by | ARTICLES, BLOG, ECONOMY, HYPOCRISY, OBAMA, OBAMACARE, POLITICS
Eye-opening words of HHS Secretary Sebelius yesterday:
“This is no longer a political debate; this is what we call the law,” Sebelius told a group that includes Democrats and Republicans, elected officials, political appointees and bureaucrats. “It was passed and signed three years ago. It was upheld by the Supreme Court a year ago. The president was re-elected. This is the law of the land.”
Except when it is not.
If this is the law of the land, why is our President of the United States picking and choosing the parts of law that he wants to implement and/or delay?
Just this morning, Forbes is reporting “that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year”.
Recently, there was a delay in the employer mandate.
Before that, “there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies, relying on the “honor system” instead”
And for starters in April 2012, there was a delay of Obamacare’s Medicare cuts until after the election.
Oh, and don’t forget the security flaws and delays recently revealed. Deadlines for security safeguard have been missed, and the date to implement that system has been moved to September 30 (one day before the exchanges open).
Here’s the problem. Sebelius and the Obama Administration want to use the argument “It’s the law of the land!” when they are criticizing Republicans for questioning Obamacare. At the same time, they are not followign the “law of the land” when they are moving deadlines, delaying implementation of the law, and using the honor system.
Michael McConnell wrote an excellent piece last month in the WSJ entitled ” Obama Suspends the Law: Like King James II, the president decides not to enforce laws he doesn’t like. That’s an abuse of power”
He points out the simple fact that “Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so”.
Indeed. When Obama decides to pick and choose the parts of the law he wishes to execute, he is not upholding “the law of the land”.
Is Obama using Obamacare to set up a series of precedents for which he easily dispenses with troubling or inconvenient laws or statutes, in order to expand his Presidential powers?
There are many reasons why Americans should continue to be wary of Obamacare. These include:
Fiscal — Staggering costs of the system, rising costs of premiums, etc
Medical — Not being able to keep your doctor or healthplans as promised. Concerns about rationing, death panels, etc.
Personal — Your information is, at this time, not secure, and is overseen by unregulated “navigators” (think TSA)
Operational — Obamacare was signed into law in March 2010. It was expected to be fully implemented January 1, 2014. Yet in those almost four years, Americans have seen delays, missed deadlines, cost changes, and more. If Obamacare can’t even be implemented without substantial missteps along the way, what confidence does the public have that it will run efficiently and properly?
Constitutional — Obama is ignoring deadlines contained in the law and delaying parts that are problematic
Americans will have varying opinions as to which of these concerns above is most acute. However, the Constitutional aspect might very well be the most troublesome. Invoking the “law of the land” when chastising your political opponents, while simulataneously ignoring the “law of the land” is the height of executive hubris. An expansion of power by the Executive Branch undermines our entire American system of government.
by | ARTICLES, BLOG, BUSINESS, ECONOMY
Detroit is not too big to fail.
The city of Detroit must take its lumps, as difficult as they may be to swallow. But the city of Detroit is to blame. They made a very bad calculated error. They thought their decades of cronyism and sweeping promises were good and economically viable. The people didn’t realize, or really didn’t care, that they were sold a lot of snake oil from public service sectors and unions that were promised too-good-to-be-true benefits and rewards.
But Detroit must not be bailed out because there are a great many other localities in the same boat as Detroit, that operated on the same premises. We simply cannot afford this financial baggage. Thatcher warned us decades ago, “The problem with socialism is that you eventually run out of other people’s money.”
One of the most difficult facets of Detroit’s economic woes is the fact that the state of Michigan constitutionally protects the rights of public service pensions. But pensions systems function as a vendor as a budget item to be paid; therefore, there should be no (other) protection for them than any other vendor — to do so is a clear form of cronyism. It is typically very difficult to get constitutional provisions passed at all, and yet some states, like Michigan and New York for example, managed to get it done. So this mindset of economic self-protection has clearly long been pervasive; these states have had the constitutional pension protection in place for some time.
The constitutional protection for public pensions is rather duplicitous because of how such money is protected when finances or the economy sours. You see, when states and cities raise money via taxes, the purpose is not for profit-making, and they don’t make decisions based on profits and such. First and foremost, their job is to take care of citizens. You would think with that being the case, it would therefore be really important to the elected leaders to make certain that the bondholders (who execute money in large quantities to help finances projects to benefit the citizenry) would know that their bond money is protected first and taken care of first. This is common sense.
