Today is Thursday, May 17, 2012

Taxes

Colorado House passes sick tax

Democrats in the Colorado House passed a tax on hospitals that will tax the sick.

The tax on hospitals will be passed on to the sick patients and to workers who buy health insurance either individually or through their employers. However the sick tax is collected, it will be passed on to consumers.

This will further reduce consumers’ disposable income, increase their debt and prolong the recession.

I discussed this bill in greater depth here.

“Bed tax boondoggle” at Rocky Mountain Right.

Colorado adds tax after tax despite TABOR restrictions

Colorado continues to pile tax after tax on workers and small businesses in an effort to avert needed budget cuts.  This is despite TABOR, the section of the state’s constitution that requires voter approval of all tax cuts.  While Colorado, like most states, is

Colorado legislature wants to rob its taxpayers and hospital patients to cover the ‘uninsured’

Colorado’s legislature wants to increase the cost of hospitalization for patients and their families by imposing a $600 million tax on hospitals, which would pass the tax on to their customers one way or another.

The Colorado politicians reason that

Are New York’s housing prices still high because of it’s smart people?

A Harvard economist, Edward L. Glaser, who grew up in New York City, says its economy and housing markets weather recessions better than the rest of the country because its smart people network and work together to reinvent the city.

Nice boosterism, but the chances are good that the city’s inflated housing prices and economy are weaker than provincial New Yorkers think.

How many smart, connected people does it take to reinvent a city?

When smart people fail, as on Wall Street, do they get another chance? Why or why not?

Wall Street Madoffed the world, and there are a lot of smart people in the world who won’t trust Wall Street for the rest of their careers.

With NYC housing at 190% of 2000 prices and Denver at 129.5% for much better and more comfortable housing, how long will it take smart executives to move their companies and staffs to Denver? How did Exxon and Dell get to Dallas?

With the NYT’s encouragement, Obama will tax the rich, making it less important to make over $250,000, which will go a lot further in Denver than in NYC.

The near bankrupt Russians are going, along with many other rich foreigners who snapped up NYC homes while the dollar was cheap. If there’s no Tiffany’s, can there be a NYC?

Sellers of luxury goods, probably even Apple, face tough times. A visit to NYC is a luxury nobody really needs. After all, the lousy Broadway shows come to us, and, believe it or not, the NY Phil has never impressed me. So, as tourism tanks, so will NYC housing prices.

Gov. Paterson wants more than 100 taxes and fees increased, including an “obesity” tax? How about an adultery tax for Albany and the rest of the political class.?

Higher taxes depress demand for luxury goods: Private planes, yachts, jewelry, theater tickets, hotel rooms, nights on the town, cabs, limos, magazines, books and newspapers. Smart New Yorkers will seek greener pastures.

NYC will continue to attract the dumbly greedy for wealth and political power, but they don’t look very smart these days. Heck, New York’s “smart” Senator Clinton couldn’t even beat an Illinois state senator.

Senate Democrats could try to eliminate filibusters on Obama’s judicial candidates: Sen. Thompson

With 57 seats in the Senate, Democrats may impose the nuclear option by changing Senate rules to ban filibusters by Republicans on President-elect Obama’s judicial candicates, but knowing that they will lose their majority someday, they may not seize that power, former presidential candidate and senator Fred Thompson (R-TN), told a meeting of conservatives today.

Byron York, White House correspondent for National Review Magazine, sponsors of the meeting on a cruise ship, warned more than 720 diehard conservatives that with 57 senators and a few Republicans who might vote with them, Obama can do whatever he wants with judicial candidates. Conservatives fear that Obama will nominate very left-wing judicial candidates, and Thompson warned that Federal District judges, who are appointed for life, are the most powerful people in the country.

Both Thompson and former presidential candidate and governor Mitt Romney (R-MA) said they aren’t interested in being chairman of the Republican National Committee. Romney said the election of the next RNC chair is the most important decision Republicans will make over the next few months. The RNC chair will be the party’s face and voice on talk TV and radio, he noted.

Thompson warned that the Democrats will move as far left as they think they can get away with.

He warned conservatives that they should avoid the “cult of personality,” because another Reagan who both believes in conservative principles and economic policy and can sell his beliefs is unlikely to come along any time soon. Republicans need to avoid the “great communicator syndrome,” he warned.

Both Thompson and Romney were crowd pleasers, and their apperances at the National Review’s post-election cruise probably signals both are preparing to run for president in 2012, although neither will admit that at this time.

Obama panics markets

Sen. Obama’s likely election and his promises to raise capital gains taxes on the 50% of Americans who are investors and income taxes on anybody making more than $250,000 are panicing the stock markets.

CNBC’s Charles Gasparino writes in the NY Post:

I look at Obama’s record differently. From his days as a community activist, to his years in the Illinois Senate and now his brief time in the US Senate, he has shown little inclination to deviate from his party’s tax-and-spend orthodoxy.

And if he governs like a liberal ideologue - with a belief that the government that works best is the one that’s biggest and raises taxes the most - he won’t even have to work hard to get his way. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid won’t stop him - the Democratic majorities in Congress are only likely to grow.

And the markets know this - even if pundits (even many of the financial ones) refuse to face it.

No one can blame the faltering stock market solely on Obama’s tax plans or McCain’s own inanity on economic issues. But stock prices reflect current market conditions plus best guesses of what’s coming down the road. And I keep hearing nervous traders and investors talk about “a lack of leadership from Washington.”

h/t Drudge.

