Forbes in January 1998. He served on the transition committees for Reagan-Bush in 1980 and Bush-Cheney in 2000. During President Reagan’s first term, Kudlow was the associate director for economics and planning, Office of Management and Budget, Executive Office of the President, where he was engaged in the development of the administration’s economic and budget policy.  He was formerly chief economist and senior managing director of Bear Stearns & Company. Kudlow started his professional career at the Federal Reserve Bank of New York where he worked in open-market operations and bank supervision. He is co-authoring a forthcoming book about President John F. Kennedy’s tax cuts.

DR. ARTHUR B. LAFFER

Dr. Arthur B. Laffer is founder and chairman of Laffer Associates and was a member of President Reagan’s Economic Policy Advisory Board for both of his two terms. Dr. Laffer also advised Prime Minister Margaret Thatcher on fiscal policy in the U.K. during the 1980s. He has been a faculty member at the University of Chicago, University of Southern California, and Pepperdine University. Dr. Laffer received a B.A. in economics from Yale University in 1963. He received a MBA and a Ph.D. in economics from Stanford University in 1965 and 1972 respectively.

STEVE MOORE

Stephen Moore, who formerly wrote on the economy and public policy for The Wall Street Journal, is the Distinguished Visiting Fellow, Project for Economic Growth, at The Heritage Foundation.  Moore, who also was a member of The Journal’s editorial board, returned to Heritage in January 2014—about 25 years after his tenure as the leading conservative think tank’s Grover M. Hermann Fellow in Budgetary Affairs from 1984 to 1987. He was a senior economist under Dick Armey’s Joint Economic Committee, and he played a large role in the creation of the FairTax proposal.

MARGO AND JOHN CATSIMATIDIS

John Catsimatidis is the Chairman and CEO of the Red Apple Group, a Fortune 500 company with annual revenues in excess of $5 billion. The Red Apple Group is a diverse holding company comprised of an energy sector which includes oil refineries, bio-diesel plants, and extensive New York area storage facilities with a deep draft tanker facility on the eastern shore of Long Island.  The Red Group also carries a real estate portfolio valued at nearly $1 billion. In addition, Red Apple Group has an aviation component which leases corporate aircrafts as well as a major supermarket chain in New York City.  Margo Catsimatidis is the President of MCV Advertising and is heavily involved with philanthropy. One of Mrs. Catsimatidis’ primary charities is the Hellenic Times Scholarship Fund which has provided college scholarships for the past 25 years. Margo and John are parents of Andrea and John Jr., both graduates of NYU and now work alongside their parents in all facets of their businesses.  Margo and John are firm believers in giving back to the community and they have a large portfolio of charitable interests which have a common theme of assisting young people.

RELATED ARTICLE: The Path to Repeal Obamacare With Just 51 Votes

PRAVDA: U.S. Taxpayers pay $3.5M to Study Lesbian Obesity

Pravda.Ru reports:

The U.S. Department of Health and Human Services has conducted a research to find out how the sexual orientation influences the body build.
The U.S. taxpayers have already paid $3.5 million for the ‘significant’ project, and it is to last till June 30.

Sexual Orientation and Obesity: A Test of a Gendered Biopsychosocial Model,” seeks to determine why there is a disparity in the obesity rates between straight women and lesbian women and straight men and gay men.

According to the study, “It is now well-established that women of minority sexual orientation are disproportionately affected by the obesity epidemic, with nearly three-quarters of adult lesbians overweight or obese, compared to half of heterosexual women. In stark contrast, among men, heterosexual males have nearly double the risk of obesity compared to gay males.”

Meanwhile, the U.S. government debt is going to beat ‘records’ of WWII.

Read the full article here.

The Government Cannot And Will Not Solve Poverty

Jesus Christ stated that the poor you will always have amongst you.  However, he did not say that the problem of being poor could not be solved.  In fact, again He said “the poor you will always have amongst you.”   I interpret that to mean that despite viable solutions to poverty, people, especially progressive government officials eventually increase poverty, not decrease it.  America is still reeling from the awful effects of Lyndon Baines Johnson’s “War on Poverty.”  After $20 Trillion and counting spent to fight poverty with tax-payers dollars has resulted in a higher poverty rate now than in the 1960s.

I find it ironic when those who have never run a business, vie for political office and declare they will provide jobs.  I guess I will give Donald Trump a pass after saying “I will be the greatest jobs president God ever created” because he has provided both jobs and business opportunities for many thousands of people.  But government has never, ever created jobs without extracting monies from the wealth producing economy to pay for government jobs.  Many of which are wasteful duplications and don’t get me started on economy draining burdensome departments like the IRS, Department of Education, the Just us uh Justice Department and everyone’s favorite, the EPA all of which have the problems they were supposed to address, much worse.