A lot of the time in municipalities, the bonds that are issued are General Obligation (GO) bonds. GO Bond money is usually considered first in line for protection because of the enormous sums of money issued. Bondholders have to be promised by the locality that they get paid back first as an element of protection, a form of collateral if you will. In exchange for that guarantee, the GO Bonds are usually issued at lower rates than other types of bonds. That iron clad arrangement enables the GO Bonds rates to be very affordable for projects (think “smart money”), specifically because the bond has the guarantee of the locality that the money is financially protected. Other bonds don’t have that guarantee and therefore have a higher rate.
But if there are constitutionally protected items (like a pension system), they get put at the top of the list for protection, even ahead of GO bonds. This is an enormous problem. GO bonds have no actual and true collateral — only the “full faith and credit” of the borrowing locality. What kind of hypocrisy is it now to say to the bondholders that the money which was was borrowed to pay for education and teachers and government projects for the betterment of Detroit citizens now won’t get paid back — because we have to first pay for the teachers and unions and public service retirement pensions?
Detroit must be allowed to go through the proper process and not be propped up. This is a city that continuously and consciously made outrageous and untenable financial decisions with no accountability. A bailout for this behavior and operation will have a rippling effect on other localities which practiced this same kind of cronyism. Why should other taxpayers now be responsible for shouldering such gross economic negligence of a city rife with economic corruption?
by | ARTICLES, BLOG, OBAMA, OBAMACARE
Reuters is reporting today that Obamacare is in dire straits down for another reason: security. The government has missed important deadlines for implementing the proper measures in order to safeguard our information.
“CMS – the agency within HHS that is running Obamacare – had set a May 13 deadline for its contractor to deliver a plan to test the security of the crucial information technology component.
A test was to have been performed between June 3 and 7. But the delivery deadline slipped and the test – assessing firewalls and other security elements – is now set for this week and next”
The new deadline for implementing the system is September 30, precisely one day before the October 1st implementation date.
So the big questions to come away from this announcement are:
1) If the security system is not ready for the October 1 deadline, will Obamacare still proceed?
a) If so, will citizen data be safe? How?
b) If not, how will that affect consumers?
2) This is one of several examples of Obamacare issues (including running out of money prematurely and delaying Obamacare for businesses, among others). If the government has been able to get right the mere IMPLEMENTATION of a law of this size and scope, how are we supposed to be confident in its ability to adequetely and effectively run Obamacare come January 2014?
by | ARTICLES, OBAMA, OBAMACARE
Staggering costs. Gross mismanagement. Delays. If these current problems with Obamacare aren’t enough to persuade you to support its full repeal, maybe this latest revelation will: The Federal Data Services Hub
What is this Hub, and how is it related to Obamacare? According to the folks over at Rare.com
“The Data Hub is a comprehensive database of personal information being established by the Department of Health and Human Services (HHS) to implement the federally facilitated health insurance exchanges. The purpose of the Data Hub, according to a June 2013 Government Accountability Office (GAO) report, is to provide “electronic, near real-time access to federal data” and “access to state and third party data sources needed to verify consumer-eligibility information.”
As Rare.com astutely points out, “in these days of secret domestic surveillance by the intelligence community, rogue IRS officials and state tax agencies using private information for political purposes, and police electronically logging every license plate that passes by, the idea of the centralized Data Hub is making lawmakers and citizens nervous”.
What kind of information will be stored in the Federal Data Services Hub? Why sorts of your…data. This inlcudes “income and financial data, family size, citizenship and immigration status, incarceration status, social security numbers, and private health information. It will compile dossiers based on information obtained from the IRS, the Department of Homeland Security, the Department of Defense, the Veterans Administration, the Office of Personnel Management, the Social Security Administration, state Medicaid databases, and for some reason the Peace Corps”
And who will be in charge of your secure info? The government has it all figured out. They even have a catchy name: “Navigators”: “The hub will be used on a daily basis by so-called Navigators, which according to the GAO are “community and consumer-focused nonprofit groups, to which exchanges award grants to provide fair and impartial public education” and “refer consumers as appropriate for further assistance.” Thousands of such people will have unfettered access to the Data Hub, but there are only sketchy guidelines on how they will be hired, trained and monitored”
So there you have it. A completely intrusive, centralized information database combining health, financial, and citizenship information, overseen by officials no more professional than the current TSA. If Obama can artibrarily ignore the PPACA starting date of January 1, 2014 for businesses, than the House and Senate need to takes the reigns and push for a delay (or better yet — a full repeal) of Obamacare for individuals as well.
