by | ARTICLES, BUSINESS, ECONOMY, GOVERNMENT, HYPOCRISY, OBAMA, POLITICS
Bernie Sanders recently chose to test the waters of a possible Presidential campaign by weighing in on the deliberations regarding the Post Office. Thankfully, we have this Op-Ed so early on, because it reveals Sanders’ complete and utter inability to comprehend basic economics and accounting.
Bernie argues two main points: 1) the Post Office is not broke and 2) those who believe it is are “anti-government”, “wealthy special interest”, profit-seeking, or all of the above. These points rest entirely on his premise that pre-funding health benefits to postal workers is a very bad thing.
Sanders actually believes that planning for future promised benefits is not a fiscally sound practice. If he feels this way about the Post Office, surely he feels the same about Social Security and Medicare (two programs who have trillions in future liabilities). Does Sanders know that his type of accounting would land any business executive in jail?
Sanders says that if we didn’t have to pre-fund future benefits, than the Post Office would make a profit. Simple, right?
What he fails to mention that if we didn’t pre-fund benefits, the Post Office would merely be sloughing off paying its promises to some future nebulous day and time for some other taxpayers else to take care of –only when its liabilities were astronomical and the finances were on the edge of a precipice.
That result is precisely what we are facing programs like Social Security, Medicare, and many defined benefits plans across the country: politicians made future monetary promises without planning for them, and now the economic pressure has ballooned into severe fiscal instability. Sanders belongs to the ‘spend first, fix (maybe) later” group of bureaucrats who refuse to follow basic accounting practices like any business would be required to practice.
With the Post Office, we actually have an quasi-government entity following good, non-gimmick accounting so taxpayers can see first-hand the true financial picture (current and future) of the post-office. Pre-funding benefits to account for future and current liabilities is a proper and healthy way to do business. And if the Post Office cannot turn a profit while protecting its current and future liabilities, than it must make changes to its business operations
By repealing the legislation to pay for future liabilities, Bernie Sanders is ostensibly demanding someone in the future — your kids and grandkids — to clean up the mess of his government and his generation’s deliberately poor financial planning.
Which bring us two his second point. Bernie Sanders does what the Left does best, which is resort to name calling, straw-man arguments to build up his weak ideas. Sanders actually thinks that those who wish to pass on a health economic future while practice basic and principled accounting practices are anti-government, bought-and-paid-for, or profit-mongers. No, Mr. Sanders, we only wish for the government and its entities to practice the same kind of accounting standards that any other business or family is required to do.
Watch out, America — Bernie Sanders is just more of the same. Another bureaucratic imbecile who refuses to face economic and financial realities when it comes to the Post Office — or any big government program which deals with current and future liabilities. Sanders would rather pass the buck to the next generation in order to save a few union jobs.
by | ARTICLES, BLOG, FREEDOM, GOVERNMENT, NEW YORK, OBAMACARE
Would any consumer-driven industry be able to get away with this?
“Surprise medical bills occur when a consumer does everything possible to use hospitals and doctors that are in the consumer’s insurance plan, but nonetheless receives a bill from a specialist or other medical provider by whom the consumer did not know he or she would be treated, and who was outside his or her plan’s network of providers.
Worse, a relatively small but significant number of out-of-network specialists appear to take advantage in emergency care situations in particular, where the consumer has little choice or ability to “shop” for an appropriate provider. Too frequently, out-of-network specialists charge excessive fees — many times larger than what private or public insurers typically allow. In one example, a New Yorker who severed his finger in an accident went to participating hospital and ultimately received an $83,000 bill from a plastic surgeon who reattached the finger but – unbeknownst to the patient — was outside the insured’s network of providers.
The problem of surprise bills is not limited to emergency situations. They also can occur when a consumer schedules health care services in advance and an in-network provider, such as an anesthesiologist, is not available. In these instances, consumers are not told that the provider is out-of-network, not informed about how much the provider will charge, or not advised how much the insurer will cover. This lack of disclosure not only ill serves the consumer, but also undermines the efficiency of the health insurance market because consumers cannot effectively comparison shop for benefits or services”
This except from is part of a larger letter from Benjamin M. Lawsky, Superintendent of Financial Services for New York State, written to members of the New York State Legislature. You can read the letter here.
