Tuesday, January 01, 2013

Federal Taxes for 2013+

Life, Liberty, and the Pursuit of Happiness

Breaking from Newsmax.com
Senate Deal Keeps Most Tax Cuts
The White House and Mitch McConnell have reached a tentative deal early New Year's Day.
The measure would raise taxes by about $600 billion over 10 years and delay for two months across-the-board spending cuts otherwise set to begin slashing the budgets of the Pentagon and numerous domestic agencies.
  • Income tax rates: Extends tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6%, up from the current 35%. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.
  • Estate tax: Estates would be taxed at a top rate of 40%, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35%.
  • Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15% to 20%.
  • Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000.
  • Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, earned income tax credit, and an up to $2,500 tax credit for college tuition.
  • Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.
  • Cuts in Medicare reimbursements to doctors: Blocks a 27% cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.
  • Social Security payroll tax cut: Allows a 2-percentage point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2%.
  • Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rules changes on converting traditional individual retirement accounts into Roth IRAs.

Tuesday, November 13, 2012

Political Correctness and National Security

Life, Liberty, & the Pursuit of Happiness

New York Times, Washington Post, Los Angles Times, etc. should be very careful about how closely they align themselves with political parties, political personalities, and political issues in their effort to be politically correct.

As politicians and bureaucrats obtain more and more centralized planning they will, as Friedrich Hayek believes, employ more and more censorship and coercion.  It will be more common place to prevent the free flow of information   It will begin in benign and insignificant ways and then more and more pressure will be applied to FREE press to comply with political correctness.

This same approach will be used to control the usage and content of the Internet.  Laws will be passed and regulations written to limit the use of the Internet with national security being the excuse for such a move.  More and more surveillance of content on the Internet will happen and it will travel down this road to total control.

Historically the press has been the fourth estate that kept the government and politicans honest.  With the decline of objectivity and honest reporting of facts our country is heading down a long and dusty road to a terrible ending with some brutal consequences.

Free press cannot remain free if it tries to be politically correct and does not question the legitimacy of national security propaganda.

Wednesday, November 07, 2012

The Future: More Confusion

Life, Liberty, and the Pursuit of Happiness

Truth:  Capital flows in the direction of the highest RETURN with the least amount of RISK

Citizens have re-elected the most divisive socialist I could have ever imagined but that is what they want (at least half of the voters).  For investors, such as myself, we have to consider the anti-business environment that this President brings to the table along with a complete agenda to transform America.

2012 Obama Re-Election Consequences for Investors to consider:

  • inflation (all business segments and asset categories) (consumer prices)
  • Cap-and-Trade will reemerge as an issue 
  • 2013 higher taxes (Obamacare) (estates) (capital gains) (personal)
  • appointment of more liberal justices looking to punish business concerns even more and re-interpreting the constitution 
  • divisiveness (House vs. Senate and President) (Republicans vs. Democrats) (Budgets)
  • redistribution of wealth issues will intensify (entitlement programs will expand)
  • private property issues will intensify (guns, etc) 
  • debt and deficits increase by unholy amounts (Democrats trying to spend their way to prosperity)
  • terrorism intensifies (lower military spending)
  • zero interest rates for investors (bonds, CD) for years to come (FEDERAL RESERVE)
  • rising health care insurance rates (Obamacare) (DHHS)
  • private hospitals will be put under extreme pressure (DHHS) to reduce costs
  • fossil fuels will be demonized and prices increase (oil & gas, coal) (EPA)
  • labor unrest will intensify as business profits are put under increasing downward pressure (NLRB)
  • multinational corporations will move more off-shore to avoid regulatory problems
  • avoiding higher taxes and regulations will become business and investor highest priority
  • Multinational Corporations will not repatriate their foreign profits back to America (IRS)

Research to understand to evaluate the following issues:
  • investments that can stay up with inflation (multinational corporations?) (FEDERAL RESERVE)
  • industries that will not be demonized and/or harmed (EXECUTIVE ORDERS) (EPA)
  • avoid higher taxes where possible (Cayman Islands?) (IRS)
  • industries where regulatory pressure will be applied (NLRB, DHHS, EPA, Dodd-Frank)
  • currency devaluation (FEDERAL RESERVE)
  • Foreign investments
  • Real Estate
  • Industries that Democrats like 

Monday, September 10, 2012

Full List of Obamacare Tax Hikes

Full List of Obamacare Tax Hikes

Obamacare law contains 20 new or higher taxes on American families and small businesses
Taxpayers are reminded that the President's healthcare law is one of the largest tax increases in American history.
Arranged by their respective effective dates, below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:
Taxes that took effect in 2010:
1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971
2. Codification of the "economic substance doctrine" (Tax hike of $4.5 billion).  This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks "substance" and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113
3. "Black liquor" tax hike (Tax hike of $23.6 billion).  This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105
4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980
5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004
6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons.Bill: PPACA; Page: 2,397-2,399
Taxes that took effect in 2011:
7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959
8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
Tax that took effect in 2012:
9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957
Taxes that take effect in 2013:
10. Surtax on Investment Income ($123 billion/Jan. 2013):  Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single).  This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93

Capital Gains
*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.  The 3.8% surtax does not apply to non-resident aliens.
11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:

