The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
“It is difficult to make predictions, especially about the future,” says a proverb often attributed to Yogi Berra. Imagine the world of freedom, or lack of it. Who could foresee the technologies that make our lives so rewarding and convenient? The same technologies have us all under the government’s giant microscope. Thankfully, the brave have turned the microscope around.
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA's most troublesome behavior has not been a part of the public debate.
National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The problem for NSA apologist is that when guys like Snowden disclose that the government conducts comprehensive surveillance in ways that would have made 1984’s O’Brien drool, it puts the entire progressive agenda in jeopardy.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
In times of war and national emergency, it’s sometimes necessary to sacrifice civil liberties to secure vital gains in public safety. In those cases, we may have to accept a loss of privacy or freedom rather than invite mass slaughter of Americans.The National Security Agency’s domestic phone records collection is not one of those.Never have […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
On Feb. 7 the United States will once again reach its statutory debt limit, meaning it cannot legally borrow any more money. Since the obvious option of cutting spending to match the amount of revenue that the government collects is off the table for some inexplicable reason, Congress will have to pass a new, higher […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
For critics of the surveillance state, it is tempting to see President Obama’s speech a few weeks ago as a partial victory: Prompted by Edward Snowden’s leaks and the public pressure for National Security Agency reforms, he announced significant changes to the program that collects and stores information about all telephone calls. And he promised […]
If you think of American wage-earners as swimmers, they were mostly underwater after 2008. Then last year, wages increased a bit. It was only 2.4% for the year, but it was like coming up for a slight gulp of air.
Now think of Congress and the president as the people in a boat pushing the swimmers’ heads back underwater. That’s exactly what they did when they let the payroll tax arrive on the first day of 2013.
The 2% increase wiped out virtually the whole wage gain for the previous year. It came as a shock to most workers. “There goes my raise,” was the cry heard all over the Web in the first week of the year.
Michael Daneau, who works a lighting store in Rhode Island, posted on his Facebook wall:
“I opened my paycheck today and noticed I got less pay than I usually get on a regular 40 hour week. Obama stole $20 more out of social security. So now I’m back to making what I was making before my last raise. All that hard work paid off! Stick around more hope and change is coming!”
Some follow-up comments:
- “My wife is being taxed another $150 a month making less than $40,000. We will likely have to move back to an apartment from our rental house as a result”
- “I’ve been drawing two days vacation pay each week since my heart attack in early Dec. One day pays for my weekly insurance premium, the other goes towards my rent. This week, I have a $6 reduction in total net ‘income’…”
- “I’ve lost $18 per week”
- “I make about $50,000 a year. I will lose approximately $70 a month due to this hike. Someone with a brain, please explain to me why in the hell my taxes should rise when we’ve all seen the nauseating curve of how well the 1% are doing.”
It came as a shock to most people because a payroll tax increase had not really been part of the negotiations. We endured weeks of wall-to-wall coverage of the “fiscal cliff.” It was a brutal and heavily partisan battle. How much spending? How high or low the income tax rates? Either way, only the rich would be hurt, right?
Think again. The payroll tax is the most broad tax in increase, taking a far greater bite out of income than the income tax as such.
But where was the discussion of the payroll tax increase? There were no speeches about it. There was no back and forth between the parties. This is because, says The Washington Post, there was “general agreement” it had to happen. The government provides these programs. They disbursements have already gone out. They must be paid for. You are on the hook, period.
Earlier in the year, when this subject was discussed behind closed doors, The Christian Science Monitor reported:
“Getting Congress to agree to continue the payroll tax cut yet again might have been problematic. Many politicians, from Rep. Nancy Pelosi (D) of California to Sen. Orrin Hatch (R) of Utah, were less than enthusiastic about extending it. That is in part because the money that would have come from wage earners’ pockets for Social Security was coming instead from the U.S. Treasury’s general fund.”
If anything, the Republicans were even slightly warmer to the payroll tax increase. This is because it was the Democrats who made the temporary decrease part of the stimulus package of 2010. The idea back then, inspired by Keynesian-style theory, was that by letting workers keep more of their money, they would spend more money and thereby increase aggregate demand, which supposedly addresses the key to why the economy is faltering.
Republicans traditionally favor a more supply-side solution. They want tax changes that benefit producers and investors, based on the idea that what is causing the economy to falter is a lack of real investment. They, as much as the Democrats, see the tax system as a tool for a different sort of economic stimulus.
Both sides are right, but for the wrong reasons. Whenever private property is transferred away from owners to the government, the prospects for recovery are harmed. The point isn’t to boost either the supply or the demand side, but simply to let people keep more of their money. Whether that money is saved or spent, invested or blown on fripperies, what matters is that economic growth flows from the decisions that people make on their own, and not the decisions that government makes for them.
But people in Washington of either party aren’t very warm to this idea.
Note this for the future: What matters is not what they debate, but that what they together decide should not be discussed at all! This is the real business of government. It’s the issues that the political parties agree on that the public need fear most. This is the area in which the most deadly fleecing occurs.
So it came as something of a shock to millions to see their paychecks slammed by $20-40 every week. Where is that raise I was just granted? How is this even possible?
Another factor here is the following: Ever since the 1940s, the payroll tax has been fobbed off on the public not as a tax, but as an insurance premium for services coming later. You know, like Social Security and Medicare. In the market, we pay premiums for services delivered at a later date all the time. Isn’t this just the same?
Well, it’s not the same. For one thing, these “insurance” programs aren’t insurance at all. They are direct transfers of wealth. Young workers today are paying the bills for the money that retired workers have already spent. That’s not the market at work. That’s pure redistribution.
Another crucial factor here: No one elects to pay these stupid taxes. They are forced on us. And just as a sweet little reminder that this is true, the government prosecuted a prominent case of failure to pay just days after the payroll tax when up.
Fox News reported on Jan. 6:
“An eastern Wisconsin business owner will spend about a year in prison for failing to pay taxes that had been withheld from employees’ wages.
“According to court records, Lisa Bartz Vanden Elzen, co-owner of Dairy Transport Services of De Pere, failed to pay about $193,000 in payroll taxes. She’s also accused of failing to pay the Internal Revenue Service $81,000, the employer’s matching share of those taxes.
“The Green Bay Press-Gazette reports the 47-year-old was found guilty in U.S. District Court of failing to pay payroll taxes that had been withheld from employee wages from July 2005-December 2010.
“She was sentenced to 366 days in prison and ordered to pay restitution of $274,000 for federal tax violations.”
The message is that the government means business. You may not refuse its benevolence. If you do, you will go to jail. There is no way out. They’ve got the guns.
But of course, you can push people only so far. The growth of the informal sector continues, and this sneaky little robbery is going to push more people into the role of noncompliance, choosing modes of living that avoid the official system altogether and living on a cash basis, using modern financial tools like anonymous debit cards to make doing so more efficient than ever.
Washington tells us constantly that they are looking after our best interests and want to stimulate the economy toward recovery. This little caper is the best and clearest evidence I’ve seen in recent days that this is not the case. What Washington really wants is more of your money.