Welcome to tax season, now prepare to give your #Obamacare subsidy back

**Posted by Phineas

"Obamacare has arrived"

“Obamacare has arrived”

This item has been sitting in my files for a while (1), but, since we’re deep into tax season, it’s still relevant — especially so for people relying on that federal subsidy to help pay for their “affordable” health care:

As many as 3.4 million people who received Obamacare subsidies may owe refunds to the federal government, according to an estimate by a tax preparation firm.

H&R Block is estimating that as many as half of the 6.8 million people who received insurance premium subsidies under the Affordable Care Act benefited from subsidies that were too large, the Wall Street Journal reported Thursday.

“The ACA is going to result in more confusion for existing clients, and many taxpayers may well be very disappointed by getting less money and possibly even owing money,” the president of a tax preparation and education school told the Journal.

While the Affordable Care Act fines those who don’t have health insurance, it also provides subsidies for people making up to four times the federal poverty line ($46,680).

But the subsidies are based on past tax returns, so many people may be receiving too much, according to Vanderbilt University assistant professor John Graves, who projects the average subsidy is $208 too high, the Journal reports.

If, like a lot of people, you’re used to getting some sort of a refund, you probably already have an idea of how much you expect and how you plan to spend it. Imagine then how happy these many millions of people will be when they’re told they’re either getting less of a refund, or that they in fact owe money. And, on top of that, their subsidy for the next year will almost certainly be lower, so even more of their money will go to the insurance companies by force of law for coverage that probably isn’t as good as they had before, or at least isn’t what was promised.

That, my friends, is a recipe for angry voters. And, oh, there’s a presidential election warming up, too. Fancy that.

If anything good comes of this fiasco, it will probably be the hard-learned lesson that government is poorly equipped to do more than a certain few tasks and running a huge, massively complicated healthcare system isn’t among them.

Call it another “teachable moment.”

Footnote:
(1) Ancient by Internet standards — a whole month!

(Crossposted at Public Secrets)

NC residents may find themselves in a “Land of Confusion” come tax-filing time

Taxes

It’s tax-filing time – are you ready?

Yours truly is now officially a contributor to the Independent Journal Review, and my first piece is on the NC tax reform laws that went into effect last year and how, as a result, some residents of this state might be perplexed on how to fill out their state tax returns come tax-filing time.

Very excited for the opportunity to write for the IJ Review! The NY Times did a surprisingly nice profile on them last November – make sure you read it to understand why the site has become a big deal for conservatives, and make sure to bookmark the site and visit back often. :)

Report: Government may have erroneously paid out $100 billion in 2013

Money on trees

Apparently, the government thinks money grows on trees.

And people wonder why we think a smaller government is a better government- via the AP:

WASHINGTON — By its own estimate, the government made about $100 billion in payments last year to people who may not have been entitled to receive them — tax credits to families that didn’t qualify, unemployment benefits to people who had jobs and medical payments for treatments that might not have been necessary.

Congressional investigators say the figure could be even higher.

The Obama administration has reduced the amount of improper payments since they peaked in 2010. Still, estimates from federal agencies show that some are wasting big money at a time when Congress is squeezing agency budgets and looking to save more.

“Nobody knows exactly how much taxpayer money is wasted through improper payments, but the federal government’s own astounding estimate is more than half a trillion dollars over the past five years,” said Rep. John Mica, R-Fla. “The fact is, improper payments are staggeringly high in programs designed to help those most in need — children, seniors and low-income families.”

Mica chairs the House Oversight subcommittee on government operations. The subcommittee is holding a hearing on improper payments Wednesday afternoon.

Each year, federal agencies are required to estimate the amount of improper payments they issue. They include overpayments, underpayments, payments to the wrong recipient and payments that were made without proper documentation.

Some improper payments are the result of fraud, while others are unintentional, caused by clerical errors or mistakes in awarding benefits without proper verification.

Gotta love the smell of government incompetency first thing in the morning! /sarc o=>

America continues the decline into “part time nation” status

Unemployment line


Photo via the pepperhawkfarm blog.

Via the Washington Post:

In the new landscape of the American labor market, jobs are easier to come by but hours remain in short supply.

New government data slated for release Thursday is expected to show the economy added more than 200,000 jobs for the fifth straight month — the longest streak since the late 1990s. The unemployment rate is expected to hold steady at 6.3 percent after falling more than a percentage point over the past year. [Note from ST: It dropped to 6.1for these reasons]

But there’s a gnawing fear among economists that the improving data provides false comfort. More than 26 million people are in part-time jobs, significantly more than before the recession, making it one of the corners of the labor market that has been slowest to heal. That has led to worries that the workforce may be becoming permanently polarized, with part-timers stuck on one side and full-time workers on the other.

