Canada Shows How to Eliminate the Tax Bias against Saving

October 24, 2014

Phineas Fahrquar:

This will drive lefties who like to point to Canada’s health system as a model for the US crazy, but they’re much more free market-oriented than we are these days in other areas, and they treat savings in a more intelligent fashion. There are some very good ideas in here we should emulate, as well as looking at the Australian and Chilean national pension models as a replacement for the failing Social Security.

Originally posted on International Liberty:

Since all economic theories – even Marxism and socialism – recognize that capital formation is a key to long-run growth, higher wages, and improved living standards, it obviously doesn’t make sense to penalize saving and investment.

Yet that’s exactly what happens because of double taxation in the United States, as can be seen by this rather sobering flowchart.

So how can we fix the problem? The best answer, particularly in the long run, is to shrink the burden of government spending so that there’s no pressure for punitive tax policies.

Good reform is also possible in the medium run. Policy makers could implement a big bang version of tax reform, replacing the corrupt internal revenue code with a simple and fair flat tax. That automatically would eliminate the tax bias against saving and investment since one of the key principles of the flat tax is that income…

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In a stunning reversal, the Australian Labor Party bails out on the ‘carbon tax’

October 11, 2014

Phineas Fahrquar:

This is big: the major Center-Left party in Australia has just forsaken a key element of Mankind’s penance for sins against the Earth in the Church of Anthropogenic Global Warming. Al Gore will no be pleased.

Originally posted on Watts Up With That?:

Australian Political Opposition Leader Bill Shorten has today stunned observers by reversing his position on a carbon tax – ruling out any future reinstatement of a carbon tax.

According to The Sydney Morning Herald;

“We will not have a carbon tax, the Australian people have spoken and Labor is not going to go back to that,” Mr Shorten told reporters in Sydney on Saturday.

http://www.smh.com.au/federal-politics/political-news/bill-shorten-says-labor-wants-to-tackle-carbon-pollution-but-rules-out-return-of-carbon-tax-20141011-114nmp.html

Despite turning his back on a carbon tax, the Labor Opposition Leader continues to back the introduction of a “market based mechanism” for tackling “carbon pollution”.

One of the core platforms of the current Abbott government, which helped propel him to electoral victory last year, was the promised abolition of the deeply unpopular carbon tax.

Until recently, Labor advocated reinstating a carbon tax, pending the negotiation of a market based pricing mechanism, but they now appear to be backing away from carbon pricing, however tentatively…

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The Punitive Economic Cost of Class-Warfare Taxation

September 1, 2014

Phineas Fahrquar:

More evidence (from Europe!) that high tax rates harm economic growth and general prosperity. Barack Obama, take note.

Originally posted on International Liberty:

I’ve already shared a bunch of data and evidence on the importance of low tax rates.

A review of the academic evidence by the Tax Foundation found overwhelming support for the notion that lower tax rates are good for growth.

An economist from Cornell found lower tax rates boost GDP.

Other economists found lower tax rates boost job creation, savings, and output.

Even economists at the Paris-based OECD have determined that high tax rates undermine economic performance.

And it’s become apparent, with even the New York Times taking notice, that high tax rates drive away high-achieving people.

We’re going to augment this list with some additional evidence.

In a study published by a German think tank, three economists from the University of Copenhagen in Denmark look at the impact of high marginal tax rates on Danish economic performance.

Here’s what they…

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Boom: #Obamacare architect upholds #Halbig decision

July 25, 2014
"Obamacare has arrived"

“The end of Obamacare?”

I normally use that graphic as a metaphor for the needlessly disruptive, even harmful effects the Affordable Care Act is having on the American health care system and the millions who rely on it. But the First Circuit Court of Appeals ruling in Halbig v. Burwell (formerly Halbig v. Sebelius) turned the ACA into its own flaming wreck by holding that purchasers of insurance on the federal exchange were ineligible for subsidies, meaning those buyers would be forced to pay the full cost of their new, needlessly more expensive O-care plans.

Oops.

Some background: When the writers of Obamacare were designing this anti-constitutional monstrosity of a law, it was decided that states would be able to set up their own exchanges, with the federal exchange serving as the “insurance mall” for those that didn’t. To encourage states to create exchanges, it was written into the bill that subsidies for insurance purchases would only be available to those who bought their policies via an exchange “established by the State.” The idea was that pressure from purchasers who wanted those subsidies would force even conservative governors and legislatures to “opt in” to the system.

Trouble was for Obamacare fans, it didn’t work out that way.

Only 14 states set up their own exchanges (and some of those have been such disasters that their states are switching to the federal marketplace). That meant that, under the law, insurance buyers in the federal marketplace would be paying full price for their policies. It also meant that the federal government could not collect the “Roberts tax” (penalties) for not buying insurance, since those taxes were triggered by the availability of subsidies. No subsidies, no tax revenues, which the government was relying on to fund those same federal subsidies. You can just imagine how that prospect thrilled the pols in D.C.:

panic button red

 

So the IRS, hearing its master’s voice, suddenly decided it had the power to declare that “established by the State” intended to include the federal exchange, and thus the subsidy money could keep flowing.

Enter Halbig  and its argument that, no, the law meant what it plainly said, and then the First Circuit’s agreement.

The reaction on the Left has been amusing, to say the least. Ranging from shrieks of “judicial activism!!” to whines of “it’s just a typo and you know very well that’s not what Congress intended, meanies!”, they want the full, en banc, First Circuit to reverse the ruling. And, if they don’t do it, then, by golly, it’s on to the Supreme Court, where John Roberts will rewrite the law for us! Or something.

