Archive for the 'Unconstitutional Taxes' Category

The Solyndra Connection

Incompetence is one thing. Solyndra was criminal.

Ok, so Obama was his normal incompetent self when he lent $529 million in taxpayer funds to a struggling solar manufacturing plant which then went bankrupt. What’s the big deal? I mean besides the fact that he is asking for another $447 billion after admitting that with all the stimulus cash in the last bill he still failed to fix 152 structurally unsound bridges that Americans are driving on every day.

Except, wait, what’s this? The Obama administration specifically restructured the loan agreement so that if Solyndra went under and liquidated the investors would get their money back first. Read that again.

So unlike Chrysler, where the chicago boss stole the company from the bondholders and gave the liquidated funds to the unions, here Obama specifically determined that after giving $529 million in taxpayer funds to Solyndra, if Solyndra went under the owners of the company would get their money back before taxpayers got our money back. Congratulations, You have been officially robbed by the President.

So why would Obama do that? He didn’t care about the Chrysler bond holders who legally should have had first rights to those liquidated funds. What is so different about the Solyndra owners? Here is where this story goes from incompetent theft to 1st degree theft.

One of the two companies who is going to get paid back before taxpayers is Argonaut Ventures I, LLC, the investment firm for billionaire George Kaiser. Kaiser raised between $50,000 and $100,000 for Obama in 2008 and continues to raise significant campaign cash for him now.

Follow the money.

Barack Obama takes $529 million of our money and sinks it in a failing solar panel company. Obama changes the terms of the loan so that when the company goes under, whatever is left goes to the investors instead of back to the taxpayers. The investors donate a kickback of up to $100,000 to Obama’s campaign, that ends up being funded with our tax dollars.

Remember Tom DeLay? DeLay was accused of taking corporate donations of $190,000 to the national Republican party and finding ways of funneling them to the Texas state party, where corporate donations are illegal. DeLay’s sentence was three years in jail (currently being appealed). DeLay took donations willfully given to the GOP and redirected them to the state party. Obama took $529,000,000 of our tax dollars, laundered them through Solyndra, and now is receiving them back into his own campaign coffers through donations from George Kaiser. If DeLay got 3 years, how much time should Obama serve?

The Abortion Deduction

In four hours the government shuts down.  Republicans refused to fund abortion both directly in DC and indirectly at Planned Parenthoods across the country.  The result is that after failing to pass a budget in 2010 when Democrats controlled both houses and the Presidency, after failing to even consider HR 1, and after refusing the latest stop gap, Democrats are going to let the government shut down.  Apparently abortion funding is something Democrats won’t compromise on.

But that actually isn’t what this blog is about.  It is about a different abortion bill.  While Obamacare canceled the ability to use HSAs and Flex plans to buy over the counter drugs, and raises the AGI floor for medical deductions from 7.5% to 10%, abortions are still considered medical expenses.

In fact, cosmetic procedures, health club dues, quit smoking programs, non-prescription drugs, weight loss programs, vitamins, acne treatments, and even specially designed cars for the handicapped are non-deductible medical expenses.  But abortion is deductible for taxes.

Republicans are currently working on passing a bill that will add abortion to other non-deductible medical expenses except in the case of rape, incest, or danger to the mother’s life, but Democrats are expected to kill the bill.

That is the country we live in.  You can kill an unborn baby on demand, and then deduct the cost from your taxes.

Back to being just President

It’s amazing to me that after shrugging of Republican fears of anti-constitutional judicial activism, now Democrats are crying judicial activism after the voiding of Obamacare by a Pensacola judge.  Judge Roger Vinson agreed with 26 states that the Federal government does not have the right to force citizens to buy certain products from private corporations.

He is right.  Where in the constitution does it even suggest that the government can force people to buy things?  And this is for a very good reason.  After all, if the government could mandate that you buy certain products from private industries, then those in power could maintain their power by picking winners and losers through legislation.

