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How Trump Needs to Repeal and Replace

President Donald Trump told the American public that he wants to keep Obamacare, at least to the extent of the provisions that protect individuals with pre-existing conditions and allow 26 years olds to stay on their parent’s plan.

This is, in fact, a ridiculous comment. Most people (myself included) believe that a competent Health Plan would contain these provisions. And they will. But they will be part of a new plan which will be entirely rewritten. No part of Obamacare should be retained. It needs to be repealed in total.

The new replacement for Obamacare can (and should) have provisions for people with pre-existing conditions to get insurance and even keeping 26 year olds on the plan (possibly), but not in the way the law is currently written. Free market pricing will keep overall costs down, and with respect to individuals whose premiums become unaffordable (due to pre-existing conditions, low income, etc) there could be risk-pools and/or subsidies to deal with the issues. The Obamacare method of forced overpayments and intrusively detailed regulation with perverse incentives on every component of health care, has failed. That’s why we’ve been seeing an exodus of insurers; they simply cannot sustain their fiscal health they way the current system is.

Only by replacing the law with one that focuses on free-market solutions can we make progress in fixing our health system to actually help our citizens and in a fiscally sound way.

Tax Return Shenanigans Not a New Thing

The National Review reprinted an article from their archives, first written on May 30, 1994. It recounts the media treatment of George Bush, Sr.’s tax returns from 1991. Not surprisingly, the analysis omitted certain facts from the return to make the Bushes appear to pay less income taxes for a high income earner, in order to satisfy a particular agenda.

It’s worth it to read the old article in its entirety to appreciate how such media manipulation has been going on for at least a generation.

“Donald Barlett and James Steele are two of the most successful journalists in the United States. As reporters for the Philadelphia Inquirer, they have won two Pulitzer Prizes. Their gargantuan nine-part series, “America: What Went Wrong?,” was published in 1992 and reprinted in numerous newspapers. The series became an immediate best-seller when it was turned into the book of the same name.

Barlett and Steele’s new book, America: Who Really Pays the Taxes?, has now been excerpted, syndicated, and run as a series in newspapers throughout the United States. It is undoubtedly destined for the same bestseller status. The authors’ answer to the question posed in the new book’s title is — not surprisingly, in light of their earlier work — that the tax system is rigged against average Americans, who pay more than their fair share of income taxes while higher-income Americans pay less.

This thesis is demonstrably false. Although average Americans are indeed overburdened by taxes, upper-income taxpayers are even more so. Furthermore, although Barlett and Steele have described themselves as supplying “detailed information” that their readers “can get nowhere else,” their economic journalism constitutes little more than slanted anecdotes mixed with statistical sleight-of-hand.

Every year, the Internal Revenue Service analyzes tax returns and publishes data showing how much income was reported and how much tax paid by taxpayers in various income groups. These IRS figures are widely distributed, and no one writing an entire book on the subject could possibly be unaware of them. Barlett and Steele’s avoidance of these hard data is easy to understand, however, because the IRS figures destroy their thesis. In 1991, the most recent year for which the figures have been compiled, the top 1 percent of tax filers reported 13 percent of the nation’s total adjusted gross income (i.e., before most deductions), but paid 24.6 percent of all federal income taxes. The top 5 percent of taxpayers reported 26.8 percent of the income, but paid 43.4 percent of the taxes. And the top 10 percent — those earning over $61,952 — reported 38.2 percent of the income, but paid 55.3 percent of the taxes. The bottom 50 percent of tax filers, by contrast, reported 15.1 percent of the income, but paid only 5.5 percent of the taxes, leaving 94.5 percent of the tax bill to be paid by those with above-average incomes.