 

When more than 50% of Americans don’t pay taxes, unemployment will rise

America already is staring 8.5% to 9% unemployment in the face, according to some economists, and Sen. Barack Obama’s wealth redistribution plans will not only make high unemployment standard in this country, it also will increase it to European levels of 11% and higher.

That’s what readers can conclude from Adam Lerrick’s op-ed column, Obama and the tax tipping point, in today’s Wall Street Journal. And it documents in academic terms much of what I wrote here on October 13.

Lerrick’s impact graphs:

Calculating how far society’s top earners can be pushed before they stop (or cut back on) producing is difficult. But the incentives are easy to see. Voters who benefit from government programs will push for higher tax rates on higher earners—at least until those who power the economy and create jobs and wealth stop working, stop investing, or move out of the country.

Other nations have tried the ideology of fairness in the place of incentives and found that reward without work is a recipe for decline. In the late 1970s and throughout the 1980s, Margaret Thatcher took on the unions and slashed taxes to restore growth and jobs in Great Britain. In Germany a few years ago, Social Democrat Gerhard Schroeder defied his party’s dogma and loosened labor’s grip on the economy to end stagnation. And more recently in France, Nicolas Sarkozy was swept to power on a platform of restoring flexibility to the economy.

The sequence is always the same. High-tax, big-spending policies force the economy to lose momentum. Then growth in government spending outstrips revenues. Fiscal and trade deficits soar. Public debt, excessive taxation and unemployment follow. The central bank tries to solve the problem by printing money. International competitiveness is lost and the currency depreciates. The system stagnates. And then a frightened electorate returns conservatives to power.

The economic tides will not stand still while Washington experiments with European-type social democracy, even though the dollar’s role as the global reserve currency will buy some time. Our trademark competitive advantage will be lost, and once lost, it will be hard to regain. There are too many emerging economies focused on prosperity and not redistribution for the U.S. to easily recapture its role of global economic leader.

 

Obama’s ties to ethanol, corn lobbyists distort his views of energy markets

Corn-based ethanol is helping inflate energy and food prices, and Sen. Barack Obama (D-IL), his party’s presumptive presidential nominee, has close ties to the ethanol and corn lobbies, the NY Times reports here.

Having spent the last two days driving 982 miles from central Illinois across Iowa, Nebraska and Colorado, I can tell you that when ethanol is blended with gasoline, it reduces mileage by more than three times the price discount offered on gas blended with the corn-based ethanol. I’ve had the same experience in previous trips across the corn belt.

In other words, the lobbyists representing Illinois-based corn growers and ethanol producers have Obama in their pocket.

Politicians and economists who aren’t dependent on ethanol and corn lobbyists agree that when President Bush and members of Congress enacted huge subsidies for ethanol in an effort to win Corn Belt votes and campaign contributions, they made one of the biggest mistakes in top-down, centralized planning in the history of the country.

Their support for ethanol, which is basically a not very well hidden agricultural subsidy, got them elected. And it has helped inflate energy prices and has made a lot of foodstuffs unaffordable and even scarce in poor countries.

Now Obama is proposing to have the federal government spend $150 billion over 10 years on research into alternative energy technology. That boondoggle for alternative energy venture capitalists and entrepreneurs would not only take money out of the pockets of tax payers but also distort the capital and energy markets even more. It’s a disaster waiting to happen.

Rocky says, ‘What on Earth took him so long?’ to proposed health care reforms?

Mostly dead on arrival.

The Rocky Mountain News summarizes Bush’s political plight as well as anyone:

HSAs expanded in Tax Relief and Health Care Act of 2006

Health savings accounts will be more attractive under the Tax Relief and Health Care Act of 2006.

Click head to see summary:

 

Health insurers propose changes in health care industry

Interesting proposal from the American Association of Health Plans, but will the new Democratic-controlled Congress buy it?

Impact graphs from the NY Times:

The industry proposed these steps, estimated to cost $300 billion over 10 years:

¬?The federal government and the states should expand Medicaid to cover all adults with annual incomes under the poverty level, including single adults who cannot now qualify. The poverty level is $16,600 for a family of three and $9,800 for an individual.

¬?The Children‚Äôs Health Insurance Program, financed jointly by the federal government and the states, should, at a minimum, cover all children in families with incomes less than twice the poverty level.

¬?Congress should create tax incentives for people to establish ‚Äúuniversal health accounts.‚Äù People could take tax deductions for amounts contributed to such accounts. They could use the accounts to pay premiums for any type of health insurance. The federal government would help pay premiums for people with incomes below certain levels.

¬?Congress should establish a tax credit for individuals and families who buy health insurance for their children. The credit would be $200 a child, up to a maximum of $500 for a family. It would be available to families with incomes up to three times the poverty level ‚Äî up to $60,000 for a family of four.

The industry did not say how its proposals would be paid for; did not recommend any budget cuts or tax increases; and did not say what, if anything, it would do to slow the growth of health costs.

 

HSAs plus tax deductibility of costs for individuals are key health care reforms

Glenn Hubbard, dean of the Columbia Business School, is emerging as a leading health care economist and advocate of market-based reforms, including health savings accounts and tax reforms that he says would save $65 billion a year. His impact graphs from the Sept. 20 issue of Business Week: