Illegals Cost Taxpayers $113 Billion a Year: Why Does No One Care?

CFP

President Obama dumped a real dilly on Congress for Valentine’s Day. That being a $3.73 trillion dollar budget that actually increases the deficit in 2012, but which attacks the problem with tax increases later on.

Tax increases? During a recession?

Obama’s proposal confirms that the president remains stuck in the quagmire of a “learning curve” gone amuck. It also proves that his short-term memory is wonky as well.

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Obama budget resurrects rejected tax increases

WASHINGTON – President Barack Obama’s budget proposal resurrects a series of tax increases on certain corporations and the wealthy that were largely ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.

The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited starting in 2012, including deductions for mortgage interest, charitable contributions and state and local taxes.

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The Debt Commission Report

Let me get this straight, the Government can do and spend what it wants and The People have to pay for it? I think that sucks. How about cutting all Federal Employees Pay 50%, doing away with the Department of Energy, (the department was created by Jimmy Carter to keep us less dependent on foreign oil….. how’s that been working out?), getting rid of all of Obama’s Czars, Charging a 100% Import Tax on all goods coming into this country made by companies that left the US for cheep labor outside the US, tell Obama to quit flying around the world telling the rest of the world how great they are only to come back here and bad-mouth us, and tell Congress to buy there own Health Care.  It would be a nice start.                              1 Dragon

 

Red State

As you wake up this morning, there is a lot of talk about the leaked report of the Debt Commission. Keep in mind that this is not the final report, but a draft passed out by the co-chairs.

What you need to know is pretty straight forward.

Yes, the plan ends the deficit. It does so with lots and lots of spending cuts across the board. There are actually some good suggestions in the plan, but there is one inescapable fact — the proposal has buried in it one trillion dollars in tax increases.

Some of what are defined as tax increases are, in fact, closing loopholes in the tax code that lobbyists have inserted on behalf of clients. But also included is getting rid of the home mortgage deduction. That would amount to a massive, massive tax increase on the middle class.

The reforms suggested for social security are out and out garbage. It is not means tested. It is not “lock boxed”. Payments are cut. Retirement is increased.

This proposal is dead on arrival.

But there is another point that must be made — even were all the proposals, plans, and points adopted it would do no good. Why? Because until Washington admits that it has exceeded the powers given to it under the constitution the same problems will continue to occur over and over.

The Leviathan knows no bounds and, left to itself to check its own growth it will continue growing. Until we are willing to admit that Article I, Section 8 of the U.S. Constitution gives limited powers to Congress, we are wasting our time.

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8 Lies in the President’s Healthcare Reform Proposal

Verum Serum

Most of these are not new, but if the White House is going to use the media spotlight on healthcare reform this week to repeat many of the same lies and half-truths, then it is incumbent on someone to point them out once again.

8. Small business taxes will not go up to pay for the cost of the uninsured. It depends on what the definition of a small business is. The President’s proposal defines this as any business with less than 50 employees. Any business with 51 or more employees which does not provide insurance will be required to pay a fee of $2,000 per worker if any of their employees receive subsidized coverage in the government insurance exchange (although the President’s proposal does except the first 20 employees from this calculation). In addition, any small business owner who earns more than $200,000 per year will be required to pay an additional .9% in payroll taxes for Medicare, and a brand new 2.9% tax on unearned income (interest, dividends, etc.).

7. ObamaCare will lower premium costs for the individual (non-group) market by “14 to 20 percent”. As detailed in my earlier post, the CBO reported that these premiums on average will increase by 10 to 13 percent, and for families who obtain coverage directly they will actually increase on average by 16%, or $2100 per year by 2016.

6. You will be able to keep your doctor if you are on Medicare. Only if your doctor does not opt out of participating in Medicare as a result of health reform, a possibility the government is keenly aware of since the Center for Medicare Services continues to extend the 2010 deadline for physicians to opt out based on the uncertainty over the health reform legislation. The recent, albeit limited, Medicare/Medicaid opt-out by the Mayo Clinic is likely a harbinger of things to come.

