Hide your IRAs: Obama admin. — “We think you’ve saved enough!”


**Posted by Phineas

"We're here for your fair share."

“We’re here for your fair share.”

Or maybe it’s the off-ramp to Cyprus.

Over at lefty blog Talking Points Memo (h/t Joel Gehrke), Brian Beutler has noted an interesting item in the White House’s latest budget proposal: a cap on the amount one is allowed to save in tax-deferred accounts. Anything over that is open to the taxman.

Per the budget, “Individual Retirement Accounts and other tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”

But how would they close this loophole?

One way experts believe financial managers avoid the current annual contribution limit to IRAs is by using IRAs to participate in investments and assigning those investment interests a nominal value vastly below fair market.

Obama wouldn’t curb this practice directly. Instead his budget calls for an overall cap of about $3 million on the net balance across all of an individuals’ tax-preferred accounts. Only have one IRA? It can hold $3 million. Have three? Their holdings must sum to $3 million or less.

The $3 million figure is approximate. A formula would set the cap at a level just high enough to finance an annual distribution of no more than $205,000 per year in retirement for someone retiring this year.

Now, I can imagine TPM is just thrilled with this; it just reeks of class warfare disguised as “fairness.” We’ve got “reasonable levels” (Defined by whom? Oh, wait…) and the ever popular “loophole,” with its scent of someone getting away with something, cheating the rest of us.

What the administration is talking about, I believe, are self-directed IRAs  and other retirement vehicles that allow you to invest your money where you see fit (1). When you sell the stock and withdraw the funds, under the rules you’re taxed at a much lower rate. It’s a great vehicle for wealth creation and the encouragement of saving for retirement.

And that’s what they can’t stand. The rules as written prevent them from taxing this sheltered wealth to fund their bloated spending, so they’re going to change the rules. Oh sure, they say this is aimed the the “Romneys” of the world, those rich people who have sheltered more the $3 million, but how long do you think that barrier will last? About as long as it takes them to realize they need more.

Rocco always wants more.

This idea to tax sheltered money isn’t new; FDR, to whom Obama acolytes compare him, has his own undistributed profits tax, to punish businesses that were holding on to cash. (Look out, Apple!) That scheme blew up in Roosevelt’s face as business investment collapsed and the nation entered a new recession in 1937-38. You can bet a move like this would have its own unintended consequences, which the social engineers at Team Unicorn would blame on anyone but their own ham-handed, grasping, greedy policies.

This is progressivism showing its face as Leviathan. Forget that it was your skill and acumen and good habits that accumulated that wealth (and, through investing it, helped others by creating jobs, &c.); forget that this is, in the end, your money, yours to dispose of as you see fit, beyond that portion needed to fund the basic functions of government.

Forget all that.

The administrative state beloved by progressives knows what’s best. It has its plans and goals for us all, because it has divined the national will. Thus all the resources of the nation are at its disposal to meet those goals.

Including your retirement accounts.

This budget is dead on arrival, thank Heaven, but don’t think this scheme is going away. Oh, no. Once broached, it’s out there, waiting.

PS: I wonder if this is where Obama got the idea?

(1) You know: your money, your property, your liberty.

(Crossposted at Public Secrets)

This is why California can’t have nice things: taxing email


**Posted by Phineas



Not yet, but a Berkeley (natch) city councilor thinks it’s a grand idea:

Gordon Wozniak, a Berkeley city councilman, proposed taxing email messages during a recent city council meeting in an effort to reduce the spread of “spam,” or unwanted emails.

Wozniak also said an email tax could raise money to keep the U.S. Postal Service functioning.

“There should be something like a bit tax … [it] could be a cent per gigabit and they would make, probably, billions of dollars a year,” he said.

First question for Mr. Wozniak: are you taxing the senders or the recipients? If the former, how do you plan to get Nigerian scammers and Chinese porn spammers to comply? If the latter, then how…. Wait, I know: “It’s for the good of the community.”