In any other industry, this would ALL be considered fraud.
by | ARTICLES, ECONOMY, GOVERNMENT
Janet Yellen, the new Fed Chairman, recently spoke about her decision to continue low interest rates, calling the policy “beneficial.” As the WSJ noted, Yellen described how she seeks to assure the markets:
“By keeping interest rates low, we are trying to make homes more affordable and revive the housing market,” she said. “We are trying to make it cheaper for businesses to build, expand and hire. We are trying to lower the costs of buying a car that can carry a worker to a new job and kids to school, and our policies are also spurring the revival of the auto industry.”
The problem with Yellen’s approach to the economy is that she completely misunderstands how interest rates affect the economy, an incredulous thing considering that she is the Fed Chairman.
When Yellen describes the benefits of low interest rates, she gives several reasons for them: homeownership, business growth, and car prices. However, the real estate market and auto industries are actually doing fine, and businesses are not using low interest rates to borrow to hire.
The crux of the problem is that all of Yellen’s examples analyze the economy from a consumption perspective. While consumption does affect the economy, it is not nearly a powerful a stimulant as investment. Any basic economics course will tell you that.
The real reason for the continued sluggishness is that investors are prevented from earning any real and considerable income when interest rates remain low. When investors don’t see a decent return on investment (ROI), they stop investing.
What else? Couple the investment problem with the administration’s policies that hurt growth such as burdensome regulations, minimum wage increases, food stamp usage, and Unemployment Insurance extensions, and you have a recovery that is best described as tepid.
Yellen should know better than to appeal to emotion rather than basic economics when making her Fed decisions. The choice to continue low interest rates for at least another year guarantees an anaemic economy for the foreseeable future.
by | ARTICLES, FREEDOM, GOVERNMENT, OBAMA, QUICKLY NOTED
From Katie Pavlich at Townhall.com
“According to new IRS emails obtained through a Freedom of Information Act request from Judicial Watch, former head of tax exempt groups at the IRS Lois Lerner was in contact with the Department of Justice in May 2013 about whether tax exempt groups could be criminally prosecuted for “lying” about political activity.
JW IRS doc
Read the full story here
by | ARTICLES, ECONOMY, OBAMA, OBAMACARE, TAXES
Americans for Tax Reform (ATR) has done an analysis of taxes that Obama has proposed since taking office, by looking the Obama administration budgets for FY2010 – FY2015.
“The 442 total proposed tax increases does not include the 20 tax increases Obama signed into law as part of Obamacare.
Here’s a breakdown of potential taxes by by budget year:
“-79 tax increases for FY 2010
-52 tax increases for FY 2011
-47 tax increases for FY 2012
-34 tax increases for FY 2013
-137 tax increases for FY 2014
-93 tax increases for FY 2015
“History tells us what Obama was able to do. This list reminds us of what Obama wanted to do,”
by | ARTICLES
With a few days left before taxes are due, President Obama released some information regarding his 2013 taxes. Obama makes $400,000 in income as President, and he reported a total an adjusted gross income of $481,098.
Income from book sales appears to be in steep decline from previous years. “Obama received $31,139 from Random House and $85,041 from Dystel & Goderich Literary Management, for a total of $116,180 in book sales. That combined total compares with $273,739 in similar payments he received in 2012. There was a big drop in the amount from Random House, which paid Obama $162,789 in 2012”.
There was something else in noticeable decline from 2012: donations to charity. In 2012, the Obama’s donated $150,034. This year, the “Obamas reported donating $59,251 to 32 charities, which helped lower their overall tax bill…Their largest charitable gift last year, $8,751, went to the Fisher House Foundation, which supports military families. The Obamas gave the foundation $103,871 in 2012”.
In comparison, Obama paid less taxes than Vice President Joe Biden. The Biden’s had a “reported adjusted gross income of $407,009. The Bidens paid $96,378 in total federal tax for 2013, amounting to an effective tax rate of 23.7 percent…The Bidens contributed $20,523 to charity in 2013, including contributing the royalties received from Dr. Biden’s children’s book, net of taxes, to the USO.”
by | ARTICLES, ECONOMY, FREEDOM, TAXES
The Tax Foundation releases an annual “Tax Freedom Day” report, which calculates “the day when the nation as a whole has earned enough money to pay its total tax bill for year”.
This is done by looking at federal budget projections, data from the U.S. Census and the Bureau of Economic Analysis, and projections of state & local taxes. Then, all the federal, state, and local taxes are divided by the country’s income.
This year, Tax Freedom day is April 21st, 3 days later than last year. The Tax Foundation cites sluggish economic growth and recovery.
Here’s a neat graphic from the Tax Foundation, which shows the breakdown:
The Tax Foundation calculates that “in 2014, Americans will pay $3.0 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2 percent of income”.