Barlett and Steele contrast the present day with what they view as the golden era of the 1950s, when the top individual and corporate tax rates were higher than they are today. They argue that in recent years higher-income taxpayers have successfully pushed tax burdens onto those who are less well off. What Barlett and Steele fail to mention, however, is that the tax code of the 1950s was so riddled with loopholes that those top rates collected virtually no revenue because hardly anyone paid them. IRS data show that the share of the total tax burden borne by upper-income individuals grew steadily from 1981 to 1991. It is particularly noteworthy that since 1982, when marginal tax rates were cut across the board, the proportion of taxes paid by upper-income people has increased. The share paid by the top 1 percent of tax filers rose from 17.6 percent in 1981 to 24.6 percent in 1991; the share paid by the top 5 percent went from 35.1 to 43.4 percent; the share paid by the top 10 percent rose from 48.0 to 55.3 percent. It is clear, therefore, that the central theme of Barlett and Steele’s book is simply false.

Upper-income Americans pay a disproportionate and growing share of the total tax bill. If middle-income Americans are overtaxed — and they are — it is not because those above them on the economic scale are getting a free ride. The Bushes’ Tax Return Shoddy and uninformed economic analysis is bad enough, but Barlett and Steele’s portrayal of George and Barbara Bush’s taxpaying record can only be described as maliciously misleading. The authors argue that there are “two separate and distinct tax systems,” one for “the rich and powerful” and one for “everyone else.”

The centerpiece of their argument is a comparison of the 1991 taxes paid by the Bushes and those paid by an Oregon resident named Jacques Cotton. Under the rubric of “The Privileged Person’s Tax Law,” they report that George and Barbara Bush earned $1,324,456 in 1991 and paid a total of $239,063 — 18.1 per cent of their adjusted gross income in taxes. They report that Mr. Cotton, on the other hand, paid a total of $6,618 in state, federal, and Social Security taxes on a gross income of $33,499. Barlett and Steele calculate that these tax payments add up to 19.8 per cent of Mr. Cotton’s income, a slightly higher percentage than the Bushes paid. This calculation is set forth under the heading “The Common Person’s Tax Law.” Barlett and Steele conclude from this comparison that the American tax system “responds to the appeals of the powerful and influential and ignores the needs of the powerless.” That’s a rather sweeping conclusion to draw from a comparison of two out of millions of tax returns. But is the comparison a fair one to start with?

It didn’t take much investigation to find out that it isn’t. The Bushes’ 1991 tax return was made public when it was filed, and a number of news stories were written about it at the time. That return was newsworthy because the couple’s income that year was three times as high as in any other year of Bush’s Presidency. Why? Because Barbara Bush earned $889,176 in royalties on Millie’s Book, a humorous look at White House life written from the point of view of the family dog. And why were the Bushes’ taxes relatively low, compared to their income?

Because Barbara Bush donated substantially all of the proceeds of Millie’s Book to charity — $818,803, or 62 per cent of the couple’s income that year. They contributed to 49 different charities, everything from Ducks Unlimited to the United Negro College Fund, but the main beneficiary was the Barbara Bush Foundation for Family Literacy, which received $789,176. After giving away more than 60 percent of their income to charity, George and Barbara Bush had $505,653 left, of which they paid $239,063 — 47 percent — in taxes.

Barlett and Steele must have known these facts, yet chose to mislead their readers by portraying George Bush as a greedy, tax-dodging rich person. We wondered why. In fact, we tried to find out why. We left numerous messages for Barlett and Steele, but they declined to return our calls. We faxed a letter to them asking a number of questions, including why they failed to disclose the Millie’s Book income and the Bushes’ extraordinarily generous charitable contributions. But they declined to respond. We also asked them for copies of their 1991 tax returns. Needless to say, we did not get them. But we think it highly unlikely that these tireless campaigners against greed have ever donated 62 percent of their very large incomes to charity.”

The same scenario plays out over and over again when we discuss marginal tax rates, tax cuts, and tax returns. The media plays upon the fact that most Americans don’t understand how everything works and uses that to stir the pot for class warfare. This article could have been written today, and serves as a reminder that these tactics are nothing new.

AETNA To Quit Obamacare Entirely

Last year, Aetna announced it would cease providing insurance in 11 states. Then in April, Aetna said that it would leave Virginia and Iowa, leaving just a few states with Aetna coverage. Now, Aetna has announced that it will leave Obamacare altogether, citing cost as the major factor.

According to Bloomberg, “Aetna had indicated it might pull out earlier this month, when Chief Financial Officer Shawn Guertin said the company would take steps to limit its financial losses in the program. Aetna has said it expects to lose more than $200 million on individual health plans this year in the four states where it’s still selling Affordable Care Act plans.”

As has been the case with other insurers like Humana, who have left the healthcare system, Aetna has been derailed by the dysfunction of Obamacare: the amount of Obamacare enrollees has been far fewer than originally projected (off by nearly 50%!) and those who have signed up have been more ill than expected.

The recent enrollment period was abysmal. “A total of 9.2 million Americans signed up for plans sold on HealthCare.gov, which serves 39 states, by the close of open enrollment. That’s about 400,000 people fewer than had signed up last year.”

It’s clear that Obamacare has been a catastrophic financial failure, so it’s no wonder that insurers have continued to flee the system. It’s damage to the economy over the last few years has been brutal and yet Obamacare stalwarts continue to blame everyone else except themselves and a poorly written, poorly executed law. How to fix the irrevocable damage remains to be seen.

ACHA Tax Analysis: List of Taxes Repealed

Americans For Tax Reform put together their usual compilation of taxes affecting a piece of legislation. They have been following the crushing Obamacare taxes for years; now they have a list of taxes that are abolished by the ACHA bill passed on Thursday, along with potential tax savings:

“The American Health Care Act (HR 1628) passed by the House today reduces taxes on the American people by over $1 trillion. The bill abolishes the following taxes imposed by Obama and the Democrat party in 2010 as part of Obamacare:

-Abolishes the Obamacare Individual Mandate Tax which hits 8 million Americans each year.

-Abolishes the Obamacare Employer Mandate Tax. Together with repeal of the Individual Mandate Tax repeal this is a $270 billion tax cut.

-Abolishes Obamacare’s Medicine Cabinet Tax which hits 20 million Americans with Health Savings Accounts and 30 million Americans with Flexible Spending Accounts. This is a $6 billion tax cut.

-Abolishes Obamacare’s Flexible Spending Account tax on 30 million Americans. This is a $20 billion tax cut.

-Abolishes Obamacare’s Chronic Care Tax on 10 million Americans with high out of pocket medical expenses. This is a $126 billion tax cut.

-Abolishes Obamacare’s HSA withdrawal tax. This is a $100 million tax cut.

-Abolishes Obamacare’s 10% excise tax on small businesses with indoor tanning services. This is a $600 million tax cut.

-Abolishes the Obamacare health insurance tax. This is a $145 billion tax cut.

-Abolishes the Obamacare 3.8% surtax on investment income. This is a $172 billion tax cut.

-Abolishes the Obamacare medical device tax. This is a $20 billion tax cut.

-Abolishes the Obamacare tax on prescription medicine. This is a $28 billion tax cut.

-Abolishes the Obamacare tax on retiree prescription drug coverage. This is a $2 billion tax cut.

As a presidential candidate in 2008, Barack Obama had promised repeatedly that he would not raise any tax on any American earning less than $250,000 per year. He broke the promise when he signed Obamacare. With the passage of the House GOP bill, tens of millions of middle income Americans will get tax relief from Obamacare’s long list of tax hikes.”

For a different analysis on the substance of the American Health Care Act (ACHA), see my piece on Michael Cannon and “community ratings.”

WSJ: Trump’s Broad Tax Cut Plan

From the WSJ: “With Wednesday’s proposals—which include a 15% tax rate for all businesses, lower individual rates, a bigger standard deduction to benefit middle-income households and the repeal of the estate and alternative minimum taxes—Mr. Trump hopes to speed up economic growth and make his mark as a historic tax cutter.

