Taxed. Again and Again and Again.

We the Overtaxed People dread most April fifteenths but that terrible day has been delayed to April 18 again this year.

“Tomorrow, tomorrow, I love ya tomorrow
You’re always a day away …”

Form 1040Emancipation Day, a little-known holiday beyond the Beltway, is the primary reason the tax deadline changed this year. Slavery was formally abolished in the United States December 6, 1865, when the 13th Amendment was ratified, but it occurred much earlier in the District of Columbia: President Abraham Lincoln signed the Compensated Emancipation Act on April 16, 1862, freeing the thousands of slaves who lived in the district. Now a legal holiday in Washington, government offices and other public services do not operate on Emancipation Day, usually celebrated April 16. Emancipation Day falls back to April 15 or ahead to April 17 when it falls on a weekend because we couldn’t deprive civil servants in that city of a holiday.

This is the second year in a row.

In other tax news, tax-refund fraud continues to soar this tax season. It will top $21 billion this year, up from “just” $6.5 billion three years ago, according to the Internal Revenue Service. The IRS’ own “Dirty Dozen” lists the common scams that peak during filing season as people prepare their returns or hire someone to help with their taxes. Half are crimes against us including phishing, phone scams, and identity theft.

Elian Matlovsky of Staten Island was found guilty in what the prosecutor described as “one of the nation’s largest and longest running stolen identity tax refund fraud schemes.”

Here’s how it worked. Ms. Matlovsky and the other defendants were found to have filed more than 8,000 fraudulent federal income tax returns for more than $65 million in tax refunds. They did it by stealing Social Security numbers and dates of birth and using that information to file the false returns claiming refunds.

My liberal friends like to make hay on the fact that the rich don’t pay taxes but my liberal friends are wrong.

I ran a quick guestimate for the fabled “one percenter” with a gross annual income of $1,260,508, a $10,000 retirement plan contribution, $26,690 in itemized deductions, and two kids. That taxpayer has $1,152,975 in taxable income and will pay about $411,339 in taxes. The effective tax rate is 32.6% and the marginal tax rate is 39.6%. (That gross annual income is the least that qualifies for “one percent” status.)

Now look at a “ten percenter,” a married engineer earning $133,445 in salary with no investment income, a $5,000 retirement plan contribution, $13,345 in itemized deductions, and two kids. That taxpayer has $107,000 in taxable income and will pay about $17,465 in taxes tomorrow. The effective tax rate is 13.1% and the marginal tax rate is 25.0%. (That gross annual income is the least that qualifies for “ten percent” status.)

“The tax code is about 2-1/2 times the length of Stephen King’s It–except you replace ‘scary clown’ with ‘accounting methods’.”

Finally, consider the married person who earned $40,190 in wages with no other income, no retirement plan contribution, taking the standard deduction, and two kids. That taxpayer has $19,490 in taxable income and will pay about $0 in taxes tomorrow. The effective tax rate is 0.0% although the marginal tax rate is still 15.0%. (That gross annual income is about the most a family of four can make before paying $12 in income tax for the year.)

Want to tell me again who pays the least taxes?

There are now more than a thousand pages of tax forms.

Slate, apologizing again for Big Government, would have us believe the tax code wasn’t 70,000 pages long in 2013. It was “only” 4,037 pages then. Oh, goody.

Want to tell me again why this is fair.


Just remember, the very same people who want nationalized, government-run, single-payer health care (“Medicare for All”) oppose the simple, fair flat tax. I’m pretty sure there is a moral in there somewhere.

SCOTUS Upholds Obamacare: It's a tax
Bet your bottom dollar that tomorrow
your bottom dollar will be gone!

 

Random Inflation

I live in the middle of the Florida Keys where I have flood insurance and windstorm insurance as separate policies from my “traditional” homeowner’s insurance.

The premiums went up this year.

Again.

A lot.

FEMA runs the National Flood Insurance Program which “aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners…” They have lousy aim.
The state-run Citizens Property Insurance Corp provides windstorm insurance protection to Florida policyholders. The “financial responsibilities [imposed by the Florida law] drive Citizens’ commitment to quality customer service and rigorously sound financial management.” Their aim is much better since premiums have skyrocketed. They have 459,797 windstorm policies in Florida overall and 17,264 of the 22,663 wind policies here in the Keys.

When I realized how much my premiums went up and how much my Social Security didn’t, I got to wondering why. After all, these are all government programs, driven to customer service and affordability. And we know the government ties everything to the Consumer Price Index, right?