Can you imagine how fast businesses would leave California if email messages (or data transfer) were to be taxed? Hint: hard to believe, but even faster than they are, now. And what about people who rely on email for their small or micro-businesses, or their hobbies? The Internet has been a fabulous engine for wealth creation, so naturally progressive Luddites want to kill it through taxation.

And what is it with the leftist obsession with preserving dying institutions? The Postal Service is collapsing, in large part due to the efficiency and convenience of email. It can’t compete, so let it go and let other, better services take its place. Just like their obsession with railroads, “progressives” boldly look to the past, when the future is staring them in the face. And because the future frightens them, their reaction is to tax it to prevent it.

Meanwhile, a suggestion to Councilman Wozniak: If spam email so annoys you, stop whining and get a service or software with a good spam filter.

And keep your grasping paws off my wallet.

(Crossposted at Public Secrets)

Bad news for Dems: On the economy, Obama’s advantage over GOP is gone


So reports Micah Cohen at the NYT’s 538 blog (hat tip):

During the debate over the so-called fiscal cliff in December, public opinion surveys showed more Americans trusted President Obama than trusted Republicans in Congress when it came to handling the nation’s economy. The New Year’s Day deal to avoid going over the cliff, which included higher marginal tax rates on high earners — something Mr. Obama had campaigned on and lobbied for — was largely seen as a victory for the president.

But with more budget battles approaching, over raising the nation’s borrowing limit and perhaps reaching a grand bargain, Mr. Obama’s advantage over Congressional Republicans has all but vanished. Public approval of his handling of the economy has slipped, according to polls, and surveys now show that a roughly equal number of Americans favor Mr. Obama as favor Congressional Republicans on economic matters.

In December 2012 and January 2013, polls found that roughly half of Americans had more faith in Mr. Obama’s economic stewardship, while just over a third of respondents said they had more faith in the economic stewardship of Congressional Republicans. Since December, however, Mr. Obama’s standing has declined by roughly 10 percentage points, while Republicans in Congress have gained 4 or 5 percentage points.

Other pollsters, asking slightly different questions, have also found that the White House and Congressional Republicans are now on more equal fiscal footing. A Fox News poll conducted this week found when “it comes to handling the budget deficit,” 44 percent of registered voters agreed more with Mr. Obama, while 41 percent agreed more with Republicans.

CNN poll conducted March 15 to 17 found that respondents were split in whom they preferred on handling of “the federal budget and the way the government raises and spends money,” 47 percent for Mr. Obama and 46 percent for Republicans.

The CNN poll had another worrying number for Mr. Obama. The last time a government shutdown was in the news, in September 2011, CNN found that 47 percent of respondents thought Republicans in Congress would be more responsible for a shutdown if it occurred. Just one-third of respondents said Mr. Obama would be to blame.

But CNN asked the question again in its mid-March survey and found that Mr. Obama’s advantage was gone; 40 percent of respondents said they would blame Congressional Republicans for a government shutdown and 38 percent said they would blame Mr. Obama. (Threat of a near-term government shutdown was averted after the House of Representatives passed a stopgap bill financing the government through the end of the fiscal year.)

By way of extension, if Obama has fallen to those low “Republican levels” of support in polls about the economy, Congressional Democrats are in no better shape.  Senate Democrats just (barely) passed their first budget in four years – with a trillion dollars in tax hikes.   And if people believe those tax hikes are only for “the rich”, they are sadly mistaken.

I love it.  The phony “advantage” Democrats once enjoyed with the public over the GOP on the issue of the economy – which helped propel Obama back into the WH and led to party gains in the House and Senate –  is a thing of the past, just in time for the budget battle between the Dems and Republicans heats up.   Game on.