5. The President’s proposal will reduce the deficit by $100 billion over the next decade, and $1 trillion in the next. Not exactly sure how the White House can make this claim given that the CBO has not and will not score the President’s proposal. These figures seem to be based on the CBO’s score of the Senate bill, but the President’s proposal provides for more generous individual subsidies, increased federal coverage for Medicaid, and reduces the income generated from the so-called “Cadillac tax” – all of which will greatly add to the cost of the bill.

4. Nothing will change if you currently receive insurance coverage through an employer. True enough so long as your employer does not opt to drop health insurance coverage for its employees completely. But according to the CBO this is exactly what will happen to 8-9 million people under the Senate bill. And given the relatively weak employer mandate, I have a feeling the CBO grossly underestimated this total.

3. Medicare benefits will not be cut. The CBO Director directly contradicted this claim while testifying before Congress back in September, a fact which even the White House seems to acknowledge by clarifying that only “guaranteed” Medicare benefits will not be cut. This hair-splitting by the White House will mean little to seniors who lose benefits they currently receive through Medicare Advantage plans.

2. If you like the insurance you have, keep it. Unless you have a Medicare Advantage plan (see #3). Or unless your employer drops your coverage (see #4). Or unless you have a high deductible plan paired with a Health Savings Account (HSA). And if the Democrats use reconciliation to revive the public option as threatened – which notably the President is not opposed to – then we are ultimately all moving to single payer.

1. The President’s proposal represents the “largest tax cut for health care in history”. This one IS new and it is my personal favorite. I suppose it’s true insomuch as no one else has ever had the gall to spin the creation of a $2+ trillion entitlement program as a “tax cut”. Personally I think the fact that the President proposes to provide tax-payer funded subsidies to families earning up to $88,000 the most fiscally irresponsible aspect of the entire plan. Coming a close second is the fact that over half of the cost of these “tax cuts” will be funded from reductions in Medicare spending, when Medicare itself faces insolvency within the next 10 years. If the White House wants to tout these subsidies – funded largely at the expense of seniors – as a “tax cut”…then I say go for it.

In the now immortal words of Congressman Joe Wilson, President Obama:

You lie.

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Obama Begins His Assault on Your Life Savings

Townhall

The welfare state and your life savings are two cars heading down a one-lane road in opposite directions. One must yield, or there will be a crash.

For Americans who believe in the old-fashioned virtues of hard work, self reliance and respect for private property, the solution is obvious. The welfare state must yield.

For politicians who believe in the welfare state and redistributing wealth, the solution is equally obvious. Your savings must yield.

Barack Obama is of the latter group. In the new health care proposal he outlined this week, he suggested a series of unprecedented tax increases that would extend the greedy hands of government into the life savings of hard-working Americans.

These new taxes would essentially construct a new fiscal pipeline capable of carrying money out of the savings of private citizens and dumping it into government coffers specifically for subsidizing Medicare under the new health care system Obama envisions. The White House summary of Obama’s proposal presents this would-be pipeline as a facilitator of economic justice.

“Under current law, workers who earn a salary pay a flat tax of 1.45 percent of their wages to support the Medicare Hospital Insurance (HI) trust fund, but those who have substantial unearned income do not, raising issues of fairness,” says the summary. “The Act will include an additional 0.9 percentage point Hospital Insurance tax for households with incomes exceeding $200,000 for singles and $250,000 for married couples filing jointly. In addition, it would add a 2.9 percent tax for such high-income households to unearned income including interest, dividends, annuities, royalties and rents (excluding income from active participation in S corporations).”

There are, of course, multiple unanswered questions here. For starters, wouldn’t increasing the Medicare payroll tax on “households with incomes exceeding $200,000 for singles and $250,000 for married couples filing jointly” violate Obama’s pledge that, as his campaign literature put it, he would “not raise any tax rate on families making less than $250,000 per year, period.” Plenty of single Americans, who are raising children or taking care of other dependents, file their taxes claiming “head of household” status. Aren’t they “families” covered by Obama’s tax pledge?