“What we’re seeing is a growing trend of low-quality part-time jobs,” said Carrie Gleason, director of the Fair Work Week Initiative, which is pushing for labor reforms. “It’s creating this massive unproductive workforce that is unable to productively engage in their lives or in the economy.”

Washington has begun to take notice. As the unemployment rate has dropped, the debate among policymakers has expanded from providing aid to those without a job to include improving conditions for those who do. President Obama has raised the minimum wage for federal contract workers, many of whom are part-time. The White House is also building support for a measure that would require companies to provide paid sick leave. Nationwide protests at retailers and fast-food chains that heavily rely on part-time labor have called for more reliable schedules.

NONE of which will “fix” the problem. Frankly, at this point the only thing that would fix it is to have another President in the White House who understands basic economics.  November 2016 can’t come soon enough.

Surprise: Bill & Hillary Clinton are hypocrites on the estate tax

Bill and Hillary Clinton

Masters of deception.

Bloomberg has an intriguing report detailing just exactly how hypocritical the Clintons are on the issue of the estate tax (hat tip):

Bill and Hillary Clinton have long supported an estate tax to prevent the U.S. from being dominated by inherited wealth. That doesn’t mean they want to pay it.

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”

The Clintons’ finances are receiving attention as Hillary Clinton tours the country promoting her book, “Hard Choices.” She said in an interview on ABC television that the couple was “dead broke” and in debt when they left the White House in early 2001. After being criticized for her comments, she told ABC’s “Good Morning America” that she understood the financial struggles of Americans.

Look,  I have no issue with people who want to keep more of their own money – whether they keep it themselves or try to keep it in the family. I do, however, have an issue with those who advocate one set of rules for some people while they do just the opposite, something the Clintons – Bill and Hillary both – are infamous for.

Make sure to read the full article – and take note of the journalist who wrote it, Richard Rubin, who is soon to be added to the Clinton “Enemies List” in advance of her likely decision to run for President … if he hasn’t been already.

Obamacare penalties to slam low-income Americans

**Posted by Phineas

"Obamacare has arrived"

“Obamacare has arrived”

Wait. I thought the whole point of this rolling fiasco was to make insurance  affordable for the least among us. But, according to the Congressional Budget Office, roughly one million Americans will pay the fine tax whatever the heck Roberts decided it was. Via The Washington Free Beacon:

“All told, CBO and [the Joint Committee on Taxation] JCT estimate that about four million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf),” the report said. “An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, an estimated $5 billion will be collected per year over the 2017–2024 period.”

A chart accompanying the report revealed that 200,000 of those paying the penalty earn less than 100 percent of the poverty line. An additional 800,000 are considered low-income, earning between 100 and 199 percent of the poverty level.

The article then points out how Obama was originally against the individual mandate, because it would be unfair to the poor. During a 2008 debate with Hillary Clinton Lady Macbeth, he said:

“You can have a situation, which we are seeing right now in the state of Massachusetts, where people are being fined for not having purchased health care, but choose to accept the fine because they still can’t afford it even with the subsidies,” he said. “They are then worse off, they then have no health care and are paying a fine above and beyond that.”

Which is …erm… kind of what’s about to happen right now under your system, sir. Not to be picky, or anything.

Of course, this is one of those predictible outcomes, like Obamacare causing increased use of emergency rooms instead of decreased use, that critics on the right have been warning about for several years. When faced with two painful choices –buy insurance you can’t afford or pay a fine– the vast majority will choose the least painful option. This was how the system was designed.

It’s a pity the Democrats who wrote it and shoved it down the nation’s throat didn’t bother read and understand it before voting on it and causing so many poor people so much pain. A pity, but not my problem, because not a single Republican voted for this anti-constitutional monstrosity.

And we need to remind them of that in November.

(Crossposted at Public Secrets)

Austinite who always votes for raising taxes can’t afford to live there anymore

Overtaxed

Will the rest of American left soon come to the same realization when it comes to overtaxing & change their ways? Don’t count on it!

How much do you want to bet this person is a liberal Democrat?

On a recent evening, more than 300 homeowners who are worried about their rising property tax bills filled First Unitarian Universalist Church in North Austin for a town hall meeting. If something doesn’t change, many said, they will soon be priced out of their homes.