What the administration delivered Wednesday largely hews to tax-cut proposals Mr. Trump made during his campaign last year, but includes some crucial changes. Most notably, he is proposing to repeal a provision of the tax code that allows individuals to deduct the state and local taxes they pay from their reportable income. That will hurt residents of high-tax states such as Mr. Trump’s home state of New York, New Jersey and California, and is already spurring objections from Republican lawmakers in those largely Democratic states.

Such a repeal has the potential to raise more than $1 trillion over a decade, which would help fund the reduction in rates and get the tax plan through Congress, which is focused on deficits in part because of budget rules.”

“Unless Mr. Trump can attract votes from Democrats—which appears unlikely—the plan must comply with legislative procedures that allow for a party-line vote in the Senate, where Republicans have 52 seats out of 100.

The key to those procedures: Any tax plan can’t increase budget deficits beyond a 10-year period. The Committee for a Responsible Federal Budget said Wednesday that the plan would cost about $5.5 trillion in lost revenue over a decade. Those limitations could lead Republicans to make some or all of the tax cuts temporary to limit the long-run fiscal effect.

Mr. Trump’s team intends to argue that his tax cuts will spur economic growth and increase revenue, which would help avert increased deficits. Lawmakers and Congress’s nonpartisan tax policy scorekeepers—the Joint Committee on Taxation—need to agree for the plan to proceed. Independent experts cautioned that the administration’s growth assumptions appear optimistic.”

As more details of this plan emerge, we can assess its merits and pitfalls.

Trump’s Obamacare Tax Reforms Should Not Be Considered a Tax Cut

I’m sick and tired of reading over and over again in places both liberal and conservative that Trump’s (as well as the Republican’s) proposed tax reforms are going to give the lion’s share of the cuts to the top 1%. The entire concept is totally distorted.

In fact, nobody has been talking about the series of tax changes that occurred when Obama and his Democrat cronies passed the Obamacare increases. 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 a net investment income tax (NIIT), otherwise known as the “Obamacare tax,” which covered all investment income. The increase 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%. That’s ridiculous!

Those ludicrous tax increases were principally responsible — along with the hemorrhage of regulations coming out of the Obama administration — for the horrific economic performance since Obama took office. The first step of any meaningful tax reform should be to reverse those Obamacare tax increases, which went 100% to the higher income individuals, and 0% to the middle class and lower income. The reversal of those insane tax increases should in no way be considered a tax cut. It is just restoring what was in fact an egregious toxin on our entire economy.

 

What Trumps Tax Returns Really Tell Us About His Rate

The clearest example yet of Media abuse of Donald Trump has surfaced in connection with the recently released excerpts from Pres. Trump’s 2005 federal income tax return. The return shows clearly and unambiguously that he paid an effective federal tax rate of 78.2%. Yet the press twisted the truth- outright lied – in reporting a tax rate of 25%, or even less.

It is outrageous that the media is distorting the true tax rate that Donald Trump paid for the 2005 tax year. His 1040 that was released last week showed that he paid an effective tax rate of 78.2% — not the 25% that some outlets are reporting (or the 5.3% figure that even other uninformed pundits have tried to peddle).

Let’s break this down: Trump’s Adjusted Gross Income (AGI) was reported to be $48.6 million. The AGI is an important number for all taxpayers, because it is derived from a taxpayer’s gross income net of allowable, rational, and legal adjustments to it. Every taxpayer reports an AGI and is the base figure from which taxable income amounts are calculated. Trump’s tax was $38million. Trump’s tax rate was effectively 78.2%: 38 million in federal taxes/48.6 million AGI = 78.2% tax rate.

