New York Branch.
As the quid pro quo for agreeing to Governor Andrew Cuomo’s demand for his higher minimum wage, the New York Senate Republicans browbeat him into accepting a tax credit for businesses who hire at that new minimum wage.
Leaving aside the anti-hiring outcomes of minimum wage increases, as a result of this foot-shooting everyone in New York now gets to pay a piece of that higher wage, not just the businesses and their customers.
Brilliant, guys.
Under Obamacare, writes Emily Chasan in The Wall Street Journal, employers will be required by 2018 to pay a tax of 40% on health care plans that President Barack Obama and his minion, Health and Human Services Secretary Kathleen Sebelius, decide for themselves are somehow “excessively rich” in the benefits they pay out.
The excuse these two and other Progressives make for this is that these Cadillac plans, with their low deductibles and “generous” medical coverage, will encourage overuse of our health-care system. Sure. Everyone needs to be covered. But only to a government-approved degree. And never mind that those low deductibles make the policy purchasers ineligible for Health Savings Accounts—Progressives don’t want Americans to have those, anyway.
But these folks also ignore—or don’t understand—another aspect of their interference. Competition in a free market for health insurance, including an ability for insurers to charge risk-based premiums, and for health services would address that “overuse” concern much more efficiently than a 2000 page law with its tens of thousands of pages of HHS rules ever could. Such an environment would directly impact the costs born both by suppliers and their customers/patients.
The competition would drive down the prices charged, and risk-based premiums within that environment would enable insurers to bill for the coverage offered in accordance with the actual likelihood of payout. Yes, some high-risk coverages would get more expensive, but the vast majority of coverages, by not having to be priced so as to subsidize those high risks, would get a lot cheaper.
Also, customers and patients would gravitate to the combination of policy coverage and medical service usage that actually interested them, instead of having to buy a government-approved policy that included things only a bureaucrat could love. An equilibrium would develop that had customers and patients getting the policies and services they wanted at prices that suited them with insurers and providers offering those services and policies at prices that would let them stay in business.
There’s no need of a tax to manage demand and supply. Americans are fully capable of doing that for themselves in a free, competitive market.
The Heritage Foundation has looked at it. As has already been pointed out, Senate Budget Committee Chairwoman Patty Murray’s (D, WA) budget has little good in it; although it does preserve the sequester cuts in their magnitude and general allocation. However.
Cynically, it raises taxes on Americans—and amazingly, on our businesses, which already are subject to the highest rates in the world—by a shade over $1.5 trillion. This isn’t new, but their budget is worse than originally thought. The Democrats’ guess (and I use that term advisedly) of getting $155 billion per year over the next 10 years is based on their erroneous static analysis. A dynamic analysis, which includes the actual and ongoing effects of taking this much money out of the economy, indicates that this “budget” would only get $88 billion per year. Heritage’s graph below illustrates the year-by-year revenue flow. 
This only exacerbates the impact of the Democrats’ continued increases in spending on our debt and on our economy. Their 5% increase in spending, in every year of those same 10 years, increases the Federal budget deficit, and it contributes to a continued explosion in our national debt—to the tune of $7 trillion more added to an already ruinous level.
But that’s all to the good, anyway, right? The Democrats say so. The Senate Republicans have a different analysis. Overall, they point out that this budget would
They also look on a state-by-state basis, and the outcome is clear and even starker (it’s important to note here that the state-by-state analysis was done by the Senate Budget Committee’s staff economists, not by Republican staffers). Here are the outcomes for, oh, say, California and Texas.
California:
For the state of California these tax changes mean losses in personal income, household disposable income, and job opportunities:
Texas:
For the state of Texas these tax changes mean losses in personal income, household disposable income, and job opportunities:
There are no states—none—in which the Budget Committee’s staff economists projected gains in personal income, household disposable income, or job opportunities. Every state suffers losses as a result of this Democrat budget.
Spiegel International Online notes that the Cypriot government may be figuring out some of the foolishness of the troika’s (ECB, EC, and IMF) demand concerning the latter’s “offered” bailout as well as some of the variants under discussion. Some of those variants include reallocating the confiscationtax according to more deposit account sizes than just two, and hitting the highest—still those over €100,000 with a 15.6% claim.
[C]oncerns have emerged that a large number of foreign investors and depositors will withdraw their money from the country en masse. Critics warn this would devastate Cyprus as a financial center and also threaten the country’s entire economy.
Well, yeah.
Still, even the current proposal has central bankers nervous. Officials at the Cypriot central bank are still fearing a massive capital flight. Central bank head Panicos Demetriades said he expects that at least 10 percent of deposits will be transferred abroad during the first few days after the banks reopen, according to lawmaker Roula Mavronikola who attended the session.
Demetriades is optimistic. The Cypriot banking system would be fortunate to retain a single euro, were this institutionalized theft to go through. The only way to stop the capital flight would be for the government to steal it all.
In the event, though, the Cypriot Parliament rejected any sort of levy, rather resoundingly.
And these guys are serious.
Recall that Cyprus is as bankrupt as Greece. In order to bail out Cyprus (we’ve been over the legitimacy of bailouts elsewhere), the European Central Bank, European Commission, and the IMF have demanded a one-time tax on deposits: 9.9% on deposits over €100,000 ($131,000) and 6.75% on smaller deposits.
Nothing underhanded about any of this, either. Uh, uh. Because depositors, including many of the 3,500 British soldiers stationed in Cyprus, are complicit in the incompetence of the banks’ management. Yeah. That’s it. We’ll go with that.
Finance Minister Michalis Serris already has taken steps to block depositors from taking their money out ahead of the tax:
We have taken immediate measures so that electronic transfers cannot take effect before banks reopen on Tuesday [today is a holiday in Cyprus.]
Chump change was recovered by depositors over the weekend via Cyprus’ cash machines, but the machines’ money stocks were limited and not replenished as they ran out. Willy Sutton couldn’t have done it better.
A planned weekend vote by the Cypriot Parliament to pass this thing, however, was been postponed until today amid…concerns…that the Parliament may have more integrity than Serris and block the “agreement” with the ECB, the EC, and the IMF.
This is supposed to raise €5.8 billion ($7.6 billion). Think about this, though. Are the interest rates or investment rates of return that the Cypriot banks are paying on those deposits more or less than those taxes? You get three guesses, and the first two don’t count. For how long will those depositors leave their remaining money in those banks? Again, three guesses, and the first two don’t count.
This is what happens when the wrong folks are left in charge of OPM.
Update: Cyprus’ legislative vote has been delayed until Tuesday afternoon.
Update again: Today (Tuesday) the Greek Parliament rejected any “tax” on private deposits by a vote of 36 “No,” 19 abstentions, and 0 “Aye.”