Unfortunately, that practice has run most of America’s once gleaming major cities into the ground politically, morally, economically and economically.  Under liberal/progressive policies have been immorally manipulated to barely function under the false premise that American style inequality and unfairness entitles certain people to your hard earned money.  How long do you think that “We the People” can afford to allow ourselves to be seduced by the evil lies of the progressive game of lying to us and draining us of our earnings, while making it more difficult for the next generation to reach their vision of the American dream?

Because of the non-stop onslaught of lies, government school indoctrination, trillions of dollars of annual wasteful spending, then the many international trade agreements that always grant advantages to competitor nations America is in a heap of hurt.  Right now, our republic is on the brink of utter collapse.  Despite the obvious situation, government officials continue to methodically shrink the U.S. economy.  Of course, as a result there are more and more so-called dependents every single year.  The thirty plus million illegal immigrants, who President Obama, presidential candidate Hillary Clinton and California governor Jerry Brown want taxpayers to pay for everything the illegals desire and demand.  So now, some Americans are asking why should I bust my hump just to have my earnings taken away and given to illegal immigrant moochers?

The Congressional Budget Office recently warned that if congress does not soon reign in over spending, over taxation and I’ll throw in over regulations, our prosperous way of life will be negatively altered permanently in less than ten years.  By now it would seem that America would have learned from the five-plus decades of offensive progressive blunders foisted upon Detroit.  That once great city was per capita the wealthiest city in the world in 1962.  In November of that year progressive democrat Cavanaugh was elected as mayor.  The changes in policies he enacted were a dramatic departure from the previous republican administrations.  Almost immediately, there was a piling on of regulations and layers of taxes that set that city on a downward spiral she has yet to recover from.

Right now the percentage of working Americans is declining while the dependent class is rapidly multiplying.  What can be aptly described as the American welfare state is not shrinking as we are so often told by progressive democrats and rino republicans.  In fact the $1 Trillion a year fighting poverty fighting budget is a planned abysmal failure.  Most politicians, including president Obama know this.  I remember telling people, long before Obama was elected as president that he and many others want to do to America what was done to Detroit.  Unless some major changes are made in the very near future they will reach their goulash goal.

For example, federal and overall welfare spending is going up.  The federal government alone currently funds and operates 126 different welfare or anti-poverty programs.  Federal welfare spending alone totals more than $14,848 for every poor man, woman, and child in this country.  For a typical poor family of three, that amounts to more than $44,500.  Combined with state and local spending, the government spends $20,000  for every poor person in America, or $61,830 per poor family of three.

Yet government economic no growth policies such as draconian environmental regulations with our republic being the most taxed on earth, stymies the ability to create new economic opportunities, while chasing away or killing off existing businesses.  This brutal assault on America’s onetime prosperous economy only serves to threaten our blessed way of life, while whetting the appetites of our enemies both foreign and domestic who seek to overthrow us.

May America soon seek Providential guidance and reclaim the wisdom that made her the onetime envy of the world, before it is much too late.

FLORIDA: 25 Reasons NOT to Take Federal Dollars to Expand Medicaid

Monday, The Florida Legislature opened a special session to decide on the state budget and debate how Florida should move forward in regards to our healthcare future. The Senate offered a plan that supporters, including many business interests, sugarcoated in conservative buzzwords such as “a free market approach,” even though the plan is anything but. As we say here at The James Madison Institute, pro-business isn’t always pro-free market. House Republicans and Governor Rick Scott, for good reason, oppose expanding federal control and a flawed program in our state. The Senate approved its plan Wednesday and the House is set to debate the bill today and vote on it this Friday [May 5th].

The Tampa Bay Times recently released an editorial giving 25 reasons Florida should take the money and encouraging Floridians to “tell (lawmakers) to listen to the powerful moral and financial arguments for taking the money and providing access to affordable health care.” Yes, there is a powerful moral and financial argument to be made. Yes, solutions exist to provide access to affordable healthcare. No, the Times does not have the right answers for either.

As Forbes opinion editor, senior fellow at the Manhattan Institute for Policy Research, and friend of JMI, Avik Roy points out, “Progressives have long enjoyed wielding the straw man. “If you oppose expanding Medicaid,” they say, ‘you oppose health care for the poor. Plain and simple.’ But the truth is, if you support expanding Medicaid, you’re doubling down on a failed system, one that shuts the door on real reforms that could provide quality health care to those who most need it.”

The James Madison Institute offers “25 Reasons NOT to Take Federal

Dollars to Expand Medicaid.” Share our infographic today and tomorrow through social media. RT on Twitter here. Share through Facebook here. Find on our website here.

