Sunday, December 30, 2012

Obama’s Deadly Plan for the Death Tax

In some ways, it would be fun to be a leftist.

No, I’m not talking about living a life of idleness and letting others pay my bills, though I suppose that’s tempting to some people.

And I’m not talking about becoming a Washington insider and using corrupt connections to obtain unearned wealth, though I confess I’m actually friends with some of those people.

Instead, I’m talking about what it must be like to engage in reckless demagoguery and personal smears.

Remember during the presidential campaign when Mitt Romney was – for all intents and purposes – accused of causing a woman’s death because of his actions at Bain Capital?

The pro-Obama Super-PAC that produced that ad relied on indirect connections and overlooked some very salient facts that completely disproved even the indirect connections.

But even though the ad was exposed as maliciously false, the folks who put it together probably laughed all the way to the bank.

With this in mind, maybe it’s time to publicly ask why President Obama wants to kill old people.

“Time for your death panel appointment”
This isn’t a blog post about Obamacare, though there certainly are enough horror stories from the United Kingdom to make us fearful of government-run healthcare.

I’m referring instead to what might happen because of Obama’s proposal for a much more onerous death tax, which is part of his class-warfare agenda and would take effect in just a couple of days.

It seems that there’s good evidence this may lead to some premature deaths. CNBC reports.

Many families are faced with a stark proposition. If the life of an elderly wealthy family member extends into 2013, the tax bills will be substantially higher. An estate that could bequest $3 million this year will leave just $1.9 million after taxes next year. Shifting a death from January to December could produce $1.1 million in tax savings. It may seem incredible to contemplate pulling the plug on grandma to save tax dollars. While we know that investors will sell stocks to avoid rising capital gains taxes, accelerating the death of a loved one seems at least a bit morbid—perhaps even evil. Will people really make life and death decisions based on taxes? Do we don our green eye shades when it comes to something this serious? There is good evidence that there is some “elasticity” in the timing of important decisions about life and death.

And what does that mean? Well, according to some of the academic research, the President is going to have proverbial blood on his hands.

Gans and Leigh looked into another natural experiment. In 1979, Australia abolished its federal inheritance taxes. Official records show that approximately 50 deaths were shifted from the week before the abolition to the week after. “Although we cannot rule out the possibility that our results are driven by misreporting, our results imply that over the very short run, the death rate may be highly elastic with respect to the inheritance tax rate,” Gans and Leigh write. This isn’t just something peculiar to Australia. Economists Wojciech Kopczuk of Columbia University and Joel Slemrod of the University of Michigan studied how mortality rates in the United States were changed by falling or rising estate taxes. They note that while the evidence of “death elasticity” is “not overwhelming,” every $10,000 in available tax savings increases the chance of dying in the low-tax period by 1.6 percent. This is true both when taxes are falling, so that people are surviving longer to achieve the tax savings, and when they are rising, so that people are dying earlier, according to Kopczuk and Slemrod. “Death elasticity” does not necessarily mean that greedy relatives are pulling the plug on the dying or forcing the sickly to extend their lives into a lower taxed period. According to a 2008 paper from University of Pittsburgh Medical Center Doctor G. Stuart Mendenhall, while tax increases give potential heirs large economic incentives to limit care that would prolong life, distressed patients may “voluntarily trade prolongation of their life past the end [a low tax period] for large ?nancial implications for their kin.

I’ve previously cited the research from Australia, and also wrote a post about incentives to die in 2010, when the death tax temporarily was abolished, so this research makes sense.

What’s the bottom line?

…based on past reactions to changes in taxes, it at least seems likely that some deaths that might otherwise have occurred shortly after January 1 will occur shortly before. Death may slip in ahead of the tax man for some with estates worth over $1 million.

In the grand scheme of things, I have a hard time feeling anguish about some elderly rich guy dying today rather than one week from now. But there is real data to suggest that Obama’s policies will cause premature deaths.

And these premature deaths will only occur because the President is greedy for more revenue from a tax that shouldn’t even exist. Indeed, it’s worth noting that every pro-growth tax reform plan – such as the flat tax or national sales tax – eliminates this pernicious form of double taxation.

