Georgia’s 4th Congressional District – November 2014

Useless Idiot

– By: Larry Walker II –

President Barack Obama has endorsed Congressman Hank Johnson for re-election in the Fourth Congressional District of Georgia.

“Congressman Johnson has done an outstanding job,” said President Obama. “Together, we are fighting to restore middle class security and expand opportunity for all Americans. I’ve worked with Congressman Johnson as we’ve extended the security of health care to millions and pulled our economy back from the brink of collapse while protecting consumers and passing historic Wall Street reform. I am proud to stand with Hank and support his re-election.”

Congressman Johnson is famous for his on the record comment in March of 2010, where he reasoned that if 8,000 Marines were stationed on the Island of Guam, he feared the island could tip over and capsize due to overpopulation (see clip below).

And let’s not forget his 30 minute rant, Giants Need Midgets, in December of 2012 (see clip below). Despite these and many more idiotic comments, Johnson has not only been endorsed by Barack Obama, but he’s been re-elected 4 times, and runs virtually unopposed this year.

Unfortunately, there is no Republican candidate opposing Johnson in next month’s election. One has to wonder why. It seems that no one in the district is willing or able to oppose this moron. However there is one, and only one, alternative. Raymond L. Davis stands as the sole Certified Non-Partisan Write-In Candidate opposing Johnson this year. He may be our last hope.

Raymond L. Davis has lived in the Atlanta area for 33 years. The 50 year old is a licensed and ordained Minister at the Greater Traveler’s Rest Baptist Church, “House of Hope” in Decatur. He’s also the Founder, President/CEO of Genesis Network International, Inc., a 501c(3) non-profit organization that he has run for more than twenty years. Davis sits on many boards and is well known as an international and national advocate in the fight against HIV/AIDS.

If you’re sick and tired of President Obama’s policies, and his useless idiots like Hank Johnson, then don’t just skip over the District 4 U.S. Congressional section on this year’s ballot. It’s time to give someone else a shot. It’s time to send a clear message. This year, remember to write in Raymond L. Davis for United States House of Representatives, District 4.

Sources of Income Tax Identity Theft

Compiled by: Larry Walker II ::

In a February 2014 House Oversight Hearing, J. Russell George, Treasury Inspector General for Tax Administration, stated that, “IRS employees are entrusted with the sensitive personal and financial information of taxpayers. Using this information to perpetrate a criminal scheme for personal gain negatively impacts our Nation’s voluntary tax system and it can generate widespread distrust of the IRS. TIGTA aggressively investigates IRS employees involved in identity theft-related tax refund fraud and refers these investigations to the Department of Justice for prosecution. Many of these employees face significant prison sentences as well as the loss of their jobs if convicted.

I can think of several other situations negatively impacting our Nation’s voluntary tax system and generating widespread distrust of the IRS. Former IRS Official Lois Lerner’s use of executive privilege in targeting Barack Obama’s political opponents comes to mind, but I digress. What’s on my mind today are sources of identity theft.

I personally know several people who have been victims of income tax related identity theft. At least two have had to wait more than a year to receive legitimate refunds from the IRS. In one case over $8,000 was delayed over a two-year period. When it comes to the process of having income tax withheld at the source, perhaps it’s better to underpay. Whenever I hear about a case of tax related identity theft, the question I always ask myself is how the thieves were able to obtain the victim’s personal information. The answers I found are shocking.

The major sources of income tax identity theft appear to be healthcare providers, including doctor’s offices, nursing homes and even veterans hospitals, but even more disturbing, from within the IRS itself.

IRS Employee Orchestrated Identity Theft Refund Scheme Using Taxpayer Records (January 13, 2014)

On December 10, 2013, in the Northern District of Georgia, IRS Tax Examining Technician Missy Sledge was indicted for aggravated identity theft and mail fraud.

According to court documents, as part of her official IRS duties, Sledge had access to taxpayers’ personal identifiers, including names, Social Security Numbers (SSN), dates of birth, and addresses, and information about tax professionals. Sledge used this access in furtherance of an identity theft scheme which included the filing of fraudulent tax returns and the subsequent theft of refunds. With information from IRS computer systems, Sledge provided taxpayers’ personal information to her coconspirators.

It was part of the scheme that others would file fraudulent tax returns with the IRS using the stolen identities of various taxpayers. Sledge used her IRS computer to review the fraudulent returns submitted to determine if she could release fraudulent tax refunds from those returns. When identified, Sledge would release the fraudulent refund for payment. Sledge further assisted those involved in the scheme in impersonating either the taxpayers or their authorized representatives so the taxpayers’ addresses of record could be changed to a fictitious address accessible to Sledge or others involved in the scheme. Sledge then caused the IRS to mail refunds in the taxpayers’ names to the fictitious address to be intercepted or stolen.

On May 21, 2013, an individual was arrested in Texas and was found to be in possession of an IRS refund check in the amount of $595,901.97, along with three pages of internal IRS documents containing tax information for one of the identity theft victims. A review of IRS systems revealed Sledge made accesses to this taxpayer’s account, as well as to the taxpayer’s accountant’s information, on seven dates between February 2013 and May 2013. The victim was due a large refund because she had overpaid her estimated taxes. One of the perpetrators used the accountant’s information and Government-issued representative number to impersonate the tax practitioner in telephone communication with the IRS on March 5, 2013, to change the address on record from a North Carolina address to an address in Atlanta, Georgia. Sledge then released the $595,901.97 refund to the fictitious address.

On May 23, 2013, an e-mail was sent from Sledge’s IRS e-mail account containing the personal information for two other taxpayers, a married couple. The e-mail included the taxpayers’ names, SSNs, dates of birth, address, and tax preparer’s information. A subsequent telephonic address change was made, changing the address of record from the taxpayers’ Massachusetts address to a Georgia address, and a refund in the amount of $961,779.33 was paid on or about May 31, 2013. Review of the IRS systems identified accesses to the taxpayers’ accounts by Sledge on May 23, 2013 and again in June 2013.

Multiple communications were identified to and from Sledge’s IRS e-mail account on dates between May 2013 and September 2013, relaying taxpayer information and/or internal IRS documents for up to as many as 56 taxpayers to Sledge’s coconspirators. Text messages containing taxpayer information and discussing the theft of Government funds were also identified. In one message she sent to an individual she was trying to recruit as a coconspirator, Sledge told the recipient she had a business proposition for him and indicated she had a plan to change the addresses so checks would come to him. Sledge offered to split the scheme proceeds three or four ways, depending on the number of people involved. Sledge said she would give him all the information needed to get the address changed without any problems or questions and said, “All of this money is just sitting here for the taking.”