  1. Medicaid already takes up more than 30% of Florida’s budget: Currently, Medicaid takes up more than 30 percent of Florida’s budget and crowds out other public priorities such as education, public safety and infrastructure.
  2. Medicaid payment rates are well below market rates:Payments to healthcare providers under Medicaid are well below market rates. Exasperating this system would be anathema to free-market reforms in healthcare.
  3. The federal government is already $18 trillion in debt; Obamacare costs rise daily:The federal government is $18 TRILLION in debt with the cost of Obamacare rising daily, requiring even more money from taxpayers to feed the beast.
  4. The supply of doctors accepting Medicaid is shrinking: As a consequence of federal Medicaid price controls, the supply of doctors that will accept Medicaid patients is shrinking — this shrinkage will become more rapid under an expansion of Medicaid.
  5. Medicaid expansion leads to greater use of ERs, not less: A March 2015 survey of 2,098 emergency-room doctors showed Medicaid recipients newly insured under the health law are struggling to get appointments or find doctors who will accept their coverage, and consequently wind up in the ER.
  6. Arkansas’s “private option” costs state taxpayers tens of millions: Medicaid expansion is not working in Arkansas. The Arkansas legislature passed a “private option” healthcare plan similar to what the Senate in Florida is proposing and the price tag is rising by the month under Obamacare’s Medicaid expansion and state taxpayers will now have to pay tens of millions to cover the unexpected costs. The proposed plan in Florida could cost far more than projections indicate.
  7. Mandated premiums create inefficiencies in supply and demand for healthcare services: When premiums for healthcare plan participants are mandated and set by legislative action, it is nothing more than market distorting price controls, which ultimately create inefficiencies in the supply and demand for healthcare services
  8. Feds won’t approve Senate’s special waivers; Florida left with traditional Obamacare expansion: The Senate’s plan includes a requirement that enrollees work, attend classes or prove they are seeking work in order to maintain eligibility for healthcare coverage. However, to date the federal government has rejected all state-run expansion plans with a work requirement. They will deny this special waiver and we’ll be left with traditional Medicaid expansion.
  9. Oregon study revealed Medicaid enrollees hardly better off than uninsured: Medicaid expansion is not working in Oregon. In Oregon, a study was conducted among Medicaid enrollees that found Medicaid “generated no significant improvements in measured physical health outcomes.”
  10. Medicaid Expansion will do nothing to lower cost of overall healthcare delivery: Medicaid expansion would not lead to any type of price transparency in healthcare delivery, which does nothing to help lower the cost of healthcare delivery.
  11. Medicaid expansion does not lead to better health outcomes for the poor: Research consistently shows Medicaid patients frequently receive inferior medical treatment, are assigned to less-skilled surgeons, receive poorer postoperative instructions, and often suffer worse outcomes for identical procedures than similar patients both with and without health insurance.
  12. New Hampshire feels the financial burn and is reconsidering Medicaid expansion: Medicaid expansion is not working in New Hampshire. According to the National Association of State Budget Officers’ annual report, in New Hampshire Medicaid grew from 24 percent of the overall state budget in 2012 to 27 percent in 2014. In January 2015, the state’s Department of Health and Human Services announced that it was $82 million over budget, thanks to Obamacare, Medicaid expansion and to the original Medicaid program expanding with additional enrollees. Lawmakers are now deciding whether to continue the expanded Medicaid program which sunsets in 2016.
  13. The federal government’s promises aren’t reliable: The U.S. Supreme Court told the federal government mandating Medicaid expansion was unconstitutional. However, they admitted this year that if Florida didn’t expand Medicaid under Obamacare, they would not be incentivized to continue the Low Income Pool funding. If they would pull funding from some of the most vulnerable in the system, what wouldn’t they do?
  14. Florida taxpayers will foot the bill for billions: Florida taxpayers will be responsible for a tab of billions of dollars as the federal government requires increasing shares from Florida’s budget after a certain point if the state expands Medicaid under Obamacare. Even if the federal government keeps its “promise” on the funding percentage, Florida taxpayers will be responsible for 10 percent of the total cost of expansion, a tab that will run into the billions based on even the most conservative estimates.
  15. Having health insurance isn’t the same as receiving healthcare:Medicaid is socialized health insurance, not access to healthcare. There is no guarantee that just receiving socialized insurance means an individual receives quality service.
  16. The majority of the Medicaid expansion population consists of working-age adults: The overwhelming majority of the Medicaid expansion pool are made up of childless, able-bodied, working-age adults. Expanding a failing entitlement program for this population will only lock people into the cycle of dependence.
  17. Medicaid expansion creates a perverse disincentive to improving one’s financial status: In many cases, making just a few more dollars per year will actually cost a person thousands in copayments, deductibles, and out-of-pocket expenses resulting in being pushed out of Medicaid rolls.
  18. Illinois faced unanticipated cost increases in the billions:Medicaid expansion isn’t working in Illinois. Forbes’s Akash Chougule reports, “Health officials originally estimated it would cost $573 million from 2017 through 2020 when the state’s funding obligation kicked in. But nearly 200,000 more people enrolled in the program in 2014 than originally projected. State budget officials were forced to revise their cost estimates to $2 billion—more than triple initial estimates.”
  19. Medicaid will cost Florida way more than anticipated: The cost projections for a Medicaid expansion in Florida are unreliable and grossly underestimated. Several states are experiencing the financial strain of Medicaid enrollment figures well higher than initial projections.
  20. Medicaid expansion wouldn’t necessarily result in more coverage or access to care: Florida’s own Medicaid director stated that he couldn’t guarantee the expansion would result in more coverage or access to care.
  21. Medicaid expansion increases private insurance rates: Expanding Medicaid rolls will inevitably distort the risk pool causing private insurance premiums to rise, effectively shifting more of the cost of expansion onto taxpayers and those not receiving Medicaid benefits.
  22. Ohio taxpayers face a $400 million bill: Medicaid expansion isn’t working in Ohio. Ohio’s Medicaid expansion is expected to be nearly $1 billion over budget in June. With Ohio on the hook for 10 percent of the expansion’s cost by 2020 (if the federal government keeps its promise) that will result in an annual cost of over $400 million for Ohio taxpayers.
  23. Expanding Medicaid will likely increase fraud: Medicaid expansion will increase the amount of fraud and abuse within an already strained government program
  24. The systemic issues in the healthcare system will not go away:Expanding Medicaid does absolutely NOTHING to address systemic issues facing Florida’s healthcare system that impact everyone.
  25. Dependency cycle will expand beyond true safety net intent: 
    The idea behind the safety net programs has always been to serve individuals in need, while providing mechanisms to pull out of dependence into productivity, not to create generations of citizens who know nothing except government reliance. By expanding Medicaid to populations that are outside the typical safety net composition, we effectively enlarge and encourage the cycle of dependency to grow and become more ingrained in our culture.

