Tag Archives: taxes

Off Ramps

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That’s the cool, new buzz phrase. Congressmen John Kline (R, MN), Paul Ryan (R, WI), and Fred Upton (R, MI), Chairmen of the House Education and Workforce Committee, Ways and Means Committee, and Energy and Commerce Committee, respectively, used it Monday in The Wall Street Journal to propose alternatives to Obamacare should the Supreme Court strike down Federal subsidies related to health care coverage plans bought through ObamaMart rather than through the State exchanges that the Obamacare law requires for Federal subsidy eligibility.

In the main, their alternatives are good ones, but there are a couple points with which I wholeheartedly disagree, and it’s disappointing that three men who know better would propose them.

We would allow parents to keep children on their plan until age 26.

That’s fine, but 26-year-olds aren’t children; they’re grown adults. They stopped being children at 18, or 20, or 21 depending on the jurisdiction. They stopped being children when they became eligible to make their own binding decisions on legal documents. Retaining sons and daughters on parents’ plans should be a matter of negotiation between the plan seller and buyer; government shouldn’t be involved in magnanimously granting permission—which carries with it the authority to rescind that permission later.

We would prohibit insurers from imposing lifetime limits on benefits.

This is especially disappointing. This, too, should be a matter of negotiation between the involved parties. Mandating an expense to the company, which this plainly does, forces a cost on the customer. There is a greater cost for paying out over an indefinite lifetime than there is for paying out over a known and fixed interval. Denying the company the option to offer either forces the company to pass on the greater cost to the customer, whether the customer wants that much coverage or not. It’s also an unacceptable denial of market choice to the customer.

[W]e would offer those in the affected states a tax credit to buy insurance.

This comes from the false premise that government should be the default source of welfare, and not the last resort. From that, it jumps the gun: the magnitude of the need is not at all established, especially given the initial fluid market environment that would be created were the competition across state lines part discussed in their op-ed actually passed. Only after private sources of aid have been exhausted, in that stabilized environment of lower basic cost for health plans, should government aid become available. (It’ll also be interesting to see how these guys propose to pay for these tax credits, but perhaps that’s for a later op-ed.)

Who Should Run For What?

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Of the Republican candidates, likely and unlikely, for President, who should run for what (I’m ignoring term limits in this little exercise)? I’m also doubling up on some positions because, primaries. Here’s my thumb nailed early list, alphabetically sorted.

Jeb Bush—President

Effective conservative governor. Regardless of his views on Common Core, the race should not be about one issue. Regardless of his views on legalization of illegal immigrants, immigration is a thing that needs to be settled—all three legs. Bush reduced taxes, while balancing Florida’s budgets, by some $19 billion over his time in office. That ain’t peanuts.

Ben Carson—US Senate

Strong Conservative, but he’s not ready for the White House. He wants political seasoning first—as our current President is demonstrating, in spades.

Chris Christie—Governor

Effective governor. He’s not suited for national level politics, though. He, and New Jersey, are better off if he stays home and finishes fixing New Jersey.

Ted Cruz—US Senator

Too polarizing, too much his way or the highway. He’s good for keeping Senate balanced and debating, though.

Carly Fiorina—Vice President

Not ready for the top of the White House; however, she understands and communicates effectively Conservative principles.

Mike Huckabee—Governor

Effective governor, not so effective on the national level. Alternatively, he can go back to being a vocal private citizen commenting on Conservative principles.

Bobby Jindal—President

Effective conservative policies, unafraid of a fight, vastly improved communicator since 2012. He may well not be fully checked out on national level politics, but he’s close enough to take very seriously.

Sarah Palin—US Senate

Strong Conservative, and she would be excellent Senator. She tried for Vice President once; she’s too damaged by McCain’s dysfunctional campaign to have a serious shot at either White House position.

Rand Paul—US Senator

Too polarizing, and his foreign policies views are evolving suspiciously (to my paranoid pea brain). Like Cruz, though, he’s good for keeping Senate balanced and debating.

Rick Perry—Vice President

Effective Conservative governor. I could not love Perry less, loved I not Walker, Jindal, and Bush more. He would be good President, but a President needs a strong Vice President, too. In fact, of these four, any would be good President, any of the other three would be a good Vice President.

Marco Rubio—Vice President

Not ready for the top of the White House, but he knows the Senate; he could elevate the Vice President’s role there very effectively.

Rick Santorum—US Senator

Too socially conservative, occasionally too shrill for national level success.

Donald Trump—Chairman, Sit Down and Shut Up Committee

Country needs an effective man/woman, not an egotistical blowhard. Considering egotistical blowhards, Trump is indistinguishable from Barack Obama.

Scott Walker—President

Strong Conservative, successful Conservative governor. Not afraid of a fight with the Left, knows how to win those fights.

Taxes and Audits

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Fox Business reported the following earlier in the week:

The IRS says budget cuts forced the agency to reduce the number of tax audits last year to the lowest level in a decade.

