by | BLOG, FREEDOM, GOVERNMENT, OBAMA, TAXES
I joined the Tea Party in my locality when it began because I sincerely believed in its simple, but extremely powerful and direct message:
Low Taxes
Limited, Constitutional Government
Individual liberty
and nothing else. The Tea Party was not to be a political “Party” with positions on every subject under the sun. It would only be involved in its particular concerns, so as not to dilute its message.
Then what is this nonsense regarding certain Tea Party groups espousing substantial anti-immigration rhetoric?
How can someone espousing limited government, individual liberty, and rule of law be FOR crony capital government-imposed restrictions on businesses hiring who they want?
And with that, a large reason for such a high number of “illegal” immigrants is because the government has created arbitrary, low quotas which limit the amount of foreign-born workers allowed — though many sectors of our economy demand more.
The current Tea Party was galvanized by the original (Boston) Tea Party and share a same disdain over high and unjust taxation. But the original “tea partiers” would be turning over in their graves by being associated with the current Tea Party’s anti immigration stance!
Our colonists came to America for a variety of reasons ranging from freedom of religion to economic opportunity and wealth. They sought hope, prosperity, and freedom. They were the original immigrants.
America is a unique country because men, women, and children from other countries all want to come here. Unless you have a relationship to a US citizen or a permanent resident, the only way to be able to come here is through a job by being a skilled laborer or professional. This is a good thing.
We are getting the creme de la creme from other countries — and we want to say no to them? Here we have people who work and are motivated enough to uproot and better themselves by living in another country. That is the best kind of ethic we need to continue to nourish and aspire to America, the way we always have.
As for those who flee here from oppression: if their only crime is that they seek a better life, decent housing, food, and hygiene and they risk life and limb to come here, how can we turn that spirit away?
The current Tea Party would do well to remember that this country has survived and thrived precisely because of immigration; first, from the original colonists and second, from the wave of people who came here mainly during the late 1800s and early 1900s.
You are here because of an immigrant who believed in America. For the Tea Party to be closed-minded and protectionist on the issue of immigration flies in the face of the original Tea Partiers who inspired them.
by | ARTICLES, FREEDOM, OBAMA, QUICKLY NOTED, TAXES
From National Review Online:
“The Internal Revenue Service may have been caught violating federal tax law: In October 2010, the agency sent a database on 501(c)(4) social-welfare groups containing confidential taxpayer information to the Federal Bureau of Investigation, according to documents obtained by a House panel.
The information was transmitted in advance of former IRS official Lois Lerner’s meeting the same month with Justice Department officials about the possibility of using campaign-finance laws to prosecute certain nonprofit groups. E-mails between Lerner and Richard Pilger, the director of the Justice Department’s election-crimes branch, obtained through a subpoena to Attorney General Eric Holder, show Lerner asking about the format in which the FBI preferred the data to be sent”.
More evidence that the 2013 IRS scandal targeting 501c4s is worse than we thought. Read the whole article here:
by | ARTICLES, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, POLITICS, TAXES
Obama issued an Executive Order today that brought extra relief to some student loan borrowers. A 2010 law allowed for repayment caps at 10% of a borrower’s income, though some loan holders were ineligible. This Executive Order expanded those who could qualify for the income repayment plan.
From the NYT: “Mr. Obama’s main action will be to expand on a 2010 law that capped borrowers’ repayments at 10 percent of their monthly income. The intent is to extend such relief to an estimated five million people with older loans who are currently ineligible — those who got loans before October 2007 or stopped borrowing by October 2011. But the relief would not be available until December 2015, officials said, given the time needed for the Education Department to propose and put new regulations into effect”.
Though this Executive Order — and its 2010 law counterpart — may sound well and good, financially it is a disaster. The 10% income repayment does not help any young person get off on a solid financial footing. Likewise, because some sectors allow for loan forgiveness after a period of time, that amount gets written off by the federal government, thereby substantially adding to the federal debt.
For example, if someone borrows $30,000 a year for 4 years for a degree, that is $120,000 of student loan debt. The debt carries an interest rate of at least 6%. The Obama repayment plans offer an option that allows borrowers to pay 10% (it used to be 15%) of what they earn, and if not fully paid back by the end of ten years, any balance is forgiven.. So for instance, if a new graduate lands a job that pays a generous $50,000/year, he/she would pay back $5,000/year. With interest of at least $7,200 ($120,000 x 6%) which likely does not even cover the interest on the original $120,000 loan.