TIGTA special agents arrested Sledge in Chamblee, Georgia on November 26, 2013. She entered a not guilty plea at her arraignment, held on December 19, 2013.

Source: U.S. Treasury Inspector General for Tax Administration (January 13, 2014)

Other Sources of Income Tax Identity Fraud

GA: “The returns were filed using the names and personal information of patients from two healthcare facilities in Georgia…”

GA: “According to court documents and evidence introduced at trial, Banks, who is a former certified nursing assistant, obtained the names and Social Security numbers of nursing home patients from her employer and conspired with Mosely…”

GA: “In her plea agreement, Blount admitted that beginning in 2010, she obtained stolen identities of nursing home patients and used that information to file fraudulent income tax returns…”

FL: “Also found in both rooms were medical records that had been stolen from a veterans hospital…”

FL: “Latonya Ware stole patients’ names and social security numbers from a medical office where she worked, and gave the information to Tilus and her cousin, Andrew Ware. Rowe electronically filed fraudulent tax returns utilizing the victims’ names and social security numbers…”

GA: “The defendants obtained their victims’ information from publicly available websites that publicize the names, social security numbers, and other personally identifying information of unsuspecting individuals…”

GA: “Thomas orchestrated a scheme to file over 1,200 false tax returns using the names and Social Security numbers of various victims, many of whom were incarcerated in jails or prisons throughout the country…”

FL: “Lyon worked as a service representative for Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF). As an employee of TIAA-CREF, Lyon had access to the names, addresses, social security numbers, and dates of birth of TIAA-CREF’s clients. In anticipation of a share of the proceeds, Lyon provided Martin with personal identifying information belonging to individual clients of TIAA-CREF for the purpose of filing fraudulent tax returns claiming tax refunds in those clients’ names…”

Source: IRS: Examples of Identity Theft Schemes – Fiscal Year 2014

From now on, I’m going to question anyone who asks for my personal information, and those that don’t really have a need won’t be getting it. For example, Why does my doctor need to know my Social Security number? As long as I’m paying cash, she doesn’t. I pity all the poor souls who recently published all of their personal information on the insecure Obamacare website. We’ll see how that works out.

As far as trusting the IRS, that bridge is already pretty much burned to the ground. One of the greatest opportunities the federal government will ever have in positively impacting our Nation’s voluntary tax system and restoring trust in the IRS is to prosecute Lois Lerner, and if found guilty, lock her up and throw away the key.

Give Up 300,000 Federal Workers… and then we’ll talk.

U.S. Government Shutdown: Negotiation 101

– By: Larry Walker II –

“Treasury Secy. Jack Lew warns the country will run out of money later this month. Actually, that’s another lie. The country ran out of money $17 trillion ago. It’s all borrowed since then, much of it by this administration.” ~ Andrew Malcolm *

The United States federal government shutdown of 1995 and 1996 was the result of conflicts between Democratic President Bill Clinton and the Republican Congress over funding for Medicare, education, the environment, and public health in the 1996 federal budget. The government shut down after Clinton vetoed the spending bill the Republican Party-controlled Congress sent him. The federal government of the United States put non-essential government workers on furlough and suspended non-essential services from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996, for a total of 28 days. The major players were President Clinton and Speaker of the U.S. House of Representatives Newt Gingrich.

According to the U.S. Bureau of Labor Statistics, in November of 1995, near the beginning of the shutdown, there were 2,152,900 federal government employees, excluding postal workers. By January 1996, at the end of the shutdown, this number had been trimmed by 110,300, to 2,042,600. After the parties reached an agreement, the number of federal workers was further slashed, by an additional 184,900, falling to it’s lowest point in more than 30 years, all the way to 1,857,700 by October of 2000 (see chart below).

Looking back a bit farther, there were 2,309,200 federal employees in December of 1992, so the number had already been slashed by 254,600 from the time Bill Clinton entered office until the shutdown. All in all, the federal government was able to rid itself of 451,500 non-essential employees between the years 1993 and 2000. Simply amazing!

Unfortunately, since October of 2000, the number of federal employees has grown by 291,200, reaching 2,148,900 by August of 2013. How quickly we forget. But the situation today is even more dire. According to the Cato Institute, “Total wages and benefits paid to executive branch civilians will be about $248 billion in 2013, indicating that compensation is a major federal expense that can be trimmed. During the last decade, compensation of federal employees rose faster than compensation of private-sector employees. As a consequence, the average federal civilian worker now earns 74 percent more in wages and benefits than the average worker in the U.S. private sector.” What’s up with that?

Keeping in mind that the only time the federal budget has balanced in our lifetimes was between the years 1996 and 2000, and putting aside partisan B.S. for a moment, what does that tell you? Was it just a coincidence that balancing the federal budget during this time-frame entailed slashing the number of federal workers to the lowest level in more than three decades? No it wasn’t.

The Bottom Line: What this should tell us is that among the 900,000 (or so) non-essential federal workers just placed on furlough, at least 300,000 need to be sent packing – permanently. There’s no way the federal budget will ever balance again, until the federal government takes serious measures to reduce its own size. The private sector is not the problem; government is the problem. Now is not the time to add new entitlement programs, and ever more federal employees, rather like 1995 it’s time to slash and burn. Give up 300,000 federal workers, then, and only then, may we engage in an adult conversation regarding the remainder of the federal budget.

References and Related:

Chart: Overpaid Federal Workers – Cato Institute

If 900,000 federal workers can be furloughed as ‘non-essential,’ why employ them? – Investor’s Business Daily

Make the Shutdown of Undesirable Federal Departments and Agencies Permanent: A Continuing Resolution is an abomination. – Ideal Taxes Association

U.S. Government Manufactures 469,000 Jobs – Natural Born Conservative

Watcher’s Council Nominations – Storming The Barrycades Edition – Watcher of Weasels

Endless Stimulus | Payroll Tax Cut

Common Sense vs. Nonsense: Bankrupting the Future –

By: Larry Walker, Jr. –

Facts: The 2% payroll tax cut not only boosted workers’ take-home pay by $120 billion in 2011, but it also widened the government’s budget deficit, and left the social security trust fund in the red.

Since Social Security and Medicare taxes are collected in order to realize future benefits, why would the federal government choose to refund a portion of those collections today? Are its entitlement programs in such good shape that the government can afford to distribute benefits prematurely? I don’t think so. For that would infer that future benefit payouts are on the decline. However, to the dismay of many, in fiscal year 2011 the net cost of social security benefits increased by 18.9%, over fiscal year 2008, while tax collections declined by 13.5%, widening the breach by 1,678%.