In a clear attempt to avoid admitting that Trump paid such a high rate of tax, the pundits began manipulating and distorting the data.  AGI was raised from $48.6 million to $152 million by arbitrarily – and inappropriately – adding back what appeared to be a $103 million perfectly legal carryover loss. Carryover loss provisions are necessary in that prevent people from paying taxes on profits that just restore losses that were actually incurred in a prior year.

Because Trump is a high income earner, he must calculate his taxes both by the regular tax rate and the Alternative Minimum Tax (AMT). The AMT is a parallel tax rate used by the IRS that disallows some or all legal deductions and credits that other taxpayers enjoy to ensure that such taxpayers pay “at least their fair share.” The AMT has been used for decades to collect more taxes by denying or minimizing income-reducing tax benefits that lower income-earners use. In Trump’s case, most of his deductions, including the carryover loss, were disallowed or reduced, resulting in his federal tax liability ultimately rising to $38 million.  

That means on Trump’s AGI of $48.6 million, he paid $38 million in federal taxes.

It is always standard procedure to calculate one’s tax rate using the AGI as the starting point — not the gross income amount. No other politician (Romney, Obama, Clinton, etc.) has had tax rates calculated and published with other than their adjusted gross income as the base. Applying the standard used by the media for all other important figures, Trump’s tax rate was effectively 78.2%: 38 million in federal taxes/48.6 million AGI = 78.2% tax rate.

Continuing to focus on the $153 million as the starting point serves the media two purposes: 1) it makes Trump sound like a greedy capitalist who earned gobs of money and is out-of-touch with the average American; and 2) they want to highlight his $103 carryover loss as something that is unethical or wrong or a  “sneaky loophole” that Trump should not have been allowed to do — even though virtually every business and investor makes uses of such tax provisions. Carryover losses are a necessary tax tool that is used as a means to continue to encourage investors who put up capital for long-term investments in the economy and deal with the ebb and flow of the market.

The real story here is this glaring example of the AMT creating yet another unfair and irrational burden on a taxpayer by siphoning extra tax revenue through the elimination and reduction of basic tax law provisions that other taxpayers enjoy. A 78.2% tax rate is extremely outrageous — about as outrageous as the media who ignores basic tax calculations in an effort to sensationalize and demonize Trump.

IRS Has Relaxed Rules Making the Obamacare Tax Penalty Payment Optional

In response to Donald Trump’s Executive Order last week, the IRS altered its rules about tax returns and Obamacare’s “shared responsibility” penalty.  This is one of the methods of paying for Obamacare, and if collection of the penalty is not being strictly enforced, it will contribute further to the already unstable financial state Obamacare is in.

From Reason.com:

How much difference does a single line on a tax form make? For Obamacare’s individual mandate, the answer might be quite a lot.

Following President Donald Trump’s executive order instructing agencies to provide relief from the health law, the Internal Revenue Service appears to be taking a more lax approach to the coverage requirement.

The health law’s individual mandate requires everyone to either maintain qualifying health coverage or pay a tax penalty, known as a “shared responsibility payment.” The IRS was set to require filers to indicate whether they had maintained coverage in 2016 or paid the penalty by filling out line 61 on their form 1040s. Alternatively, they could claim exemption from the mandate by filing a form 8965.

For most filers, filling out line 61 would be mandatory. The IRS would not accept 1040s unless the coverage box was checked, or the shared responsibility payment noted, or the exemption form included. Otherwise they would be labeled “silent returns” and rejected.

Instead, however, filling out that line will be optional.

Earlier this month, the IRS quietly altered its rules to allow the submission of 1040s with nothing on line 61. The IRS says it still maintains the option to follow up with those who elect not to indicate their coverage status, although it’s not clear what circumstances might trigger a follow up.

But what would have been a mandatory disclosure will instead be voluntary. Silent returns will no longer be automatically rejected. The change is a direct result of the executive order President Donald Trump issued in January directing the government to provide relief from Obamacare to individuals and insurers, within the boundaries of the law.