Collectivism in SW Florida

Ayn Rand wrote a short nineteen page paper asking: What is the basic issue facing the world today? Rand, in her paper makes the case that, “The basic issue in the world today is between two principles: Individualism and Collectivism.” Rand defines these two principles as follows:

  • Individualism – Each man exists by his own right and for his own sake, not for the sake of the group.
  • Collectivism – Each man exists only by the permission of the group and for the sake of the group.

The idea of collectivism is alive and well not just in Washington, D.C. but also in SW Florida. Specifically, in the Englewood Water District, which has decided to forsake the individual and vote in favor of the collective. Government at every level has a propensity to expand, and with that expansion it takes power from the poor in the name of the “greater good”.

According to the Englewood Water District website:

A small group of members from the Englewood Chamber of Commerce formed a “water committee” in 1955 to look into the water “situation.” During the next 4 years they had the perseverance, determination, and dedication to make the Englewood Water District a reality. They fought the odds, and the obstacles, because they saw the need to develop a high-quality, clean water system that would provide for the present and future Englewood. As they moved forward in their efforts, they learned the water and sanitary system could be owned and managed by the people of Englewood and not an outside source. They realized not only would residents’ health conditions be jeopardized without a water and sanitary system, but also the Lemon Bay environment. [Emphasis added]

So what is it that this “water committee” is proposing that has residents of the V9C District of Englewood, FL and others so agitated? The Englewood Water District has decided that for the “greater good” a group of citizens living in the V9C District of Englewood who currently use septic tanks must now pay (read imposed tax) to hook up to the city sewer system, whether they want to or not. Data shows there is no threat to the existing water quality or health conditions of those living in Englewood.

The bottom line: The 314 families living in Englewood’s V9C District are being forced to do something that they do not want to do, nor need to do.

Kathy Bolam, member of the Board of the South Venice Civic Association and the Governmental Affairs Committee, at a Sarasota Board of County Commission meeting testified:

Government was formed by the people to protect our rights and defend us from enemies whether foreign or domestic. That’s why we are asking your voice to be added to ours, because Englewood Water District in a bill passed by the Florida legislature in 2004, called their Enabling Act took away all property rights from the people living in the V9C district. The people in this district never were told about this bill, didn’t get the chance to read it or respond. As a result the EWD board of Supervisors feel empowered to expand their sewer program whether there is a public health or environmental need and whether the people want it or can afford it.