That got an awful lot harder to imagine, though, after the Competitive Enterprise Institute last night uncovered video from 2012 in which Jonathan Gruber, one of the key architects of both Obamacare and the earlier Romneycare, point-blank admitted the plaintiffs in Halbig were right:

The key moment starts at minute 31. Here’s CEI’s transcription of the big reveal:

What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.

Per Michael Cannon, Gruber is off on one point, because the “Roberts taxes” are only triggered in states that create exchanges and thus get subsidies. But the core is that this destroys the government’s “congressional intent” argument, because we now have one of the designers saying the limitation of subsidies to state exchanges was the intent of Congress.

Where Obamacare defenders go from here (other than to a bar to drown their sorrows), I don’t know. They can’t give up, because the loss of the subsidies wrecks Obamacare. Can you imagine the reaction when customers on the federal exchange are told they have to pay full price, prices mandated by Obamacare, which was passed solely by Democrats?

I have no idea how the courts will handle this. Assuming the government asks for an en banc hearing, it’s possible the ruling in Halbig will be reversed, thus probably ending the matter, but I’d have to think less so after this revelation. And there is a contradictory ruling from the 4th Circuit, a situation that almost guarantees the Supreme Court would take the case in 2015.

As ST likes to say, stay tuned… popcorn.gif

RELATED: More from Reason. The Federalist on Michael Cannon’s revenge. Mr. Cannon himself points out how Halbig frees tens of millions from an illegal tax. Paula Bolyard reports how Mr. Gruber calls the plaintiff’s arguments in Halbig “nutty,” …er… but they’re his own ideas, too. Oops, again. By the way, did you know 91% of fake applicants for Obamacare can get subsidized coverage? Another reason to kill this thing and bury it under a crossroads at midnight with a stake through it.

UPDATE: This is amusing – four ways in which Obamacare defenders have desperately tried to spin Mr. Gruber’s “speak-o.”

(Crossposted at Sister Toldjah)


Six Astounding Examples of Left-Wing Hypocrisy

July 18, 2014

Phineas Fahrquar:

Remember, kiddies: It’s “do as I say, not as I do.”

Originally posted on International Liberty:

Last month, I nailed Bill and Hillary Clinton for their gross hypocrisy on the death tax.

But that’s just one example. Today, we’re going to experience a festival of statist hypocrisy. We have six different nauseating examples of political elitists wanting to subject ordinary people to bad policy while self-exempting themselves from similar burdens.

Our first three examples are from the world of taxation.

Here are some excerpts from a Washington Timesreport about a billionaire donor who is bankrolling candidates who support higher taxes, even though he structured his hedge fund in low-tax jurisdictions specifically to minimize the fiscal burdens of his clients.

Tom Steyer, the billionaire environmental activist who is spending $100 million to help elect Democrats this fall, is rallying support for energy taxes that could impact everyday Americans. But when he ran his own hedge fund, Mr. Steyer sought to help wealthy clients legally avoid paying…

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RIP Australia’s Carbon Tax

July 16, 2014

Phineas Fahrquar:

Just as the EPA is trying to force us into a de facto carbon tax, Australia comes to its senses and repeals former-PM Gillard’s monstrosity. Well done, Tony Abbott!

Originally posted on Watts Up With That?:

Carbontax_tombstoneUPDATE: at ~ 11:14AM local time in Australia, it was repealed!

From ABC: Legislation to scrap the carbon tax has passed the Federal Parliament in a major win for the Abbott Government.

After a lengthy debate, the Senate voted to get rid of the price on carbon, with 39 senators voting for and 32 voting against.

This was the Government’s third attempt to scrap the tax since the election – the first two were rejected by the Senate.

The Australian reports:

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Really? Lois Lerner thought of investigating Senator Grassley (R-IA)??

June 25, 2014
No way!!

No way!!

Real smart. Let a United States Senator find out you were planning a fishing expedition into his finances? Try it, and just see how fast the hammer gets dropped on you once he’s in the majority, again:

New emails reviewed by the House Ways and Means Committee in the IRS targeting investigation revealed something that might knock the probe up another notch: IRS manager Lois Lerner allegedly sought to have the circumstances surrounding a speaking invitation to Sen. Charles Grassley, a Republican from Iowa, referred for IRS examination.

“We have seen a lot of unbelievable things in this investigation, but the fact that Lois Lerner attempted to initiate an apparently baseless IRS examination against a sitting Republican United States Senator is shocking,” said Ways and Means Chairman Dave Camp (R-MI) in a written press release.

According to the Ways and Means Committee, and the email chain released today, Lerner and Sen. Grassley were invited to speak at the same event in Dec. of 2012, but their invitations got mixed up. When Lerner received Grassley’s invitation, she suggested to others in her office that the invitation should be referred for examination.

“Looks like they were inappropriately offering to pay for his wife,” Lerner said. “Perhaps we should refer to Exam?”

Lerner’s idea was dropped after another employee politely said (I’m paraphrasing) “Are you nuts??” Still this is another example of the arrogance that infects the bureaucracy, much of which seems to have forgotten who employs whom around here.

BTW, Grassley sits on the Finance, Budget, and Joint Taxation committees, all of which have jurisdiction over the IRS. He had no comment about this story, but I’m sure he will have plenty to say in early 2015.

RELATED: My blog-buddy is already on the case.


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