There is too much to risk — financially and personally — to keep Obamacare on the books.
by | ARTICLES, OBAMA, OBAMACARE
Three major Unions, including James P. Hoffa of the International Brotherhood of Teamsters, wrote a letter to Nancy Pelosi and Harry Reid this past week. In the letter, they echoed the sentimeng of millions of Americans who are concerned about Obamacare.
The opening salvo is scathing. “When you and the President sought our support for the Affordable Care Act, you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat,” letter said. “Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour workweek that is the backbone of the American middle class.”
The reason why this letter is attention-grabbing is the fact that the Unions have been the staunchest supporters of Obama through thick and thin. And interestingly, they acknowledge that in this letter. They write, ” We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision. Now this vision has come back to haunt us.”
Ouch.
If you don’t want to read the letter in its entirety, Wall Street Cheet Sheet does a quick little analysis. “The letter lists three complaints. First, that the law creates an incentive for employers to keep workers’ hours below 30 hours per week. Second, that millions of Americans, including a great majority of union members, are covered by nonprofit health insurance plans. But with the implementation of Obamacare, union workers will be “treated differently and not be eligible for subsidies afforded other citizens.” Finally, the letter argued that while union, nonprofit plans will not receive the same subsidies, they will be taxed to pay for those subsidies”
The interesting questions is — will Obama respond? Will changes happen? The Unions don’t seem too sure. In fact, they charge that “Unless changes are made, however, that promise is hollow”.
This strongly worded letter is all too revealing. Obama used the Unions to get elected, and how he’s folding on them since they’ve outlived their usefulness. For the Unions to deride Obamacare in this fashion is encouraging. If even the big Unions refuse to get behind Obamacare anymore, it gives more weight for Congress to work with, especially in the Senate, when considering the law and its repeal.
by | ARTICLES, HYPOCRISY, POLITICS, SOCIAL SECURITY, TAXES
Faithful devotees on the Left continue to peddle the notion that Social Security is not in crisis, that it doesn’t contribute to the deficit, and there is no need for reform. However, reading through this year’s just-released Social Security Trustees report, the annual “State of the SSA”, we find that the Trustees tell a different narrative — one that is grim indeed. The following primer pulls directly from the report and then explains the statement in layman’s terms. It is copied text from summary of the entire report.
What it actually says:
“Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period”.
What it means:
Non-interest income includes payroll taxes, taxes on scheduled benefits, and general fund transfers. Expenditures (payouts to beneficiaries) have exceeded (been more than) income (taxes collected ) since 2010. Social Security has not been paying for itself for the last three years. Anyone telling you otherwise is patently false.
What it actually says:
“The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012”.
What it means:
Again, right here the report describes that there is a deficit occurring and provides a tangible figure for each year. It directly contradicts the notion the idea that Social Security is PAYGO. It is not.
What it actually says:
“The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers”
What it means:
The deficit is only going to worsen by about 30% over the next 5 years to $75 billion a year. Then the deficit is going to RISE STEEPLY because even more people will be claiming benefits than those working and paying into the system.
What it actually says:
Redemption of trust fund asset reserves by the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits.
What it means:
The Government is using Trust Fund Asset Reserves by the General Fund of the Treasury NOW — and has been for three years — to meet its Social Security obligations. What the Left fails to understand or deliberately doesn’t explain is that we are already borrowing from reserves (think using savings) just to meet basic program costs.
What it actually says:
“Since the cash-flow deficit will be less than interest earnings through 2020, reserves of the combined trust funds measured in current dollars will continue to grow, but not by enough to prevent the ratio of reserves to one year’s projected cost (the combined trust fund ratio) from declining. (This ratio peaked in 2008, declined through 2012, and is expected to decline steadily in future years.)”