Senate Democrats rush to repeal tax they rushed to pass without reading, first


**Posted by Phineas

Remember how the Democrats pushed and pushed to ram through Obamacare as fast as they could, despite huge public opposition? So fast, most didn’t even bother to read the bill before voting on it? So fast, the Senate had to use “Rube Goldberg” procedures to pass it? So fast, Nancy Pelosi said they’d have to pass the bill to find out what’s in it?

Those were the days, my friends.

But, now that they’ve found out about at least one part, the idiotic “medical devices tax,” Democrats, especially those from states where the medical device industry is important, are joining with Republicans to repeal it:

The Senate gave sweeping bipartisan approval Thursday to a proposal by Orrin Hatch, R-Utah, and Amy Klobuchar, D-Minn., to put senators on record in favor of repealing a tax on medical devices – a key part of President Obama’s controversial health care law.

The Hatch-Klobuchar amendment to the GOP budget plan is the latest effort to roll back the tax that applies to a range of medical products, from surgical tools to heart devices. It’s among several taxes in Obama’s 2010 health care overhaul.

The amendment passed the Senate by a vote of 79 to 20. The bill that it was attached to did not pass, but the sponsors used it as an opportunity to rally support for repealing the tax — as well as a separate bill they’ve introduced to achieve that. 

“Today, bipartisan members of the Senate spoke loudly and clearly that this tax on medical devices simply must go.  It is a drain on innovation, on job creation and on our ability to provide ground breaking medical technologies to patients,” Hatch said in a statement.

The Affordable Care Act levies a 2.3 percent tax on medical devices with the goal of raising nearly $30 billion over the next decade.

The Obama administration, naturally, is opposed to repeal of the tax, because the money it is expected to raise is crucial to Obamacare’s funding. But Democratic senators from vulnerable seats don’t want to have to explain to angry voters why their pacemakers and prosthetics cost more, or why the pace of innovation will slow, as the profits that would have been plowed back into R&D instead goes to the Treasury.

Expect this to happen more and more as the full weight of the PPACA kicks in. An already impossibly unwieldy law will become increasingly unstable as people demand unpopular taxes be repealed or find ways to avoid them, until the whole structure just collapses.

Of course, some would argue (and I would agree) that this collapse is an acceptable outcome to democratic socialists like Obama and Illinois Rep. Jan Schakowski, who think and hope that the turmoil caused will lead people to demand what the Left really wants: state-run single-payer health care.

Our job is to remind people every day that Obamacare is itself the problem, that the only solution to rising medical costs is a program of patient-centered, market-based reforms that remove the price distortions caused by government intervention and respects the liberty of the individual. If someone says that “Too late, Obamacare is set in stone, we can only tinker with it,” just give them a one-word answer: “Prohibition.”

Meanwhile, we can enjoy the spectacle of liberals like Senator Klobuchar running screaming from the monster they helped set loose.


(Crossposted at Public Secrets)

NC Five Guys franchise holder: ObamaCare costs will be passed on to consumers


Gee, what a surprise. Not. Via the Washington Examiner’s Paul Bedard
(bolded emphasis added by me):

The fight over Obamacare, so far held at the 30,000-foot level, is about to hit home. The latest impact hot off the grill: prices of burgers and hot dogs at Five Guys, the national chain that started in Washington, are going to rise to cover the president’s mandated insurance coverage.

“Any added costs are going to have to be passed on,” said Mike Ruffer, a Five Guys franchise holder with eight of the popular restaurants in the Raleigh-Durham, N.C. area. He will need all the profits from at least one of his eight outlets just to cover his estimated added $60,000-a year in new Obamacare costs.

What’s more, he’s iced plans to build another three restaurants until after the administration explains the exact rules and penalties employers will face. The law’s plan to have those available March 1 has been pushed back to October.

“I’m kind of in a holding pattern,” said Ruffer, a former Marriott executive who added that many franchise owners are in a similar situation.

Ruffer was the star witness at a Monday Heritage Foundation seminar on the impact Obamacare will have on small businesses. He is typical of many: Because he has enough full time employees to activate the law, he faces either coughing up the money to provide health insurance or paying a fine of up to $3,000 per worker.

