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On the heels of the tragic Houston floods, the mayor has added insult to injury and proposed at 9% property tax increase to “help pay for Harvey costs.” The mayor stresses that the tax increase would only be temporary — but when have we ever seen a tax not become permanent?
The Houston City Council has approved a recommendation from the Director of Finance to do that. The city will now hold three public hearings before being able to vote on the increase. Those hearings are planned for Monday, Sept. 25 at 6 p.m., Monday, Oct. 2 at 6 p.m., Wednesday, Oct 11 at 9 a.m.
So besides having to rebuild homes and lives, residents have to worry about incurring additional personal costs instead of the city tapping the rainy day fund.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, FED, POLITICS, POTUS, TAXES, TRUMP
The Trump Administration has continued the same path of deficit spending as its predecessors.
(CNSNews.com) – The federal government collected record total tax revenues through the first eleven months of fiscal 2017 (Oct. 1, 2016 through the end of August), according to the Monthly Treasury Statement.
Through August, the federal government collected approximately $2,966,172,000,000 in total tax revenues.
That was $8,450,680,000 more (in constant 2017 dollars) than the previous record of $2,957,721,320,000 in total tax revenues (in 2017 dollars) that the federal government collected in the first eleven months of fiscal 2016.
At the same time that the federal government was collecting a record $2,966,172,000,000 in tax revenues, it was spending $3,639,882,000,000—and, thus, running a deficit of $673,711,000,000.
Individual income taxes have provided the largest share (47.9 percent) of federal revenues so far this fiscal year. From Oct. 1 through the end of August, the Treasury collected $1,421,997,000,000 in individual income taxes.
Payroll taxes provided the second largest share (35.9 percent), with the Treasury collecting $1,065,751,000,000 in these taxes.
The $233,631 in corporate income taxes collected in the first eleven months of fiscal 2017 equaled only 8.6 percent of total tax collections.
The $21,172,000,000 collected in estate and gift taxes equaled only 0.71 percent of total taxes collected this fiscal year.
(Tax revenues were adjusted to constant 2017 using the Bureau of Labor Statistics inflation calculator.)
by | ARTICLES, BLOG, ECONOMY, POLITICS, TAXES, TRUMP
As the new jobs report posted 156,000 jobs (forecasted 180,000) and a slight uptick in unemployment (4.4% from 4.3%), CNSNews noticed a shift in government workers stats:
The number of people working for the federal government has declined by 11,000 in 2017 while the number working for state governments has declined 2,000, according to data published today by the Bureau of Labor Statistics.
But because the number of people employed by local governments has climbed 12,000 so far this year, the overall decline in the number of people employed nationwide by government has only dropped by 1,000 in 2017.
Meanwhile, even though manufacturing jobs have increased by 137,000 this year, the number employed by government in August still exceeded the number employed in manufacturing by 9,818,000.
In December 2016, there were 22,299,000 people employed by federal, state and local governments in the United States. By August, that had dropped to 22,298,000—a decline of 1,000.
On the federal level, there were 2,819,000 people employed by government in December 2016. That dropped to 2,808,000 in August—a decline of 11,000 so far this year.
On the state level, there were 5,085,000 employed by government in December 2016. That dropped to 5,083,000 in August—a decline of 2,000.
On the local level, there were 14,395,000 employed by government in December. That climbed to 14,407,000 in August—an increase of 12,000.
With federal and state governments dropping a combined 13,000 employees so far this year, and local governments adding 12,000, the net change in government employment nationwide so far in 2017 has been a decline of 1,000.
The 22,298,000 people employed by government in the United States in August continues to far outstrip the 12,480,000 people employed in manufacturing—evening though manufacturing has seen employment gains this year as government employment has marginally declined.
“Manufacturing employment rose by 36,000 in August,” the BLS said in its release today. “Job gains occurred in motor vehicles and parts (+14,000), fabricated metal products (+5,000), and computer and electronic products (+4,000). Manufacturing has added 155,000 jobs since a recent employment low in November 2016.”
Of those 155,000 manufacturing jobs added since last November, 137,000 have been added since last December. In the last month of 2016, there were 12,343,000 people employed in manufacturing in the United States. In August, there were 12,480,000–accounting for the 137,000 gain in manufacturing jobs thus far this year.