Secondly, wouldn’t slapping these households with a new 2.9 percent tax on interest, dividends, annuities, royalties and rents also violate Obama’s tax pledge?

But the most important question is this: Would allowing the government to tap into the savings of one group of Americans to pay entitlement benefits to another group create a system of taxation that could swiftly destroy the American dream?

Yes, it would. Here’s how:

When Obama took office, the federal government confronted a massive long-term fiscal problem. The nonpartisan Peter G. Peterson Foundation estimated that revenues expected under the current tax system would fall $56.4 trillion short of covering the current federal debt and the long-term costs of promised entitlement benefits. That $56.4 trillion equaled $184,000 for every living American and $435,000 for every full-time worker. Given the fiscal trajectory at the end of 2008, the government was headed toward spending 18 percent of gross domestic product by 2028 just to cover the annual costs of Social Security, Medicare, Medicaid and interest on the debt.

To put that in perspective, the entire federal government cost only 18.2 percent of GDP in 2001 and only 19.6 percent as late as 2007. By 2028, if overall government expenditures were held at the 2001 level as a share of GDP, welfare-state entitlements would squeeze out all other federal spending — including maintaining an Army and a Navy.

The Mack truck of the welfare state was speeding down the one-lane road straight at the little compact car of your life savings.

How did Obama respond? He massively ramped up short-term spending, submitting a budget that will spend an average of 24.13 percent of GDP over the next four years — more than the average of 19.13 percent FDR spent during the Depression and World War II. For the long run, Obama is trying to establish a national health care system in which the federal government will subsidize health insurance not only for the elderly and the poor but also for the middle-aged and the middle class.

Redistributionist politicians like Obama see their core constituents as the net recipients of government benefits, not the net payers. Increasing the number of net recipients serves their ideology and political interests.

The new taxes Obama wants to impose on interest, dividends, annuities and rents to pay for his health care plan are in fact taxes on the life savings of the net payers — on their 401(k)s, savings accounts, paid-off mortgages and life insurance policies — to cover benefits for the net recipients. The redistributionists would ultimately need $435,000 from every full-time worker to cover the welfare state’s unfunded liabilities — even if Obama’s health care plan were never enacted.

Obama is pointing them down the road where they will find it.

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Putting “Limited” Back in Government

Big Government

Jan. 22, 2010

If your finances looked like the federal budget, you wouldn’t get elected. You’d get arrested. Under the Democrats’ iron-fisted, one-party rule of Washington, family budgets shrink and the federal budget bloats: The deficit, the debt and spending are at record levels; massive tax increases impend in the days ahead; and widespread unemployment persists and pains working families. Compounding this crisis, the Democrats’ spending spree imperils our national security by creating a “debt threat” whereby antagonistic nations to which we owe hundreds of billions of dollars practice economic statecraft against America to influence our foreign and domestic policies and/or actively undermine our strategic interests. In sum, government exacerbates rather than ameliorates the economic chaos around us.

is it 2012 yet?

Amidst the economic, social and political challenges of globalization, the injurious inequity of Democrats’ fiscal irresponsibility is not lost upon Americans. We know the government’s morally bankrupt boondoggle, committed with our hard-earned money, squanders our prosperity, weakens our security and constitutes an immoral usurpation of our liberty and sovereignty.

A Rasmussen poll in August quantified the public’s wisdom on the subject, revealing that 62 percent of Americans “say that it is always better to cut taxes than increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their own money.” The same poll showed that half of all Americans “believe that a dollar of tax cuts is always better than a dollar of public spending” and that just 25 percent of Americans think “spending provides much more bang for the buck than tax cuts when it comes to economic policy and creating jobs.” Seventy percent of voters “favor a government that offers fewer services and imposes lower taxes over one that provides more services with higher taxes”; 74 percent of Americans “trust their own economic judgment more than that of the average member of Congress.” Sixty-six percent “trust their own economic judgment more than President Obama’s”; and “Nearly four out of five voters [think] the problem is not their unwillingness to pay taxes [but is] their elected representatives’ refusal to cut the size of government.”

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