The results of their program will result in several families losing their homes. The area is mostly made up of retirees on fixed incomes and working single mothers, and small families. Those who cannot make the full payment when invoiced of $8,666.94 will then have $834.99 added to their property tax bill for 15 years. If they do not pay those taxes, the tax lien will be sold, and they will lose their home. One lady’s current tax bill is less than $500.00 and she stated that after paying her mortgage, etc. she has barely enough money to eat. Instead of decreasing the amount of homeless people, this action by EWD will increase it. U.S. Senator Elizabeth Warren said in a speech on Jan 7, 2015 quote “Since 1980, guess how much of the growth in income the 90% got? Nothing. None. Zero. In fact, it’s worse than that. The average family not in the top 10% makes less money than a generation ago.” Close quote. People just cannot afford to pay for something, they don’t need and don’t want just because a government body assumes they have the authority and power.

According to the Florida Constitution at Article 1 Section 1, it states that “All political power is inherent in the people.” Therefore, the voice of the people supercedes the goals of the EWD Board of Supervisors. Therefore, we ask you to send a fax, e-mail to that Board requesting that they be true to their Oath of the U.S. Constitution and the Florida Constitution and not violate the “voice of the people.”

According to Bolam, “Jerry Paul who was the local state representative for this area will be at the meeting talking about funding. He was the state representative in 2004 and was responsible for the Enabling Act.  He currently is a lobbyist (Capitol Energy Florida) for EWD and for Key Agency (EWD co-chair Mr. Fogo is financially connected to Key Agency). EWD renewed their insurance coverage with Key Agency.”

The Englewood Water District is moving forward and a final vote on taking the property of these families will occur on Thursday, June 4th, 2015 at 8:00 a.m. Citizens may call the Englewood Water District at 941-474-3217 to voice their opinions on this issue or attend the meeting at 201 Selma Ave, Englewood, FL.

Some Basic Economic Truths

During the summer of 1985 my oldest son, Mark, decided to leave his job as a chemistry teacher in a Silver Spring, Maryland, Catholic Boy’s High School to complete his Master’s thesis and his Doctoral work in Metallurgical Engineering at the University of Oklahoma.  With little money to finance the move, he was looking for ways to transport his wife; his five-year-old stepson, Chris; and his four month old infant son, David, from Washington, D.C. to Norman, Oklahoma.

Having recently retired from my job with a major oil company in suburban Philadelphia, I offered to help with the move.  So, on the appointed day I drove to Silver Spring and loaded every cubic foot of my trunk and my rear seat with some of their belongings.  As we headed west on Interstate 70, my son took the lead in a borrowed Mercury station wagon, with every cubic foot filled to capacity; my daughter-in-law followed close behind in their worn-out old Toyota, the baby strapped into a car seat beside her; and I brought up the rear with five-year-old Chris riding “shotgun” in the passenger seat beside me.

The trip across the country was not up to my usual standard for cross-country driving.  Since the Interstate highway from Indianapolis to St. Louis was completed, but unposted, I had always taken that to mean that they wanted me to use my own discretion.  As a result, I was accustomed to driving the 1.030 miles from Philadelphia to St. Louis in just under fifteen hours.  But on our trip in August 1985, from the D.C. area to St. Louis, it was drive two hours, nurse the baby, drive two hours, nurse the baby, and on and on.  Then, after a night’s rest in St. Louis we set out again the next morning for the last leg of our trip from St. Louis to central Oklahoma.

As we had lunch in a roadside restaurant in Joplin, Missouri, I remarked that we were just a few miles north of Camp Crowder, Missouri, where I spent the first week of my U.S. Army military career, and that I’d like to revisit the place sometime just to see if it was the same as it was in the summer of 1953.

That was the last word on the subject until we crossed the Missouri/Oklahoma state line fifteen or twenty minutes later.  It was then that young Chris said, “Grandpa, tell me about some of your war wounds.”

Not wanting to go into detail on how I was machine-gunned by a group of South Koreans in a “friendly fire” incident during basic training, I decided to tell him some stories about wounds I received when I was a boy, just a few years older than he.  So I proceeded to describe a long ugly scar I have on my right knee that I received when I was just ten or eleven years old.  When I had described the scar, Chris said, “Grandpa, how did you get that wound?”

I said, “Well, as I recall, my friends and I were at the local ballpark in my hometown, crawling around under the bleachers, when I knelt on a broken soda bottle.”  To which he replied, “What were you doing crawling around under the bleachers?”

I said, “We were looking for small change, nickels and dimes that people had inadvertently dropped while watching a softball game.”

“Why were you looking for nickels and dimes?” he asked.

To which I replied, “We wanted to buy some sodas.”

