Monthly Archives: May 2013

Is it Time?

Posted on by
Reply

Fox News is asking the question, “Is it time to overhaul the IRS?”

I say, no, but not for any of the reasons offered by Fox.  It’s time to overhaul our tax code to simplify it to a single flat tax at, say, 10% with no deductions, credits, subsidies, exceptions, differences depending on source of income, or what-have-you, and that everyone pays.

How much money did you make from all sources (wages, cash payments, interest, capital gains, dividends, gambling, etc)?  Pay 10% of that total.  Based on 2007 numbers (i.e., pre-Panic), that actually would increase revenue to Uncle Sugar by a substantial amount.  That’s only a static analysis.  Considering the ripple effects on our pocketbooks and so on our economy—which would take off—that would yield an even more substantial amount of revenue for the government.

Then we can restructure the IRS (as opposed to merely reform it) to vastly shrink it and limit it to the tax bookkeeping function that’s all it would need to be.  At those low tax rates and with no…deductions…there’s no need for an IRS division for special exemptions for this or that organization, no need for an IRS division to gather data and enforce the Obamacare suite of taxes (which would be included in the tax overhaul), no need for eight of the nine IRS divisions in Services and Enforcement.  The rest of the major sections—all overhead—could then be reduced or eliminated.

But first things first.

Obamacare Fail

Posted on by
Reply

…again.

Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage.

Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would broadly enrich benefits—are pitching these low-benefit plans around the country.

This, of course, is backwards.  The coverages here should be paid out of pocket.  The better policy would cover only catastrophic events—like hospitalization.

Then there’s this:

[E]mployers and benefits experts have understood the rules to require robust insurance, covering a list of “essential” benefits such as mental-health services and a high percentage of workers’ overall costs….

But a close reading of the rules makes it clear that those mandates affect only plans sponsored by insurers that are sold to small businesses and individuals, federal officials confirm.

The money-saving bare bones policies are only available to large companies.  The jobs producers remain stuck with the expensive, overwrought mandated policies that they cannot afford.  Nor can they afford the penalties Obamacare exacts for not affording them.

And this from Kansas Insurance Department Special Counsel Linda Sheppard:

The whole idea is to get healthy people in and not-so-healthy people in.

Never mind that healthy people don’t need to be in, since they don’t need the coverage, and so they shouldn’t be being forced in.

This is Amazing

Posted on by
Reply

What a breathtaking failure to communicate.  Regarding the IRS failure to perform, The Wall Street Journal reported this tidbit over the weekend.

The Internal Revenue Service’s watchdog told top Treasury officials around June 2012 he was investigating allegations the tax agency had targeted conservative groups….

The disclosure to the Treasury general counsel and the deputy secretary was a cursory one, according to J Russell George, the Treasury inspector general for tax administration.  He said he didn’t reveal conclusions of the probe, which was in its early stages….

Thus we now see confirmed what was hinted at during Friday’s House of Representatives hearing concerning the IRS’ misbehavior vis-à-vis its targeting of government-disfavored groups and individuals, and IRS officials’ subsequent dissembling about that targeting.  Senior officials in the Obama administration knew of these misdeeds—or at least the allegations of those misdeeds and the investigation into those allegations—for nearly a year, and for months prior to the campaign season Party Conventions.

Then,

Treasury…said Neal Wolin, the deputy secretary, didn’t notify anyone outside of Treasury….

Then,

White House officials say they learned about the targeting of conservative groups from the [IG] report, and not before.

And yet “White House officials” seem to be lying:

The White House’s chief lawyer learned weeks ago that an audit of the Internal Revenue Service likely would show that agency employees inappropriately targeted conservative groups, a senior White House official said Sunday.

Somebody told Kathryn Ruemmler, that chief lawyer. Then Ruemmler told Obama’s Chief of Staff Denis McDonough and others members of Obama’s senior cotery.  She told them further, according to Obama (through Jay Carney), that

this is not a matter she should convey to the president.  Her opinion that this is not the kind of thing that requires notification to the president.