For a good example, you don’t need to look any further than the Obama administration’s handling of the bailouts.  They violated the constitution when they took Chrysler and GM from the bond and stock holders and handed them over to the unions.  Imagine what they could do if the judiciary upheld a law stating that they could order citizens to purchase goods from private companies.

What would happen is that we would all eventually be fit into the government mold of a model citizen.  If the government could tell you what foods you could eat, or what car you could drive, don’t you think they would?

Actually, they already do through our tax system.  You get tax breaks if you buy a home, go to school, buy energy efficient improvements or cars, give to charity, or do so many other government approved activities.

For once, a judge is saying no and is upholding the constitution.  President Obama must be mystified that a court would actually act as a check and balance against his power.  For years the judiciary was the vehicle of social changes that the legislature could not pass if they hoped to be re-elected.  Whether it was deciding that women have the constitutional right to privacy when depriving their unborn of the constitutional right to life or almost any decision by the 9th circuit, the courts have not been the last line of defense for constitutionalism that they were designed to be.  This time, the system worked.

Fresh into Obama’s presidency, he chose to stop enforcing federal drug laws in medical marijuana states.  He so poorly enforced immigration laws that states resorted to writing their own immigration laws, which he then sued them for.  Obama chose to drop the voter intimidation case against the black panthers even after the justice department had won the case.  He violated the constitution with a moratorium on oil drilling in the gulf.  When a judge struck it down, he turned around and issued a new moratorium.

With everything going on in Egypt, if anyone should be respecting the will of the people and our democratic rule of law, it should be President Obama.  Our constitutional system of freedom, elections, and a government of checks and balances is what prevents Presidents from becoming tyrants, and citizens from becoming revolutionaries on days other than the first Tuesday in November.

Sofar, the administration is appealing and ignoring the ruling.  But if Vinson’s ruling stands, Obama will need to make a decision.  Will he respect our constitution and the rule of law and start over on healthcare?

Obama has delivered change.  We now have an executive branch that can own private businesses, force consumers to buy, pick and choose what laws to enforce, reward supporters and punish detractors.  Obama has greatly extended the power of his office.

The message from Judge Vinson’s ruling is clear.  We have a democratic government designed with checks and balances and based on the constitution.  It’s time for Obama to go back to being just President.

Imagine No Deductions

3.8 Million.  That is the number of words in our current tax code, according to Taxpayer Advocate chief Nina Olson.  Americans spend 6.1 billion hours every year preparing their tax returns.  Tax preparation requires 3 million full time professional tax preparers and 89% of Americans either use a professional or spend an average of $50 on tax software.

Do you prepare your own return?  Should you be able to prepare your own return?  I think we can all agree tax preparation is way too complicated.  Some have proposed a Fairtax, which would be like a national sales tax.  There are other proposals to fix and shrink our tax code.  Olson proposes something much more similar to what I have advocated for a few years now.

The Taxpayer Advocate Service points out that many Americans have an effective tax rate far below their actual marginal rate.  For example, an American in the 25% tax bracket may only pay an effective rate of 9% because he has more than $15,000 in income excluded through various deductions and credits.  Olson argues that we could reduce tax rates significantly by consolidating the tax code and getting rid of all those various credits and deductions.  So who is standing in the way?  She says you are.

She’s right.  Obama’s debt panel came to the same conclusion, but could not get enough votes to send their proposal to Congress.  Let’s test this theory.  What would you say if your congressman got up at a townhall meeting and told you he was going to vote to get rid of the mortgage interest deduction?  What about the child tax credit?  How about credits and deductions for education?  What about charitable giving deductions?  Chances are, the crowd would turn into an angry mob before he could even mention lower marginal tax rates.

So far that has been the case.  Americans on both sides of the aisle are unwilling to sacrifice their credits and deductions for a simpler, revenue neutral solution.  But it’s not just Americans who want to hang on to behavior based tax reduction.