Even with the recent gains in manufacturing jobs and the small drop in government jobs, the 22,298,000 people employed by government in the United States in August still outnumbered the 12,480,000 employed in manufacturing jobs by 9,818,000.
From 1939, when the BLS started tracking manufacturing and government jobs, through 1988, manufacturing jobs always outnumbered government jobs in the United States. In August 1989, for the first time, government jobs exceeded manufacturing jobs in this country.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, HYPOCRISY, POLITICS, RETIREMENT, TAXES
Minnesota’s pension fund was recently revealed to be in crisis-mode after changing the accounting formula to more accurately reflect market realities:
“The jump caused the finances of Minnesota’s pensions to erode more than any other state’s last year as accounting standards seek to prevent governments from using overly optimistic assumptions to minimize what they owe public employees decades from now. Because of changes in actuarial math, Minnesota in 2016 reported having just 53 percent of what it needed to cover promised benefits, down from 80 percent a year earlier, transforming it from one of the best funded state systems to the seventh worst, according to data compiled by Bloomberg.”
During the most recent recession, the Governmental Accounting Standards Boards made accounting rules changes because it began to be more apparent that a majority of local and state pension systems were continuously understating the long-term obligations. It was common practice to depend on and project 8%-10% investment returns even when the reality was more along the lines of 2%.
When the public sector (and unions) signed off on lavish pension provisions for the employee, they hoped there would be enough growth and investment returns to cover it way down the road. There were no provisions made to handle the possibility of a low-interest rate society or a fledgling economy like we’ve experienced the last nine years; they took their chances and their fallback was always that they could suck money from the taxpayer by raising taxes to cover budgeting shortfalls. That is reckless and irresponsible.
Years of fiscal mismanagement in the public sector has resulted in this fiscal nightmare. Because the public sector does not have the economic forces of competition to keep compensation levels in check, as the public sector does, it was always incumbent upon public negotiators to manage contracts properly. Failing to properly negotiate, making cozy deals, and maintaining unsustainable defined-benefit plans has created the soaring budget and pension deficits we see across the country. Though the rules changes to actuarial math are a start, in some places, it’s too little, too late.
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Despite Connecticut’s status as one of the wealthiest states in the country, its fiscal health is in rapid decline. A hefty debt load has left the state without a budget for two months as lawmakers squabble how to best deal with the reality of “high taxes, outmigration, falling revenues and $50 billion of unfunded pension liabilities.”
Governor Malloy has an executive order ready to go into effect that will reduce or eliminate funds for localities and schools if the state government cannot come to a consensus. Lawmakers are staring down a multi-billion deficit for the next two years so austerity measures could be both drastic and necessary.
According to Reuters, “one major factor for the debt load is municipal spending. Some $23 billion of outstanding municipal debt has also constrained spending. Bondholders must be paid ahead of most other expenses like non-essential services and payments to vendors….Connecticut has borrowed for decades to fund school construction, whereas nearly all other states typically borrow at the local level for those projects.”
Other issues besides municipal projects have wreaked havoc. Skyrocketing pension costs have been a major contributor, although Connecticut has been staring down this problem for nearly a decade; Connecticut “piled on debt to bolster its public pensions, selling $2.3 billion of bonds in April 2008.” And budget deficits are not new; 18 months after the bond sale, “in December 2009, the state sold $916 million of economic recovery notes to close a budget deficit after depleting its rainy day fund during the Great Recession.”
So here we have a debt-ridden state — quite possibly the worst of all 50 states — suffering from financial woes for years now with only bandaid solutions. Sufficient tax revenue is not the problem; zealous overspending and fiscal mismanagement is. Unfortunately, Connecticut is one of several states facing the same issues; state insolvency is going to get worse in many places before it gets better.
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According to Bloomberg’s monthly economist poll, 78% of respondents think that Congress will be successful with tax cuts prior to mid-term elections next year — though they may be less ambitious than what has been originally planned.
Trump has promised to make this a priority. Whether or not this is a permanent change to the IRC — much like the reforms of 1986 — remains to be seen. Bloomberg notes that “White House officials have said they’re still committed to a permanent tax revamp, and the plan is to start hearings and a markup of a tax bill after Labor Day so a version can get through the House in October and the Senate in November.”