This says amazing things about the judgment and competence of the men and women that President Barack Obama has brought into his Executive Branch: they didn’t think it necessary to inform anyone up the chain–that would be the President–that such politically, not to say legally, explosive doings were afoot.

I have no reason to believe that Ruemmler–or McDonough or that cotery–did, in fact, sit on that bomb.

Update: via The Wall Street Journal [emphasis added]:

The Internal Revenue Service briefed the Treasury Department extensively last month about a looming inspector general’s report that would find the agency had inappropriately targeted for extra scrutiny applications from conservative groups seeking tax-exempt status, a new timeline of events shows.

The IRS consulted Treasury in late April about its plans to pre-emptively apologize for its actions….

Two people kept out of the loop, according to administration officials, were President Barack Obama and Treasury Secretary Jacob Lew. Neither was consulted, administration officials said, because their staff wanted to ensure that it didn’t appear they had interfered in any way in the process.

Yeah.  I still have that beachfront property north of Santa Fe, too.

Let’s Try That Again

Posted on by
Reply

Joe Rosenberg, Loews Corp Chief Investment Strategist, has suggested that large, rich corporations should bailout a spendthrift, debt-ridden Federal government.  After all, he says, since the Federal government had bailed out some big businesses in the Panic of 2008, it’s only proper to return the favor.  As if two wrongs would make a right.

Rosenberg’s proposal is this in its essence:

Companies like Apple, J&J, Microsoft, and other US multinationals are major vendors to the federal government.  Instead of the deficit-ridden government borrowing money to buy their products, let the companies offer the government long-term, no-interest financing in lieu of cash.

In return for this no-interest loan, the companies—which would be required to source the government-purchased products in the US—would be allowed to repatriate 75 cents of every dollar they lend without incurring income tax.  The repatriated cash would pay US workers and US suppliers, increasing employment in this country.

Sadly, no.  The present problem is government spending too much, not being short of money to spend.  Moreover, the demanded vig—paying a 25% tax on the repatriated funds instead of the current 35%, and that only if the money is turned over to the government, anyway—is a money loser for the companies.  On top of which, requiring the government to buy only from American sources means denying the government the lowest prices available for the goods and services it thinks it needs—more wasteful government spending.

Here’s my proposal: companies like Apple, J&J, Microsoft, and other US multinationals should stop being major vendors to the federal government.  Since the government is so addicted to spending it can’t control itself, it’s time for an intervention: stop selling to the government and thereby force it to reduce spending.  These companies will take a hit to their bottom lines from the loss of revenue, but a) the government is paying them with soon to be depreciated—heavily—dollars (that Bernanke Inflation that’s just around the corner from all of his money printing), and b) the hit will be temporary as the companies find other buyers with which to replace the government.

Of What Are They Afraid?

Posted on by
Reply

British PM David Cameron, in another step in his push to give the British people a vote on their continued membership in the EU, has

given his Conservative Party’s backing to a draft bill that would commit the UK to holding an EU referendum by the end of 2017[.]

Of course many of his governing coalition partners oppose this bill—they not only want continued membership in the EU, they want the matter closed without the people’s further input.

Opposition cronies also oppose the thought of acknowledging the people’s view—and the primacy of that view—in the matter, fearing the referendum might actually come out in favor of leaving the EU.  One such crony, John Cridland of something called the Confederation of British Industry, insists

For those of us in the business world, it feels like a diversion from what we should be doing in Europe, which is restoring growth, through trade deals, and championing the reforms that we want to see….

Europe is more important than Great Britain?  What “reforms” does Cridland seriously think he’s going to get through the EU?  Why not focus on helping Great Britain first?

The EU, in fact, is doing nothing serious for Great Britain; it does, in the larger picture, endanger British fiscal soundness with the EU’s own continued demand for bailouts of spendthrifts (which only condones that irresponsibility).

Of what are the opponents of the British voice so afraid?  Or is it simply that the people shouldn’t be allowed waste government resources on making a choice that their Betters already have made for them?