Lobbyists, and by extension the government, would hate to lose the ability to increase or reduce your taxes based on your behavior.  Right now the government can reward you for going to college, buying a house, being a teacher or performing artist, saving for retirement, having kids, working and getting childcare for those kids, working even if you can’t make a lot of money, making energy efficient improvements to your home, buying health insurance, buying energy efficient vehicles, giving to charity, paying union dues, adopting kids, hiring people who can’t get jobs ever since they raised the minimum wage, and so much more.  They can penalize you for taking early retirement distributions, not buying insurance, and of course, making too much money.  The government has more control over your personal life on your annual tax return than through any other venue.

Olson proposes a zero-based budget where we start with nothing and add back only the credits and deductions that Congress considers absolutely necessary.  Then consolidate the tax rates into two brackets.  Here’s the problem, if Congress didn’t think those credits and deductions were necessary, they wouldn’t have enacted them in the first place.  No Congressman is going to proudly announce that he voted against a tax deduction for teachers who pay for supplies out of pocket, or a credit for a student who goes to college.

The constitutional solution is a tax that is fair and equal for each individual.  It is a tax that does not reward or punish individual behavior.  It is a tax that does not take into account relations, status, and is flat based on income.  If you want a simple tax system with a return that you can file yourself with a pencil and a calculator, you will have to kiss your credits and deductions goodbye.

Righteous Taxes?

The key to understanding the true Democrat agenda is to replace the word “reform” with the word “tax”.  To make things worse, they are now seeking to tax your carry-on luggage.  And the best part is that this tax on Americans, no matter how much or how little they make, is being disguised as some sort of valiant effort to protect consumers from greedy corporations.

It is a sad thing when the Senators in charge of ensuring that corporations play by the rules and that interstate commerce is appropriately regulated have no idea about one of the simplest concepts in economics.  Corporations don’t pay taxes.  This idea that corporations pay taxes is about as ridiculous as if you were to tell the cop that it was your car that was speeding, not you.

So you can imagine my disbelief when Chuck Schumer, D-NY, announced that Spirit Airlines should be taxed if they decide to charge their customers for carry on bags.  Apparently this is supposed to punish Spirit?  The effect however, would actually be that Obama’s government would get it’s cut of the new carry on fee from consumers.  Nothing else.  After all, shouldn’t government get their fair share?  When it comes to racketeering, they are the experts.

When corporations are taxed, there are three potential groups of people who must pay those taxes: the owners, the employees, and the consumers.  Employees pay the tax because profits are scaled back and it affects their raises, benefits, or even perpetuity of employment.  Consumers pay the tax when corporations factor that tax into their costs and pass that cost on to you.  The owners pay the tax when the dividends hit your 401k and you suddenly realize you have to work an extra five years to retire.  By the way, the owners are the ones who get to decide which of those three groups pays the tax.  Do evil CEOs pay taxes on consumer products?  Sure, but not in any progressive manner.  Only if they choose to fly Spirit Airlines and take a carry on bag.

Actually, what is really happening in the case with Spirit is that they have found a way to reduce the taxes you pay, and the party in power doesn’t like it.  You already pay taxes every time you buy an airplane ticket.  Spirit charges a very low ticket price, but then lets you choose to add on other fees for checked bags, certain seating, peanuts and drinks.  By not including those in the ticket price, they save you taxes.   If they can’t tax you more through your ticket, Democrats will look for new ways to tax you.

But doesn’t Schumer have a point?  Isn’t it ridiculous for Spirit to charge you for your carry on bag?  Why do they hate your bags?  Here is another concept Democrats like Schumer just don’t understand: consumer choice.  Nobody is forced to fly on Spirit Airlines.  Who flies Spirit instead of say, Southwest?  The people who would rather pay less for their flight and don’t have overhead luggage.  As long as we have a free market with choice and competition, Spirit will learn quickly whether their idea of carry on fees was a good one or not.  Already some of the major full service airlines are learning that fees on checked baggage were not such a good idea.