Two nights later, a similar discussion played out in South Austin, where homeowners gathered at Grace United Methodist Church in Travis Heights to talk about what can be done to slow escalating residential tax values.

“I’m at the breaking point,” said Gretchen Gardner, an Austin artist who bought a 1930s bungalow in the Bouldin neighborhood just south of downtown in 1991 and has watched her property tax bill soar to $8,500 this year.

“It’s not because I don’t like paying taxes,” said Gardner, who attended both meetings. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore. I’ll protest my appraisal notice, but that’s not enough. Someone needs to step in and address the big picture.”

These are the same types of people who, when faced with similar situations, move to other cities or states with lower taxes and then turn around and try to do the same d*mn thing there!   Then, they move again. And again, not understanding that they put themselves into their own over-taxed predicament time and time again. I have zero sympathy for them. Zilch, nada. They made their beds – now they get to lay in them.   And while we’re on the subject, I hope they stay the hell out of my state. Their attitudes and hypocritical stances on taxes and government intrusion into my wallet are not welcomed.

The IRS wants to tax your frequent flyer miles and hotel points

**Posted by Phineas

"Shakedown"

It’s as if the agency was worried it wasn’t hated enough.

Writing at Reason, Ira Stoll reports that the Internal Revenue Service is looking at taxing rewards points offered by airlines and hotel chains:

Just in time for your summer vacation, the IRS is getting ready to toughen the tax treatment on frequent flyer miles and hotel loyalty reward programs.

The IRS announced in 2002 that it wouldn’t try to go after individuals for income taxes on frequent flyer miles or hotel loyalty points earned on company-paid business trips. Yet the temptation to wring some tax revenue out of the vast non-dollar economy of Starwood Preferred Guest Starpoints, Marriott Rewards points, American Airlines AAdvantage miles, Delta Skymiles, and so on is apparently so great that that the government just cannot resist.

Sure enough, the Tax Foundation, a research group that tracks tax issues, flags a recent post on the View From the Wing blog that runs under the provocative headline, “The IRS Looks To Be on the Verge of Imposing a Big Tax Burden on Loyalty Points.”

The IRS’s plans are vague, but they have airlines and hotel owners concerned enough about the issue that they reportedly sent a letter to Treasury Secretary Jacob Lew. “The IRS’ proposal to alter the tax treatment of loyalty programs will impose a significant new tax on existing and future loyalty points that travel customers enjoy and rely upon,” said the letter, according to a report in Politico. “Any change or clarification of loyalty program accounting should be made through the legislative process, not IRS promulgation.”

Frequent flyer mile fanatics got a wake-up call on the issue back in 2012 when Citibank sent IRS Forms 1099, documenting “miscellaneous income,” at a rate of 2.5 cents a mile, to customers who had signed up for an American Airlines-branded credit card and gotten 40,000 AAdvantage miles as a bonus. It was an unpleasant surprise to cardholders who thought they were getting a free trip, not an unwanted extra tax bill.

I’ll say. I rarely rack up enough points for a free flight or hotel night, but I know plenty of people who fly a lot and who rely on those points to help cover the occasional vacation. Suddenly taxing them not only diminishes their value as a customer-retention tool, but also burdens the consumer by imposing a monetary cost for a non-monetary reward. (Sure, the points have “value,” but it’s not like real income. Just try paying for a meal with airline points…)

Stoll covers several problems with this plan, but I’ll add one of my own: this is another example of the gradual bureaucratic usurpation of legislative power that’s grown to be such a problem since the Progressive Era. Congress writes laws that allow regulatory agencies to create rules for their implementation, but agencies, like bureaucracies everywhere, constantly push the bounds of that authority to accumulate ever-greater power to themselves, to the point whereat they’re no longer writing rules, but actually making law in place of the elected legislature. Which, for progressive ideology, is a feature, not a bug. (1)

Although, perhaps “usurpation” is too strong a word. After all, congresses dominated by both Democrats and Republicans have gone along with this, even if they didn’t agree with progressive ideology, passing vague legislation and letting agencies “fill in the blanks.” It’s a tempting bit of laziness: as Washington accumulated more power to itself, Congress had to deal with more and more, until it became expedient to let someone else deal with the details. And it gives them political cover: It wasn’t your congressman who decided to tax your airline miles, it was the IRS. Left unsaid is how generations of congressmen and senators have enabled this.

Of the many reforms our government needs, congress reclaiming its power to make laws and reining in the bureaucracy –especially the IRS!– is high on the list.