He thought for a moment, a puzzled look on his face.  Then he said, “Grandpa, you can’t buy a soda for five or ten cents.  Sodas cost sixty cents.”

Not when I was your age,” I replied.  “When I was your age we could by a soda for five cents.”

That came as a big surprise to him.  He said, “How did that happen, Grandpa?”

I said, “The Democrats did it.”

“The Democrats did it?  Why did they do that?”

Thinking I’d impart a bit of economics wisdom, I said, “Well, the Democrats discovered many years ago that if they passed a law taking money away from people who have jobs and who work for a living, and give it to people who don’t have jobs or who don’t want to work, the people who get the free money will always vote for them on election day.  That helps to create what we call inflation and that’s why a soda costs a lot more than five cents today.”

This was obviously a new concept for him and I could almost hear the wheels turning in the seat beside me.  Finally, he said, “Grandpa, could the Democrats pass a law that would make candy free?”

I replied, “Sure they could.  But think about it… if the Democrats made a law saying that candy would be free, how long do you think the people who make candy would continue to make it?”

New concept; I could hear the wheels turning again.  Then he said, “Grandpa, am I a Democrat?”

I said, “Well, it’s too early to tell.  We’ll have to wait a few years to find out.”

Then he asked, “Grandpa, could the Democrats make a law that some candy would cost money and some would be free?”

I replied, “Yes Chris, the Democrats could make some candy free and others that would cost money.  But are you asking whether the Democrats could make a law saying that the kind of candy you like would be free and all the rest would cost money?”

A big smile crossed his face.  He nodded his head and said, “Yeah!”

I said, “You’re a Democrat.”

I’m happy to report that my step-grandson has turned out just fine, in spite of his Democratic leanings as a five-year-old.  He graduated from the University of Oklahoma with a degree in Economics and is now a successful executive with a major Oklahoma City bank.  But now, thirty years later, there is evidence that many who were as ignorant of basic economic principles as my grandson was at age five, are still burdened by the same economic illiteracy.

The proof of what I say can be found in the television commercials of a company called Lear Capital, Inc.  In their most recent TV ads they tout the current low price of silver, showing a two dimensional graph in which the abscissa, or x-axis, represents time, and the ordinate, or y-axis, represents the fluctuations in the price of silver.  If one were to believe the graph, the market price of silver during a significant time period represented on the graph dipped to less than the price of production.  In fact, that claim is made quite clearly in the Lear Capital voice-over.

When I saw the ad I couldn’t help but be reminded of my grandson’s attitude toward the candy market when he was just five years old.  The fact that a precious metals marketing firm would continue spending big bucks attempting to convince television viewers that mining companies are continuing to mine silver when the market price is less than the cost of production, is proof that there are some adults out there in TV land who still believe in the Tooth Fairy.

When I posed the hypothetical question to my grandson thirty years ago, asking him how long he thought candy manufacturers would continue to make candy if there was no profit in doing so, it never occurred to me that, some thirty years later, silver miners might be doing just that.

However, there is some empirical evidence that there are fewer consumers who might fall for that advertising scheme than we might think.  Another Lear TV ad that has run on a daily basis for many months proclaims that the first one-hundred callers to their 800 number will receive up to $500 worth of free silver… just for calling their number.  If, in fact, callers to that 800 number are actually given silver coinage, they could be given a silver ten-cent piece, just for their taking the time to listen to a sales pitch, and the marketer could still claim truth in advertising by hanging their hats on the words “up to.”

Nevertheless, it is frightening to think that Madison Avenue advertising firms have such a low opinion about the economic smarts of the American people that they would air such an insulting advertisement.  My step-grandson has discovered some important economic truths.  Apparently, some in the corporate world and on Madison Avenue have not.

VIDEO: IRS Commissioner Admits the Tax Code Cannot Be Understood

“The best thing [Congress] could do would be simplify the tax code,” Koskinen told the National Press Club on March 31. “I don’t know how anybody understands all the ramifications of it.”

The IRS Commissioner also quipped that, “the IRS code is longer than the Bible, with none of the good news.” Read more.

A Handy Glossary for Tonight’s Class Warfare State of the Union Speech

Let me preface this piece by saying that if you have convinced yourself that the government, by taking more of our money through higher taxes, will make us all more prosperous, then you need not read any further. I have come to learn that any attempt to persuade the far-left “tax-and-spend” crowd is a fruitless endeavor despite the obvious disconnect between what these people say, and what they do. This piece is directed at ordinary Americans who, as evidenced by the mid-term election results, have lost patience with the “big-government-is-best” crowd.