First $200,000
($250,000 Married)
All Remaining Wages
Current Law
2.9% self-employed
2.9% self-employed
Obamacare Tax Hike
2.9% self-employed
3.8% self-employed
Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93
12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax.  Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
13. High Medical Bills Tax ($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI).  The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
14. Flexible Spending Account Cap – aka "Special Needs Kids Tax" ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited).  Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, 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 educationBill: PPACA; Page: 2,388-2,389
15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994
16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000
Taxes that take effect in 2014:
17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying "qualifying" health insurance must pay an income surtax according to the higher of the following

1 Adult
2 Adults
3+ Adults
1% AGI/$95
1% AGI/$190
1% AGI/$285
2% AGI/$325
2% AGI/$650
2% AGI/$975
2016 +
2.5% AGI/$695
2.5% AGI/$1390
2.5% AGI/$2085
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337
18. Employer Mandate Tax (Jan 2014):  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 $2000 for all full-time employees.  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 $3000. 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). Bill: PPACA; Page: 345-346
Combined score of individual and employer mandate tax penalty: $65 billion/10 years
19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018.  Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993
Taxes that take effect in 2018:
20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on "Cadillac" health insurance plans ($10,200 single/$27,500 family).  Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions.  CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956


Friday, August 10, 2012

Who produces the wealth of America?

Life, Liberty, & the Pursuit of Happiness

I found this opinion of one Ricky Poff to be very precise and straight to the point.  He outlines the position of who builds the wealth in this country that pays the taxes and helps people find jobs.  If it were not for the private sector's wealth, the government would not be able to coerce any taxes from citizens,  Obama is very much in favor of empowering the government at the expense of the private sector.

I am afraid that if we keep Obama in for one more term as President, government will become something of a lethal parasite devouring the wealth and energy of the private sector; which will have consequences on our national security, and economic viability throughout the 21st Century.

Sunday, August 05, 2012

GOP Alternative to ObamaScare

Life, Liberty, & the Pursuit of Happiness

Claims by Obamacare backers about lack of GOP alternative are unfounded

The Oklahoman Editorial Published: July 31, 2012    Comment on this article 45
SUPPORTERS of President Barack Obama's health care law claim conservatives offer no alternative other than a return to an untenable status quo.


In reality, Republicans have produced bold reform proposals that would allow officials to both repeal and replace Obamacare.
Oklahoma's own U.S. Sen. Tom Coburn, R-Muskogee, introduced the Patients' Choice Act in 2009 (along with U.S. Rep. Paul Ryan, R-Wis., and others.)

Coburn's plan would grant individuals the same tax advantages employers get for purchasing health insurance. That would greatly benefit Oklahoma's countless self-employed farmers, ranchers and other entrepreneurs, as well as uninsured workers.
Coburn's bill also gives every American a $2,290 tax credit (or $5,710 per family) to buy health insurance. The tax credit would cover the employee's share of a policy while the employer continues to cover the rest, as occurs currently. Any remaining tax credit money could be used for a health savings account covering routine medical expenses.

The legislation reforms Medicaid by giving low-income families an additional $5,000 on top of their tax credit. That would provide a family $10,710 to buy insurance coverage outside of Medicaid. Coburn notes that 40 percent of doctors and hospitals nationally refuse to accept Medicaid patients due to low payments. His plan would therefore improve low-income families' access to health care.
On the other hand, Obamacare doesn't address Medicaid's problems; it merely supersizes the program.
Coburn's bill calls for state insurance exchanges giving citizens access to a wide range of insurance products with guaranteed coverage regardless of age or pre-existing conditions. Unlike Obamacare, Coburn's plan isn't financed by cutting Medicare funding, and it doesn't require new spending or new taxes. One independent estimate predicted Coburn's bill could save $70 billion and provide coverage to a majority of uninsured Americans.
Ryan, budget guru of the U.S. House, has called for transforming Medicare to a premium-support payment for currently younger workers and increasing competitive bidding in the system. He also wants to convert the federal share of Medicaid spending into a block grant for states, indexed for inflation and population growth, allowing state-level reforms.
Liberals who decry repeal efforts act as though Obamacare has resolved health care problems. It hasn't. Surveys indicate many experienced doctors are considering retirement due to the law and fewer people may enter the medical profession.
Steve Jacob, adjunct faculty with the University of North Texas Health Science Center, estimates the United States will need to produce an additional 24,000 doctors annually for 20 years to meet demand under Obamacare. He notes one in four Oklahoma physicians is 60 or older, and Oklahoma has only 69 primary-care physicians for every 100,000 residents.
Health care costs are predicted to skyrocket under Obamacare. Jacob estimates the average family premium in Oklahoma will be $22,128 by 2020 under Obamacare, compared with $13,006 in 2010. Oklahoma employees' share will nearly double while deductibles will surge to $5,200 from $1,977. The average Oklahoma employee share of the premium and deductible combined would comprise about 12.5 percent of median household income.
Obamacare is clearly unsustainable. It lacks buy-in from patients and doctors; its financial impact on government finance and private incomes will be devastating.
Obamacare won't improve our health care woes. Coburn and Ryan show there are sustainable alternatives to improve patient coverage without breaking the bank.

Read more: http://newsok.com/claims-by-obamacare-backers-about-lack-of-gop-alternative-are-unfounded/article/3696764#ixzz22VrTa8nM

Fiscal Malfeasance: Democrats are Scofflaws

Life, Liberty, & the Pursuit of Happiness

Upon reading this article from TheOklahoman you should decide for yourself who should be considered misfits and possible fiscal terrorists.  Democrats have been unlawfully withholding budgets from the American people and do not seem remorseful or apologetic for this oversight.  Senator Coburn has worked hard to hold down expenditures of taxpayer money but he is alone in the forest.