Taxmageddon

From:

Mike Brownfield

Mike Brownfield at Heritage

Brace yourself. In a mere 271 days, you and your fellow Americans will be hit with a tax hike the likes of which this country has never seen. The Washington Post aptly called the unprecedented $494 billion tax hike “Taxmageddon”, and Federal Reserve Chairman Ben Bernanke described it as a “massive fiscal cliff.” Whatever your preferred imagery, it’s a really big deal.

Despite all the warnings, President Barack Obama has kept his silence while Congress has made no apparent effort to prevent this impending calamity to families and the economy. The prevailing wisdom is that “something will get done” in a lame duck session of Congress after the election. But why wait? And why after the election?

Here’s why you should be worried. For starters, remember that this is the same President who in 2009 promised, “if your family earns less than $250,000 a year, you will not see your taxes increased a single dime.” That’s a vow he’s broken, and in 2013, things are going to get even worse if this year Obama doesn’t lead and Congress doesn’t act. Katy, bar the door, there’s big trouble in store.

The tax man won’t draw his billions from the American taxpayer with just one big needle — the massive tax increase will be the product of tax policies expiring in seven different categories, on top of five new Obamacare tax hikes taking effect. In a new paper, Taxmageddon: Massive Tax Increase Coming in 2013, Heritage’s Curtis Dubay details the tax hikes that will occur if President Obama and Congress do not act before the end of the year:

Almost 34 percent of the tax increase from Taxmageddon comes from the expiration of the 2001 and 2003 Bush tax cuts. These cuts are best known for reducing marginal income tax rates, but they also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs.

Another 25 percent of Taxmageddon comes from the expiration of the once-temporary payroll tax cut. The expiration of the patch on the Alternative Minimum Tax (AMT) — which would raise the income threshold over which families qualify for the AMT to prevent middle-income families from paying this tax that is only supposed to impact “the rich” — accounts for 24 percent of the total potential 2013 tax increase.

The balance of the tax hikes comes in part from new taxes under Obamacare, the expiration of tax cuts in the 2009 stimulus, the expiration of a group of policies known as “tax extenders,” changes in the current policy on the death tax (in 2013, it will rise from 35 percent today to 55 percent and the exemption will fall from $5 million to $3.5 million), and the expiration of businesses’ ability to fully expense new capital investments.

This $494 billion in higher taxes will certainly hit families and business hard in 2013, but their effects are already being felt. Dubay explains that Americans must plan for tomorrow, and the tremendous uncertainty about tax policy makes the future much more uncertain, thus discouraging the investments and other actions needed to spur the economy to create jobs faster today.

So while the President and Congress appear content to put off ’til the 11th hour what they can and should do today, those who will have to pay the higher tax burden are waiting to see what the future holds. Dubay says that this is “slowing job creation and stopping many of the millions of unemployed Americans from going back to work.”

Early on in his presidency, Barack Obama said he knew about the impact of taxes. Back in 2009, on a visit to Elkhart, Indiana, Obama emphatically stated his belief that raising taxes in a recession is a bad idea. Though America is not in recession today, it still struggles with very high unemployment, and so the President’s logic applies with equal force — raising taxes is a drag on job creation. Unfortunately, in a speech in Washington on Tuesday, President Obama unabashedly revealed that preventing tax hikes is not his priority. In fact, he wants to see even more taxes imposed on the American people and on job creators all in the name of “fairness” — may of which are in his budget. That’s a political doctrine, not an economic policy, and it’s a proven recipe for economic disaster.

If the President doesn’t work with Congress to take action soon to prevent a 2013 Taxmageddon, his brand of “fairness” will result in the biggest tax increase in the nation’s history. And that storm will wreak even more damage on America’s already fragile economy. Congress shouldn’t wait for Obama to take the lead in preventing a policy nightmare he might actually favor. Instead, it should act now to prevent these tax hikes from crushing America’s families and our economy.