What it means:
Remember, we are talking about the reserves now. The reserve amount (savings) will still grow slowly even after paying the Social Security deficit, until about 2020. This is how the Left claims that there is a Social Security “surplus”. They count the Social Security Trust Fund (deficit) + Trust Fund Asset Reserves (savings) = surplus. That is not a true surplus. That is fuzzy math.
What it actually says:
“After 2020, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of total trust fund reserves in 2033, the same year projected in last year’s Trustees Report”.
What it means:
By 2020 (that’s 7 years from now) the Social Security Trust Fund deficit amount will grow and finally outpace any growth (surplus) in the Trust Fund Asset Reserves (savings). This outpacing will continue until 2033: that’s the year that the Social Security Trustees project a depletion of total trust fund reserves (the savings account runs out!). Yet because this projection date, 2033, was also in last year’s report, the Left can dismissively remark that there are “relatively few changes or surprises” in this year’s report — so that no one bothers to actually read it.
What it actually says:
“Thereafter, tax income would be sufficient to pay about three-quarters of scheduled benefits through 2087”.
What it means:
Even though you’ve faithfully paid in, you’ll only be able to get back 75% of the money. One-fourth of it gone. Poof. That means the Trust Fund Asset Reserves (savings) will have been propping up the Social Security Trust Fund a full 25% by 2033, and that Social Security will have been under-funded for 23 years by that time.
What to do about it?
Well, the very first paragraph of the Social Security Trustees report urges action:
‘Neither Medicare nor Social Security can sustain projected long-run programs in full under currently scheduled financing, and legislative changes are necessary to avoid disruptive consequences for beneficiaries and taxpayers. If lawmakers take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits”
So, despite what the media and the Left tell you, Social Security is not fully funded. There is no surplus. Its current modus operandi takes the benefits being paid today and uses them to pay their current beneficiary obligations (instead of being held in trust like its original intent). It also borrows from reserves (savings) in order to meet just those basic current obligations.
The Trustee Summary concludes,
“Lawmakers should address the financial challenges facing Social Security and Medicare as soon as possible. Taking action sooner rather than later will leave more options and more time available to phase in changes so that the public has adequate time to prepare.”
It is signed by the Trustees:
Jacob J. Lew, Secretary of the Treasury, and Managing Trustee of the Trust Funds.
Kathleen Sebelius, Secretary of Health and Human Services, and Trustee.
Charles P. Blahous III, Trustee.
Seth D. Harris, Acting Secretary of Labor, and Trustee.
Carolyn W. Colvin, Acting Commissioner of Social Security, and Trustee.
Robert D. Reischauer, Trustee.
Therefore, the next time someone claims that Social Security is not in a crisis, is solvent, is able to meet all of its obligations, and/or is running a surplus, show them the Trustees report about the real situation — in the Trustees own words.
by | ARTICLES, HYPOCRISY, OBAMA, POLITICS
How does Obama go from being the smartest person ever to be elected President to learning about important stuff going on by watching the news?
One of the key components of Tea Party ideology is the championing for smaller government. As the IRS scandal targeting the Tea Party, Conservatives, and pro-Israel Jews continues to fester, a quick glance at the various figures involved in the wrongdoing have resorted to finger pointing and the blame game. According to Obama and others officials themselves, we have an answer: “Not Me” did it.
First, from the IG Report (emphasis mine):
“The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention. Ineffective management: 1) allowed inappropriate criteria to be developed and stay in place for more than 18 months, 2) resulted in substantial delays in processing certain applications, and 3) allowed unnecessary information requests to be issued”.
“During interviews with Determinations Unit specialists and managers, we could not specifically determine who had been involved in creating the criteria. EO [Exempt Organization] function officials later clarified that the expanded criteria were a compilation of various Determinations Unit specialists’ responses on how they were identifying Tea Party cases”
Next,from the IRS officials: Shulman (former) and Miller (current)
Former IRS offical Doug Shulman testified before the House Ways and Means Committee that he was “dismayed and saddened” when he learned about the IG report, and suggested that the IRS is burdened.