Since at least 1975, a growing portion of social welfare spending has been introduced by Congressional tax-writing committees and administered by the Internal Revenue Service. As I outlined in Tax Simplification, Part II, the Earned Income Credit, Child Tax Credit, and Making Work Pay Credit were primarily responsible for IRS administered giveaways of $171 billion in fiscal year 2010, or if you prefer $1.7 trillion over 10 years. In fiscal year 2011 the amount was upped to $231 billion per year, due to the payroll tax cut. And today, some members of Congress are urging others to increase these tax giveaways to $351 billion annually, which I think will end up costing closer to $471 billion (as explained below). But in all of this pandering, what is even more illogical than charging additional debt to Obama’s unlimited credit line, is the rebating of funds “supposedly” earmarked for future liabilities.

As Sherlock and I proved in Social Security: A Breach of Trust, the federal government has summarily confiscated and spent every dime of the $2.6 trillion surplus, which would have comprised the Social Security Trust Fund, and has replaced it with non-marketable, special-issue, Treasury securities. And since these special-issue securities are an asset to the Trust Fund and a liability to the U.S. Treasury, they therefore cancel each other out. In other words, since there is no surplus, every dime of Social Security and Medicare tax collected today is spent today, therefore any shortfall rests squarely on the shoulders of the general budget. And as you may know, the general budget is currently more than $15 trillion in arrears.

When the Making Work Pay Credit expired at the end of 2010, it was replaced with the 2% Payroll Tax Cut, as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The newest tax gimmick allowed a 2% cut in payroll taxes for employees, which reduced the Social Security Tax from 6.2% to 4.2%, without affecting Social Security benefits. But in the big picture, all it really accomplished was to elevate the amount of social welfare tax expenditures already in the tax code, from $171 billion in 2010, to $231 billion in 2011, or by another $60 billion (see table below).

According to an editorial in Bloomberg-Businessweek, the 2% payroll tax cut boosted workers’ take-home pay by $120 billion in 2011. The editors contend that, “… this should stay in force for another year, be extended to the employer portion of payroll taxes, and increased for both employers and employees to a 3% cut.” And further that, “… the payroll tax cut should be widened to temporarily relieve employers of the entire 6.2% levy for new hires and pay raises.” They conclude their unbalanced argument by stating that, “Republicans should be willing to go along. We are talking about tax cuts, after all, that would pump some $240 billion into a struggling economy.”

So in other words, Bloomberg-Businessweek thinks that annual social welfare tax expenditures of $171 billion in 2010, and $231.3 billion in 2011 were not enough. According to the editor’s, social welfare tax expenditures should be increased to $351.3 billion, and conservatives should be willing to go along, to get along. But stepping back from the easel, to gain some aesthetic distance, the inference appears to be that a 10-year tax expenditure of $1,710 billion wasn’t enough, that $2,313 billion is insufficient, and that $3,513 billion is somehow the magic number (assuming that expenditures for the child tax credit and earned income credit remain fixed). I don’t know any true Conservative, in my neck of the woods, which would go along with blowing a bigger hole in the federal budget than already exists, for any reason; especially not to extend another temporary economic stimulus, some 29 months after the recession officially ended.

Endless Stimulus

These days, it’s as if every time a temporary measure expires, its reversal is deemed to be a tax hike. But the expiration of this one-year, one-time, re-election ploy isn’t a tax hike at all; it’s merely the death of what was probably a bad idea in the first place. If we follow the logic that every temporary measure is permanent, then Obama’s entire 2009 stimulus spending binge must represent the new normal, and any reduction in government spending must be deemed a deviation from the norm, and thus a bad thing. But if not a descent towards Greece, where will this road end? Italy? France? Sheol?

I am not sure how the editor’s of Bloomberg-Businessweek arrived at their $120 billion and $240 billion figures, but let’s assume the former is correct. If so, then it would seem to me that since the cost of the 2% tax cut was estimated to have been $120 billion, that upping the employee payroll tax cut from 2% to 3%, and adding an employer tax cut of 3%, would come to more than double the current giveaway. Simple math leads me to a price tag closer to $360 billion [(120 / .02) * .06], than $240 billion. And that doesn’t include adding the 6.2% tax cut on new hires and pay raises, which would up the ante even more. Other than that little boo-boo, the major omission from Bloomberg-Businessweek’s one-sided endorsement of Barack Obama, because that’s what it is, is that any cut in the Social Security payroll tax translates directly into an increase in the budget deficit, and by extension, the national debt.

The following table was extracted from the Social Security Administration’s Consolidated Statements of Changes in Net Position for the Years Ended September 30, 2008 through 2011. If you wish, you may view the actual financial statements by following the links provided at the end of this post. After navigating this rather murky tome, the bottom line, exclusive of appropriations and interest payments derived from the general fund, may be summarized as follows:

The total amount of tax revenues collected dropped from $671.2 billion in fiscal year 2008, to $580.9 billion in fiscal year 2011, or by $90.3 billion. And the total cost of operations jumped to $782.7 billion in fiscal year 2011, from $658.4 billion in fiscal year 2008, or by $124.3 billion. In a nutshell, the fiscal year 2008 annual surplus of $12.8 billion has been transformed into a $201.8 billion annual deficit in just three fiscal years. In fact, expenditures have exceeded revenues by $370.9 billion over the past three fiscal years.

In other words, social security tax revenues have fallen by 13.5%, since 2008, while operating costs have risen by 18.9%. Another way of stating this is that the shortfall in Social Security tax collections, versus expenditures, has widened by 1,678%. This is significant because any shortfall, whether covered by interest on the debt or appropriations, must be siphoned directly from the general budget. In effect, these annual deficits have increased the national debt, while simultaneously compromising the future of our troubled entitlement programs.

Following the wisdom of Bloomberg-Businessweek, and implementing this fraction of Obama’s misnamed American Jobs Act, would add another $120 to $240 billion to what is already a $201.8 billion deficit on the Social Security Administration’s account. The idea of a payroll tax cut is not a bad one in and of itself, for a nation where the net cost of social benefits is on the decline, however under the circumstances, which some of us refer to as reality, it is probably the dumbest idea proffered by the Obama Administration to-date (although that’s pretty much a tossup).

Personally, I can do without the 2% payroll tax cut, since it has done nothing to increase my personal consumption, has accelerated the national debt, and has compromised the future of Social Security. No. I’m not on the band wagon with those harping for more social insurance rebates. Nor am I opposed to a surtax on those making more than $1 million per year, as long as it’s accompanied by a greater amount in spending cuts. What good is an equal increase in both spending and taxes? And what government-manufactured problem would a tax cut for some, and a tax hike on others solve? I say, ‘no good’, and ‘none’. As far as I’m concerned, anyone who votes for either keeping or increasing the payroll tax cut, under any circumstance, short of a 10-fold cut in spending, is an idiot. And anyone against raising taxes on taxable incomes greater than $1 million per year, in exchange for a 10-fold reduction in spending, is devoid of common sense.

References:

Social Security Administration 2011 Financial Statements – http://ssa.gov/finance/2011/Financial%20Statements.pdf

Social Security Administration 2010 Financial Statements – http://ssa.gov/finance/2010/Financial%20Statements.pdf

Social Security Administration 2009 Financial Statements – http://ssa.gov/finance/2009/Financial%20Statements.pdf

Real Tax Reform II : Taxing Corporations

Not Cash Cows

Ending Tyranny

– By: Larry Walker, Jr. –

In Part I, we focused on unfair tax policies surrounding S-Corporations and Partnerships. The prospect of increasing tax rates on business owners is a far cry from what most of us would consider meaningful fiscal reform. Part II examines how government, both federal and state, milks corporations, and specifically small Personal Service Corporations (PCs) out of billions of dollars every year. In terms of combined taxes, if we add together federal and state corporate taxes, payroll taxes, and taxes levied on the wages and dividends of its owners; when the smoke clears, government walks away with approximately 76.6% of a PC’s pre-tax profits, and 45.4% of its gross income.

And just what is the end result of all the government’s efforts to hoard and redistribute our wealth? Well, as far as the federal government is concerned, with revenues of $2.2 trillion in fiscal year 2010, and a national debt of $13.6 trillion, it appears that Congress has already spent all of next year’s revenue times six. So when is enough, enough? Meaningful fiscal reform necessarily involves massive spending cuts, and major tax cuts. Our problem is government spending. Tax cuts have the effect of broadening the tax base, and are the only way to effectively increase government revenues.

“An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation.” ~ John Marshall, McCullough v. Maryland, 1819

What is a Personal Service Corporation?

A personal service corporation (PC) is a corporation composed of employee-owners who perform substantially all of its services. Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts. Like other C-corporations, PCs are subject to income taxes; but unlike regular C-Corps, PCs are taxed at a flat rate of 35% of taxable income.

Corporate Income Tax Rates

The following table shows the 2010 federal income tax rates assessed on corporations. [In the examples which follow, the company is based in the state of Georgia and is subject to its corporate tax rate of 6% of taxable income.]

Corporate Tax Rates - Click to Enlarge

Sample Personal Service Corporation

In the following example, Taxed Enough Already, PC (TEA-PC) is a small personal service corporation with ten employees, and annual revenues of $800,000. In tax year 2010, TEA-PC paid salaries and wages of $300,000, payroll taxes of $25,805, and had pre-tax profits of $474,195. The total amount of corporate income tax paid was $194,420, after-tax profits were $279,775, and employee-owners were paid dividends of $150,000. TEA-PC’s sample income statement follows:

TEA Income Statement

The Issue: Combined Taxes

Examining its total contribution to federal and state taxes, we find that TEA-PC paid $220,225 in combined payroll taxes, and corporate income taxes. We also discover that its employee-owners paid an additional $112,950 in social security, Medicare, and federal and state income taxes. Finally we see that TEA-PC’s employee-owners got soaked for another $30,000 in taxes on dividends received out of the company’s after-tax profits. Overall, TEA-PC has been milked out of $363,175 in combined taxes. In other words, TEA-PC’s employee-owners have been assessed total taxes amounting to 76.6% of their pre-tax profits. That’s pathetic. How can American businesses grow, when they are being milked out of 76.6% of pre-tax profits every year?

Combined Taxes

Proving that TEA-PC was responsible for all of these taxes is easy. We know that the company directly pays payroll taxes on its employee’s pay, and corporate income taxes. What many non-business types don’t understand is that a corporation is also responsible for withholding and paying its employee’s share of taxes. Also, since in this case, the employees are owners, their after-tax dividend receipts are subject to double taxation. Dividends are first levied a 35% tax at the corporate level (plus 6% in state taxes), and then subject to another 15% on the owner’s personal income tax returns (plus 5% in state taxes).

Tax Ratios

An examination of TEA-PC’s tax ratios reveals the following:

  1. Corporate payroll and income taxes paid were 27.5% of gross income.

  2. Corporate payroll and income taxes paid were 46.4% of pre-tax profit.

  3. The company was directly and indirectly responsible for paying combined taxes of 45.4% of gross income.

  4. The company was directly and indirectly responsible for paying combined taxes of 76.6% of pre-tax profit.

  5. The total taxes paid on dividends, which are taxed both at the corporate and individual level, amounted to 61% ((35% + 6%) + (15% +5%)).

Tax Ratios

The Proposal

In order to make the tax code more equitable, Personal Service Corporations, as well as regular C-Corporations, should be allowed to take a deduction for annual dividend distributions. This will lower corporate taxable income and the amount of corporate income taxes paid, put an end to double taxation; and enable more income to be distributed as dividends, and/or reinvested towards future growth. This is accomplished by adding a line to page one of Form 1120 for the dividend deduction.

In addition, the tax rate on PC’s should be cut dramatically. According to the tax rate schedule above, PC’s are taxed at the same rate as corporations with taxable income greater than $18,333,333. Why are PC’s with taxable income of $50,000, $100,000, or $400,000 taxed at the same rate as corporations making over $18,333,333? Does this sound like a pro-growth strategy? The government’s present fiscal commission is recommending cutting corporate rates to 26%, while others want them to be repealed entirely. Under the Revenue Act of 1926, the tax on corporations was 13.5% of net income (individual tax rates ranged from 1.4% to 25%). Today, we have a complex set of codes, rules, and regulations, which basically amount to nothing more than government lordship. It’s time to level the playing field so that no corporation has an unfair advantage over another, and so that government may no longer oppressively impose itself over private enterprises. I therefore propose a maximum corporate tax rate of 13.5% of net income.

The Effect

My proposal will effectively lower the amount of taxes paid by corporations, and personal service corporations by ending the double taxation of dividends. By allowing corporations a deduction for the amount of dividends paid, more income is distributed to the personal level for efficient consumption. Also lowering corporate tax rates to the level imposed during the Roaring 20’s will allow our economy to return to a policy of robust growth. Once enacted, my proposal will result in economic growth on steroids, massive jobs growth, skyrocketing levels of entrepreneurship, greater freedom, and less dependence on the federal government.

Real Tax Reform I : Taxing Small Business

Not Cash Cows

Stop Swindling Paper Profits

– By: Larry Walker, Jr. –

Much of the debate against raising tax rates on the upper bracket centers around how income taxes are computed on small business owners. The debate focuses on the way that pass-through income, which is earned by the shareholders of S-Corporations and Partnerships, gets taxed. What we need is a fundamental transformation in the way that businesses are taxed. A business should be treated as an investment, not a person. Once we have correctly defined the nature of a business, and how businesses ought to be taxed the rest of tax reform is easy.

“An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation.” ~ John Marshall, McCullough v. Maryland, 1819

Defining Pass-Through Income

S-Corporations and Partnerships do not pay income taxes. Instead, income is passed through to its owners and taxed on their individual income tax returns. Owners of pass-through entities receive income from their businesses in primarily two ways. The first way is through salaries and wages, and the second is through K-1 distributions. Salaries and wages are reported on W-2 Forms and are subject to withholding, social security, Medicare, and federal and state unemployment taxes. K-1 distributions are reported to the shareholder on Schedule K-1, and are not taxable, nor subject to withholding or payroll taxes.

What are K-1 Distributions?

K-1 distributions represent distributions of profit paid to the owners of S-Corporations and Partnerships. K-1 distributions get their name from the tax schedule on which they are reported, Schedule K-1. In addition to reporting the amount of K-1 distributions, Schedule K-1 also reports the shareholders share (as a percentage of ownership) of net business income, non-deductible expenses, capital gains income, and any pass-through deductions and credits (i.e. accelerated depreciation).

K-1 distributions are similar to the dividends paid by C-Corporations, with one key exception. Taxable dividends are reported on Form 1099-Div, and taxed to the recipient as current year income. K-1 distributions are reported to the recipient on Schedule K-1, but are not taxed to the recipient as current year income. The recipient of Schedule K-1 is instead taxed on the entire net income of the business, which is usually far greater than the amount physically received as a distribution.

The Issue

The discrepancy lies in that S-Corporation and Partnership shareholders are taxed on their share (as a percentage of ownership interest) of the net income of the business, not on the amount of distributions they physically receive.

Example – A small business has net income of $400,000, only one shareholder, and paid the owner a salary of $100,000 plus a distribution of $50,000.

Under current tax law this shareholder has taxable income of $500,000, the entire net income from the business of $400,000, plus a salary of $100,000. But in reality, the owner has only physically received $150,000, a salary of $100,000, and a distribution of $50,000. The remainder of $350,000 was earned by the company, but has yet to be spent or distributed. Is it fair to tax the small business owner on $500,000 of income when she has only physically taken custody of $150,000? Foul! Anyone who thinks this is fair should make a voluntary tax-deductible charitable contribution to the federal government, and earmark it towards the national debt, which by the way is allowed under the tax code.

This is the issue at hand. On one side, you have those who want to treat the lowly small business owner as a millionaire, and to tax her on income she has yet to receive; and on the other side, you have those who think it hurts the economy to tax unrealized small business profits, which businesses need to retain for future expansion.

The Proposal

In order to make the tax code more equitable, shareholders of S-Corporations and Partnerships should only be taxed on the amount of income actually received. The amount of income received is comprised of salaries, wages, and K-1 distributions. Small business net profits should not be taxed until they have been physically paid out to shareholders. What is required is a simple change to Schedule K-1, instructing the shareholder to report the amount of distributions as taxable income, instead of the amount of net profit.

Other pass-through income, losses and deductions will be capitalized at the corporate or partnership level and kept up with on a cumulative basis. When the business is sold, or otherwise disposed of, the original investment, plus any capitalized earnings, losses and deductions will be taken into account in determining whether the sale or disposition is a long-term capital gain, or loss.

The Effect

What my proposal will do is simply return businesses to their original purpose. A business is an investment, not a cash cow for the government. Think about it. If you invest in $100 worth of corporation stock, and the value goes up to $10,000, you are not taxed on the unrealized gain each year, but rather on the realized gain which occurs when the stock is sold. Businesses are investments and should be allowed to grow as investments, and the only way this is going to happen is for the government to stop taxing unrealized business appreciation.

My proposal will effectively lower taxes on small businesses which are operating as S-Corporations and Partnerships. Once enacted, it will result in economic growth on steroids, massive jobs growth, skyrocketing levels of entrepreneurship, greater freedom, and less dependence on the federal government.

Q&A

[Q] What if the S-Corp never distributes all of its income?

[A] The income will eventually be distributed either in the form of K-1 distributions, salaries and wages to the owner, salaries to new employees; or it will be used to re-invest in new plant and equipment, or to make acquisitions. Any remaining accumulated profits will eventually be taxed upon the sale or disposition of the business. Among the reasons a business retains its income in the first place are to invest in the future, to repay debt, and to guard against future downturns.

[Q] What about the tax on distributions in excess of a shareholders basis?

[A] This problem is simplified by taxing pass-through shareholders on all distributions. There will therefore no longer be a need for tracking the shareholders basis for the purpose of taxing excess distributions. The shareholders basis will instead be tracked for the purpose of determining gain or loss upon the eventual sale, or other disposition of the business.

[Q] Is a business an investment or a person?

[A] Check the corporate resolutions. A business is an investment, which is owned by investors (i.e. shareholders).

[Q] What about the issue of double-taxation on C-Corporations?

[A] I believe it’s wrong to subject a C-Corporation to income tax, and then to turn around and tax a recipient of dividends on the same income. This is double taxation. A simple solution is to give C-Corporations a deduction for the amount of dividends paid. It’s just that simple.

2011 Tax Jam: Wrong Way, Wrong Road

Directions for Misguided Democrats

by: Larry Walker, Jr.

In my last blog post, 2011 Tax Increase: A Reality Check, I attempted to point out how the Bush tax cuts applied to all Americans at every level of income, and that with their expiration at the end of 2010, income taxes will rise across the board. Although valid enough to ignite renewed interest, I now want to expand on this in a more technical manner with examples.

The following table compares the pending change in tax rates (assuming no change for inflation).

2010 vs. 2011 Tax Rates

As evident with a quick glance, those in lower income levels will see their taxes increase the most with taxes increasing by 50% (from 10% to 15%), but this doesn’t tell the whole story. Only by looking at effective tax rates, can we see the impact of the pending tax increase on hard working Americans, and small business decision makers. [Note: The effective tax rate is calculated by dividing the amount of taxes paid, by the amount of gross income.]

When it comes to taxes, there are many variables that will effect the calculation of ones effective tax rate, such as filing status, number of children, whether or not one itemizes deductions, and whether one has income from pass-throughs (i.e. Partnerships, and S-Corporations), or from capital gains. So in an effort to keep this somewhat simple, the examples that follow assume a married couple without children, without capital gains, who does not itemize deductions, and whose income is limited to $500,000.

[Note: The following tables place income on the cusp of each tax bracket, and thus were prepared on a ‘give or take a dollar or two’ basis. (You may click on each table to enlarge.)]

2010 Effective Tax Rates

2011 Effective Tax Rates

2011 Marginal Tax and Rate Increases

Example 1 – 10% Bracket: Joe and Jane are married and have combined wages of $35,450.00. In 2010 they will pay income taxes of $1,675 with an effective tax rate of 4.7%. Their 2010 after-tax income is $33,775. In 2011 they will pay income taxes of $2,512.50 with an effective tax rate of 7.1% which represents a tax increase of 50%. Their after tax income in 2011 will fall by $837.50.

Example 2 – 15% Bracket: Lance and Lori are married and have combined income of $86,700.00. In 2010 they will pay income taxes of $9,362.50 with an effective tax rate of 10.8%. Their 2010 after-tax income is $77,337.50. In 2011 they will pay income taxes of $10,200 with an effective tax rate of 11.8% which represents a tax increase of 8.9%. Their after tax income in 2011 will fall by $837.50.

Example 3 – 25% Bracket: Nick and Nancy are married and have combined income of $156,000.00. In 2010 they will pay income taxes of $26,687.50 with an effective tax rate of 17.1%. Their 2010 after-tax income is $129,312.50. In 2011 they will pay income taxes of $29,604.00 with an effective tax rate of 19.0% which represents a tax increase of 10.9%. Their after tax income in 2011 will fall by $2,916.50.

Example 4 – 28% Bracket: Paul and Penny are married and have combined income of $227,950.00. In 2010 they will pay income taxes of $46,833.50 with an effective tax rate of 20.5%. Their 2010 after-tax income is $181,116.50. In 2011 they will pay income taxes of $51,908.50 with an effective tax rate of 22.8% which represents a tax increase of 10.8%. Their after tax income in 2011 will fall by $5,075.00.

Example 5 – 33% Bracket: Ronald and Rhonda are married and have combined wages $392,350.00. In 2010 they will pay income taxes of $101,085.50 with an effective tax rate of 25.8%. Their 2010 after-tax income is $291,264.50. In 2011 they will pay income taxes of $111,092.50 with an effective tax rate of 28.3% which represents a tax increase of 9.9%. Their after tax income in 2011 will fall by $10,007.00.

Example 6 – 35% Bracket: Tom and Tammy are married and have combined income of $518,700.00. In 2010 they will pay income taxes of $145,308.00 with an effective tax rate of 28.0%. Their 2010 after-tax income is $373,392.00. In 2011 they will pay income taxes of $161,127.10 with an effective tax rate of 31.1% which represents a tax increase of 10.9%. Their after tax income in 2011 will fall by $15,819.10.

Does the government deserve 30-40% of your money? From the examples provided, those making over $392,350 will pay between 31.1% up to 39.6% of every additional dollar earned in taxes. This particularly impacts small business owners whose income is taxed at the personal level. It’s hardly worth the effort to expand operations and provide jobs when the government will get 30% to 40% of the paper profits.

All income is not created equal. The federal government should understand that just because a small business has taxable income of $400,000 doesn’t mean that its owner has $400,000 in the bank. Some of that money was used to pay non-deductible principal payments on loans, and some of it is necessary for working capital in order to continue operations. Although the interest paid on loans is deductible for tax purposes, principal repayments are not, so the government really shouldn’t assume that taxable income is the same thing as disposable income.

A tax increase is a tax increase. Those making under $36,000 per year will see the highest tax rate increase of 50%. Although those making between $36,000 and $87,000 will see the smallest increase at potentially 8.9%, a tax increase is a tax increase. For those in the remaining brackets, taxes will increase by approximately 10% to 11%. This is a far cry from Obama’s bold declaration that we would not see our taxes increase by ‘one dime’. Technically it will be more like a dime to fifty cents on the dollar. Yes, income taxes will increase for all who pay taxes, without quick action.

Taxes will rise by a lot more than a dime. When the Bush tax cuts expire at the end of this year, couples making over a nickel and under $500,000 per year, will see their effective income tax rates rise, from between 8.9% to 50.0%. Lower income wage earners face the largest increase. Couples with income above $392,350 will be effectively handing the government 30% – 40% of each additional dollar earned.

Unusual uncertainty is unusually uncertain. The longer Congress delays in giving the public clarity, the more prolonged this period of ‘unusual uncertainty’. Individuals and small businesses are already in process of making plans for the remainder of 2010 and forward, and without knowing for certain whether or not the Bush tax cuts will be extended, planning has come to a halt. Under the assumption that taxes will rise in 2011, plans for further spending in 2010 have been shelved, because those deductions will be of better use next year. Delaying a decision until year-end would not be wise.

What’s your total tax bill? Now when you add to the above effective tax rates: State and Local taxes, Social Security and Medicare taxes, sales taxes, property taxes, excise taxes; and possibly new health care and carbon taxes, the situation is not only unusually uncertain, but unbearable and unsustainable. Politicians should listen when taxpayers holler the acronym, T.E.A., which stands for taxed enough already. Congress should not only re-instate the Bush tax cuts, but should consider further cuts in both income taxes and its own out-of-control spending (which leads to higher and higher taxes). Failure to take the public seriously will result in the death of the American economy. Yes, Misguided One, when it comes to taxes and spending, we wish to go backwards, not further into the abyss.

A Potential Solution – One solution would be to extend the Bush tax cuts for another three years with one minor change. There should be an additional standard deduction granted to small business owners. Job creators who own Partnerships and S-Corporations should specifically be granted an additional deduction based on the level of business income reported on their personal tax returns. This incentive would encourage small business owners to expand, will create more jobs, and will improve the overall economy. Let’s start putting the incentive where it matters and stop punishing those who drive the American economy.

Related: Liberals, Conservatives Agree: Re-Imposing the Death Tax Designed to Penalize the Wealthy

An Unlicensed MMS Engineer and The Gulf Disaster

We Don't Need No Stinking License

By: Larry Walker, Jr.

Frank Patton is the name of the unlicensed Minerals Management Service (MMS) Engineer who approved the Deepwater Horizon Disaster. No, that’s not his picture to the left. That’s another matter for another day.

Funny, but I can’t find Tony Hayward’s name on any of those, smoking gun, internal emails being touted around by the House Oversight and Investigations Subcommittee, but I do see Frank Patton’s name. Yep, on April 16, 2010 – ‘Approved By’ – Frank Patton.

From the trial (or hearing) the other day, you would think it was Congress’ job to oversee and investigate private businesses. I somehow don’t think that was part of the original plan. What I would like to see is a subcommittee investigating why federal workers are not required to maintain credentials equal to, or greater than, those whom they regulate.

Who’s regulating the regulators? Unlicensed engineers are approving plans submitted by licensed engineers. When are we going to have a trial about stuff that really matters?

According to licensed Professional Engineer (PE), and whistleblower, Joe Carlson, the Minerals Management Service (MMS), just as other federal agencies, does not require their Engineers to be professionally licensed. Instead, federal agencies have invoked a special ‘exemption’ whereby unlicensed federal workers are above reproach. In other words, “We don’t need no stinking license.” You’ve got to be kidding me!

As one who holds two professional licenses (not in engineering), each with its own rigorous set of ongoing requirements, I have nothing but contempt for the federal government, the Congress, and our feckless POTUS, in this matter. There are no excuses. How is an unlicensed ‘engineer’ supposed to have the ability, training, and the professional integrity to review and approve plans designed by professionally licensed engineers?

What’s worse is the fact that Frank Patton can’t be blamed, fired, reprimanded or fined. Why not, you say? Because, remember, Frank Patton is not even licensed. But Congress can go around blaming Tony Hayward, who is also not licensed, and whose name is curiously not found on any of those damning internal emails. I do however see the names: Brian Morel, Mark Hafle, and Richard Miller. Perhaps they are licensed and should be brought up on charges by the appropriate engineering licensing board. And as for Frank Patton, I just wonder how many safety awards are hanging in his office?

Following are a few excerpts from Joe Carlson:

Frank Patton is the unlicensed MMS engineer who approved the BP drilling plan. During his May 11, 2010 testimony (see pages 252-314) to the Deepwater Horizon Joint Investigation, he admitted, (see pages 274-76), that he failed to ensure the BP Drilling Plan complied with federal regulation at 30 C.F.R. §250.416(e), because it did not contain the required information about the design and performance adequacy of the blow-out preventer. The New Orleans Times-Picayune, which live-blogged the hearing, described his testimony here.

If MMS required its engineers to be PE’s, then Mr. Patton would have been required to “blow whistles,” publicly if necessary, to prevent BP’s inadequate drilling plan from being approved. This could well have resulted in his being fired or otherwise discriminated against at MMS, given widespread, longstanding, MMS corruption. However, had MMS required Mr. Patton to be a PE, then anyone could now file a professional misconduct complaint against him with the Louisiana Professional Engineering Licensing Board, for his professional negligence/incompetence in approving a plan that failed to comply with federal regulation. If he lost his PE license as a result, then MMS could fire him. If he had been a PE, Frank Patton would have made sure the BP drilling plan contained the required information about its blowout preventer and perhaps this unprecedented disaster is averted….

The federal government has a duty to protect American health and safety, at work and elsewhere, including our environment. PE’s, by law, must “hold paramount the health, safety and welfare of the public in the performance of professional duty.” That federal agencies exempt their engineers from having the legal obligations of PE’s is nonsensical and a contributing cause to the Gulf disaster and many other accidents and disasters, such as the recent Upper Big Branch mine disaster which killed 29 in West Virginia.

Here is a formula we can all live with:

Federal PE licensure + reformed federal whistleblower protection = much improved workplace and public health and safety in America.

Read More at the Source: Whistleblowers Protection Blog

BP Hearing | Time-Wasting Morons

Mostly Time-Wasting Morons

Oversight and Investigations?

by: Larry Walker, Jr.

Only one constructive question came out of the Congressional hearing with BP’s CEO, Anthony Hayward. The question was, “Why aren’t relief wells drilled at the same time as the main well, and would it make sense to drill one or two relief wells along with the main well in the future?” That was a valid and constructive question. It is, however, really a regulatory question and not so much the responsibility of BP. No other question posed during the rest of the hearing was even valid.

I can’t believe that the present Congress is anywhere near the best that America has to offer. I am convinced more and more that we just need to clear the slate and start over. I am ashamed of the US Congress. Congress wants to act tough and bully people around, “who are you….who are you…who are you…,” but it would be more effective if we had a Congress with brains, one which knew how to match wits with normal everyday human beings.

Hayward, was at one point compared to the captain of a ship that had crashed and killed 11 people. Come on! The fact is that Tony Hayward was not the captain of the Deep Water Horizon. Hayward was not aboard the rig when it blew, and probably had never set foot upon it during its short life. At worst, BP hired a contractor, who either cut corners, or followed the orders of some lower-level BP employee to cut corners. As a fellow CEO I have empathy for Mr. Hayward, and nothing but contempt for Congress.

For example, if a certain department head within a corporation cuts corners in order to improve his own personal bonus, and then covers up his dirty deed, which is later discovered and reported to the CEO, then is the CEO responsible for the corner cutting? No. The CEO is responsible for putting in place mechanisms for discovering the incident, and for taking action against the employee, but the CEO is not responsible for the infraction committed by one of his, or her employees. The employee who screwed up is responsible and should be held accountable.

Here’s another example. If an accountant embezzles $800K from his employer, stealing money that was meant to pay payroll taxes, and hides the delinquent tax notices, then is the CEO of the company responsible for the crime committed by one of his employees? No. The CEO is responsible for trying to recover the money from the embezzler, and for making sure the back taxes are paid, but the CEO is not guilty of committing the crime.

If Congress was at all interested in getting to the bottom of the Deep Water Horizon accident, then it would wait for the conclusion of the investigation, and allow the proper authorities to take any necessary legal action. It’s clear to me that this Congress has no interest at all in getting to the bottom of the incident, nothing to offer in solving the current leak, and no ability to oversee the future of offshore drilling. With the exception of that brilliant question mentioned above, the hearing was a total waste of time.

Are you shocked? Am I suddenly supposed to trust the same people who lied about health care reform and the stimulus program? Instead of wasting valuable time, this subcommittee ought to be investigating the regulatory failures of the MMS, the EPA and the US DOE. It looks like the House Oversight and Investigations Subcommittee could use not only a few lessons in oversight and investigations, but a complete replacement of its members.

The Health Insurance Black Hole

Point of No Return

The Health Insurance Black Hole

By: Larry Walker, Jr.

Tweet

@CoachChic to @larrymwalkerjr Tell me: If Obama wants us to buy-into a healthcare package, why not just give us what congressmen get? I’m serious here.

Facts

With more than 1.8 million civilian employees, (1) the Federal Government, excluding the Postal Service is the Nation’s largest employer. The U.S. Postal Service employs an additional 636,000 (2) full-time employees.

Politicians and Federal employees receive the country’s best care – at taxpayers’ expense. While over 46 million Americans (disputed) remain uninsured and millions more underinsured, members of Congress receive health-related services that many in the U.S. will never see.

Representatives and Senators alike receive some of the best health care benefits in the country, much of it paid for with taxpayer dollars. Yet these same members seem unable – or unwilling – to extend similar protections to the rest of America.

Federal Employees Health Benefits Program

As soon as members of Congress are sworn in, they may participate in the Federal Employees Health Benefits Program (FEHBP). The program offers an assortment of health plans from which to choose, including fee-for-service, point-of-service, and health maintenance organizations (HMOs). In addition, Congressional members can also insure their spouses and their dependents.

Not only does Congress get to choose from a wide range of plans, but there’s no waiting period. Unlike many Americans who must struggle against precondition clauses or are even denied coverage because of those preconditions, Senators and Representatives are covered no matter what – effective immediately.

And here’s the best part. The government pays up to 75 percent of the premium. The government, of course, is funded by taxpayers; the same taxpayers who often cannot afford health care for themselves.

Self-only Estimates (Georgia Rates)

For non-Postal Employees, let’s use the federal government’s Georgia rates for Humana’s Standard Plan for self-only coverage. The total monthly premium in 2009 is $373.75. The amount paid by the employee is $93.44. The amount paid by taxpayers is $280.31 (3).

For Postal Employees, let’s use the federal government’s same Humana Standard Plan for self-only coverage. The total monthly premium in 2009 is $172.50. The amount paid by the employee is $23.29. The amount paid by taxpayers is $149.21 (4).

Click Image to Enlarge

Family Estimates (Georgia Rates)

For non-Postal Employees let’s use the federal government’s Georgia rates for Humana’s Standard Plan for Family coverage. The total monthly premium in 2009 is $859.67. The amount paid by the employee is $214.92. The amount paid by taxpayers is $644.75 (3).

For Postal Employees let’s use the federal government’s same Humana Standard Plan for Family coverage. The total monthly premium in 2009 is $396.77. The amount paid by the employee is $53.56. The amount paid by taxpayers is $343.21 (4).

Summary

Depending on the plan, and the State, the costs vary widely, but at the minimum, using Georgia’s insurance rates, which are among the lowest nationwide, taxpayers are on the hook for somewhere between $7.1 billion and $16.5 billion annually. Based on the rates in other states I think it would be safe to double these amounts. So let’s say it costs taxpayers between $14.2 billion and $33.0 billion per year to subsidize health insurance premiums for Federal Employees.

Again doubling the Georgia rates, health insurance subsidies for the 535 members of Congress cost taxpayers between $3.6 million and $8.2 million annually. To me this is a Black Hole. We pay for our own health insurance, and then we turn around and pay 75% of the cost for federal workers. Members of Congress and the Executive Branch need to start pulling their own weight. Especially since all they seem to be doing lately is spending money that we don’t have.

The Answer

Option 1: How much would it cost if the Congress were to grant the same health insurance plan that government workers enjoy, to the alleged 46 million uninsured?

If the government paid 75% of the premiums for the uninsured, the minimum cost to taxpayers would be somewhere between $154.7 billion and $355.9 billion. Since Georgia rates are about half of what they are in most States, the average is more reasonably, between $309.4 billion and $711.8 billion. Using the high-end figure of $711.8 billion, that’s about $2,372 per capita, annually.

Option 2: How much would it cost if Congress were to grant all 300 million of us access to the same 75% subsidized plan enjoyed by government employees?

The cost to taxpayers would be just over $1.0 trillion at Georgia rates, or more like $2.0 trillion nationwide. Using the high-end figure, again, $2.0 trillion is about $6,727 per year, per capita.

Thus it is unlikely that the nation could afford to offer all American’s access to the same kind of taxpayer subsidized health care which Federal employees receive. With the government paying 75% of the premiums, it would cost taxpayers around $2.0 trillion, or $6,727 per citizen, per year. And then we would still be responsible for 25% of the premiums.

As a Georgia resident, although my monthly premiums would only be perhaps $93.44, my taxes would increase by potentially $6,727 per year to subsidize everyone else. Thus, it would wind up costing me $7,848 per year, or $654 per month. For a family of four, the cost would be roughly $2,616 per month ($654 * 4). The average cost nationwide would be double the premium or $747 per month for individuals, and $2,990 per month for a family of four. Now that’s just outrageous.

Even if we could afford to give all Americans the same health insurance benefits hoarded by Congressmen and Senators, this still would not address the problems of rising annual health care costs, doctor shortages, rationing of care, lack of competition across state lines, undocumented workers, portability, unemployment, delinquent taxpayers, the recession, Medicare, Medicaid, the National Debt, the Budget Deficit, …etc….etc….etc…

Once again, I would conclude that it’s probably best to make some reforms to the current system, and not attempt any kind of radical ‘fundamental’ changes. However, one thing we can and should do right away is end the notion of taxpayer subsidized health insurance premiums for Federal Employees. We have to pay for our own insurance and then for 75% of theirs? This can and should end immediately, starting with the Black Hole – Congress, and the Executive Branch.

~A penny saved is a penny earned~

RT @CoachChic Again to my dream: That every American have on the tip of his/her tongue, “You design it, then join us!”

RT @CoachChic @HeavenandHealth My plan: Have pols design a healthcare plan, then join us in it. Fair enough?

RT @CoachChic Ya know, some of the most complicated problems have really simple solutions. 🙂

Sources:

  1. http://www.bls.gov/oco/cg/cgs041.htm

  2. http://www.federaltimes.com/index.php?S=4265826

  3. http://www.opm.gov/insure/health/rates/nonpostalhmo2009.pdf

  4. http://www.opm.gov/insure/health/rates/postalhmo2009.pdf

  5. http://public-healthcare-issues.suite101.com/article.cfm/health_care_for_the_us_congress#ixzz0RtqtCaVc