On the other hand, let me tell you a personal story about Ryan Air.  Ryan Air is an airline that flies in Europe.  They have very low rates, but charge fees for everything.  Last I heard, they were planning on charging for restrooms.  But last year about this time, my wife and I left for three and a half weeks in Europe.  We had a very tight budget, but wanted to see as much as possible and spend as little time in trains or cars as possible.  We went bare bones with nothing but the backpacks on our backs, and I’m not talking about big hiking backpacks.  I’m talking about packs that we could carry on with an airline like Ryan Air whose carry on size limit is less than in the US.  But our packs were small enough, and we flew from Paris to Rome for less than it would have been to take a train.  I am very thankful for an airline that let us choose what we wanted to pay for.

We knew a Democrat administration meant taxes across the board.  Anyone who bought the line that only the rich would pay higher taxes under Obama probably voted for him too.  They only need to find ways to make the taxes sound good.  Don’t let this carry on tax fool you.  In the end, you will be the one who pays it.

So, when do they pass healthcare REFORM?

The bill is passed.  Finally, after hundreds of years, we have healthcare.  No more poverty, no more sickness, no more evil insurance company profits.  But before you cancel your policy and call your representative for your free health insurance card, you might want to do a little research and see just what is, and isn’t, in this bill.

First of all, you won’t see the majority of the provisions in this bill until 2014.  The tough parts of the bill hit in odd years, and the best provisions start in even years.  Guess what else happens in even years…elections.

In 2010, we see expansions of coverage.  Children with pre-existing conditions cannot be denied coverage, even if parents had ample time to establish coverage before the condition was discovered.  The definition of a dependent (for insurance purposes only) will change to anyone up to 26 years of age and insurance companies must cover them under their parents’ plan.  Seniors who have spent more than $2,830 on prescriptions will get an extra $250.  There will be tax credits for businesses with up to 25 employees, but that may be subject to average salary levels which could be as low as $25,000 a year.

Hospitals, healthcare providers, home health agencies and others will face significant reductions in Medicare payments.   Many will probably stop taking new Medicare patients, especially when healthy young 26 year olds can go to the doctor’s office for the sniffles and daddy’s insurance has to pay for it.  When I was 26 I was making less than 25k a year and buying health insurance for my family.

What about taxes?  Well, in 2010 we see a 10% sales tax on indoor tanning.  Good thing I live in a beach town.  What about free healthcare?  Not yet.  In fact, we will all be paying more to make up for lower Medicare payments to doctors.  But senior voters will get their $250 vote bribe.

In 2011 we see a voluntary long-term care benefit created to cover nursing home costs or home health, but benefits won’t start until you’ve been paying in for five years.  Medicare patients who have spent that $2,830 get a 50% discount on name brand drugs, not generics.  Doctors in underserved areas, who are still taking Medicare patients, get a 10% bonus to continue taking Medicare patients.  Payments to Medicare Advantage are frozen, but funding for community health centers is boosted.  Whether or not those centers will be able to perform abortions with that funding is still up in the air.  And finally, the bill imposes a $2.3 billion tax on drugmakers which will go up every year.  It shouldn’t take an economics degree to know who will pay that $2.3 billion tax.

In exchange for that $2.3 billion in extra taxes that drug-makers will pass on to consumers, competition from generics is crushed.  Also, with this bill it is illegal for the Government to negotiate for lower prices on Medicare drugs.  That’s probably why the Wall Street Journal calls this bill a huge victory for big drug companies. Good job Democrats.  By the way, in 2011 still no free health insurance.

In 2012 we will have the public option.  Yes, you read that right.  A new government program will be set up to create non-profit insurance co-ops to compete with commercial insurers.  While it is not a government run insurance program, it will be interesting to see how it is implemented and subsidized.  Also, hospitals with high readmission rates will be penalized and possibly cut off through lower Medicare reimbursements.

So, no free health insurance in 2012.  But it is Obama’s re-election year, so we will see a de facto public option.  Will the public option cut costs?  It’s doubtful when everything else in this bill sofar increases actual healthcare costs.  Public option co-ops may not have to pay for profits, but they will have to pay the embedded taxes and make up for Medicare cuts.  But that doesn’t matter.  What matters is the PR generated by the public option being generated in Obama’s election year.