Since I’m an economist, I can’t resist a final comment about this tax having a terrible impact on capital formation. This is bad for workers, since it translates into lower wages.

And it’s definitely not good for U.S. competitiveness.

P.S. Whatever you do, don’t die in New Jersey.

P.P.S. It’s a morbid topic, but there is such a thing as death tax humor.

On Obamacare (and Guns), We Won't Comply

Americans know instinctively that when liberals start talking about deficit reduction that’s it’s just a case of the fantods, as Huckleberry Finn would say. And say what you will about old Huck, but he knew a couple of frauds when he saw them.    

No matter what liberal “Wonks” like Ezra Klein say about the historically dumb healthcare “reform” known as Obamcare, Americans are uneasy about it.

And they should be.

More and more law-abiding Americans say that they have constitutional objections to the healthcare and liberty land grab by the Obama administration.

Coming next? It could be guns!

Despite Sotomayor Ruling, Hobby Lobby Won’t Comply With Abortifacient Mandate, says the National Catholic Register.

The Becket Fund for Religious Liberty, which is representing Hobby Lobby as well as a number of other organizations and groups that have filed lawsuits against the mandate, said in a statement posted on its website following Sotomayor’s decision that the company would not provide abortifacient drugs in its health-insurance plan.

And the trend could grow, from healthcare to guns. And then, Houston, we have a problem.

The best thing- as Democrat strategist James Carville admitted last year- that could have happened for the Democrats is for the Supreme Court to have tossed out the landmark legislation that bears Obama's name.

But that didn't happen, so now the Democrats are stuck trying to make another bad law work.

Obamacare supporters like Ezra Klein, instead of trying to fix the problem continue to play dirty pool when it comes to healthcare reform.  They now count it as a deficit fighter, when in fact, it’s no such thing.

Unless of course you count any bill with a tax increase in it as a deficit fighter. A defense contract could be a deficit fighter too, if a defense contract was designed just like Obamacare.

Here let me show you the sleight of hand that liberals did to claim Obamacare fights the deficit.  

Say, for example, that when we decommission the old Nimitz-class carriers we then replace them with the newer Gerald Ford class of carriers at $15 billion a clip. Let’s say, in this example, that we then raise taxes 3.8 percent on people who go over a certain income limit, to an extent that we not only pay for each carrier but we also create a surplus of $100 billion that we can apply to the deficit- just as they did in Obamcare. 

Actually in the case of the aircraft carriers, the exact same tax increase that the used for Obamacare would pay for the carriers and leave a surplus of $180 billion over the same period, almost twice what Obamacare claims. 

Then we could pass both the replacement aircraft carrier budget authorization and the tax increase in one bundle- just as they did with Obamacare- and call it the The American Affordable Defense Act (AADA).   

Then any time someone threatens to scrap the Ford class carriers we could cry out “But getting rid of the AADA would add to the deficit!”

While the typical American doesn’t necessarily know the ins and outs of Obamacare, the same confidence game has been played on them so may times that they are wise to it.  

Counting on public stupidity to see a massive new spending program, like Obamacare, as some sort of deficit fighter, because THEY SAY IT IS, just shows you how weak the original case for Obamacare was in the first place.

And only in Washington can you start off entitlement reform that’s supposed to reduce spending, by ushering in a massive new government program that will greatly grow government spending. And then pat yourself on the back for it.  

Wasn’t it the same type of entitlement Ponzi scheme that gave us the problem in the first place?

Wonks and politicians may not see it, but those guys are in the process of self term-limiting out of business anyway- either by votes or by pageviews. 2010 was just a preview, not a conclusion even accepting the standstill in the 2012 election.

Readers know that I hate to pick on the Washington Post this way, but I don’t know anyone who would willingly call themselves a wonk in the first place. The Post’s Wonk brand is stuck in the Way-Back Machine of the 1990s.

The Wonk Disneyland, known as DC, is exactly what gets us these kinds of political and mathematical ruses that pass for solutions these day. The only choice we will have soon is to stop complying with federal mandates like Obamacare.

