By: dpatten

Posted 1/17/13 05:44 PM

The student knows the proper way to use a footnote.

Footnotes are generally used to disclose sources or to explain an obscure fact.  They are not used to recommend massive tax policy changes.  Yet this is just what Obama does in his Fiscal Year 2010 Budget Proposal.

Slog through the budget to page 121, and see footnote 1, which states, “[T]he estate tax is maintained at its 2009 parameters.”  What does this mean?

Under current law enacted by the Bush tax relief of 2001, the death tax is scheduled to be repealed for one year in 2010.  Due to complex Senate budget reconciliation rules, the tax then comes back at the rate of 55% in 2011.  Obama’s footnote assumes that Congress will cancel the temporary repeal and make the death tax permanent at the rate of 45%.

President Bush and most of the Republicans have been fighting to make repeal permanent for the last eight years.  This change would render all those efforts asunder.

That’s a pretty significant policy proposal.  Why is Obama hiding it deep in his budget in a footnote?  Is there a reason to be so secretive?

Oh, right. Obama has probably heard that taxes which punish people for saving and investing don’t help the economy.  He may have read reports from his own chief economic advisor, Larry Summers, who has said that the death tax is bad policy.

Economists on the left and the right agree — the death tax takes a huge bite out of productive capital in the economy.  Two of President Clinton’s chief economic advisors — Joseph Stiglitz and Alicia Munnell — have written extensively about the impact of the tax on capital.

The Joint Economic Committee has calculated that the death tax reduces the stock of capital in the economy by $847 billion.  That is $847 billion that can’t be used to start new businesses, expand existing operations, and create new jobs.

Obama probably realizes that in a time of economic turmoil, confiscating nearly half the capital of productive businesses is the last thing the federal government should do, especially if he is concerned about job creation.

The American Family Business Foundation’s new study by Dr. Douglas Holtz-Eakin finds that the death tax is responsible for lowering overall employment by 1.5 million jobs.

In the case of family owned businesses and farms, the loss of any capital can have a devastating impact on the survival of the enterprise.  Family owned businesses are highly reliant on inheritances to finance the business and keep it viable.  When the death tax confiscates a substantial portion of the inheritance, it makes it difficult for the heirs to maintain the business.

Obama has probably heard the stories of family business owners who are wiped out by the death tax or who are forced to cut jobs in order to keep the business running.  In Biloxi, Miss., the Mavar family was forced to sell their multi-generational family business to a large national corporation due to looming death tax liabilities.  They hoped that the corporation would keep the business and its jobs in Biloxi, but within five years, the entire business was relocated out of state.

The Mavars’ story is just one of the many stories that describe the real human costs of the death tax.

And of course, Obama might realize that taxing those who work hard, save and invest, and leave an inheritance to their children, is simply unjust.  People who have already paid taxes on their income shouldn’t be punished for being responsible throughout their life and creating wealth and jobs for others.

68% of Americans agree that the death tax is unjust and should be repealed.  These same Americans certainly do not support permanently shackling the nation with a 45% death tax.

Clearly, Obama doesn’t want to hurt his popularity by promoting the hated death tax.  Ergo, rather than openly supporting the tax, President Obama is promoting it on the sly in his budget proposal.

All thanks to clever use of a footnote.

Of course, this is only the budget proposal, and it will not determine the future of the death tax.  Even so, it sets the tone for the administration’s policy goals and their tactical mindset.

Clearly, if Obama can’t be upfront about the tax plans in his budget proposal, he knows that he faces strong opposition.

Let’s see how long he can keep his secret.

http://www.humanevents.com/2009/03/12/obama-hides-death-tax-proposal-in-a-footnote/

Obamacare is All About Death and Taxes

By Alan Caruba

Posted: January 17th, 2013

Prior to the November elections, I received an email that was chilling. It was about the new Obamacare rules. Before I discuss the Obamacare taxes that are kicking in this year and next, I want to share excerpts from it.

The email was from an individual whose son-in-law has a brother who is a surgeon at Emory Hospital in Atlanta. It is ranked high among American hospitals. This is what he related:

“A group of non-doctors, from ‘our’ country’s Department of Health arrived last week at Emory for a two day session and is on their rounds around the country to make sure every hospital fully understands the new rules (which start in December (after the elections) concerning treating all patients over 70 years of age.”

“This group informed the staff Emory and all the doctors present that they will very soon not be allowed to operate on anyone over 70 (no matter how urgent or life threatening the situation is), without first having it approved by a board of eight doctors. Failure to comply will result in a huge financial burden to the hospital and more than likely the doctor will lose his/her ability to practice medicine anywhere in the country.”

“This board is to be established at every hospital in the country and the board members will only work eight hours a day…the DOH group almost got lynched at this point by the doctors who were present. The point that got the Emory doctors so upset originally was that the “Death Board” will be available only 8 hours during the day. And once their 8 hour shift is up, they may have to wait 16 hours to get in touch with them and another hour or two or three to get a decision and permission to operate.”

This is, however, anecdotal. Despite efforts to confirm whether this is a new, official policy, no confirmation could be found and, it should be noted that there have been numerous efforts to debunk what former Alaska Governor Sarah Palin dubbed “death panels.”

Officially called the Affordable Care Act (ACA), Obamacare will surely migrate into a bureaucratic death sentence for an American healthcare system once deemed the best in the world.

In the course of the “fiscal cliff” negotiations Congress actually repealed a section of the ACA, the Community Living Assistance Services and Supports affecting people who need long-term care. It is likely that as the 2,000-plus pages of ACA are examined in greater detail by Congress, further dismantling will occur. It needs to be entirely repealed, something the House voted for, but which was deep-sixed in the Democrat-controlled Senate, and Obama would surely veto any effort to do so.

Obamacare’s taxes have arrived and they include another investment tax increase for taxpayers with taxable income exceeding $250,000 ($200,000 for singles). There is also another payroll tax increase of 0.9 percent in the hospital insurance portion of the payroll tax. There is a new tax on medical devices of 2.3 percent affecting manufacturers and importers on all their sales. This increase will be passed along to consumers.

There is a reduction in the income tax deduction for individual’s medical expenses and the elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy and a limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.

These ACA tax increases are in addition to a variety of other deductions that taxpayers have previously been allowed to take; in addition to a death tax increase there was the elimination of full expensing of capital purchases.

The news about Obamacare just keeps getting worse. Actuaries at the management consulting firm Oliver Wyman are predicting that the law’s age rating restrictions could mean a 42 percent hike in premium costs for people aged 21 to 29 when buying individual coverage.

After the Supreme Court ruled that ACA is a tax, the Congressional Budget Office did an update of its scoring of the law and concluded that Obamacare will spend $1.7 trillion over ten years on its coverage expansion provisions alone, including a massive expansion of Medicaid and federal subsidies for the new health insurance exchanges. This translates to federal health spending by 15 percent.

Infants, the young, middle aged and older, all will find their costs for medical care increase or even be denied. There is nothing “affordable” about Obamacare. It is a draconian threat to every American.

http://www.ruthfullyyours.com/2013/01/17/obamacare-is-all-about-death-and-taxes-by-alan-caruba/