Ann’s Pretzel Logic

I would like to first apologize for the length of this article, but I thought it too important to cut down. Anyway, here we go.

Has the once great conservative voice, Ann Coulter, become a moderate loving, Romney Zombie?

I’d say, evidently so, but you may judge for yourself.

I was going to disect this article myself, when I heard Mark Levin had already done it.

Knowing I could never compete with the intellect of Levin, I will instead pull some exerpts from his brilliant rebuttal of the following.

Due to the length of Levin’s rebuttal, I will, at times, paraphrase.

Three cheers for RomneyCare

by Ann Coulter

If only the Democrats had decided to socialize the food industry or housing, Romneycare would probably still be viewed as a massive triumph for conservative free-market principles — as it was at the time.

Levin: No it wasn’t a triumph for the free-market. Ted Kennedy was one of the main collaborators. He didn’t view it as conservative free-market principles.

It’s not as if we had a beautifully functioning free market in health care until Gov. Mitt Romney came along and wrecked it by requiring that Massachusetts residents purchase their own health insurance.

Levin: I don’t think we have a perfectly functioning  free-market in anything we do. The free-market accepts successes & failures & that there are many imperfect people within that system. That’s part of the brilliance of the free-market. That imperfection is not a justification to detroy it.

In 2007, when Romneycare became law, the federal government alone was already picking up the tab for 45.4 percent of all health care expenditures in the country.

Levin: So…what does that have to do with anything. Did all the other states say, “Hey, that’s a great idea, individual mandates. Let’s all copy Romneycare.” Have any of them copied Romneycare? No.

Until Obamacare, mandatory private health insurance was considered the free-market alternative to the Democrats’ piecemeal socialization of the entire medical industry.

In November 2004, for example, libertarian Ronald Bailey praised mandated private health insurance in Reason magazine, saying that it “could preserve and extend the advantages of a free market with a minimal amount of coercion.”

Levin: Apparently Ronald was wrong, Ann.

A leading conservative think tank, The Heritage Foundation, helped design Romneycare, and its health care analyst, Bob Moffit, flew to Boston for the bill signing.

Levin: What Ann leaves out of her column is that Heritage has since renounced the individual mandate.

Romneycare was also supported by Regina Herzlinger, Harvard Business School professor and health policy analyst for the conservative Manhattan Institute. Herzlinger praised Romneycare for making consumers, not business or government, the primary purchasers of health care.

Levin: Really, Ann. So Herzlinger supported it. But you left somebody out, didn’t you. Jonathan Gruber. Why did you leave Jonathan Gruber out, Ann? Because he’s a leftist? Jonathan Gruber had the biggest role in designing Romneycare of anybody and he was also one of the main architects of Obamacare. He has said publically that there is little difference between the two. Somehow Mr. Gruber didn’t make it into Ann’s piece. Anyway, why does it matter what any of these people thought. We can all think for ourselves, can’t we? The fact is, the only one who bit, was Mitt Romney. If any other Governor adopted such a thing, they’re awfully quiet about it.

The bill passed by 154-2 in the Massachusetts House and unanimously, 37-0, in the Massachusetts Senate — including the vote of Sen. Scott Brown, who won Teddy Kennedy’s seat in the U.S. Senate in January 2010 by pledging to be the “41st vote against Obamacare.”

Levin: So now we’re going to sight Scott Brown who’s feet are firmly planted in the air. Scott Brown voted for Romneycare and against Obamacare. You know why that is? Because his constituants are turning. The more people are invloved in Romneycare, the less they like it. But again, what does that have to do with anything, particularly if you are a Constitutionalist. The fact that anything like Romneycare empowers any government to interfere with your private medical decisions, who cares how many people vote for it. Politicians imposing their will on the people. The Founders rejected all of that.

But because both Obamacare and Romneycare concern the same general topic area — health care — and can be nicknamed (politician’s name plus “care”), Romney’s health care bill is suddenly perceived as virtually the same thing as the widely detested Obamacare. (How about “Romneycare-gate”?)