Tax reform and cuts are an indispensable way to boost floundering GDP growth, which has remained below 2% now for several years. Healthy GDP growth — 3% or higher — is imperative to restoring confidence in our continuously weak economy of the last decade.
by | ARTICLES, BLOG, ECONOMY, OBAMA, OBAMACARE, POLITICS, TRUMP
Anthem announced today that it would discontinue individual insurance coverage plans in Virginia in 2018, the third major insurer to do so this year; Aetna and United Health announced their plans earlier in the year. For Anthem, this marks the 4th state change so far in 2017, after Indiana, Ohio, and Wisconsin.
In their press release, Anthem noted,
“Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to a shrinking and deteriorating Individual market, as well as continual changes and uncertainty in federal operations, rules and guidance, including cost sharing reduction subsidies and the restoration of taxes on fully insured coverage. As a result, the continued uncertainty makes it difficult for us to offer Individual health plans statewide in Virginia.” Anthem will “reduce its plan offering and will only offer off-exchange plans in Washington and Scott Counties and the city of Bristol, VA.”
According to the Richmond Times-Dispatch, the move would be significant: “More than 206,000 Virginians could lose their individual health insurance policies with the sudden withdrawal of Anthem Blue Cross Blue Shield in Virginia, the state’s largest insurer, from the federal exchange and individual market in 2018.” Anthem will still employer-based plans, as well as Medicare and Medicaid plans.
The move leaves just five insurers in Virginia — Optima, Kaiser, Piedmont, Cigna, and CareFirst. Some localities will be left with just one insurer choice next year. This move by Anthem is a big deal, and yet another major failure of the poor structuring of the entire Obamacare apparatus. Americans deserve better.
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Mayor DeBlasio released a new plan to add a “nearly 14 percent tax increase on high-income Big Apple residents” in order to raise money for various transportation projects. It is projected to raise $800 million/year and would be used to pay for subway repairs, bus system upgrades, and low-income train rides.
DeBlasio pitched a city income tax hike that “would raise the rate for individuals making more than $500,000 and married couples earning over $1 million from 3.876 percent to 4.41 percent.” That translates into ” an additional $2,700 levy on an individual earning $1 million a year, and an additional $8,000 on an individual earning $2 million.”
Using quintessential class warfare speech, DeBlasio invoked Obama’s favorite phrases about the “top 1 percent” who “can afford to do a bit more” arguing that “a transit system that works makes New York City’s economy strong and benefits us all.” What he forgot to mention is that New York City is already one of the top tax-heavy localities in the United States for high income earners, who fork over 50% of their income in combined city, state, and federal taxes. Ridiculous, money-grubbing schemes like these continue to be the reason why the wealthy continue their mass exodus from the area.
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Centers for Medicare and Medicaid Services (CMS) have published data which projects that 1,332 counties (over 40%) will have only one health insurer on Obamacare in 2018 and 49 will have none. According to CNSNews, “the data comes from the Health Insurance Exchanges Issuer County Map, which shows projected issuer participation on the Health Insurance Exchanges in 2018 based on the issuer public announcements made prior to late July of 2017.”
Successful healthcare systems do not continuously lose insurers, accumulate massive debt, and leave citizens with little to no choice. Obamacare has continued to wreak havoc on our citizens. It has to go. We can do better.
by | ARTICLES, ECONOMY, FREEDOM, OBAMA, OBAMACARE, POLITICS, TAXES
I have to admit that I was a bit surprised to read an article by AEI (“This health care tax could spark a GOP civil war,” July 13, 2017) which treated the Net Investment Income Tax (NIIT) as a pesky tax that was wreaking havoc on health care reform, because <gasp>, some Republicans wanted to eliminate it.
But nobody has been talking about the series of tax changes that occurred when Obama and his Democrat cronies passed the Obamacare increases in the first place. These raised the Bush tax rates on only the wealthiest from 36% – 39.6 % and then again raised the tax rates on the wealthiest by adding the 3.8% Net Investment Income Tax (NIIT), which covered all investment income. Then there was the 0.9% Obamacare Medicare surtax on upper-income earners. Obamacare increases also raised capital gains on the wealthiest ones from 15% – 20%. When the 3.8% tax would get tacked on, capital gains rates effectively went from 15%- 23.8% — an increase of about 55%. Taxes like these punish investment!
How is that not ridiculous? Or rather, how is it considered ridiculous that some Republicans want to eliminate the NIIT? Democrats continuously refer to it as an “upper-class tax cut.” Don’t fall for the rhetoric!
