Tag Archives: taxes

Romney’s Tax Plan and Obama’s Tax Plan

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It’s interesting, at this juncture just after the third debate—on foreign policy—to look at the proposals the two Presidential candidates have for personal taxes and personal tax reform (yes, yesterday’s debate and tax policy have little to do with each other, but never mind about that).

The Wall Street Journal provided a description of Republican Presidential Candidate Mitt Romney’s proposal.  Against a backdrop of an across the board rate cut of 20% (along with a reduction in the top business tax rate from the current 35% to 25%), Romney is proposing a cap on the total value of the deductions and credits an individual or family might take.

During the first Presidential debate, Romney proposed

What are the various ways we could bring down deductions, for instance?  One way, for instance, would be to have a single number.  Make up a number—$25,000, $50,000.  Anybody can have deductions up to that amount.  And then that number disappears for high-income people.

He repeated the concept in early October, suggesting a $17,000 cap with higher income people perhaps having a lower cap.

In the second debate, Romney again put forward his concept.

I’ll pick a number—$25,000 of deductions and credits, and you can decide which ones to use.  Your home mortgage interest deduction, charity, child tax credit, and so forth, you can use those as part of filling that bucket, if you will, of deductions.

Of course Progressives and the NLMSM want yet more specificity, and Romney declines to provide it.  In the first place, it doesn’t get much more specific than a cap—no particular deductions or credits are on the table for elimination, so there’s nothing about which to be specific there.  In the second place, Romney acknowledges that there are, also, other

ways to reduce deductions that in any case would have to be negotiated with Congress.

This is quite a different approach to Obama’s concept of negotiation.

Why a cap, rather than eliminating outright several of these market distorting deductions and/or credits?  Each taxpayer would pick and choose the deductions and credits that are of value to him in his particular circumstance, in a particular year.  Thus, these deductions and credits would compete with each other for inclusion.  What a concept: competition and individual choice.  And we’d be accumulating empirical data about which deductions and credits really do have value for us taxpayers.  But those are anathema to Progressives, whose raison d’être would disappear the moment their dependents don’t need them anymore.

Moreover, this competition, coupled with the generally lower tax rates, would reduce the degree of market distortion that each deduction causes.

The cap also preserves, for now, the degree of progressivity in our tax code that in itself is market distorting, yet is politically necessary to get any reform be passed in today’s DC environment.  See the table below.

Notice how, under the current system, the average total of deductions and credits rises with income.  The Progressives’ evil rich would bear the brunt of the effect a deduction cap.  And middle income Americans wouldn’t feel the cap at all.

Set in apposition to Romney’s proposal is Democratic Presidential Candidate Barack Obama’s tax plan.  We’ve seen his idea at the link above: raise taxes on those Americans whom he despises.  And for what purpose?  Not to pay down our national debt or even to reduce the Federal budget deficit.  No, Obama intends to use his tax increase to transfer funds to his favored Americans—union, and so-called green energy, cronies who will then fund his political power.  And he’ll use the monies to fund the rapidly increasing spending for which he called in the last two budget proposals he sent to Congress.

Hmm….

Extortion

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Fox News is reporting that the

White House confirmed Thursday that President Obama is prepared to veto legislation that would skirt the so-called “fiscal cliff”—a battery of tax hikes and spending cuts—unless Republicans consent to raise taxes on top earners.

Democratic Presidential Candidate Barack Obama plainly willing to see our economy collapse into another recession every bit as deep as the one from which we’ve not yet recovered solely for the sake of the ego of his getting his way on tax increases.  Obama demands to raise taxes on the 2% of the wealthiest of Americans while leaving taxes alone for the remaining 98% of us.  That’s his number, 2%.  Even though his tax increases will impact far more Americans than that (like anyone with income over $250k—small businesses, for instance, which pass through their incomes to the mom and pop owners/partners for tax payment), let’s take his number for argument’s sake.  What Obama is saying is that he’ll cheerfully blow up our economic future because he can only get 98% of what he claims to want: unchanged taxes for the 98% of the rest of us.

This makes crystalline what Obama really wants: those taxes on that group of Americans which he despises so much.  Obama doesn’t care a whit about the middle class or the poor, whom he could help by calling off his self-imposed gridlock.  He’s only concerned about the rush he’ll get from getting his way and getting over on that unacceptable group of citizens.