Levin: You can mock it, Ann, but the architect of both, which you left out of your column, he said they were the same.

As The New York Times put it, “Mr. Romney’s bellicose opposition to ‘Obamacare’ is an almost comical contradiction to his support for the same idea in Massachusetts when he was governor there.” This is like saying state school-choice plans are “the same idea” as the Department of Education.

Levin: No it’s not like saying that. It is like saying it’s the same mind set, that government knows best. Government can and will pass laws and has no respect for the circle of liberty.

One difference between the health care bills is that Romneycare is constitutional and Obamacare is not. True, Obamacare’s unconstitutional provisions are the least of its horrors, but the Constitution still matters to some Americans. (Oh, to be there when someone at the Times discovers this document called “the Constitution”!)

Levin: So what, who cares. Romney says it’s different. You (Romney) says he believes in the tenth amendment, but you don’t believe in the individual and that’s the proiblem. You believe in Utopianism, these impossible fantasies, State run healthcare.

As Rick Santorum has pointed out, states can enact all sorts of laws — including laws banning contraception — without violating the Constitution.

That document places strict limits on what Congress can do, not what the states can do. Romney, incidentally, has always said his plan would be a bad idea nationally.

Levin: Well, good for him. It’s a bad idea, period.

The only reason the “individual mandate” has become a malediction is because the legal argument against Obamacare is that Congress has no constitutional authority to force citizens to buy a particular product.

The legal briefs opposing Obamacare argue that someone sitting at home, minding his own business, is not engaged in “commerce … among the several states,” and, therefore, Congress has no authority under the to Commerce Clause force people to buy insurance.

Levin: There is absolutely nothing in American history, including the examples Ann has given, that compels two private parties, an individual & a business to enter into a private contract for goods or services the individual may not want nor the business may not want to give, and none of the examples Ann provides, disputes that.

No one is claiming that the Constitution gives each person an unalienable right not to buy insurance.

Levin: No, what we’re saying is that people should free to pursue their own interests and to be unmolested by government a much as possible. I’m not even sure why she’s mixing the Constitution with state issue. Maybe she thinks she’s on to something? She’s on to nothing.

States have been forcing people to do things from the beginning of the republic: drilling for the militia, taking blood tests before marriage, paying for public schools, registering property titles and waiting in line for six hours at the Department of Motor Vehicles in order to drive.

Levin: None of these are examples of entities being forced to enter into private contracts with other entities against their will. That has never been done in the history of this country. Are we to reject our principles to defend this man? I don’t believe in three cheers for socialism.

There’s no obvious constitutional difference between a state forcing militia-age males to equip themselves with guns and a state forcing adults in today’s world to equip themselves with health insurance.

The hyperventilating over government-mandated health insurance confuses a legal argument with a policy objection.

If Obamacare were a one-page bill that did nothing but mandate that every American buy health insurance, it would still be unconstitutional, but it wouldn’t be the godawful train wreck that it is. It wouldn’t even be the godawful train wreck that high-speed rail is.

Levin: Some of us have been arguing to the Supreme Court, that this individual mandate changes the relationship of the individual to the government. That government can order you to enter into private contracts against your will, or fine you, penalize you, sick the IRS on you. There is not a single example in history of that. None! What then, would prevent the government from ordering to buy anything? I don’t know. I’ll have to wait for Ann’s next column.

It would not be a 2,000-page, trillion-dollar federal program micromanaging every aspect of health care in America with enormous, unresponsive federal bureaucracies manned by no-show public-sector union members enforcing a mountain of regulations that will bankrupt the country and destroy medical care, as liberals scratch their heads and wonder why Obamacare is costing 20 times more than they expected and doctors are leaving the profession in droves for more lucrative careers, such as video store clerk.

Nothing good has ever come of a 2,000-page bill.

Levin: Really. She just gave a explaination for what is beginning to happen in Massachussetts, albeit, on a smaller level, because it’s a state.