Whether it’s John Kerry’s tax avoidance scheme…or the Obamas spending $1,000 on just one meal at a club that charges an unbelievable $500,000 for membership, it’s clear that the leaders of the far-left are living by the credo “do as I say, but never as I do.”

I have asked many of the tax-and-spenders two simple questions and I rarely, if ever, get a reasonable answer.

Question #1: Do you voluntarily pay more in taxes? Hint; they always say no (despite demanding that we pay higher taxes).

Question #2: How does taking more of my money make me better off?

If you decide to tune in to Tuesday’s State of the Union speech or to ask your tax-and-spend friends the above questions, I have provided you below with a glossary of key buzzwords and phrases you will find in the president’s speech and in their answers:

“WE NEED TO” – The tax-and-spend crowd never discuss taxes in terms of “I need to” and “you need to,” largely because they avoid higher tax rates themselves and they know you don’t want to pay higher taxes either. Using the term “we” rather than the terms “I” or “you” is a clever rhetorical-trick they use to make you believe that the “other guy” is going to be hit by the new taxes, not you. Whether it’s John Kerry’s tax avoidance scheme by parking his $7 million luxury yacht in Rhode Island to avoid paying the $500,000 Massachusetts tax bill, the Clintons avoiding hundreds of thousands in estate taxes by using shady loopholes to divide their real-estate holdings into trusts, or the Obamas spending $1,000 on just one meal at a club that charges an unbelievable 500,000for membership, it’s clear that the leaders of the far-left are living by the credo “do as I say, but never as I do.”

“IT’S AN INVESTMENT” – I love this one because it requires tax-and-spend types to completely exit the world of the real for the world of wishful thinking. An “investment” is something individuals CHOOSE to do with their money where they put off immediate satisfaction for future payments based on a reasonable expectation of future gain. When government takes your money in the form of taxes to “invest” they do the following:

Tragically, this scene is repeated everyday inside the D.C. inner circle and rhetorically disguised as public “investments.”

1) They have CHOSEN for you what you chose not to do in the first place. If you wanted to “invest” in Solyndra then the opportunity was there, and the fact that Americans didn’t invest in Solyndra should have been a sign to the government that something was wrong. Instead, they took your money and gave it away at an incredible loss to all of us. Tragically, this scene is repeated everyday inside the D.C. inner circle and rhetorically disguised as public “investments.”

2) They distort the markets they enter by giving away your money to their connected friend’s businesses and, at the same time, assisting their connected friends in crushing their unconnected business competitors. If you have money, then it pays to make government connections to ensure your “investments” never lose.

3) They take your dollar and make it worth less before the “investment” is even made. The government bureaucracy siphons off a large percentage of your money before it arrives back in the economy, a phenomenon economist Arthur Okun called the “leaky bucket.” What “investment” have you ever made that is guaranteed to lose money before it’s even proposed? Only in government-speak is this a sound “investment.”

“FAIR SHARE” – An inconvenient series of facts for the tax-and-spend crowd, which they contort themselves to explain away, is that the government is taking a historic amount of money from you, and the highest income-earners already pay a significant share of the taxes. For the first time in American history the government took over $3 trillion from you in taxes, an astounding $1 trillion more than they took from you in the year 2000. Also, the top 20% of income-earners already pay 70% of the taxes and earn about 52% of income. Think about that, just 2 out of 10 Americans pay 70 cents of every tax dollar the government takes. If this isn’t a “fair-share” then you owe it to us to explain what percentage is, and how you figured that out.

Obamacare is decimating middle class incomes by hiking premiums while, at the same time, increasing the costs of healthcare for business owners and dramatically reducing the take-home-pay for their employees, as employee salaries stagnate to compensate for the increased healthcare costs.

“THEY DON’T NEED ALL THAT MONEY” – This one is ironic because most of the leadership of the modern tax-and-spend crowd seem to “need” a whole lot of money themselves. Whether it’s liberal rock-star Elizabeth Warren, or Bill Clinton, both with a net worth in the tens of millions of dollars, they appear to “need” millions of dollars for themselves, while telling the rest of us that we “need” a whole lot less.

“WE NEED TO BUILD THE MIDDLE CLASS” – This is an often used, yet ironic, statement considering so few of the tax-and-spend crowd are defined as “middle-class” yet, the people they preach to, are. Doubly ironic is that President Obama has rode roughshod over our economy with a hapless class warfare agenda of new and higher taxes on income, investments, capital gains, payroll, healthcare, and more. But, with each new tax, the rich get richer and the middle class are stuck in the mud. Here’s the painful truth about why this is happening:

1) The high corporate tax is driving quality manufacturing jobs out of our country, and to countries with more reasonable tax rates. This is harming the middle-class that needs these jobs to keep pace with the increasing cost of living.

