Category Archives: markets

Value of Your Tax Bill

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…if the money were left in your hands to put toward your own retirement.  WalletHub has looked at the differing state and local tax bites that they charge you for the privilege of living in their fair states.  Not surprisingly (to some of us) Red states take a sharply lower bite out of your money than do Blue states, as the figure below illustrates. 

But what does this mean in practical terms?  I looked at how the tax money could be used for an individual’s or family’s retirement program were the money left in the pockets of the earner.  Even though this study indicated that Wyoming’s state and local tax bite was the lowest, at $2,365, I used Texas’ more middling $5,193 take (middling because, even though Texas was rated as having the 7th lowest collection rate, the difference between Wyoming and Texas was $2,828, and adding that to Texas’ number got me to the neighborhood of DC’s $8,034, which was ranked 37th lowest) as my baseline because that’s where I live.

I also made a couple of heroic assumptions: working from WalletHub‘s assumption of a single filer, I fleshed that out to say he’s just turned 30 (yeah, he’s late to marriage), and he can afford to set aside the amounts identified below in his retirement program (actually, he chooses to afford, since he already can afford—he’s paying the taxes already).  Those amounts are the differences between the state and local taxes he’d pay in the state indicated in the table below and the taxes he’d pay in Texas.  I also assumed our young man can get a 3% return on investing his money, thereby roughly matching historical inflation.  As a 30-year old, he’ll work for 37 years before retiring.    Finally, this is a static analysis; it assumes no tax differential changes over those 37 years.

State, Local Taxes

Tax Difference from Texas

3% Investment Return

New York

$4,525

$172,300

California

$4,316

$164,400

New Jersey

$3,637

$138,500

DC

$2,841

$108,200

Even with that middling difference between Texas and DC, DC’s “state” and local tax bite is worth more than $100,000 over our man’s remaining working lifetime were he allowed to keep his money.  What does he get for that extra tax money taken?  A higher cost of living, and not much else.  More restrictions on individual freedom and responsibility—gun laws, for instance—and a denser population; although lots of folks like that part.

But think about what our man can do for himself with all that extra money—like visits to states with denser populations for all those attractions, while living more cheaply when he’s done with his vacation.  And more support for charities of his choice, through means of his choice, rather than those of government’s choices.

The Liberal Justice and the Birth Control Mandate

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Justice Elena Kagan had a number of questions—as did Justice Sonya Sotomayor—in Tuesday’s oral arguments on Obamacare’s Contraceptive Mandate.  Indeed, counsel for the mandate’s challengers, Paul Clement, wasn’t even allowed to get into his argument, so little were these Justices in a listening mode, but that’s for another post.  Kagan had one “question,” though, which was very telling:

One religious group would opt out of this and one religious group would opt out of that, and everything would be piecemeal.  Nothing would be uniform[.]

Yeah, and, Madam Justice?  So what?  Why must everything fit into a Liberal’s—or Big Government’s—Procrustean bed?  Opting out is part of the Free Exercise Clause—it goes right to the heart of it.  If things do get…piecemeal…where is the problem?  Government convenience is not a reason to deviate from the Constitution on the bench—or to truncate liberty from anywhere.

If it isn’t government convenience, then the Liberal just seems terrified of the noisiness of republican democracy.

Birth Control “Mandate”

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In the Twitter to-do surrounding the Supreme Court’s hearing two cases related to this, Planned Parenthood linked to one of their favorite posters, reproduced just below.  The poster is so mendacious, it cries out for a post in point-by-point response.

1. 99% still can—and 99% already were, long before Obamacare came up.  Neither case before the Court has anything to do with women’s access, only whether employers, or insurers, must cover birth control in every plan offered.  And it’s always been cheap, too, including for guys (why aren’t condoms mandated, by the way?  Whatever happened to equality of the sexes?).  WalMart, for instance sells birth control pills for as little as $4/mo.  The doctor’s appointment to get the prescription still is extra.  WalMart sells condoms for as little as $15 for three dozen.  No doctor’s appointment required.

2. Birth control for health reasons isn’t birth control; it’s medicinal use for treating an illness or other condition unrelated to pregnancy.  As a medicine, it’s already covered in other aspects of a health plan.  If it isn’t, that would be a legitimate gripe, but it would be legitimate only between customers and plan purveyors.  It would remain no business of government.

3. 27 million women still can; this is wholly unrelated to any question of the legitimacy of a contraceptive coverage mandate.  See #1 above.

4. 70%?  That depends on who’s polling.  Of course there’s a bias involved: who doesn’t like free stuff?  Especially when they’re not the ones paying to make it “free.”