Inflation and its Effect on Premiums

The Bureau of Labor Statistics “is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy.” They collect and analyze that data and then tell us about it. We the Overtaxed People as well as the U.S. Congress, other Federal agencies, and State and local governments depend on BLS data every day. The Consumer Price Index may be their best known number among older Americans. Current Employment Statistics may be the most quoted in the press. They have more.

The official BLS inflation calculator shows there has been 14% change in the CPI since 2009.

The official Cost Of Living Adjustment (based on the CPI) increased 0.0% in 2009, 0.0% in 2010, 3.6% in 2011, 1.7% in 2012, 1.5% in 2013, 1.7% in 2014, 0.0% in 2015, and 0.3% in 2016. Because “inflation has been very low in recent years,” Social Security recipients did not get a COLA increase in 2010 or 2011. SWMBO, who received about the average monthly Social Security through that entire period, has seen her check increase 7.7% from 2009 through 2017. Recipients did (sort of) receive a cost of living adjustment this January but most saw no increase in their monthly check because the government’s own Medicare Part B insurance premium went up more than the COLA.

Meanwhile, my FEMA-run flood insurance has risen 75% from $1,173 in 2009 to $2,051 today. Citizens more than doubled my windstorm premium, a 224% hike, from $2,149 in 2009 to $4,816 last year. It will be even more this year.

The liberal ideal is “Medicare for all” because they say it will drive costs down, but if FEMA and Citizens are examples of efficient, affordable government programs, we should be very, very afraid of all of these “ideal” liberal programs.

 

Expressive

Commuters are getting soaked in Florida. It ain’t raining.

Back in 2006, the American Association for State Highway and Transportation Officials and the Federal Highway Administration commissioned Future Financing Options to Meet Highway and Transit Needs. That and other studies going back to Robert Poole’s original paper for the Reason Foundation helped set up the market priced “express” lanes all over the country.

See, highway departments have tax-driven budgets.

Every politician says “I oppose solving these problems by raising taxes.”
“The only difference between death and taxes is that death doesn’t get worse every time Congress meets.” –Will Rogers

Here in South Florida where 36-mile Krome Avenue project is now underway at a projected cost of $284.8 million, the Department of Transportation is always looking for ways to supplement its budget. They found it by adding toll lanes to the “free” Interstates. They call those “express lanes.” Most Floridians call them dangerous abominations.

Sen. Frank Artiles (R-Miami) filed SB 250 last month to do away with express lanes on all of Florida’s highways.

Yay, Frank!

Lane DivingThe bill will allow FDOT to collect tolls to pay off the bonds for the toll construction but the tolls must be eliminated after discharge of the project’s bond. It prohibits the creation of any new high occupancy toll lanes or express lanes. And it requires FDOT to change existing lanes so they are no longer high occupancy toll lanes or express lanes upon elimination of their tolls.

Here’s the biggie: Tolls may not be charged for use of an interstate highway where tolls were not charged as of July 1, 1997.

“The problem is government spends too much. So raising taxes is what politicians do, instead of reducing spending.” –Grover Norquist

In Miami, FDOT turned two existing lanes into toll lanes which simply shrank the highway for everyone. It was another money grab.
Miami drivers are so frustrated, the new South Florida sport is “lane diving,” that is, drivers diving in and out of express lanes.

Express Lane Accident“At any moment there is a chance that somebody is going to dive into my lane not wanting to pay the fee for the express lanes from the beginning,” Mark Kaire told WFTS in Tampa this month. The Miami attorney represents 10 clients suing FDOT; all were had accidents caused by the orange lane dividers that separate the express lanes from the regular lanes.

By the way, FDOT got it wrong another way. The “closed” signs on I-95 Express have a black background with the “No Vacancy” part illuminated in yellow lights. The trouble is, Florida highway regulatory signs must be black and white to be legal so the Florida Highway Patrol can’t enforce the FDOT request to not use the lanes.

If SB 250 is successful, FDOT will lose the $27.6 million in revenue they made last year.

I hope Florida hasn’t heard of the Alameda freight corridor plans. They charge up to $30 fees “on each container that uses or could have used the corridor.” I can just imagine the glee at that idea within FDOT.

“Let’s see. Harper drives up Krome Avenue to avoid our tolls on Florida’s Turnpike or the I-95 Express Lanes,” goes that thought balloon. “But he should take the turnpike, so we’ll deduct that fee from his SunPass.”

12,192 crashes occurred in the express lanes in Miami-Dade County alone but there were only five fatalities.

The Florida Department of Transportation, of course, maintains that the lanes are safe.