There is almost no way a borrower can begin to pay back anything on their loan, and by the time they actually can make a dent, the additional interest accrued would have ballooned the total loan amount to at least $150,000. This is financially crippling for a young person.
The costs for the 10% repayment program since its implementation have ballooned from $1.7 billion in 2010 to $3.5 billion in 2013 to an estimated $7.6 billion for 2014.
This Executive Order seems to be a precursor to a bill being pushed by Senator Elizabeth Warren, which Obama has said to endorse. It “would allow borrowers to potentially save thousands of dollars by giving them a chance to effectively pay off their high-rate existing loans in exchange for new loans that carry substantially lower interest rates”.
How would this program be paid for? A new tax or increased taxes on the wealthy, of course.
The real impact of this higher education reform is that the government is now encouraging people to borrow substantially for their education, while simultaneously providing an avenue for students to avoid paying back much of their funds — leaving the taxpayer on the hook, a deficit in freefall, a tax increase for targeted high income earners, and an economy in stagnation.
by | ARTICLES, BLOG, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, TAXES
From the Bureau of Labor Statistics (BLS):
Total nonfarm payroll employment rose by 217,000 in May, and the unemployment rate was unchanged at 6.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, health care and social assistance, food services and drinking places, and transportation and warehousing.
Household Survey Data
The unemployment rate held at 6.3 percent in May, following a decline of 0.4 percentage point in April. The number of unemployed persons was unchanged in May at 9.8 million. Over the year, the unemployment rate and the number of unemployed persons declined by 1.2 percentage points and 1.9 million, respectively.
Among the major worker groups, the unemployment rates for adult men (5.9 percent), adult women (5.7 percent), teenagers (19.2 percent), whites (5.4 percent), blacks (11.5 percent), and Hispanics (7.7 percent) showed little or no change in May. The jobless rate for Asians was 5.3 percent (not seasonally adjusted), little changed from a year earlier.
Among the unemployed, the number of job losers and persons who completed temporary jobs declined by 218,000 in May. The number of unemployed reentrants increased by 237,000 over the month, partially offsetting a large decrease in April. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their current job search.)
The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 3.4 million in May. These individuals accounted for 34.6 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 979,000.
The civilian labor force participation rate was unchanged in May, at 62.8 percent. The participation rate has shown no clear trend since this past October but is down by 0.6 percentage point over the year. The employment-population ratio, at 58.9 percent, was also unchanged in May and has changed little over the year.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 7.3 million, changed little in May. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
In May, 2.1 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 697,000 discouraged workers in May, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.
by | ARTICLES, BUSINESS, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, TAXES
This is a tad worrisome:
Nonfarm business sector labor productivity decreased at a 3.2 percent annual rate during the first quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as hours increased 2.2 percent and output decreased 1.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decrease in productivity was the largest since the first quarter of 2008 (-3.9 percent).
And this:
In the first quarter of 2014, nonfarm business productivity fell 3.2 percent, a greater decline than was reported in the preliminary estimate. The revised figure reflects a 1.4 percentage point downward revision to output and a 0.2 percentage point upward revision to hours.
You can read the whole report here
No one else seems to be reporting on the revised numbers, which mirror that of the 1st quarter of 2008 (-3.9).
Couple this with the report last week that the “economy in the U.S. contracted for the first time in three years from January through March as companies added to inventories at a slower pace and curtailed investment”.
It will be interesting to see what the unemployment numbers show on Friday.
Friday update: Unemployment stays flat
by | ARTICLES, ECONOMY, FREEDOM, GOVERNMENT, OBAMA, POLITICS, TAXES
Diana Furchtgott-Roth wrote an article this past week outlining the economic impact of Obama’s newest regulations. Obama has decided through Executive Order to institute environmental regulations similar to those in the failed “cap-and-trade” legislation from a few years ago. But Obama will now go a step further than just the regulation of power plants; regulations will include regional emissions.
Regulation is stifling. It creates more barriers for American businesses which drives up costs for consumers. Businesses which are abroad are not subject to such regulation, which means they will often be able to charge less for products than American ones. With the economy at such a sluggish pace right now, of course consumers will purchase the lowest price. With higher costs to run the business, as well as drop in demand for product, employees will face the risk of losing jobs as a cost-saving measure for their employer.