But this failure goes far beyond petty ego or the damage done to our economic future; it hits at our ability to protect ourselves from our enemies.  By vetoing any bill that doesn’t have his precious tax increases, even though it would walk us back from the fiscal cliff (just a bit over two months off), he’ll also be vetoing any bill that would end the sequester of an additional nearly half-trillion dollars from our military capacity beyond the already built-in nearly half-trillion dollar cut in spending for defense.  This is having, today, a negative effect on defense-related jobs.  Worse, the veto will put our military’s welfare, training, equipage, and capacity in serious jeopardy.

Here is extortion the Chicago way.  Nice economy you got there….

Lies of my President, Part 4

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This is Part 4 of my series on the lies told by Democratic Presidential Candidate Barack Obama in the nearly four years in which he’s been in office.  As I said earlier, I’m not concerned with his broken campaign promises so much as I am with his dishonesty while in office.

Here’s this little episode, reported by James Taranto, where Obama lied to the Catholic church.  Here’s how then-Archbishop, now Cardinal Timothy Dolan described a conversation and its aftermath with Obama over HHS’ mandate that insurance providers provide coverage for contraceptives and abortifacients, even when that coverage contradicts the religious teachings of the provider:

I said [in summary of his conversation with Obama], “I’ve heard you say, first of all, that you have immense regard for the work of the Catholic Church in the United States in health care, education and charity….  I have heard you say that you are not going to let the administration do anything to impede that work and…that you take the protection of the rights of conscience with the utmost seriousness….  Does that accurately sum up our conversation?” [Mr. Obama] said, “You bet it does.”

The archbishop, says Taranto, asked for permission to relay the message to the other bishops. “You don’t have my permission, you’ve got my request,” the president replied.

“So you can imagine the chagrin,” Archbishop Dolan continues, “when he called me at the end of January to say that the mandates remain in place and that there would be no substantive change, and that the only thing that he could offer me was that we would have until August….  I said, ‘Mr. President, I appreciate the call.  Are you saying now that we have until August to introduce to you continual concerns that might trigger a substantive mitigation in these mandates?’  He said, ‘No, the mandates remain.  We’re more or less giving you this time to find out how you’re going to be able to comply.’ “

Then there’s this cynical distortion of President Ronald Reagan’s position on tax increases, as described by Steven Hayward in Commentary.  In arguing for his permanent tax increase on a group of Americans of whom he greatly disapproves, Obama cited this from Reagan:

Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer.

As Hayward pointed out, what Reagan was talking about was this: all the “tax increases” to which Reagan agreed were temporary excise hikes on cigarettes and telephone calls and technical changes in the tax code (such as the elimination of depreciation schedules and the reduction of tax credits and deductions).  Moreover, Reagan refused to accept any rollback or other alteration to the reduced tax rates he’d already fought so hard to win.  Even in the ensuing recession.  Especially in the ensuing recession.  But that’s OK, there’s nothing like a remark taken out of context and then distorted further by its present usage.

Lies of my President, Part 3

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This is Part 3 of my series on the lies told by Democratic Presidential Candidate Barack Obama in the nearly four years in which he’s been in office.  As I said earlier, I’m not concerned with his broken campaign promises so much as I am with his dishonesty while in office.

Last February, Obama had this to say through his Chief of Staff and former Budget Director, Jack Lew.  The remarks first came in response to a question from Dick Gregory, of MSNBC’s Meet the Press, and then in an interview with CNN’s Candy Crowley.

Gregory: Here’s a stat that a lot of people may not know, but it’s pretty striking.  The number of days since Senate Democrats passed a budget is 1,019.  Can you just explain as a former budget director, how do you fund the government when there’s no budget?

Lew: Well, you know, one of the things about the United States Senate that I think the American people have realized is that it takes 60, not 50 votes to pass something.  And there has been Republican opposition to anything that Senate Democrats have tried to do.

and

Crowley: I want to read for our viewers something that Sen Harry Reid, the Democrat Majority Leader in the US Senate, who said, “We do not need to bring a budget to the floor this year.  It’s done, we don’t need to do it.”

Lew: He’s not saying that they shouldn’t pass a budget.  But we also need to be honest.  You can’t pass a budget in the Senate of the United States without 60 votes and you can’t get 60 votes without bipartisan support.

It stretches credulity far beyond the breaking point for Obama—or his ex-budget director—not to know that it takes 51 votes to pass a budget resolution; budget resolutions cannot be filibustered, the point of the 60-vote red herring.  This is a lie, pure and simple.

On the Keystone XL pipeline, there’s this bit of dishonesty.  Recall that Obama killed the pipeline that would have run from Canadian oil sands into central and Gulf-coastal US because he felt “rushed” by Republicans.  Last March, he staged a photo-op to take credit for “expediting” the permit process for a southern portion of Keystone XL, a part that runs in Oklahoma.  And a part that doesn’t need his, or State’s, approval since it doesn’t cross an international border.

