Taxes

It Doesn’t Seem Possible, but France Is Going from Bad to Worse

Remember when Paul Krugman warned that there was a plot against France? He asserted that critics wanted to undermine the great success of France’s social model.

I agreed with Krugman, at least in the limited sense that there is a plot against France. But I explained that the conspiracy to hurt the nation was being led by French politicians.

Simply stated, my view has been that the French political elite have been taxing the nation into stagnation and decline and there is every reason to think that the nation is heading toward a severe self-inflicted fiscal crisis.

But it turns out I may have been too optimistic. Let’s look at some updates from Krugmantopia.

We’ll start with a report from the Financial Times, which captures the nation’s sense of despair.

…if the country’s embattled socialist president was hoping for some respite from what has been a testing year, he can probably think again. … the French economy barely expanded during the second quarter of this year after stagnating in the first. …the result will make it all but impossible to achieve the government’s growth forecast for 2014 of 1 per cent… Bruno Cavalier, chief economist at Oddo & Cie, the Paris-based bank, says one reason is the huge constraint on disposable income posed by France’s tax burden, which has risen from 41 per cent of GDP in 2009 to 45.7 per cent last year – one of the highest in the eurozone.

#IAmUnitedLiberty: Dan Mitchell is the Guardian Angel of the American Taxpayer

Full disclosure: Dan and I are both alumni of the University of Georgia (UGA) and play on a UGA alumni softball team together, so I count him as a friend. I only bring it up because he asked me during this interview if I was going to mention the UGA connection and, while I hadn’t planned on it, I suppose I should because it is how I knew him before I found out he was “kind of a big deal” as we like to say on the softball team. So, while he’s difficult to watch UGA football games with given his propensity toward pessimism — which I think is really just to get a reaction from me, usually successfully — he’s a great softball player and pitched an amazing game a few weeks ago that allowed us to beat the pants off a very solid Richmond Spiders team. So he’s not only a genius in the field of tax policy and a formidable emissary of small government — all detailed rather hilariously at his blog International Liberty — he’s a tremendous softball player and a proud Georgia Bulldog. Go DAWGS!

World renowned tax expert and Cato Institute scholar Dan Mitchell thinks of politicians as characters in old cartoons that, when faced with a decision, suddenly find they’ve an angel on one shoulder and a devil on the other, both handing out advice as to the right move.

He sees himself, flashing a grin that signals you shouldn’t take him too seriously, as the angel. “My job is to convince [politicians] to do what’s right for the country, not what’s right for their own political aspirations,” he says.

Hey, Barack Obama, businesses are moving overseas because of a terrible tax climate made worse by you

There’s been a lot of talk lately from President Barack Obama and administration officials about “economic patriotism.” They say that corporations shouldn’t be allowed to move overseas to escape paying the corporate income tax.

“Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes,” President Obama said at a stop in Los Angeles on Thursday. “They’re keeping, usually, their headquarters here in the U.S. They don’t want to give up the best universities and the best military and all the advantages of operating in the United States. They just don’t want to pay for it. So they’re technically renouncing their U.S. citizenship.”

Earlier this month, President Obama suggested that Congress (read: Republicans) lack “economic patriotism” to work with his administration on issues the country faces. Treasury Secretary Jack Lew dropped the same term in a letter to Senate Finance Committee Chairman Ron Wyden (D-OR) as he urged Congress to pass legislation to end corporate inversions.

“What we need as a nation is a new sense of economic patriotism, where we all rise or fall together. We know that the American economy grows best when the middle class participates fully and when the economy grows from the middle out,” Lew wrote in the letter to Wyden. “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”

This Republican Senate candidate wants to raise your taxes

David Perdue

David Perdue is poised to make the runoff in the Georgia Republican Senate primary, according to recent polls. He’s managed to put his name on the map through his personal largess, dropping nearly $2 million of his own money into his campaign, and quickly become the darling of the state party establishment. He’s saturated the media market, running four television ads to raise his name identification, and, as noted, that strategy has paid off.