Ruffer initially thought he would escape the law because he created each restaurant as its own company. But the law doesn’t recognize that distinction, so now he’s trying to determine if he can fire enough workers, or cut enough hours, to slide out of the grasp of Obamacare.

Neither of which he indicates he really wants to do, as the article made clear.

As I’ve pointed out here before on several occasions, he is far from the only franchise holder having to decide how much this will impact consumers, his bottom line, and the fate of his employees as a direct result of the implementation of the bloated monstrosity known as ObamaCare. He won’t be the last, either.

Ask a staunch proponent of ObamaCare how they feel about this disturbing trend amongst business owners both small and large to face the possibility of having to cut back hours, cut back on employees, and/or pass the costs of ObamaCare onto consumers, and they’ll snidely tell you that the owners can “afford to do with less money and should put more emphasis on keeping people employed than on the profitability of their business(es).” Ignorance of how to run a successful company is bliss, I guess – for pro-socialism leftists, anyway.

Don’t be surprised if you find out far left “activists” are calling for a boycott of the particular Five Guys establishments in question. Because in their warped minds, boycotting a restaurant to make sure they have less business and less customers for the existing employees to take care of is a sure fire way to reverse staggering negative unemployment trends and get employers to change their minds. Or something …

Phineas Butts In: Coincidentally, I read a short piece last night by Slate’s Matt Yglesias on Mr. Ruffer and his restaurants that essentially called BS on his need to pass on costs:

The only situation in which it would make sense for Ruffer to raise prices is if price increases will on net lead to higher revenue. And if price increases will lead to higher revenue (which they might) then it makes sense for Ruffer to raise prices no matter what happens with Obamacare.

Either from economic illiteracy or mendacity, Yglesias confuses gross revenues with net income. Sure, raising prices will raise revenues, up to the point at which customers decide it’s too much to pay. But, if operating costs go higher (thanks to ObamaCare, in this case), then net income (roughly, revenue minus operating costs) will either stay about even or go down, if he follows Yglesias-nomics and keeps raising prices. And it’s that net income that Ruffer needs to make his business worth running, in the first place, and to expand it and –think about it, Matt– hire more people.

Be sure to read it all for a textbook example of the Left’s fantasy economics, and check out my Elections Have Consequences category for other examples of businesses dealing with reality, instead.

Meanwhile, Matt Yglesias should put down his copy of The Nation and pick up a good book on microeconomics.

Pelosi really does believe that all the money is hers


**Posted by Phineas

All the money! Give it to me! MINE!!!

All the money! Give it to me! MINE!!!

Well, the government’s, but you just know that, deep down inside, she sees herself as synonymous with the government — l’Etat c’est Nancy!

Bryan Preston noted this interesting bit of progressive logic while the Minority Leader was talking about reducing government spending:

“Tax cuts are spending.”

“Our whole budget is what $3.5 trillion,” Pelosi said at a Capitol Hill press conference. “So, when we talk about reducing spending, we certainly must, and we certainly have–$1.6 trillion in the previous Congress, $1.2 of it in the Budget Control Act.

“But spending is also related to tax cuts,” said Pelosi. Tax cuts are spending. Tax expenditures, they are called. Subsidies for big oil, subsidies to send jobs overseas, breaks to send jobs overseas, breaks for corporate jets. They are called tax expenditures. Spending money on tax breaks.

“And that’s the spending that we must curtail as well,” she said.

Preston is right: the only way this logic works, the only way a tax cut can be intellectually considered a government expenditure, is if all money is the government’s in the first place. Then it would make sense: by lowering tax rates, the government spends money it otherwise would have had, by letting the people keep more. It is also the government’s right —superior to that of the people— to decide how the money is expended, because it’s their property, anyway.

And it’s an idea utterly alien to everything this nation was founded on.