Some lawmakers are waking up to the economic impact over-regulation has on our industries. Several legislators introduced a bipartisan in 2011 aiming to reduce regulatory burdens in particular agricultural endeavors. According to records, “this legislation passed the U.S. House of Representatives on March 31, 2011 as H.R. 872, The Reducing Regulatory Burdens Act of 2011. Additionally, it advanced out of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, but the full Senate failed to consider it during the last Congress”. It is now known as H.R.935, “The Reducing Regulatory Burdens Act of 2013”. Yesterday, on June 2, it was placed on the Union Calendar, which means it has not been defeated in Committee. Such legislation is a starting point for raising awareness of the destructive nature of burdensome regulation.
Back to Obama’s new Executive Order environmental rules. Furchtgott-Roth summed up her article nicely when she wrote,”For those concerned about economic growth, poverty, and inequality, cap-and-trade makes no sense, either nationally or regionally. Our air is getting cleaner, and will continue to do so for the foreseeable future as new capital replaces old. Cap-and-trade did not pass a Democratic Congress in 2010, and Mr. Obama should not impose it on a regional basis through regulation”.
by | ARTICLES, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA, OBAMACARE
Paul Krugman did it in 2011. Nicholas Kristof did in 2009. So did Ezra Klein. And Barack Obama did it in 2008. What did they do? They all praised the VA system as a model for health care.
Krugman: “Yes, this is ‘socialized medicine’…But it works, and suggests what it will take to solve the troubles of US health care more broadly.”
Kristof: It is fully government run, much more “socialized medicine” than is Canadian health care with its private doctors and hospitals. And the system for veterans is by all accounts one of the best-performing and most cost-effective elements in the American medical establishment.
Klein: the “VA is actually socialized medicine, where the government owns the hospitals and employs the doctors. If you ordered America’s different health systems worst-functioning to best, it would look like this: individual insurance market, employer-based insurance market, Medicare, Veterans Health Administration”
Obama: Make the VA a leader of national health care reform so that veterans get the best care possible.
We all now know how laughable these statements are. At least they did get one thing right: The VA is a model for healthcare — government-run health care.
Money is not the problem. From 2007 to 2012, enrollment in VA services has increased by 13% from 2007 to 2012. At the same time, the VA budget went from $82 million to $125 million — a 53% increase, and the biggest jump in budget history since records go back from 1940. Yet the VA could not deliver quality services to our Veterans.
We see the same scenario with the other major government -run health program: Medicare. It is currently insolvent; Medicare spends roughly 3 times what it takes in and it is only getting worse. There are no cost controls. Even Obama acknowledged this in 2010 when he said, “The major drivers of our long-term liabilities as everyone knows are Medicare and Medicaid, and health care spending.”
Government should not be handling our health systems. The fact that secret waiting lists existed shows just how far the government went to hide their incompetency in running a health system at the very time that Obamacare was being debated both in Congress and then in the public square. If Congress and Americans had known the truth of the condition of the VA health system, it is likely that Obamacare would never have been allowed to become law.
by | ARTICLES, ECONOMY, FREEDOM, OBAMA, POLITICS, TAXES
The Pease Amendment came into play for high income taxpayers this year once again, after a bit of a hiatus. The Pease Amendment was passed as part of the Omnibus Budget Reconciliation Act of 1990, and named after Congressman Donald Pease, who introduced it. This rule provided that if your adjusted gross income (AGI) passed a particular threshold, then some deductions would be reduced on your taxes — thereby curbing your ability to limit your tax liability.
This rule has the effect of increases tax rates for those individuals by 1.2% — therefore a tax rate that was 39.6% became 40.8%. The way it was done is patently criminal because it uses the tax system to incorporate a complicated formula to hide the fact you are raising tax rates. There is no rational or logical reason for a formula like that to be used unless its intent was to deceive.
Acknowledging the irrationality of the Pease Amendment, Congress slowly scaled it back and then eliminated by 2010 after the Economic Growth and Tax Relief Reconciliation Act of 2001. During 2010 session, Congress passed the 2010 Tax Relief Act which extended the elimination of the Pease Amendment, but only through 2012.
By that time, it was understood that the tax reductions of 2001, including across-the-board rate reductions, the Pease Amendment and Personal Exemption Phaseouts (PEP) would all be gone forever. And yet, Congress declined to extend the Pease Amendment elimination further past 2012 which meant that 2013 saw a return to the previous Pease Amendment rules that existed before 2001.