“I truly believe that it’s only a money-making scheme,” Sen. Artiles told Local 10 News. Me, too, Frank. Me, too.

 

Taxed. Again and Again and Again

We the Overtaxed People dread most April fifteenths but that terrible day has been delayed to April 18 or even April 19 this year.

Form 1040Emancipation Day, a little-known holiday beyond the Beltway, is the primary reason the tax deadline changed this year. Slavery was formally abolished in the United States December 6, 1865, when the 13th Amendment was ratified, but it occurred much earlier in the District of Columbia: President Abraham Lincoln signed the Compensated Emancipation Act on April 16, 1862, freeing the thousands of slaves who lived in the district. Now a legal holiday in Washington, government offices and other public services do not operate on Emancipation Day, usually celebrated April 16. Emancipation Day falls back to April 15 or ahead to April 17 when it falls on a weekend because we couldn’t deprive civil servants in that city of a holiday.

In other tax news, Schedule HI-144, Vermont’s “Household Income Schedule” has a couple of unique features. By “unique” I mean “criminal.”

Here’s the first.

Definition:
Household Income means modified adjusted gross income, but not less than zero (0), received in a calendar year by:
all persons of a household while members of that household;
AND
the spouse of the claimant who is not a member of that household no matter where that spouse lives and who is not legally separated from the claimant, unless the spouse is at least 62 years of age and has moved to a nursing home or other care facility with no reasonable prospect of returning to the homestead.

So. Imagine that you live in North Puffin in the People’s Republic of Vermont but your spouse lives in Florida or South Dakota or Pago Pago, the territorial capital of American Samoa. You go to work, come home, feed your rabbit, put your feet up, watch TV. Tomorrow, lather, rinse, repeat. Meanwhile, your spouse works extraordinarily hard in that other place. He or she walks down to the beach, sniffs the fine odor of fish, and counts the boats in the harbor, until it is time to go home, feed his or her koi, put the old feet up, and watch TV. Tomorrow, lather, rinse, repeat.

That spouse never, ever comes to Vermont and has no Vermont income. Vermont grabs on to the Household Income of the spouse of the claimant who is not a member of that household no matter where that spouse lives.

It gets better.

Line e Interest and dividends
Enter the income required to be reported on Lines 8a and 9a of Federal returns 1040 or 1040A; or on Line 2 of Federal return 1040EZ plus the nontaxable interest not required to be reported on Federal return 1040EZ.
Line t
Add columns 1, 2, and 3 and enter sum. Entry cannot be less than zero (0).
Line u
For claimants under the age of 65 as of Dec. 31, 2015, enter the total of interest and dividends for all household members reported on Lines e and f in each column.
Line v
Add the three columns on Line u.
Line w
For purposes of calculating the property tax adjustment or renter rebate, household income is increased by the household total of interest and dividend income greater than $10,000.
Line x
Subtract Line w from Line v. If Line w is more than Line v, enter zero (0).
Line y Household Income.
Add Line t and Line x.

Didya notice?

Line e: enter the interest and dividend income required to be reported on your Federal return even if it’s nontaxable. Line u: enter the interest and dividends reported on Lines e and f. Now add it all up.

Didya notice? Vermont makes you add in your interest and dividend income twice.

Wet Lubes Wet Uranus SiliconeWhat have we learned today?

If the People’s Republic of Vermont knows your name, they will tax you even if you live off planet. If you have a homestead in the People’s Republic of Vermont, they will tax twice for interest and dividends.

And there is no deduction under tax preparation expenses for Wet Lubes Wet Uranus Silicone.

Now does anyone wonder why I support (a) the flat income tax and (b) elimination of all other tax methods including corporate taxes? People have the right to be taxed fairly, the right to know how much is coming out of their pockets, and the right not to be taxed two or three times on the same income.

 

Sale! Sale! Sale!

Americans lurve sales. We shop the grocery fliers. We bargain for our cars. We go to garage sales.

I bought milk on sale Saturday because it was “on sale” but it would be “regular price” today when I actually run out. I have to buy milk every few days, sale or not, but I try to time it to match the store cycles.

On the other hand, I’m in the market for a new-to-me pickup truck and a camera lens. I don’t need either of those today so I’ve been more picky waiting for the price I’m willing to pay.

Willing to pay is the key.

Ever tried to figure out what that new car actually cost the dealer? How about what the dealer paid for that “certified pre-owned”?

I found a car on sale recently. A dealer bought the car for $9,500 and spent about $400 for repairs and reconditioning. The car went on the lot for $13,990. That’s more than a 40% markup for some “floor” space on a gravel lot.
The eventual buyer “negotiated” the price down to $12,450 for that $9,500 car.