You can also visit the site to see how your state factors in, or what the Tax Freedom date is if you include federal borrowing.
by | ARTICLES, ELECTIONS, FREEDOM, GOVERNMENT, OBAMA, TAXES
Last week, the Commissioner of Internal Revenue Service, John Koskinen, spoke to the National Press Club on a variety of matters. One of the items he discussed was the proposed regulation changes to 501c4s.
As I mentioned earlier, the citizen commentary on this matter was unprecedented. As such, the IRS concluded they could not review it all in a timely matter for this year. However, he did not say that the matter was closed — only delayed:
“Another recommendation by the IG was that the Treasury Department and the IRS should provide clearer guidance on how to assess the permissibility of 501(c)(4) social welfare organizations’ activities. So last November, Treasury and the IRS issued proposed regulations that are designed to clarify the extent to which a 501(c)(4) organization can engage in political activity without endangering its tax-exempt status.
While I was not involved in the issuance of this draft proposal, because it happened before I was confirmed as Commissioner, I believe it is extremely important to make this area of regulation as clear as possible. Not only does that help the IRS properly enforce the law, but clearer regulations will also give a better roadmap to applicants, and will help those that already have 501(c)(4) status properly administer their organizations without unnecessary fears of losing their tax-exempt status.
During the comment period, which ended in February, we received more than 150,000 comments. That’s a record for an IRS rulemaking comment period. In fact, if you take all the comments on all Treasury and IRS draft proposals over the last seven years and double that number, you come close to the number of comments we are now beginning to review and analyze. It’s going to take us a while to sort through all those comments, hold a public hearing, possibly repropose a draft regulation and get more public comments. This means that it is unlikely we will be able to complete this process before the end of the year.”
Therefore, the IRS will continue to ponder the matter and revisit it — likely during another important election cycle. It is imperative to keep an eye on this, as the changes are onerous and unnecessary for the operation of 501c4s to educate and advocate.
by | ARTICLES, ELECTIONS, OBAMA, POLITICS, TAXES
The IRS recently proposed major changes to the way not-for-profit 501c4 organizations operate, which would effectively and severely limit their ability to engage in advocacy. These are your social welfare organizations, for which advocacy for “the common good and general welfare” is their primary purpose. They differ from 501c3, which are your charitable organizations; 501c5s, your labor unions; and 501c6s, your trade organizations. The one thing all of these organizations do have in common is that they are all tax-exempt organizations.
501c4s are not tax-deductible precisely because they are not political organizations. They serve to educate by being issue-based. This is protected under free speech; so long as the 501c4 sticks to an issue and not advocate for a particular candidate, it is not considered political speech and therefore it cannot be curbed. They can talk about policies and positions, not people.
These social welfare groups can therefore participate in the political arena as long as they maintain education as their primary purpose. Some examples of 501c4s would be the National Rifle Association (NRA), American Association of Retired Persons (AARP), Americans for Tax Reform (ATR), and the Sierra Club. 501(c)4s have been around for nearly 100 years, and the regulations that currently govern them have been in place since 1959.
So why has the Obama administration and the IRS taken a sudden interest in clarifying the rules for social welfare organizations that have been in place for more than 50 years? And why only the social welfare organizations, not the unions or trade organizations?
It is well known that on issue-based advocacy, the Republicans have made much better use of 501c4s than the Democrats. So of course, the Democrats want to find a way to disrupt this. You can find a flood of recent articles documenting how this conservative group and that conservative group spent money on political ads, more than the liberal groups–as if that is somehow unfair. It’s perfectly fair and perfectly legal — except when the Democrats are on the losing/receiving end.
This situation is reminiscent of the attempt to implement the “Fairness Doctrine” for talk radio, pushing to give conservative and liberal talk radio shows “equal air time” — because the conservatives dominate that market as well.
The 2014 Democrats are vulnerable, and they know it. What better way to stifle the ability for conservatives to message (foremost on the fledgling Obamacare law) than by attacking the methodology? The Obama Administration is retaliating by using the IRS to propose changes to the way social welfare organizations function and introducing very specific and onerous rules. These rules that have not been necessary at all for the entirety of the time (nearly a century) 501c4s have been in existence — until suddenly now.
What the new policy does is make definitions of political activity, specifically creating a huge number of things to now be considered “political”. The regs “would explicitly define which kind of activities are political and fall outside of the social welfare category, forcing such groups to be more careful about how they spend their funds. Under the proposed regulation, “candidate-related political activities” would include running ads that mention candidates close to Election Day, preparing voter guides or holding voter registration drives”.