There’s not much governors can do about the collectivist mess Congress has made of health care in this country. They are mere functionaries in the federal government’s health care Leviathan.

Levin: So every governor is compelled to do what Romney did, right? There’s evidently only one response, Romneycare.

A governor can’t repeal or expand the federal tax break given to companies that pay their employees’ health insurance premiums — a tax break denied the self-employed and self-insured.

A governor can’t order the IRS to start recognizing tax deductions for individual health savings accounts.

A governor can’t repeal the 1946 federal law essentially requiring hospitals to provide free medical services to all comers, thus dumping a free-rider problem on the states.

Levin: While a state does have to deal with these things like free hospital care, there are ways to deal with it. Why can’t they garnish wages, seize assets, do all those things for people who really can afford there hospital & medical care, but simply refuse to pay for it.

It was precisely this free-rider problem that Romneycare was designed to address in the only way a governor can. In addition to mandating that everyone purchase health insurance, Romneycare used the $1.2 billion that the state was already spending on medical care for the uninsured to subsidize the purchase of private health insurance for those who couldn’t afford it.

Levin: So as Governor, he was concerned about those poor. It’s just unfair. Sounds just like a liberal. So in the name of fairness & equity, we will create a whole top down government run system. That’s what every Governor would do, right? Problem is, every Governor didn’t do that. You want to look at a Governor whose making real  progress, fighting like hell. Look at Scott Walker in Wisconsin. Where as Teddy Kennedy stood shoulder to shoulder with Mitt, you won’t find anyone like that standing with Scott Walker. Tells you something, doesn’t it.

What went wrong with Romneycare wasn’t a problem in the bill, but a problem in Massachusetts: Democrats.

Levin: That’s precisely the problem. When George Bush opened the door to bailouts, did he think would end with him? Did Mitt really think when he opened the flood gates the water would stop when he left? Just as Bush did, you and he only laid the foundation and set the precedent for future governors and presidents to run with it, as it were.

First, the overwhelmingly Democratic legislature set the threshold for receiving a subsidy so that it included people making just below the median income in the United States, a policy known as “redistribution of income.” For more on this policy, see “Marx, Karl.”

Levin: Gee, that was utterly unpredictable!

Then, liberals destroyed the group-rate, “no frills” private insurance plans allowed under Romneycare (i.e. the only kind of health insurance a normal person would want to buy, but which is banned in most states) by adding dozens of state mandates, including requiring insurers to cover chiropractors and in vitro fertilization — a policy known as “pandering to lobbyists.”

Levin: We know they do these things in advance, Ann, don’t we? DON”T WE!

For more on “pandering” and “lobbyists,” see “Gingrich, Newt.” (Yes, that’s an actual person’s name.)

Romney’s critics, such as Rick Santorum, charge that the governor should have known that Democrats would wreck whatever reforms he attempted.

Levin: Gee, ya think?

They have, but no more than they would have wrecked health care in Massachusetts without Romneycare. Democrats could use a sunny day as an excuse to destroy the free market, redistribute income and pander to lobbyists. Does that mean Republicans should never try to reform anything and start denouncing sunny days?

Levin: That’s your defense? Liberals & democrats will do what they always do. Is this why we elect republicans? This isn’t reform, it’s big government. This is absurd!

Santorum has boasted of his role in passing welfare reform in the 1990s. You know what the Democrats’ 2009 stimulus bill dismantled? That’s right: the welfare reform that passed in the 1990s.

Levin: Isn’t that interesting. Santorum tried to undo the welfare state. She says because liberals can undo it, why bother. Liberals try to undo a lot, but we must fight the good fight. Romneycare was not the good fight.

The problem isn’t health insurance mandates. The problem isn’t Romneycare. The problem isn’t welfare reform. The problem is Democrats.

Levin: Actually, Ann, the problem is leftists and republicans who play along with them. Shame, shame, shame.