“Given the challenges the agency faces, it does its job in an admirable way the great majority of the time. Men and women of the IRS are hardworking, honest public servants. While the inspector general’s report did not indicate that there was any political motivation involved, the actions outlined in the report have justifiably led to questions about the fairness of the approach taken here. The effect has been bad for the agency and bad for the American taxpayer.”
Yet those same (nameless) hardworking, honest public servants are the ones that Shulman blames for the activity. He said, “I agree that this is an issue that when someone spotted it, they should have run up the chain, and they didn’t.
Recent IRS head Steven Miller concurred during his testimony that “I’m not going to disagree with your characterization at all of bad management here.”
So, where is the accountability within the levels of the IRS? Ultimately, the IRS falls under U.S. Department of the Treasury, which is part of the Executive Branch. But you wouldn’t know it talking to this Administration.
When the IRS scandal was erupting, Jay Carney and Obama both stated publicly (Jay on Friday, May 10, and Obama on Monday, May 13) that the IRS was an “independent agency”. This is patently untrue.
The Federalist Society reminds us that there are two types of agencies: One is an “independent agency” which is not part of an Executive Branch department (thinks Boards and Commissions). They are headed by a Cabinet Secretary and are “independent of presidential control, usually because the president’s power to dismiss the agency head or a member is limited”.
The other type of agency is the one kind that the IRS falls under. It is headed by a Senate-confirmed Presidential appointee, and is directly part of the Department of Treasury (in the same way that Federal Bureau of Investigation is part of the Department of Justice). The particular IRS Commissioner position was created in 1997, (26 USC 7803), and the confirmed appointee serves a five-year term.
Our President is counting on either ignorance from the general public ,or else he does not understand how his own government operates. “Not Me” is in charge.
The President and those with whom he has surrounded himself have not been leaders. They have abrogated the basic responsibilities of leadership by refusing to take ownership of the problem and deal with it. It is short on accountability and long on blame. Rich Lowry aptly noted this week that the corruption in our administration” is the distortion of our form of government by sidestepping democratic procedures and accountability and vesting authority in bureaucrats”.
The greatest irony in this debacle is that the Tea Party has been vindicated. It concern about a government-too-big has proven to be unequivocally and terrifyingly true.
by | ARTICLES, CONSTITUTION, OBAMA, OBAMACARE, POLITICS, TAXES
As each day passes, the various facets of Obamacare are getting implemented in order to be fully operational by 2014. And we are beginning to hear about difficulties in the implementation caused primarily by either 1) people or companies trying to avoid the “penalties” or 2) people wanting to pay the penalties in order to avoid having to pay for intentionally overpriced health “insurance”.
In order to achieve adequate and targeted enrollment in Obamacare those representing the Government have begun to be aggressive. They are choosing to use all methods at their disposal to pressure, cajole, and otherwise push people to “do the right thing” and buy the mandated insurance product. Health and Human Services Secretary Kathleen Sebelius has millions now at her disposal to dispatch “navigators” and “in-person assisters” to help enroll more Americans into Obamacare. But the very act of doing so may be rendering Obamacare unconstitutional.
It is worthwhile to remember that the only way in which the law of Obamacare was saved from being declared unconstitutional was the that that there is no penalty associated with Obamacare. It was ruled to be a “tax” derived from not purchasing the mandated health coverage. In reaching his conclusion, Justice Roberts accepted the Administration’s position that there is absolutely no negative interference whatsoever on anyone opting to pay the “tax” rather than buy the product.
Therefore, any attempt by the administration or any of the implementing bodies to pressure, threaten or even imply some sort of wrongdoing by those choosing to not buy insurance would be clearly unconstitutional.
If those implementing Obamacare are properly following the Supreme Court’s mandate, they should be telling prospective insurance purchasers that they should be deciding for themselves whether they would be better off with the insurance or the penalty. We know this is not happening. At the macro level, governors have been hustled to implement the exchanges in their states. And at the individual level, Obamacare officials are pushing for more enrollees to ensure a steady flow of premiums paid by healthy patients in order to cover those who are high-risk and high-cost.