We trust used car dealers, don’t we?

The Interwebs have exploded with people discussing Mr. Sanders and his plans to tax the rich to fund free universal health care, free college, free birth control, free housing for the poor, and more. One poster wrote:

“Obamacare is a giant bloated horrible mess. Medicare is much the same. We can’t simply toss them in the trash, though, and tell everyone, ok now, go out there and shop for insurance same as you do shoes, good luck! Because unlike the kabillion shoe-sellers competing with each other for our business, there are only a couple health insurance companies colluding to eff us all up the ass. No matter what happens, they are guaranteed to raise their rates and make more money. Nothing and no one stops them, the way things are currently structured. Obamacare never even pretended to fix this.”

Mr. Obama lied.

The NYTimes reported that, Back when he was pushing the Unaffordable Care Act, President Obama lauded Grand Junction as a model of better, cheaper health care. “You’re getting better results while wasting less money,” he told the residents.
It turned out that Grand Junction’s Medicare billings were lower than average with no impact on health outcomes. “All we have to do,” he implied “is get the rest of the country acting more like Grand Junction, to get U.S. medical costs to drop.”

Grand Junction is one of the most expensive health care markets in the country for anyone on ObamaDon’tCare or any other private insurance despite its unusually low spending on Medicare. It turns out that Grand Junction has a small enough, healthy enough Medicare population that providers can cost shift to the private plans. Grand Junction has a big enough population with little enough competition that they can charge mostly what they want.

That works because a house call used to cost one chicken but today we have no idea how much your physician will charge for the half-dozen “procedures” that go on the bill for a simple checkup.

Have you ever asked your doc what an office visit costs?

And no one every notices that Emperor Obama’s plan has no clothes.

We need a sale!

Oh. Wait. Here’s a more personal example of costs and transparency.

SWMBO had a “screening mammogram” last fall. The bills included the actual boob crushing/digital picture taking, computer analysis, more computer analysis, and an assessment. The hospital billed $402. The physician who read the “film” charged $151. Medicare paid the hospital $104 and the doc $38, about a third of the billed cost.
No one at the hospital knew how much it would cost. No one could even tell us who would “read the film” so we could ask that price.
A south Florida provider advertises “cheap” mammograms for $799. The commercial doesn’t tell us if that includes just imaging, imaging and computer assessment, imaging and computer assessment and assessment, or something else.

We had no idea how much SWMBO’s procedure cost until Medicare sent us the make good on how much they paid. It’s intriguing that the total charge (not what we paid but the total charge) was less than the “cheap” one in Florida.

Medicare is like getting medicine on sale, right?

I’ve written about cost shifting before.

ObamaDon’tCare is like getting medicine on sale, right?

Rather than reducing costs, the Unaffordable Care Act has raised the annual cost of health care from $8,299 to $9,146 last year to a looming $10,000 per person this year. That makes it a $3.2 Trillion budget item. That’s THREE POINT TWO TRILLION DOLLARS.

Mr. Sanders’ failed-plan to expand health care coverage is pretty simple arithmetic. He wants to expand health care coverage by adding or increasing specific taxes (a 6.2% income-based health care tax plus a 2.2% income-based tax, plus new progressive income tax rates, plus capital gains and dividends taxes, plus estate tax). Total government spending is about $3.8 Trillion for the Feds and $6.2 Trillion for all U.S. Federal, state, and local governments. Mr. Sanders will double the Federal budget and push government spending overall to about $10 Trillion. That’s TEN TRILLION DOLLARS.

Mr. Sanders’ “let’s pretend we can do it by soaking the rich corporations” approach takes away the retirement of seniors and guarantees poverty for everyone else working for for a living.

We need a sale!

Many pundits believe all we need is some transparency. They’re wrong, too. Just knowing how much an office visit costs is only part of the solution.

The real answer is simpler. There isn’t enough money in the U.S. economy to pay for the current model of U.S. health care whether it is nationalized a la Mr. Sanders or market-based a la the national association of used car dealers.

Back in 2009, my treatise on fixing the U.S. health care system started from a simple premise: Health care in America is fundamentally broken. The numbers in that piece are still dead bang on. In 2018, I wrote then, “health care will cost $13,000/year for every man, woman, and child in America.” It’s 2016 now and we’re at $10 grand already.

The fix is a two-part piece, starting here.


This directory lists some of the earlier  No Puffin Perspective™ articles about the Patient Protection and Unaffordable Care Act signed into law by President Obama in 2010.