But Perdue, the former CEO of Dollar General and Reebok, has come under scrutiny in recent days. The Atlanta Journal-Constitution reported Perdue, cousin of former Gov. Sonny Perdue (R-GA), has never voted in a general primary in Georgia. Whether Perdue’s camp wants to acknowledge it or not, that’s a red flag, but it’s not the only one that has been raised in the past week.

On Wednesday, the Atlanta Journal-Constitution reported that Perdue, in an interview with another local paper, floated the idea of “revenue increases” (hint: that’s a code word for tax hikes) to address the United States’ economic woes.

“Is it better to try to get out of the ditch by curbing the growth of spending or increasing revenue?” a Macon Telegraph editorial board member asked Perdue.

“Both,” Perdue replied.

“And that’s a euphemism for some kind of tax increase, of course,” the editorial board member noted.

Report: Americans face $1.8 trillion in annual regulatory costs

 Ten Thousand Commandments

One of the most dangerous, least often talked about threats of the governmental regulatory machine is how much of our money is engulfed in the regulatory process, putting the country deeper into debt.

The Competitive Enterprise Institute has just released its annual report on the general state of U.S. federal regulations and what is known as the “hidden tax” of the U.S. regulatory state known as the Ten Thousand Commandments.

Because regulations are proposed and enacted without allowing for a substantial review of their cost-benefit and its open discussion, Americans are hit with the consequences of the growth of the regulatory state where it hurts the most: their wallet.

“Federal agencies crank out thousands of new regulations every year,” says CEI Vice President for Policy Wayne Crews, “but we have little information on the cost or effectiveness of most of them.” According to Crews, one of the main issues with this process is the lack of transparency since few of us have access to reliable sources of information on what the regulations hope to accomplish.

The cost of the regulatory mess we find ourselves in adds hundreds of billions to our debt, which is why this report is so important. CEI Vice President for Policy warned the public that action is needed.

Majority of Americans Say Federal Taxes Are Just Too High

Americans are scrambling to have their taxes prepared by the end of the day to satisfy Uncle Sam’s thirst for their hard-earned money. Their lack of enthusiasm could have something to do with the fact that over half of the population claims taxes are just too high.

According to Gallup, 42 percent of Americans still say that they are paying enough, or “about right,” while 52 percent say that the taxes they are paying are too high. About two years ago, 46 percent of Americans said taxes were too high, indicating that there has been an increase in the number of people feeling they are simply paying too much.

Gallop found that the view that taxes are fair is more popular among Democrats, whereas Republicans tend to see their tax burden as not fair. According to the latest poll, 54 percent of Americans still regard the income tax as fair. However, this view is becoming less popular over time. According to Gallup, it hasn’t been this low since 2001.

Among Republicans, 57 percent say taxes are too high and 49 percent say what they pay is not fair. Among Democrats, 55 percent say they pay about right, and 69 percent say that what they pay is fair.

Among Independents, the numbers indicate that the difference between those who think their taxes are fair and those who think taxes are not fair is of 7 percent. Slightly more Independents (51%) say the federal income tax they have to pay is fair against 44 percent that say the taxes they pay are not fair.

No, Mr. President, expanding Medicaid isn’t a “no brainer”

Earlier this month, President Barack Obama visited Dallas, Texas to give a speech in front of supporters in which he tried to pressure Republican governors to expand Medicaid, a government program that covers people who make below 138% of the federal poverty line.

“We were just talking on the way over here that in addition to signing people up for the marketplaces so they can buy private insurance, part of the Affordable Care Act was expanding the number of working families who would qualify for Medicaid,” President Obama told supporters.

“Here in just the Dallas area, 133,000 people who don’t currently have health insurance would immediately get health insurance without even having to go through the website if the state of Texas decided to do it,” he said. “There’s over $500 million just for this county that would come in to help families get health insurance — has nothing to do with the website — if the state of Texas made this decision.”

“And your neighboring states have made that decision because they look at it and they say, this is a no-brainer, why would not — why would we not want to take advantage of this,” he added.