What can be done? If we are vigilant in not allowing individuals and businesses into being compelled to buy Obamacare, can we starve the beast? Are the tactics and funding unconstitutional? If so, Obamacare may just die of its own deficiencies.
by | ARTICLES, BUSINESS, ECONOMY, OBAMA, TAXES
There is an erroneous sentiment perpetuated by the media that our government gives corporate tax breaks for moving jobs overseas, implying that our tax laws favor countries like China and India over the United States. This is simply untrue. Expenses that companies and businesses incur while doing business are rightly deductible (“a tax break”) but no specific tax benefits exist in our tax code for companies who relocate outside of our country.
What you don’t hear in the media, however, is that the real reason jobs are moving overseas is because of terrible business policies here at home. Companies operating abroad can undersell us — not so much because wages and costs are lower, but more importantly because their ability to conduct day to day business is not burdened by a) government at all levels hampering their every move, b) very high tax rates, and c) courts that allow frivolous and anti-business litigation to become a significant cost of doing business. We are part of a global economy now, but the foreign countries are rapidly becoming more user friendly than our own.
We are overburdening our businesses with convoluted tax codes and paperwork. The host of local, state, and federal regulations and taxes becomes a cost of every product we make and every service we sell. Additionally, the costs of our legal system itself — not just the direct costs of dealing with frivolous lawsuits but also the need to defensively organize business records and processes — constitutes a large and growing tax on conducting business.The end result makes it more expensive to produce a job here and many companies must move overseas to a friendlier business environment in order to remain financially solvent.
I have a close relative who is an owner and executive of a substantial manufacturing operation that he started in Shenzhen, China because of its business friendly environment. I’ve heard from him many times that he went into business, not to comply with government regulations, but to make things. The wages he pays and his operating costs are much lower than they would be here in the US, but that is substantially offset by less skilled workers and high transportation costs. But his taxes are much less than what they would be in the US, and his total legal expenses would be at least 50 times higher here. And he has not suffered a single expensive lawsuit since he started business in China 25 years ago! Is there any wonder why China’s economy is thriving while ours is stagnating?
Simply put, due to government interference, if a company is going to lose money here, it is going to leave. The real reason for jobs moving overseas is that higher taxes, expensive and complex regulations, and stifling legal environment have rendered the United States less globally competitive. Without major changes, we are destined to become a declining force in the business world.
by | ARTICLES, BUSINESS, NEW YORK, POLITICS
Governor Cuomo is on the list of presidential potentials for 2016. His positions on state and federal taxes need to be elucidated in case he becomes a major candidate in the next couple of years.
For instance, Governor Cuomo lashed out against the recent federal proposal to eliminate the Federal tax deductions for state and local taxes. He calls this “double taxation” because it forces individuals to pay two separate taxes – federal and NY State – on the same income- without giving any relief against the federal tax in recognition of the tax paid to the State. Without the deduction, Cuomo warns that tax bills will rise substantially for New Yorkers.
However, the truth is that Cuomo’s attacks are nothing more than an attempt to shift the focus away from New York State failing its fiduciary responsibility to its taxpayers. It currently levies a very high level of taxation upon its citizens. The deduction is simply a subsidy that masks the egregious overspending of the state which creates the situation in which high taxation is necessary to feed the body politic.
Why should the federal government have to subsidize New York at all? If the residents of New York State think that high (some would say ludicrously wasteful) government spending paid for by very high taxes is the right way to run a state, it is certainly their right. But these residents also have no right to ask taxpayers of other states to subsidize them. And that is exactly what happens when the federal tax code enables New Yorkers to reduce their federal tax simply because they pay high taxes to their state.
Furthermore, Governor Cuomo’s outrage over this “tax increase” is blatantly hypocritical. Where was his outrage when the federal government raised tax rates which fall so overwhelmingly on his NY constituents? Where was his outrage when the federal government’s Alternative Minimum Tax (“AMT”) kept exploding the tax liability of New Yorkers (mostly because the AMT does not allow the deductions for state and local taxes)? And where was his outrage against himself when he broke his clear promise and substantially raised NY income taxes on the most productive New Yorkers?
So yes, although the proposal will seriously hurt all New Yorkers, it is essentially and simply a reform that puts all taxpayers around the country on a level playing field. If Cuomo is so concerned with New York’s taxpayers, he should aim to reduce the scope and size of government and the wildly out of control spending that created it, instead of adding to the budget deficit by his latest spending schemes.