In 2013 we have some good news.  Insurance company paperwork will be standardized, which should hopefully eliminate confusion and cut costs.  The bad news is that it is being standardized by the Government.  More bad news in 2013 includes limits on Flexible Spending Accounts (cafeteria plans) deferrals and higher taxes.  The wage threshold for deducting medical expenses will go up from 7.5% to 10% for all Americans, and we will pay a 2.3% sales tax on medical devices and equipment.  All these additional taxes will take effect in 2013 but the only mandates sofar are that insurers provide coverage to children with pre-existing conditions and 26 year olds under their parents’ plan.  There is some relief for Medicare patients (not enrolled in Medicare Advantage), however experts feel Medicare doctors and providers are hit hardest by the bill.

For individuals making $200,000 (joint filers making $250,000) Medicare taxes are going up .9%.  Also these individuals will also owe an additional 3.8% in taxes on investment income, including stock sales, dividends, interest, rental income, etc.  I suppose Obama is counting on the economy being all better before we get hit with these taxes on economic growth.  Of course, by the time these taxes hit, we might have a Republican President.

2013, still no free healthcare.  Not even cheaper healthcare.  Instead, by 2013 prices will have skyrocketed from embedded taxes.  Insurers will still be able to drop anyone older than 26, and drug companies will be making out like bandits with little competition.

2014 is when the major provisions of the bill finally hit.  So free healthcare, right?  In 2014, insurers will no longer be able to deny coverage to anyone based on pre-existing conditions.  But they also won’t be able to vary rates based on anything beyond age, location, and tobacco usage.  This means that healthy Americans will pay the same rates as the obese and drunk, so long as they don’t patronize the evil tobacco industry.  Insurance rates can go as high as $27,000 per family without the insurance company paying additional taxes.

States will be forced to create and maintain insurance exchanges (whether they can afford it or not), but these insurance exchanges won’t provide free coverage.  They will just squeeze any smaller insurance companies out of the market so that the bigger companies can charge more.  Every American will be forced to purchase insurance, which will increase demand and prices.  In fact, businesses will have to pony up $2,000 for every employee they don’t cover, and individuals will have to pay up to $2,250 in penalties to the IRS if they don’t buy insurance.  The government is hiring 17,000 new IRS agents to enforce this unconstitutional mandate.

So when does the government start giving us free insurance?  It doesn’t.  When you get laid off from your job because your boss can’t afford another $2,000 per employee, how do you afford $27,000 premiums and embedded taxes on your drugs, equipment and doctor’s visits?  The government gives you tax credits.

To qualify for this government handout, you have to be making less than 400% of the poverty level.  The subsidy would be on a sliding scale, up to 9.5% of your income.  So how would this work?

If you are single, making $42,400 or less you can get a tax credit.  But 9.5% of your income on a sliding scale means you probably wouldn’t even see $4,000 in subsidies.  If you make more than 400% of the poverty line, you are out of luck.    My wife and I are just above the threshold for couples and would not be eligible for any tax credits.

In the meantime, in addition to higher prices on drugs and medical supplies, embedded taxes on doctors and providers, and limitations on competition, in 2014 every insurance company left is hit with $8 billion a year in taxes to pass on to us.  This tax will weed out any remaining competition, and will help drive prices up even higher so that even an $8,000 credit for a family of four won’t cover half your plan.  With additional taxes not hitting insurance plans until they reach $27,000, that may be the point.  We can’t have the single payer socialist system Obama always wanted until this plan fails.

No free healthcare, no competition, no help for the middle class, no punishing evil CEOs, and surprise surprise, no healthcare reform.

The Blindside?

Nancy Pelosi heard that the American people want a no-vote on Obamacare, but I think she misunderstood.  Instead, she is giving us no vote on Obamacare.

But wait, you ask.  How is that constitutional?  Don’t the House and Senate have to pass a bill before the President can sign it into law?  Yes.  So how is Pelosi going to pass the Senate bill without forcing her Democrats to go on the record and vote for it?

