Thursday, September 26, 2013

Obamacare’s ‘Cool Calculator,’: The ‘Wedding Tax’

Better off divorced and shacking up.

In a September 13 email, Erin Hannigan of Organizing for Action’s “Truth Team” bragged about a “cool calculator from the nonpartisan Kaiser Family Foundation” showing how Obamacare’s “tax credits” work, and encouraged everyone to “share it on Facebook or Twitter.”


Obamacare’s opponents, especially those who advocate defunding it before it goes live, need to follow Hannigan’s suggestion, and evenembed it on their websites and blogs. That’s because what Kaiser’s “cool calculator” really does is expose the statist health care regime’s three ugliest financial elements.
I covered two of them in my previous PJM column. The first is that, when combined with Uncle Sam’s current income and payroll tax regimes, the gradual expiration as income increases of Obamacare’s “tax credits” — which Kaiser’s model schizophrenically describes as “government tax credit subsidies” — will raise the portion of income taken by the government for each additional dollar of earnings to between one-third and one-half, effectively taxing most American workers at marginal rates usually limited to the planet’s highest income earners. The second is that its subsidy “cliffs” will cause middle-aged single people and married couples making as little as $45,960 and $62,040, respectively, to lose over $10,000 in subsidies — or “tax credits,” in the preferred language of OFA and the U.S. Supreme Court’s — when they earn just one additional dollar. These bugs, which jubilant “progressives” as seen above apparently believe are features, will crush incentives to work and to otherwise pursue financial self-improvement.
The third tragic outcome of Obamacare is what it will do to marriages and families. In January 2010, two months before Obamacare’s passage, the estimable Robert Rector at the Heritage Foundation gave the impact a name: the “wedding tax.”
To illustrate, let’s start with the 60-year-old married couple with no children whose situation I illustrated at the end of Part 1:
MarriedNoKidsAge60OcareGraph0913
If they have identical earnings totaling $65,000, which will usually net down to $50,000 or below after all income and payroll taxes, their Obamacare exchange Silver Plan premium next year with the same earnings will be $16,382, or about one-third of what used to be their take-home pay. (And they call it the “Affordable Care Act”?)
What can this couple do? Well, they could decide to earn a few thousand dollars less, which will negate the five-figure premium hit. Encouraging ordinarily willing workers to put in less effort isn’t good in any economy, but especially not this one. But if either spouse’s earnings are unpredictable or hard to precisely track, they could still “mess up” and get socked with a premium they can’t afford.
The “easiest” solution would be to avoid the “wedding tax” entirely by getting divorced while still living together. Here’s what would happen if they make that choice:
MarriedVsCohabit60yoOcare0913
Instead of facing an exorbitant premium increase once their combined earnings hits $62,041 if they were to stay married, each cohabiting adult can earn up to $45,960 before Obamacare’s “tax credit”-free premiums kick in. Their annual after-tax savings at age 60 if they shack up and keep their individual earnings between $31,021 and $45,960 will range from $7,650 to over $11,000. The annual savings will slightly increase every year until Medicare kicks in at age 65. That kind of money can buy a lot of gifts for the grandkids.
But the grandkids will also face the prospect of seeing their moms and dads divorce because of Obamacare.
Let’s look at the situation of a 40-year-old couple with two children. The spouses’ annual earnings are $70,000 and $23,000, respectively:
MarriedCouple93kDivorce2KidsOcare0913
The couple’s annual unsubsidized premium while married is $11,547 (OFA’s vaunted “tax credits” disappear at $92,401 for married couples with two children). But if they divorce and shack up while giving custody of both children to the lower-earning spouse, their combined annual premiums, at $4,317, will be over $7,200 lower. That’s over $600 a month. As was the case in the previous example, the savings from divorce will gradually increase every year. Parents will be torn between doing what Western civilization has considered morally right for millennia and their children’s financial well-being as never before.

Wednesday, September 25, 2013

Obamacare Supporters Sign Petition to Add Sterilants to Water Supply To Reduce Birthrates


“It’s part of the Georgia Guidestones population control program”
Infowars.com
Sept. 24, 2013
In the spirit of ringing in the new healthcare law, author and media analyst Mark Dice is showing how utterly indifferent and confused some American citizens are when it comes to understanding the complexities of forced sterilization.
Dice recently asked San Diego beach-goers to support a proposal by Obama’s science czar John Holdren, who wrote in his book Ecoscience about a “coercive” population control method involving adding sterilizing chemicals to the water supply.
“They wanna take away the free birth control from the college campuses,” Dice explains to one signatory that is already eagerly filling out the form.
“So what we’re gonna do is put some free sterilants in the water supply like a fluoridation, it’s a free sterilization – yeah, birthdate there please – and it’s a modern day kind of eugenics program that way everybody will get a free dose of birth control whether they like it or not.”
“It’s part of the Georgia Guidestones population control program. I appreciate your support,” he tells another signee.
In the past, Dice has managed to garner several signatures on a petition to release all illegal aliens from prisons, even if they are convicted rapists or murderers, and has also gotten signatures on petitions calling for repealing the Bill Of Rights, banning the First and Second Amendments, as well as throwing gun owners in prison, and enforcing mandatory euthanasia of elderly people.

Obama admits: “We did raise taxes on some things.”