By defining such activities as “political” instead of advocacy, they would be opened to being limited or even banned — activities which serve to provide education for the common good, as they always have.
Critics of the way 501c4s operate, which allow their donors to remain protected, suggest that the 501c4s are somehow gaming the system — using phrases like “secret donors” and “secret activity” to inflame the public against 501c4s. But this is patently untrue.
Political donors are required to be disclosed under campaign finance, but since 501c4s are specifically not political organizations, the donor names do not need to be made public. Their anonymity is protected under the Right of Free Association. Those who are on the receiving end of 501c4 activities to educate the populace during the election cycle, however, are now pushing for this to change in order to reveal citizens identities.
Therefore turning a simple and known definition of a 501c4 into a new and incomprehensible one, has the effect of stifling speech. Even the mere presence of such a proposal has had detrimental repercussions.
The regulation triggered more public commentary– tens of thousands of responses — during the open comment timeframe that recently ended, than any other regulation in history. Because of the outcry, there is a strong likelihood that it the proposed changes will be rescinded. How it even was allowed to come to fruition is mind-boggling.
It is possible that the persons who drafted the legislation didn’t even care about its clarity or effects. Every day that the proposal is even out there is another day that these 501c4s either a) can’t get started or b) can’t engage in advocacy. Why? The possibility of these regulations becoming permanent rules has 501c4s worried about potential infractions. After the recent revelations about the IRS targeting last year, it is not unlikely to think that the IRS purposely crafted muddled regulations.
From the vantage point of the 2014 midterm elections, the effect of curbing or scaring the activity of 501c4s during this election cycle undoubtedly benefits the Democrats.
What organization would risk the potential for increased scrutiny and possible violation from the IRS, knowing that the IRS has been operating in an unjust and partisan matter? They wouldn’t of course. So the 501c4s are currently holding back.
The IRS continues to act in an incompetent manner. That they are targeting 501c4s, and not c5s and c6s, show that there is an inherent bias internally within the IRS. No one can look at the situation and not think that this wasn’t done to have an affect on the current political cycle. This is not how the IRS is supposed to function in our country.
by | ARTICLES, ELECTIONS, FREEDOM, OBAMA, POLITICS
Mat Staver from the Liberty Council put together a good overview of the proposed changes to Social Welfare Organizations (501c4s). Below is a partial list that attempts to define political activity, changing the language that has stood for more than 50 years.
“IRS Regulation-134417-13, “Guidance for Tax-Exempt Social Welfare Organizations on Candidate-Related Political Activities,” is a proposed new regulation that is an outrageously brazen attempt by the IRS to silence the speech of 501(c)(4) organizations before the upcoming election. If implemented, the regulation would prohibit a 501(c)(4) from speaking to matters of public concern during the 2014 election cycle.
In part, the proposed regulation:
–Prohibits using words like “oppose,” “vote,” “support,” “defeat,” and “reject;”
–Prohibits mentioning, on its website or on any communication (email, letter, etc.) that would reach 500 people or more, the name of a candidate for office 30 days prior to a primary election and 60 days prior to a general election;
–Prohibits mentioning the name of a political party 30 days prior to a primary election and 60 days prior to a general election, if that party has a candidate running for office;
–Prohibits voter registration drives or conducting a nonpartisan “get-out-the-vote” drive;
–Prohibits creating or distributing voter guides outlining how incumbents voted on particular bills;
–Prohibits hosting candidates for office at any event, including debates and charitable fundraisers, 30 days prior to a primary election or 60 days prior to a general election, if the candidate is part of the event’s program;
–Prohibits distributing any materials prepared on behalf of a candidate for office;
–Restricts employees of such organizations from volunteering;
–Restricts the ability of officers and leaders of such organizations to make public statements regarding the nomination of judges;
–Creates a 90-day blackout period, in an election year, that restricts the speech of §501(c)(4) organizations;
–Declares political activity as contrary to the promotion of social welfare; and
–Protects labor unions and trade associations by not including them under the proposed regulations.
The proposed IRS regulation even restricts the ability of leaders within these organizations to speak publicly regarding legislative matters of public concern and to volunteer”
Tens of thousands of comments have been recorded during the IRS open comment session, which has now closed. While the 501c4s wait to hear the outcome, many have chosen not to be active right now, which is having an impact on the current 2014 election cycle..
