by | OBAMACARE
It’s worthwhile to take note of the ruling yesterday in the Florida lawsuit against Obamacare. The judge wrote more than twenty pages of his ruling specifically stating that the fee imposed for not buying health insurance is a penalty and not a tax. Our federal government has been arguing that the healthcare fee is a tax, and therefore states cannot legally challenge Obamacare, because you cannot sue for a tax that has not been collected yet. As well as clarifying the penalty position, the judge also found the federal government’s use of the Commerce Clause to justify the individual health insurance mandate is unprecedented in American history.
Many other states have filed suit. Virginia, one of the first to challenge Obamacare, will argue on October 18th. These lawsuits are worth keeping up with, as our federal government continuously seeks to expand its powers unconstitutionally, to the detriment of our citizens.
by | TAXES
The Tax Foundation has a new report out regarding the consequences of not extending the Bush tax cuts:
Retired seniors could be among the hardest hit, since they rely most on investments and savings. Lawmakers have been warning for months about the income-tax consequences for working families, including penalties on marriage and a reduction in child tax credits. But those living off investment income would see not only their 401(k) and savings accounts taxed at higher income rates, but also dividends and capital gains skimmed deeper and deeper by the federal government.
Studies of IRS data put out by The Tax Foundation show seniors over 65 earn more from dividends and capital gains than any other age group — more than $77 billion in dividends and more than $150 billion in capital gains in 2008. That means for retired workers, every penny is that much more valuable. Investment income typically supplements Social Security or vice versa, and tax analysts say that if the Bush tax cuts expire, it could mean thousands of dollars less every golden year.
Here’s what happens to that income if tax rates increase to levels of almost a decade ago:
On the capital gains side, the hit would be somewhat modest. Currently, the lowest rate for long-term gains is 0 percent and the highest is 15 percent. If nothing is changed, the lowest rate rises to 10 percent, the highest to 20 percent. The change on the dividends side is far more drastic, since it used to be taxed as ordinary income. Barring congressional intervention, the lowest rate for qualified dividends goes from 0 to 15 percent and the highest goes from 15 to 39.6 percent. Even those in the middle-class brackets could expect to see their rate rise to close to 30 percent. For instance, a couple taking in $25,000 from interest and dividends would easily see their taxes go up by more than $2,000.
Despite warnings from lawmakers, Obama and congressional leaders on both sides of the aisle say they’re intent on extending at least some of the tax cuts — unfinished business to be taken up after the election. Republicans want all the rates extended, while Obama wants the rates extended for all but the wealthiest earners. Under the Obama plan, the top-bracket capital gains and dividends rates would rise to 20 percent.
As I’ve said many times on these pages, the Bush tax cuts must be extended for all income earners; to do otherwise would be potentially catastrophic for the economic recovery of our nation.