“The recent executive order directed federal agencies to exercise authority and discretion available to them to reduce potential burden,” the IRS said in a statement to Reason. “Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.”

The tax agency says the change will reduce the health law’s strain on taxpayers. “Processing silent returns means that taxpayer returns are not systemically rejected, allowing them to be processed and minimizing burden on taxpayers, including those expecting a refund,” the IRS statement said.

The change may seem minor. But it makes it clear that following Trump’s executive order, the agency’s trajectory is towards a less strict enforcement process.

Although the new policy leaves Obamacare’s individual mandate on the books, it may make it easier for individuals to go without coverage while avoiding the penalty. Essentially, if not explicitly, it is a weakening of the mandate enforcement mechanism.

“It’s hard to enforce something without information,” says Ryan Ellis, a Senior Fellow at the Conservative Reform Network.

The move has already raised questions about its legality. Federal law gives the administration broad authority to provide exemptions from the mandate. But “it does not allow the administration not to enforce the mandate, which it appears they may be doing here,” says Michael Cannon, health policy director at the libertarian Cato Institute. “Unless the Trump administration maintains the mandate is unconstitutional, the Constitution requires them to enforce it.”

“The mandate can only be weakened by Congress,” says Ellis. “This is a change to how the IRS is choosing to enforce it. They will count on voluntary disclosure of non-coverage rather than asking themselves.”

The IRS notes that taxpayers are still required to pay the mandate penalty, if applicable. “Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe‎,” the agency statement said.

Ellis says the new policy doesn’t fully rise to the level of declining to enforce the law. “If the IRS turns a blind eye to people’s status, that isn’t quite not enforcing it,” he says. “It’s more like the IRS wanting to maintain plausible deniability.”

Tax software companies are already making note of the change. Drake Software, which provides services to tax professionals, recently sent out a notice explaining the change in policy. As of February 3, the notice said, the IRS “will now accept an e-filed return that does not indicate either full-year coverage or an individual shared responsibility payment or does not include an exemption on Form 8965, as required by IRS instructions, Form 1040, line 61.”

The mandate is a key component of Obamacare’s coverage scheme, which is built on what experts sometimes describe as a “three-legged stool.” The law requires health insurers to sell to all comers regardless of health history, and offers subsidies to lower income individuals in order to offset the cost of coverage. In order to prevent people from signing up for coverage only after getting sick, it also requires most individuals to maintain qualifying coverage or face a tax penalty. While defending the health law in court, the Obama administration maintained that the mandate was essential to the structure of the law, designed to make sure that people did not take advantage of its protections.

In a 2012 case challenging the law’s insurance requirement, the Supreme Court ruled that the individual mandate was constitutional as a tax penalty. The IRS is in charge of collecting payments.

Some health policy experts have argued that the mandate was already too weak to be effective, as a result of the many exemptions that are included. A 2012 report by the consulting firm Milliman found that the mandate penalty offered only a modest financial incentives for families making 300-400 percent of the federal poverty line. More recently, health insurers have said that individuals signing up for coverage and then quickly dropping it after major health expenses is a key driver of losses, and rising health insurance premiums.

It’s too early to say whether the change will ultimately make any difference. But given the centrality of the mandate to the law’s coverage scheme and the unsteadiness of the law’s health insurance exchanges, with premiums rising and insurers scaling back participation, it is possible that even a marginal weakening of the mandate could cause further dysfunction. Health insurers have said the mandate is a priority, and asked for it to be strengthened. Weaker enforcement of the mandate could cause insurance carriers to further reduce participation in the exchanges. One major insurer, Humana, said today that it would completely exit Obamacare’s exchanges after this year.

It is also possible that congressional Republicans will make it moot by repealing much of the law, including its individual mandate, which, as a tax, can be taken down with just 51 Senate votes.