5. Who, indeed, are the plaintiffs?  Two families with deeply held religious beliefs who live their religion in their business operations, too—like charity toward all, family nurturing practices vis-à-vis their employees, and so on.  What products they offer to sell matters to this debate how, exactly?

6. Slippery Slope?  This is a cynically offered straw man.  No one is regulating women’s access to birth control here except the government.  No one is looking to regulate access to vaccines, transfusion, etc—except, perhaps government as it attempts to start down this slope.  The only thing the plaintiffs in these two cases want to do is to not be regulated in this arena.  As to access itself, see #1 and #3 above.

7. First time for whom, actually?  Businesses always before have had the choice to offer health coverage plans (back when they actually resembled insurance policies and not Obamacare’s mandated health welfare plans).  Now it’s government that wants, for the first time, to eliminate that right to choose.  And, of course, with this point, Planned Parenthood ignores the fact that in opposing the plaintiffs, they’re seeking nakedly to impose their own personal beliefs on others.  This whole argument also cynically elides the fact that it’s a market choice, not business’ or government’s, that determines what gets included in a health coverage plan.  At least in a free country.

As to the Twitter hashtag #Notmybossbusiness, indeed it’s not.  The employer has no business providing birth control to his employees, “free,” or otherwise.  The use of birth control is a personal choice, not an employer’s.

How Can We Trust This Program?

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ObamaMart’s back end has yet another “glitch,” this time one that impacts whether a potential Obamacare health welfare plan buyer gets the subsidy the Obama administration says is due him.

The Philadelphia Inquirer found this one in its own explorations for a story on the various income scenarios that would draw a Federal subsidy.

Incorrect poverty-level guidelines are automatically telling what could be tens of thousands of eligible people they do not qualify for subsidized insurance.

The error in the federal marketplace primarily affects households with incomes just above the poverty line in states like Pennsylvania that have not expanded Medicaid.  The mistake raises the price of their insurance by thousands of dollars, making insurance so unaffordable many may just give up and go without.

It appears, for now, to be a mistake limited to ObamaMart’s window shopping tool and not the part of the back end that calculates whether there will be a subsidy at all, and if so the subsidy actually to be paid a buyer who actually buys and pays the premium.  The error seems to be centered on the tool’s use of the 2014 Federal Poverty Guideline, rather than the Obamacare-mandated 2013 levels.

This particular error is easy to correct, but it shouldn’t have occurred at all—apparently nobody at CMS cared enough even to check the simple things, like this one, before they decided it would be a good idea to foist this Web site off onto the public.  And apparently nobody at CMS has cared enough to go look in the months since it’s become so embarrassingly well-known what a failure ObamaMart is (quite apart from the disaster that is the underlying Obamacare).

That it was discovered not by ObamaMart’s CMS developers or testers but by someone in the private sector is illustrative of the level of seriousness with which Obama, his HHS Secretary Kathleen Sebelius, or anyone else in HHS or Treasury or the IRS has (not) taken this program.

In the end, though, this “glitch” demonstrates a larger problem: no matter the good intentions, no matter the strength of the consensus that a program is a good idea, Government is simply no good at doing this sort of thing.  The tasks must be left to private enterprise operating in a free market economy.

Indeed, that’s where the needs will be best identified, and producers, sellers, and buyers will coalesce to provide the most efficient implementation.  Or not, if the market—us private citizens—don’t agree that the need exists at plausible prices.

Knowledge of Obamacare

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Seventy percent of uninsured Americans said they do not know about Obamacare tax credits, and 45% are unaware of the enrollment deadline.  So says a poll taken by Bankrate.com.

What might this mean, really, especially in the face of a Democratic Party that’s already demonstrated an impressive skill at getting its message out to all Americans?  Some thoughts come to mind.

  • We aren’t as plugged in to the Internet as we like to think we are.  While that might be true for rural America, the number of rural Americans cannot account for these numbers.
  • Nobody reads the newspapers or watches network news on television anymore.  Declining circulation and Nielson ratings do tend to support this.
  • It might also be strongly influenced by what we actually do when we’re online or reading the papers or watching TV.  Folks no longer read the “news” or watch it on TV—they’re reading the funny pages and sports sections, and they’re watching entertainment programming on TV.  And they’re doing largely the same thing as they surf the Internet.  The “news” items, no longer being unbiased reporting of the day’s events, are being increasingly disregarded altogether.
  • And it might be a simple case of whatever the Democratic, or Republican, Party says is becoming increasingly disregarded: from the fatigue induced by the constant bombardment by both parties (but by the Democrats especially) with political pronouncement, and duns for money which add to the general fatigue, as well as an irritation aspect.  And from a growing disdain for the routine and blatant mendacity of each party.