Also during that time in 2012, Obama insisted as a revenue-raising measure that the rates in the Bush tax cuts be reinstated for the high income earners in 2012. This is a simple, straight-forward tax hike. But in an action that can only be considered mean spirited, and counter to any attempt to simplify the tax laws, Obama personally insisted that both the Pease Amendment and the similarly convoluted Personal Exemption Phaseouts (PEP) be reinstated for high network individuals. Their reintroduction into the tax code by Congress is unconscionable.
The tricky thing about the Pease Amendment is that it actually has very little to do with deductions, because the trigger to implement it is based on earned income thresholds. Eliminating deductions based on income — which then affects the amount of increases tax paid — is underhanded.
Coming on the heels of the actual margin rate increase in 2012 when rates for highest earners reverted to the 39.6% rate of the Clinton years, many taxpayers found themselves with even higher tax bills in 2013 without an actual tax increase due to re implementation of the Pease Amendment. The result of the rule ensured that wealthy taxpayers were squeezed just a little bit more for their “fair share” — now nearly 41% on income tax alone.
The Pease Amendment carefully obfuscates the net effect of raising taxes without having to actually do so. Perhaps the most interesting thing about the amendment is that Pease’s only claim to fame as an eight-term Congressman is that he is responsible for writing a tax rule that tricks people into paying more taxes than they believed they were paying.
by | ARTICLES, BLOG, FREEDOM, GOVERNMENT, HYPOCRISY, POLITICS, TAXES
Many people this year are startled to find that the IRS is holding some or all of the portions of their tax return as a form of payment for old debt. Many so called debts are decades-old and often the debt is not even the debt of the taxpayer being targeted.
How did this happen? The first part of the process began in 2008, when Congress passed HR6124, The “Food, Conservation, and Energy Act 0f 2008”, commonly known as the “Farm Bill”. On page 594-594 of the 662 page document, Section 14219 reads. “Elimination of statute of limitations applicable to collection of debt by administrative offset”.
(a) ELIMINATION.—Section 3716(e) of title 31, United States
Code, is amended to read as follows: ‘‘(e)(1) Notwithstanding any other provision of law, regulation,
or administrative limitation, no limitation on the period within which an offset may be initiated or taken pursuant to this section shall be effective. (2) This section does not apply when a statute explicitly prohibits using administrative offset of setoff to collect the claim or type of claim involved.” (b) APPLICATION OF AMENDMENT — The amendment made by subsection (a) shall apply to any debt outstanding on or after the date of the enactment of this Act.
As a result of this legislation, the Department of the Treasury issued 74 FR 68537: “OFFSET OF TAX REFUND PAYMENTS TO COLLECT PAST-DUE, LEGALLY ENFORCEABLE NONTAX DEBT” on December 28, 2009. The Department of the Treasury, Financial Management Service made changes to it how it dealt with non-tax debts owed by taxpayers. This rule allowed the “ offset of Federal tax refunds irrespective of the amount of time the debt has been outstanding”.
I. Background
“The Food, Conservation and Energy Act of 2008, Public Law 110–234,
Section 14219, 22 Stat. 923 (2008) (‘‘the Act’’) amended the Debt Collection Act
of 1982 (as amended by the Debt Collection Improvement Act of 1996) to
authorize the offset of Federal nontax payments (for example, contract and salary payments) to collect delinquent Federal debt without regard to the amount of time the debt has been delinquent. Prior to this change, nontax payments could be offset only to collect
debt that was delinquent for a period of less than ten years. There is no similar time limitation in the statutes authorizing offset of Federal tax refund payments to collect Federal
nontax debts (see 26 U.S.C. 6402(a) and 31 U.S.C. 3720A). However, Treasury had imposed a time limitation on collection of debts by tax refund offset in order to create uniformity in the way that it offset payments. Now that the ten-year limitation has been eliminated for the offset of nontax payments, the rationale for including a ten-year limitation for the offset of tax refund payments no longer applies.