Regardless of its direct impact, however, the change may signal that the Trump administration intends to water down enforcement of the health law’s most controversial requirement, even if those steps are seemingly small. The Trump administration may not be tearing Obamacare down entirely, but it appears to be taking steps to weaken the law, however subtly, one line at a time.

Virginia Attorney General Used Asset Forfeiture Funds For Staff Pay Raises

When assets are seized during federal investigations, the proceeds can be shared with law enforcement agencies who participate with federal agencies during the process. This is called Equitable Sharing, and both the Justice Departments and Treasury Departments can do it.  The funds received have rules that govern how they are spent.

Therefore it was surprising that a Power Point presentation created by the Justice Department in 2015 suggested a way to circumvent those rules; typically they don’t allow funds to be spent on salaries or raises but this presentation gave a clear way for an agency to get around that restriction. “The presentation advises that instead of using the seized funds money to fund raises, agencies can use it to cover routine costs — such as maintaining vehicle fleets — and then redirect money already budgeted for maintenance into salaries. The PowerPoint says redirecting money in that manner is acceptable “so long as your overall budget does not decrease.”

It appears the Virginia’s Attorney General, Mark Herring, took that suggestion to heart. The “AP raised questions about significant pay raises for several of Herring’s employees at a time when state workers’ pay was stagnant elsewhere. Some staff attorneys’ salaries rose as much as $15,000 in a year — one had a 30-percent increase.” This investigation revealed the existence of the Power Point presentation, and is the reason 64 attorney received a raise in their pay floor, with the median raise of $7,000.

“Virginia received more than $100 million in asset forfeiture money under a joint state-federal settlement with Abbott Laboratories for an anti-seizure drug’s off-label marketing. Herring spokesman Michael Kelly said raises were made possible in part by using some of the funds to pay allowable expenses involving the agency’s rent, vehicle maintenance and operational costs.

The Abbott settlement money was administered by the Treasury Department, but Kelly cited the PowerPoint as justification for using the funds to make raises possible. He said the PowerPoint was part of 2015 training for accountants in the state attorney general’s office.”

The AP noticed the pay raises in the Office of Attorney General and requested documents about the aberration; last year, the rest of the Commonwealth canceled pay raises that were scheduled for state employees when budget problems got difficult.

It is unfathomable that a state agency, under the guidance and direction of a federal agency, could move money around in a ploy to give themselves pay increases.  If one state agency, as part of a training exercise for accountants, could conclude that this action was both just and allowable, how many other agency partners in the Equitable Sharing program have done this?

 

Stifling NYC Business Policies Claim Another Victim

The hostile New York City business environment has claimed a new victim: the legendary China Fun restaurant, which has been in operation for 25 years. A letter on left on the door of the restaurant on January 3, 2017, outlined the reasons:

“The climate for small businesses like ours in New York have become such that it’s difficult to justify taking risks and running — nevermind starting — a legitimate mom-and-pop business,” read a letter posted by the owners in the restaurant’s front door.

“The state and municipal governments, with their punishing rules and regulations, seems to believe that we should be their cash machine to pay for all that ails us in society.”

For 25 years, China Fun was renowned for its peerless soup dumplings and piquant General Tso’s chicken.

According to the NY Daily News, “the endless paperwork and constant regulation that forced the shutdown accumulated over the years.”  Other reasons included: the requirement to provide an on-site break room, minimum wage increases, health insurance, business insurance, and onerous Health Department rules and regulations.

The government essentially acknowledges the burdens it places on small businesses; “free compliance advisors are available for on-sight consultation aimed at helping small businesses comply with regulations” are a part of the Small Business First initiative.

 

So instead of making it easier for a business to start, operate, and grow a business, NYC makes it easier to comply with overbearing regulation, rules, and taxes. Businesses go into business to make a product or provide a service — not to respond to government red tape. The loss of China Fun is a microcosm of the entirely hostile, anti-business environment that plagues the NYC government.