The fact that President Obama gave this speech in Texas, home to the country’s largest uninsured population, isn’t a coincidence. Seeking to capitalize on the state’s large Hispanic population, there is a big push by activist Democrats with help from the party to “turn Texas blue.” Part of this effort is to pressure Texas politicians, including Gov. Rick Perry, to accept Medicaid expansion, which is part of the Obamacare.

One-Year Individual Mandate Delay Wouldn’t Cripple ObamaCare

individual mandate

There’s no question that the individual mandate is the center of the ObamaCare universe.  Many other provisions are crucial to the law, but none to the extent of the individual mandate.  This is what made John Roberts’ decision last June to abandon originalism by constitutionally validating the individual mandate tax-penalty so painful.  Regardless of where the court came down on severability, the law could not have effectively functioned without the mandate intact.

Which brings us to the most recent episode of the ObamaCare delay game, this time focused on a one-year individual mandate delay.  At the height of the CR/debt-ceiling showdown, I wrote a post titled “Don’t Settle for One-Year Individual Mandate Delay,” arguing that any acceptable compromise would need to at least delay the exchange subsidies to be an effective barrier toward full implementation.

Those were the good ol’ days where there was hope that the Republicans would stand together and fight for real ObamaCare concessions.  Like defunding it or a one-year delay of the entire law.  In retrospect, I suppose I should have written a post titled “Don’t Settle for…Nothing.”

So here’s my point again: The first year of the individual mandate isn’t that big of a deal.  It’s an existential issue as a matter of constitutional law and individual liberty generally, but don’t believe the hype that the individual mandate is absolutely essential to ObamaCare in the first year.

There are two major reasons why:

Report: Long-term budget issues present fiscal threat to U.S.

National Debt

TL;DR version: This is a pretty long post dealing with a subject that generally fascinates only those interested in fiscal policy. The short of what you need to know is that the CBO expects the economy to perform better in the short-term, with higher revenues and lower budget deficits. But the rising costs of entitlements and the cost of servicing the national debt will drive up spending substantially over the long-term with the public’s share of the national debt becoming equal to the size of the economy (or GDP). As if the baseline scenario isn’t concerning enough, the alternative fiscal scenario is even more of a disaster. All charts below come directly from the CBO’s report.

Forget Syria or the still ongoing war on terrorism. The real security threat is the national debt. That’s what Admiral Mike Mullen warned in 2010. Those words still ring true today, especially after reading the latest long-term budget projections released yesterday by the Congressional Budget Office (CBO).

The annual report presents the federal budget outlook for the next 10 years (2013-2023) as well as provides a look into long-term projections relative to both current law and alternative scenarios, the latter of which most economists believe present a more realistic view of the United States’ fiscal health.

CBO Director Doug Elmendorf told reporters yesterday that the “federal budget is on a course that cannot be sustained indefinitely.”

ObamaCare will cost Delta Air Lines $100 million

 ronpaulproblems.tumblr.com

Delta Air Lines sent a letter to the Obama Administration in June warning them that the mandates and taxes in ObamaCare will cost the company $100 million.

The letter, which was made available via Erick Erickson at RedState, followed a meeting between Robert Knight, a Delta executive, and an Obama Administration official at Grady Hospital in Atlanta, where the airline is based. In the letter, Knight breaks down the various provisions of the law and associated costs that ObamaCare will impose on the airline and what it could mean for employees.

“The [Affordable Care Act] requires large employers to pay an annual fee of $63 per covered participant in 2014,” wrote Knight to the unnamed Obama Administration official with whom he met. “For Delta’s roughly 160,000 enrolled active and retired employees and their family members, this represents more than $10 million added to the cost of providing health care next year.”

Knight noted that the fee, which is essentially a tax, provides no benefit to Delta’s workers and is “a direct subsidy” from the company and its employees “to those who participate in [ObamaCare’s state] exchanges.” He also explained that the requirement to cover children until they’re 26 years-old and the individual mandate will cost the company a total of $28 million.

 


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