"Some things" means uninsured families, medical devices, workplace flex accounts, small businesses, and are just a few examples on the list.
During his Tuesday remarks at the Clinton Global Initiative, President Obama admitted that his health care law raises taxes:  “So what we did — it’s paid for by a combination of things. We did raise taxes on some things.”
“Some things” is an understatement. Below is just a partial list of Obamacare’s new or higher taxes on Americans:
Starting in tax year 2013:
Obamacare Medical Device Tax:  Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year.  In addition to killing small business jobs and impacting research and development budgets, this will make everything from pacemakers to artificial hips more expensive.

Obamacare High Medical Bills Tax: Before Obamacare, Americans facing high medical expenses were allowed a deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI).  Obamacare now imposes a threshold of 10 percent of AGI.  Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income.
According to the IRS, 10 million families took advantage of this tax deduction in 2009, the latest year of available data. Almost all are middle class. The average taxpayer claiming this deduction earned just over $53,000 annually. ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 - $400 per year. To learn more about this tax, click here. 
Obamacare Flexible Spending Account Tax:  The 30 - 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) Now, a parent looking to sock away extra money to pay for braces will find themselves quickly hitting this new cap, meaning they would have to pony up some or all of the cost with after-tax dollars. 
Needless to say, this tax will especially impact middle class families.
There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  Nationwide there are several million families with special needs children and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.
Obamacare Super Saver Surtax: A new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This tax hike results in the following top tax rates on investment income:

Capital Gains
Dividends
Other*
2013+
23.8%
43.4%
43.4%
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations.  It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income.  It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. (Bill: Reconciliation Act; Page: 87-93)
Obamacare Medicare Payroll Tax Increase:

First $200,000
($250,000 Married)
Employer/Employee
All Remaining Wages
Employer/Employee
Pre-Obamacare
1.45%/1.45%
2.9% self-employed
1.45%/1.45%
2.9% self-employed
Obamacare
1.45%/1.45%
2.9% self-employed
1.45%/2.35%
3.8% self-employed
Starting in tax year 2014:
Obamacare Individual Mandate Non-Compliance Tax:  Starting in 2014, anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. The Congressional Budget Office recently estimated that six million American families will be liable for the tax, and as pointed out by the Associated Press:  “Most would be in the middle class.”
In addition, 100 percent of Americans filing a tax return (140 million filers) will be forced to submit paperwork to the IRS showing they either had “qualifying” health insurance for every month of the tax year or they obtained an exemption to the mandate.
Americans liable for the surtax will pay according to the following schedule:

1 Adult
2 Adults
3+ Adults
2014
1% AGI/$95
1% AGI/$190
1% AGI/$285
2015
2% AGI/$325
2% AGI/$650
2% AGI/$975
2016 +
2.5% AGI/$695
2.5% AGI/$1390
2.5% AGI/$2085
(Delayed by Obama to 2015) Obamacare Employer Mandate Tax:  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2,000 for all full-time employees.  This provision applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3,000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).
Obamacare Tax on Health Insurers:  Annual tax on the industry imposed relative to health insurance premiums collected that year.  The tax phases in gradually until 2018.  Fully imposed on firms with $50 million in profits.
Starting in tax year 2018:
Obamacare Tax on Union Member and Early Retiree Health Insurance Plans:  Obamacare imposes
a new 40 percent excise tax on high cost or “Cadillac” health insurance plans, effective in 2018. This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans. This Obamacare tax will be levied on insurance policies whose premiums exceed $10,200 for an individual and $27,500 for a family.  Middle class union members tend to be covered by such plans in states like Ohio, Pennsylvania, Wisconsin, and Michigan.  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. 


Read more: http://atr.org/obama-obamacare-raise-taxes-things-a7883#ixzz2fw4HvnOB
Follow us: @taxreformer on Twitter

Sunday, September 22, 2013

What happens when the Fed stops pumping? Heather Hughes Reports (VIDEO)


Stimulus now! Stimulus Forever?

The Federal Reserve decided not to cut back its monthly bond purchases, which will allow interest rates to remain low in order to artificially stimulate economic growth. SunAmerica’s Heather Hughes appeared on CNBC recently to discuss her economic forecast in light of the Fed’s decision. She believes that the Fed decision has a lot of people frustrated by not being able to find a bottom on the market. The Fed is sending mixed signals to investors, making them wait on the sidelines. Ms. Hughes believes that a lot of the losses that may come if the Fed cuts off stimulus could already be priced in, meaning the investors were prepared.
Hughes offered her opinions on the best indicators of the health of the economy during an interview on CNBC Thursday.




Heather’s Insight

Heather’s Insight

It’s a stock pickers market!

Stock correlations have dropped to 2007 levels, still relatively high speaking, but this may bode well for stock pickers into year end.  Instead of a macro-driven market, Beta =1, all stocks moving in tandem or parallel with the broad market indices.

End of year market strength?

The Baltic Dry Index- the Baltic Dry Index broke a new 2013 peak signaling global strength. The Baltic Dry is a proxy for shipping capacity on a global scale because it primarily consists of raw materials. It’s a leading economic indicator because it predicts future economic activity.  So if earnings guidance increases (revenue growth being the biggest driver) coupled with increased shipping, this may prove very healthy for the markets.

What about the Fed?

You can’t suppress rates for a prolonged period of time without having a sort of negative effect in the future. Although there is no doubt the housing market recovery would not have happened without the Fed…We may be distorting financial market and encouraging excessive risk taking.
Bio: Heather Hughes is an institutional financial sales executive as well as a lover of liberty and the free market. She is a weekly contributor to The Libertarian Republic and an expert on money and the marketplace.

- See more at: http://thelibertarianrepublic.com/fed-wont-stop-pumping-cash-us-economy-permanently-addicted-stimulus/#.Uj9mnBZoaUY