2) The compliance costs for the massive new piles of red tape regulations the Obama administration has thrown at us are costing American businesses billions of dollars. But, here’s the catch, big businesses with connections get richer because they already have massive legal departments to deal with the regulations and their smaller competitors go out of business trying to comply. Again, the middle-class and small-business owners get screwed.

3) Obamacare is decimating middle class incomes by hiking premiums while, at the same time, increasing the costs of healthcare for business owners and dramatically reducing the take-home-pay for their employees, as employee salaries stagnate to compensate for the increased healthcare costs.

In conclusion, the President will deliver his State of the Union speech this Tuesday and, at some point in the speech, will use one, if not all, of the above terms and phrases as he proposes $320 billion in NEW taxes on us. He will disguise these taxes on us in flowery, class warfare rhetoric designed to divide us into artificial groups but, he will never be able to answer the simple questions I posed above without resorting to verbal judo and linguistic gymnastics.

EDITORS NOTE: This column originally appeared in the Conservative Review. The featured is by Charles Dharapak | AP Photo.

A Year In Review for Big Government

obamacare 2Last year may have been that inflection point where it all turns around and, although nothing is permanent, I am confident that the tide of big government that has rolled upon our shores may be beginning to recede. A series of electoral and policy failures which have blackened the eyes of big government acolytes piled up in 2014, and the devastating results have made it impossible for the media to hide under the bed. Here are just a few of 2014’s big government low-lights:

  • Big government candidates running under the Democratic Party banner suffered humiliating defeats in the 2014 elections. The Republican Party will now control 54 of the 100 seats in the U.S. Senate, 247 of the 435 seats in the US House of Representatives, and 68 of the 98 partisan legislative chambers. They will also control both branches of state legislatures in 29 of the 50 states and, incredibly, will control the governorship in 33 of the 50 states, including deep-blue states such as Illinois, Massachusetts and my home state of Maryland.
  • Even the Republican losses to big government Democratic candidates in deep-blue states were extremely close. Big government Democratic Governor Dannel Molloy of Connecticut barely slipped by Republican Thomas Foley and Vermont’s big government Democrat Pete Shumlin hardly survived reelection in deep-blue Vermont, defeating Republican Scott Milne by just over one point. At the federal level, a number of big government Democrats in the U.S. House of Representatives barely slipped by their opponents, even in “safe” Democratic congressional districts. Despite winning a series of congressional elections by double-digits, New York Congresswoman Louise Slaughter defeated Republican Mark Assini by just one point.  I lost my race to unseat Maryland Democrat John Delaney by only one point in a race Delaney won by 21 points just two years ago.
  • millionaires tax quoteBig government programs are failing at an alarming rate. Obamacare has reached new lows in approval, with just 37% of Americans approving of this legislative disaster. Obamacare costs are projected to rise dramatically in the coming years as doctors drop out of the program and the new penalties and taxes are enacted. Also, the Obama administration’s takeover of the student loan industry is on the verge of collapse as forbearance requests, defaults, and requests for loan forgiveness under Obama administration programs reach catastrophic levels.
  • France, taking a lesson from outgoing Maryland Governor Martin O’Malley, instituted a “Millionaire’s Tax,” which was described by one critic as “Cuba without the sun.” Despite warnings from rational economists about its destructive effects, big government French President Francois Hollande pressed ahead with his plans to institute the 75% tax rate. After a near rebellion in the business community, a slap-down by the courts and, as happened in Maryland after their version of the “Millionaire’s Tax,” an abject failure to raise even close to the tax revenue anticipated, the tax expired and will not be renewed. As it turns out, even committed Socialist Francois Hollande’s calculator and abacus cannot make 2 + 2 = 6.
  • jobs obama last two yearsAmerican workers and businesses have finally managed to escape the yolk of big government as it appears that the economy may finally be recovering. But this is now the worst statistical recovery from a deep recession in modern American history. To reach the Reagan or Clinton-era job-production numbers, over ten million jobs would have to be created by the economy in the president’s final two years. Even if the best month of job creation under President Obama was replicated every month for his final two years, he would still be nearly 4 million jobs short. Also, it takes about 4 to 5 quarters to get through the average recession and to reach recovery, while this president took an incredible 16 quarters to reach the level of a “recovery.” President Obama’s big government ideology has managed to produce a labor participation rate (the actual number of people working) which is the lowest in 40 years, all while presiding over a government with the largest number of people ever receiving government assistance.

The good news is that 2016 is approaching and, with the right leadership, this economy is ready to explode. I am confident that the future is bright because the American people cannot be held down for long. Eventually they will rebuild their lives and their futures, in spite of big-government doing its best to anchor itself to their backs.

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