Therefore, on June 11, 2009, Treasury issued a notice of proposed rulemaking proposing to remove the limitations period by explicitly stating that no time limitation shall apply. See 74 FR 27730. The proposed rule explained that by removing the time limitation, all Federal nontax debts, including debts that were ineligible for collection by offset prior to the removal of the limitations period, may now be collected by tax refund offset. Additionally, to avoid any undue hardship, Treasury proposed the addition of a notice requirement applicable to debts that were previously ineligible for collection by offset because they had been outstanding for more than ten years. For such debts, creditor agencies must certify to FMS that a notice of intent to offset was sent to the debtor after the debt became ten years delinquent. This notice of intent to offset is meant to alert the debtor that any debt the taxpayer owes to the United States may now be collected by offset, even if it is greater than ten years delinquent. It also allows the debtor additional opportunities to dispute the debt, enter into a repayment agreement or otherwise avoid offset. This requirement will apply even in a case where notice was sent prior to the debt becoming ten years old. This requirement applies only with respect to debts that were previously ineligible for collection by offset because of the previous time limitation. Accordingly, it does not apply with respect to debts that could be collected by offset without regard to any time limitation prior to this regulatory change—for example, Department of Education student loan debts.”
The ramifications of this rule change has been far reaching. One agency, the IRS, has used it to justify going after old debts by holding tax refunds. This is a growing problem, because the agency has begun going after relatives of the phantom debt, not the debt-holder themselves.
According to the Treasury rule, “For such debts, creditor agencies must certify to FMS
that a notice of intent to offset was sent to the debtor after the debt became ten years delinquent. This notice of intent to offset is meant to alert the debtor that any debt the taxpayer owes to the United States may now be collected by offset, even if it is greater than ten years delinquent”.
The rule does not state “relative of the debtor”. In several instances this year alone, the targeted person was a relative of the debt-holder, not the debt-holder themselves, and every one of them stated they received no notice or advance warning from the IRS before the IRS decided to withhold their refund. The IRS has no right to do so.
There exists a process called “transferee liability” where the IRS can go after the debts of a relative. It is a high burden process and is not done easily. Such a scenario might be if a person died with $100,000 in a bank account, which was bequeathed to a child. Then later, it was revealed that the original account holder owed the IRS, which really should have been discovered by the person doing the estate process, and thus the money received by bequeathment could be considered as being received under false pretenses. The IRS in this situation could make a case, under “transferee liability”, that it has a right to go after the relative for that money.
Obviously, this above scenario is much different than resurrecting decades-old debt via an obscure provision in a 662 page bill. Those affected by it should demand proof of debt as well as argue that the debt is not theirs. However, in the cases where the IRS merely held the tax refund, the “debtor” did not receive due process and is at the mercy of trying to deal with a convoluted, poorly run government agency. Most people do not have the time or means to fight back. This action taken by the IRS is legal plunder, plain and simple.
by | ARTICLES, BLOG, BUSINESS, ECONOMY, ELECTIONS, FREEDOM, GOVERNMENT, HYPOCRISY, POLITICS
Oh, the hypocrisy!
In February, it was announced that retired hedge-fund billionaire Tom Steyer, has committed $100 million of his own money to “to make climate change a priority issue in this year’s midterm elections.”
How can this possibly be? First, Steyer made his millions as a hedge-fund operator — which is typically and universally denounced as a greedy profession. But if he spends his greedy millions on items considered tolerable and suitable to the political Left, it’s becomes okay.
That same political Left decries the Koch Brothers who are accused of funding groups with their obscene amounts of money to promote policy positions. The Koch Brothers made their money as businessmen, which clearly is repugnant. It begs the question: why does Harry Reid go after the Koch Brothers and turns a blind eye to Steyer’s tactics?
In reality, what Tom Steyer is doing is much worse. Steyer is essentially telling a political candidate, “if you take this position, I will give you money”. Isn’t this line of thinking exactly what the Supreme Court was trying to stop? How is this okay? Because it works for the Left.
Steyer’s game proved effective in 2013 when his NextGen Climate Action Super Pac spend $2.5 million to target conservative-leaning coal areas of Southwest Virginia on behalf of Democrat gubernatorial candidate Terry McAuliffe. Coupled with Mayor Bloomberg’s Independence USA Super PAC which spent roughly $2 million on ads in Virginia to target Republican candidate Ken Cuccinelli’s position on gun-rights, the two out-of-staters helped lead the Democrat to victory.
Steyer’s next plan is to influence the 2014 midterms. His money is planning on being spent on “attack ads during the election, including the Florida governor’s race and the Iowa Senate race.
Clearly, Steyer’s actions are appropriate for the 2014 elections, because political candidates with the “proper positions” are able to benefit from Steyer’s “generosity”. Yet in contrast, other organizations are called out for being “tainted” by the Koch Brothers for merely promoting various policies that the Left deems unacceptable. Either it’s okay for both, or for neither.
The double standard prevails.