What has become known as the Slaughter Solution was not originally designed to be a devious tactic or to push bills through that the party leadership wants but the American people don’t.  Originally it was designed as a time saver.  The normal process is that the House writes a bill and passes it, the Senate writes their own version and passes it, then they get together and work out their differences.  After that the House and Senate put together identical bills based on their conferences and then each pass it again.  The Slaughter Solution allowed the House to avoid writing and passing a whole new bill by writing a mix of amendments to the Senate bill and then passing it.  Then the Senate passes the House amendments.  That way, the House can say the original Senate bill was “deemed to have passed” by passing the amendment package.

Confused?  That is what Pelosi is counting on.  Pelosi is counting on this because confusion on the Slaughter Solution is the key to her strategy.  Discounting the vigilance of the American people, Pelosi’s Slaughter play is pure genius.  And it’s not about figuring out how to pass Obamacare without voting on it.

What Pelosi is doing with the Slaughter Solution is giving her Democrats cover to vote for an amendment package that the Senate either cannot or will not pass with reconciliation.  While Stupak might see the ruse and refuse to vote for this, it gives the phony pro-life bluedogs exactly the excuse they have been looking for to get back in the Left’s good graces.

Here is how it will go down.  The bluedogs and “conservative” Democrats will announce that they are undecided on the Senate version of Obamacare.  They will tell their conservative voters that they disapprove of the kickbacks.  They will tell their union bosses that they disapprove of the Cadillac tax on high priced insurance polices.  They will tell the pro-life majority in our country that they would never approve of taxpayer funding for abortion.  And to fix that, they will vote for Pelosi’s reconciliation amendment package.

Pelosi’s amendment package will repeal Ben Nelson’s kickback, it will prohibit any federal funding for abortion and therefore any insurance funding for abortion, it will remove taxes on high price insurance plans, and it will never be passed by the Senate.  The Senate cannot use reconciliation to pass a bill with heavy social implications such as banning insurance coverage for abortion.  The Senate also cannot use reconciliation to pass a bill that increases the deficit by cutting unpopular taxes.  And of course, the Senate cannot pull together the necessary votes if the bill does not include the bribes it took to get Senators like Landrieu and Nelson on board.

Think about it.  If the Senate could pass the House amendments through reconciliation or any other means, why don’t they just pass the House bill that is already written?  Why amend the Senate bill to look like the House bill and then just pass the amendments?  Why would the Senate pass a package containing everything they specifically left out of their bill?

So when the House passes Obamacare with the reconciliation package, and the Senate votes down the reconciliation package, the Senate bill will go to Obama to be signed into law in it’s current form.  Abortion will be funded, Senators will get their kickbacks, House Democrats can claim they took a stand against abortion funding and for the unions, and Obama can finally claim the second major policy victory of his Presidency (the stimulus pork bill being the first).

But it gets even better.  Harry Reid may decide not to pass the House amendment package through reconciliation.  After all, the point is not to pass the House changes.  Instead of simply discarding the House amendments and sending the bill as is to the President, Reid may go ahead and push for a normal supermajority vote on the House reconciliation plan.  That way Senate Republicans can either give Democrats bi-partisan support of Obamacare by voting for the Pelosi reconciliation package with it’s union favors and higher spending, or they can give Democrats bi-partisan support in voting down the Stupak’s abortion amendment and repeal of the Democrat kickbacks.  The Democrats could actually turn the split in their own party into a split in the Republican party; something they haven’t succeeded at yet in this debate.

In the end, for the ignorant and uninformed voting majority of Americans, this strategy is a guaranteed success.  The only thing that can stop Pelosi, Reid and Obama now is vigilance and a strong statement from the American people that we know what they are up to.  So it comes down to this: if you are not against it, you are for it.  Call your Congressman and ask them for a definitive stance on Obamacare.  If they say they are not sure, undecided, or would only support it with the reconciliation amendments, call them on it.  And a vote for Pelosi’s reconciliation package, no matter how good it sounds, is nothing more than a vote for the Senate version of Obamacare.

Republicans have been played into a corner.  Only the American people can stop Obamacare now.


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