As I wrote a couple of months ago, when Pelosi said something similar:

But, cynical me, I suspect that is not what Nancy wants. No, what she wants, like Rocco in “Key Largo,” is more.  More revenue, more of our money. There’s never enough. And she wants the power that comes with having more money to redistribute, to turn citizens into dependent clients of the State and the Democratic Party. She and her progressive brethren will take the money and then control who gets how much — and if they want to keep getting it, they’ll vote the right way.

The power to distribute money is the power to control.

That’s what’s at the heart of the repeated bleatings from progressives about “more revenue.” Forget “fairness,” at least as it’s understood in the real world.

(Crossposted at Public Secrets)

Federal Reserve: Fears over ObamaCare are causing employers to lay off workers



The Federal Reserve on Wednesday released an edition of its so-called “beige book,” that said the 2010 healthcare law is being cited as a reason for layoffs and a slowdown in hiring.

“Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” said the March 6 beige book, which examines economic conditions across various Federal Reserve districts across the country.

That line was found in a section of the Fed’s report on employment, wages and prices. That same section also said the Atlanta district noted that healthcare regulations are so burdensome there is a shortage of compliance specialists.

“Atlanta noted a lack of compliance specialists due to heavier regulations in the healthcare industry,” it said.

In a later section focusing on the Philadelphia district, the beige book said that “Health insurance costs are mixed, ranging from very high increases to no change.” The Cleveland district reported that “rising health insurance premiums remain a challenge” in the manufacturing industry, and that many in the energy sector cited “rising health insurance premiums as a concern.”

They told me if I voted for Mitt Romney, America would see more layoffs, an unemployment rate that would not improve, and a complete and total disregard for the concerns and plight of the working man by the administration in charge. And they were right.

Via Memeorandum

Obama visits Asheville, NC manufacturing plant, renews call for federal minimum wage hike


Does this guy EVER learn? Yes, that was a rhetorical question. Via WRAL:

ASHEVILLE, N.C. — President Barack Obama pushed for a higher minimum wage at a re-opened manufacturing plant in Asheville Wednesday because he says Americans who work full-time should not be in poverty.

The president followed up his call for the increase from $7.25 to $9 an hour in Tuesday night’s State of the Union address with a trip to reach voters outside Washington on the plan.

In 2011, Canadian-based Linamar Corp. announced that its fourth U.S. manufacturing facility would be at the site of a shuttered Volvo Construction Equipment plant in Asheville that closed in 2010 and laid off 220 workers.

Since then, the company has hired 160 workers and will hire 40 more by the end of the year. It’s expected to expand the operation further to 650 jobs and boost the total capital investment from $75 million to $200 million.

“There’s a good story to tell here,” Obama said, touted it as an example of America attracting jobs from overseas. “A few years ago, a manufacturing comeback in Asheville may not have seemed real likely. Volvo had just left town. This plant had just gone dark, 228 jobs had vanished, and it was a big blow for this area.”

The key to reviving America’s economy, he said, is to bring more jobs to the United States, give Americans the skills they need to perform them and provide those workers with a decent living.

“There’s no magic bullet here, it’s just some common sense stuff. People still have to work hard,” Obama said, arguing that just a few structural changes could have an outsize impact. He said he needs Congress to help pass his initiatives.

“It’s not a Democratic thing or a Republican thing,” he said. “Our job as Americans is to restore that basic bargain that says if you work hard, if you meet your responsibilities, you can get ahead.”

“If you work full time, you shouldn’t be in poverty,” Obama said to applause.

But if this dunce forces employers to raise the minimum wage by nearly $2 an hour, employees – many of who are just feeling fortunate to have a job at all right now in this anemic “wreckovering” economy – will be lucky to even be working PART time, let alone FULL time, and poverty will indeed be on the horizon.  The hike in the hourly wage will be partly to blame, and rising health care coverage costs as a result of ObamaCare will be even more of a factor.  In fact, hours and jobs are already being cut by employers who can’t afford to keep their employees full time while offering health insurance, too.  Even worse is how this impacts future employment:  a recent poll indicated a large number of employers who, in effect, predicted hiring freezes due to ObamaCare and fears of over-regulation by the feds.  This ain’t rocket science, folks, but sadly our Ivy League leftist Prez just does not get it.