Because Americans continue to favor repeal of Obamacare.

The Supreme Court decision calling Obamacare a tax will likely reinforce the opinion that it’s a flawed piece of legislation that greatly expands government bureaucracy at a time when Americans think that government is doing too much not too little.

You can pass Obamacare as a deficit measure and call it Constitutional -and then wonk about it all you want. But Americans know the truth.

Obamacare, like the tax on tea that saw a load of it dumped into Boston Harbor in 1773, is just plain dumb.  And both also go against natural law.

I won't comply.
Tick-tock...the clock ticks down on the 'supposed' fiscal cliff
By: Diane Sori

As the dreaded imaginary fiscal cliff draws near (you know, the one that is just a stalling tactic to get more time to drain our pockets to pay down the IOUs owed to foreign countries), what happens if we do go over this shoved in our faces non-existent cliff...simply NOTHING unexpected will happen, as we know the dog and pony show going on in DC is just so Obama can jockey for time to get what he wants...and the Republicans and 'We the People' be damned.

The sun will still rise and our economy will go on albeit with Obama's $560 BILLION tax increases and government spending cuts in place.  And even though he knows this will cause the unemployment rate to rise to 9.1% by year's end, which in turn will slow down the already weakened US economy by causing a drop of 0.5% in the real gross domestic product, he doesn't care even though these are numbers even he won't be able to hide.

Oh wait, he will...the msm will help him do it.

And add into that the fact that the expiration of the payroll tax cuts will happen, the expiration of Bush's tax cuts for the highest-income households will happen, and the start of the new Medicare surtax on high income earners will also go into effect...but all that matters to Obama is that he got his way.

So how will all this affect us...breaking the tax increases down into simple numbers means that Americans in the lowest 20% of the income scale would pay an average of about $400 more in taxes per year....middle-income households would pay about $2,000 more in taxes per year...the top 20% of taxpayers would pay about $14,000 more a year in taxes per year...and the Obama hated 1%ers would pay an average of $120,000 more in taxes per year, which would make it financially hard for them to create new businesses and jobs which would have helped put Americans back to work.

But that's what Obama wants so more will have to become dependent on the government for their survival...and more will see him as the one who saved them from ruin.

And while Obama and the talking news heads keep bloviating about this supposed cliff to total disaster, remember this entire concept of a fiscal cliff was simply the creation of Obama and Congress, who couldn't agree on a yearly budget that would have helped us reduce the deficit.  So, to resolve the impasse back in August 2011, Congress decided to push the big decisions off by 17 months but now the decisions are due.

So with the January 1st deadline closing in, going over the 'supposed' cliff will fall squarely on Obama and Congress, because they couldn't get the job they were elected to do done on time.  And that will cause the Obama and Congress made up fiscal cliff to haunt us all next year or until some agreement between both parties is made hopefully sooner rather than later.

But truth be told is that Obama and Congress are both playing the scare game with the masses.  Anyone with any semblance of intelligence knows there's a stop gap measure in place allowing for a few extra weeks of haggling giving Obama time to make a deal and appear as the hero who stopped what would have been the highest tax increase in US history along with some of the deepest spending cuts to our defense and military budget (to the tune of half a TRILLION dollars over ten years).

And as long as Obama and those in Congress seem to be working towards a deal, the tax hikes and spending cuts will be held off for a few weeks and could be repealed retroactively once a deal is reached, making Obama the hero...our lord and savior (gagging on that one) exulted by the msm yet again.

However, there are two things that even Obama can't wiggle out of...the first is that we will once again reach our borrowing limit on December 31st, leading him to go full-force ahead in trying to get the debt ceiling raised no later than February, so that he can continue his out of control spending at 'We the People's' expense.

And the second is that the US credit rating will be downgraded yet again if the debt ceiling isn't raised, upsetting the worldwide stock markets and banking industries.

So, will a twelfth hour deal suddenly be made to save Obama's reputation as our tonight or tomorrow we should know but hopefully it will all blow up in his face...he built it, let him own it.