In 2014, fewer than 1 percent of individual tax returns were audited, the lowest rate since 2004. IRS Commissioner John Koskinen says the number of audits is likely to decline again this year.

In a speech on Tuesday, Koskinen said there are fewer audits because the tax agency has fewer agents. He said the IRS is down more than 2,200 revenue agents since 2010.

Congress has cut the agency’s budget by more than $1.3 billion since 2010.

Sounds like another argument for simplifying the Federal tax code, to me. Of course Koskinen could be expected to argue against a reduction in IRS funding or staffing anyway….

The Party of Stupid on the Right

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A group of young conservatives, dubbed “reformicons,” are making inroads among Republican presidential candidates by arguing the party’s traditional reliance on broad-based tax cuts…isn’t enough to cure middle-class woes.
Instead, they are calling for crafting subsidies, tax credits, and other public-policy tools based on conservative philosophies and tastes to help the unemployed and other struggling middle-income households.

And

“For the past 10 years, our biggest issue was whether the top tax rate was 35% or 39.5%. I don’t care anymore,” said Michael Strain, 33 years old and an economist at the American Enterprise Institute think tank. One of his ideas gaining fans on the right: let employers pay some workers less than the minimum wage as an inducement to hire them and use the federal tax code to bump up salaries.

Leaving aside the abject surrender inherent in that “I don’t care” bleat, Strain’s small point—letting employers pay below-minimum wage rates under certain circumstances—is better achieved by curbing yet another government interference in the market, by getting rid of the minimum wage altogether.

Bob Davis’ article in The Wall Street Journal goes on in this vein, but you get the idea.

The larger point, though, is that these reformicons’ ideas are foolish. Using the tax code for social engineering or for favoring some Americans—which can come only at the expense of other Americans—is an inefficient and immoral use of people’s money. Even when it favors those Americans whom Republicans and Conservatives favor.

Government interference in the free market only inhibits the market, only caps what used to be equal opportunity, only reduces prosperity to the lowest common denominator rather than increasing the general prosperity by elevating the lowest common denominator.

These reformicons’ policies, worse, will only exacerbate the byzantine structure of our tax code and make it even harder to get to a single, low tax rate that every citizen pays; a rate based on all income, regardless of source and devoid of special treatment based on that income’s source; a rate devoid of gerrymandering with tax credits here, subsidies there, loopholes over there. A fair tax rate.

Higher Taxes

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Because that’s the Democratic Party’s one size fits all solution to all of the nation’s problems. Because they Know Better how to spend a citizen’s money than does that citizen. Here, via Fox News, is an abbreviated list of tax increases President Barack Obama wants.

  • Limit deductions for top earners to 28% rate, even if income is taxed at 39.6%: $603.2 billion
  • Impose a 14% one-time tax on previously untaxed foreign income: $268.1 billion
  • Impose a 19% minimum tax on foreign income: $206 billion
  • Modify estate and gift tax provisions: $214.4 billion
  • Change the taxation of capital income: $207.9 billion
  • Other increases from reform of US international tax system: $135.8 billion
  • Impose a financial fee on large financial companies: $111.8 billion
  • Increase tobacco taxes and index for inflation: $95.1 billion
  • Repeal LIFO (Last In First Out) method of accounting for inventories: $76.1 billion
  • Conform SECA (Self Employed Contributions Act) taxes for professional service businesses: $74.6 billion
  • Other revenue changes and loophole closers: $47.9 billion
  • Eliminate oil and natural gas preferences: $45.5 billion [Note: don’t eliminate “green” energy tax breaks and other subsidies]
  • Implement the Buffett Rule by imposing a new “Fair Share Tax” (making millionaires pay at least 30% tax rate): $35.2 billion
  • Reform the treatment of financial and insurance industry products: $34.4 billion
  • Limit the total accrual of tax-favored retirement benefits: $26.0 billion
  • Other loophole closers: $24.3 billion
  • Reinstate Superfund taxes: $21.2 billion
  • Tax carried interests as ordinary income: $17.7 billion
  • Make unemployment insurance surtax permanent: $15.7 billion
  • Eliminate coal preferences: $4.3 billion [Note: see oil and gas preferences]
  • Reauthorize special assessment from domestic nuclear utilities: $2.3 billion [Note: see oil and gas preferences]
  • Increase and modify Oil Spill Liability Trust Fund financing: $1.6 billion
  • Repeal tax-exempt bond financing of professional sports facilities: $542.0 million

Notice that many of these tax increases are solely to raise taxes and have nothing at all to do with any real reform of our tax code or of anything else: LIFO elimination, for instance, and those financial and insurance “reforms.”

The total tax increase from these? Nearly $2.7 trillion. Think about how much that will hurt our economy by taking that much money out of it. That is, after all, 13.4% of our GDP, of our economy.