And this one:

If you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you.

Never mind that more and more companies are limiting the health insurance coverage they’re offering as insurance costs rise (wait—weren’t these supposed to come down?).  Never mind that as health insurance coverage alters, doctors are increasingly opting out of—or being driven from by the insurance companies—accepting patients with this or that insurance company’s policy.  And never mind that Sears and Darden Restaurants are moving to a plan where they don’t offer health insurance coverage at all.  Instead, they’ll give their employees a sum of money and allow them to shop for their own coverage via an online exchange.

And this: Senator Barack Obama spoke against recess appointments, including signing a letter to President Bush the Younger objecting to a recess appointment.  He also insisted that it’s “the wrong thing to do,” to appoint people who “couldn’t get through a Senate nomination.”

As president, though, Obama has made “recess appointments” while deliberately bypassing any opportunity for the Senate to weigh in: Donald Berwick to Administrator of the Centers for Medicare and Medicaid Services after leaving the position vacant for 15 months before nominating any one at all, just because he didn’t want to hassle with Republicans; Professor Elizabeth Warren to a created just-for-the-purpose “special assistant” position in his office in order to make her the functional head of the new CFPB, when it became clear that she had no hope of being confirmed; three people to the NLRB while the Senate was still in session.

A Tax for a Health Fiscal Cliff

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It joins Democratic Presidential Candidate Barack Obama’s enormous tax hike he has taking place at the start of the new year, and it also creates a health cliff for the nearby future as it actively stifles medical innovation in the US.  “It” is the 2.3% tax that will be charged to American medical device manufacturers—on top line revenue—sales—not on profit.  Former Governor and US Senator from Indiana, Evan Bayh (D, IN), offered some thoughts on this problem in a recent Wall Street Journal op-ed.

As a result of this problem,

For a typical company, a 2.3% tax on revenues equals a 15% tax on profits.  When combined with a 35% corporate tax and state corporate taxes, the tax rate for the medical-device industry will exceed 50% in most jurisdictions.

[This inflicts an] added cost of $30 billion—according to the Congressional Budget Office—to the industry.  This tax comes straight out of a company’s bottom line.  Because many devices are sold to hospitals, physicians and other providers through multiyear contracts, the prices are already locked in, so the tax cannot be passed on to the buyer.

Think about the effects this will have on medical innovation.  Governor Bayh did:

America is a global leader in medical-device production and sales.  Last year the US device industry earned $5.4 billion more in exports than we spent on imports of such devices.

Even more important to the average American is the industry’s role in saving and sustaining life.  Medical devices have contributed to remarkable advances in numerous areas: artificial hips and knees, and devices used in the treatment of cancer, and for angioplasty, vascular surgery and in-vitro fertilization, to name a few.  Many of these devices have not only improved the quality of life for patients, but also produced health-care cost savings—for instance, each time an angioplastic balloon made open-heart surgery unnecessary.

and

Especially hard hit could be the hundreds of small companies developing medical software applications. These apps promise to revolutionize the practice of medicine—for instance, by delivering blood-sugar test results for diabetics.

But now

Thirty billion dollars must be taken out of operations or R&D.  Who knows what lifesaving devices that might have been developed will fall victim to this tax?

What about jobs?

Many US device companies, in response, have already announced layoffs, canceled plans for domestic expansion and slashed research-and-development budgets.  This month, Welch Allyn—a maker of stethoscopes and blood-pressure cuffs—announced that it will lay off 10% of its global workforce over the next three years, but all of the jobs being cut are in the US[]

and

In my state of Indiana alone, Cook Medical has canceled plans to build one new US facility annually in each of the next several years, and Zimmer plans to lay off 450 workers, while Hill-Rom expects to lay off 200.  Stryker, based in Michigan, anticipates having to lay off 1,000 workers[]

and

[P]roduction is moving overseas, good jobs are going to Europe and Asia, and cutting-edge medical devices will now be produced elsewhere for import into the US.

Of course Obama and his Progressive Congressmen knew this when they wrote the tax; it’s part of why the entire bill was written behind closed doors in the back of Harry Reid’s office suite, and why Nancy Pelosi was so anxious to get the bill passed before “we can find out what is in it.”  So much for Obama’s concern for the little guy.  So much for Obama’s concern for the health of Americans.  So much for Obama’s concern for America’s innovation leadership.

Update: added the actual name of the man in the first paragraph.