Footnote:
(1) The basic idea is that democratically-elected legislatures are too prone to public passions, too full of unqualified people, to be trusted with governance. Progressives prefer unelected, dispassionate boards of technocrats who would practice scientific management of public affairs. They may be right about the problems of legislatures, but I think the last century has shown their solution is even worse.

(Crossposted at Public Secrets)

Obama to high-dollar donors: Americans are “better off” since I was elected

King Obama

Image via Salon.com

Oh really?

President Obama said Americans were “better off now than when I came into office,” during a fundraiser Monday night outside of Washington.

Obama also slammed congressional Republicans for their focus on the terror attack in Benghazi and the implementation of ObamaCare.

The president told attendees at the high-dollar soiree in Potomac, Maryland that his Republican opposition in Congress had been “captured by ideologues” whose principal focus was on “how to make people sufficiently skeptical, so they can win the next election.”

“The debate now is about what?” Obama asked. “Benghazi? ObamaCare? It becomes this endless loop.”

Obama told donors that he preferred a robust Republican Party —  “I come from the Land of Lincoln” — but that the current iteration of the GOP did not believe “that government can get anything done.”

Obama’s remarks came at a fundraiser for the Democratic Congressional Campaign Committee at the home of Jeffrey Drenzer, a medical training and technology executive. Tickets to the event, billed as an “intimate dinner,” ranged from $10,000 per person to $32,400 per couple.

Because it’s wrong to be skeptical about government. It’s wrong to expect your government should be held accountable for its incompetence. It’s wrong to think people should be able to hold on to more of their own money. It’s wrong to believe you need to do everything you can to foster a climate of investment and job growth.  And it’s wrong that people expect you to keep your promises on, I dunno, things like being able to keep their doctor and plans if they liked them.  Silly me.

Out here in the real world people are struggling to make ends meet, more are working part time and temporary positions – or have dropped out of the workforce altogether out of frustration, are paying more for their health insurance and/or are on plans they didn’t like and/or can barely afford … the list goes on. Our celebrity President can wine and dine and captivate his big money donors all he wants to, get them to (literally) buy anything he says, but no fancy speeches and no grand gestures on his part in efforts to sugarcoat today’s economic climate can/will change that.

Detecting life in the CA economy, state senate moves to kill it

**Posted by Phineas

california_state_flag

Well, at least California’s legislative Democrats are consistent: if it works, regulate it, and if it makes money, tax it. In the latest example, Senator Noreen Evans (D-Santa Rosa) has authored a bill to slap a nearly ten-percent tax on oil extraction:

The Senate Education Committee voted 5-2 — the minimum number of votes needed — to advance a bill that would levy a 9.5% tax on oil pumped from the ground in California. The aim is to raise $2 billion annually to be divided among state universities and colleges, state parks, and human service programs, according to the Los Angeles Times.

The controversial SB 1017, which was authored by Sen. Noreen Evans (D-Santa Rosa), has been dubbed a “job killer” by the California Chamber of Commerce, as it would most likely decrease oil production and drive oil companies out of California, costing thousands of jobs. One such company, Occidental Petroleum, is leaving California for Houston, Texas — dubbed “the energy capital of the world” — after being in Los Angeles for nearly a century.

Apparently it never occurred to Senator Evans or the Education Committee that a regime of low taxes and moderate regulation would generate more revenue through the jobs created both directly and through supporting businesses. Maybe she should visit Texas and take notes. Oh, and the heartland of that oil production would be in areas with the worst unemployment, our Central Valley. Why does she hate the jobless? (Or, perhaps more accurately, why does she hate the prospect of them not needing state aid?)

Instead, she and her fellow Democrats must think that being in California is so wonderful that no one would ever go elsewhere, regardless of how many burdens and barriers Sacramento creates. If so, this former California businesswoman has a message for her.

California has had an amazing economy and has an incredible potential future, but even it can be killed with enough mismanagement.  Senator Evans and her colleagues really need to review the fable of the goose that laid the golden eggs: its owner, not satisfied with the eggs the goose was laying at a steady rate, killed it to get all the eggs he thought were inside. Instead, he wound up with no more eggs and a dead goose.

Golden eggs, golden state.

PS: With the Democrats’ two-thirds super-majority broken in the Senate for now, thanks to three corrupt Democrat senators getting caught, there’s no chance this bill will make it to the governor’s desk. For now. But expect them to have it ready, if and when they regain that majority.

(Crossposted at Public Secrets)