Or … maybe he does? *she said, in a sinister voice*

And BTW, would you say a  prayer for the employees of the Asheville Linamar plant, please?  The Obama kiss of death has already hurt too many businesses in my fair state.  I’d hate to see it strike another.

Related: Photos of Obama in Asheville today – via the Charlotte Observer.

Baltimore facing “financial ruin” from high taxes, escalating spending, population exodus


Via the Associated Press:

WASHINGTON – The Baltimore city government is on a path to financial ruin and must enact major reforms to stave off bankruptcy, according to a 10-year forecast the city commissioned from an outside firm.

The forecast, obtained by The Associated Press ahead of its release to the public and the City Council on Wednesday, shows that the city will accumulate $745 million in budget deficits over the next decade because of a widening gap between projected revenues and expenditures.

If the city’s infrastructure needs and its liability for retiree health care benefits are included, the total shortfall reaches $2 billion over 10 years, the report found. Baltimore’s annual operating budget is $2.2 billion.


The forecast will provide the basis for financial reforms that Mayor Stephanie Rawlings-Blake plans to propose next week. The city has dealt with budget deficits for the past several years, closing a $121 million gap in 2010. But those deficits have been addressed with one-time fixes that haven’t addressed the long-term structural imbalance.


In Baltimore, the erosion of the tax base is easy to see. The city’s population has dropped from a peak of 950,000 in 1950 to 619,000 today, and while the decline has slowed, there have been few signs of the trend reversing. The median income is $40,000, and 22 percent of the city’s residents live in poverty, according to Census data. The city also has 16,000 vacant properties.

Baltimore already has the highest property taxes in Maryland — twice as high as in neighboring Baltimore County. The city’s local income taxes are the highest allowed under state law. While the city enacted some new taxes to deal with the 2010 deficit — including taxes on bottled beverages and higher hotel and parking levies — city officials say they can’t tax their way out of the problem without driving away residents and businesses.

Ya think?

Let me guess – Baltimore is primarily a liberal city run by Democrats, right?

What then-Senator Obama thought about raising the debt ceiling in 2006 – vs. now


Via a January 3, 2011 National Review Online post by Katrina Trinko:

Here are Obama’s thoughts on the debt limit in 2006, when he voted against increasing the ceiling:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

In 2007 and in 2008, when the Senate voted to increase the limit by $850 billion and $800 billion respectively, Obama did not bother to vote. (He did vote for TARP, which increased the debt limit by $700 billion.)

How he feels about it now as President:

“They will not collect a ransom in exchange for not crashing the American economy,” Obama said. “The full faith and credit of the United States of America is not a bargaining chip.”

“While I’m willing to compromise and find common ground over how to reduce our deficit, America cannot afford another debate with this Congress over how to pay the bills they’ve already racked up,” Obama said in the East Room of the White House. “To even entertain the idea of this happening, of America not paying its bills, is irresponsible. It’s absurd.”

Obama made clear he’s tired of the frequent negotiations over major fiscal issues and said he wants a longer-term agreement. “We’ve got to break the habit of negotiating through crisis over and over again,” he said. “I am not going to have a monthly or every-three-months conversation about whether or not we pay our bills.”

Can you count the lies told there? Especially in the second paragraph. “Compromise” and “find common ground over how to reduce our deficit”? That’s got to be a candidate for whopper of the year, and we’re not even out of January yet.

And I’m not sure what his big deal against negotiations is when it comes to raising the debt ceiling. Negotiations over matters like this are fairly routine.

Just kidding – I know darned well why he’s so against negotiations (read: debate) with the political opposition.  Most dictatorial-like world leaders are.