Medicaid Expansion a Ruse

I read an editorial in the local paper last month here

and my response was published here

Here is the unedited version of my letter to the Editor as I submitted it:


The editorial board of the Virginian Pilot is once again spreading propaganda in an editorial that presents a false either-or choice to your readers on yet another wealth distribution scheme. Your editorial is also surprisingly cavalier about the reality that the Affordable Care Act (Obamacare) and its accompanying agenda on Medicaid expansion is, in fact, a wealth redistribution scheme funded by a large tax increase. I applaud that you finally acknowledge the ACA for what it is, albeit after years’ worth of contradictory editorials that shielded your readers from this reality in order to garner support for Obama and his ACA.

The message in this Medicaid editorial reads that under a federal law, you’ll be paying $10 billion in new Federal taxes through the next five years, so State Republicans need to support Virginia’s expansion of Medicaid so that tax money can be recycled back to the State. Your flawed premise assumes that all laws, regulations, and taxpayer behaviors will remain static during the next five years and speciously equates the acceptance of federal dollars to a savings for Virginia, as if our tax dollars somehow belonged to Virginia and her poor uninsured residents to begin with, and not to the residents who work to earn the money as income. There’s also an element of “you’ll be paying the tax money anyway, so why not have it benefit Virginia.” The false choice you present is whether we want speculative tax money to go to the feds versus the state.

Who’s guaranteeing that we taxpayers will actually pay $10 billion in new Federal taxes during this time and how does our payment of Federal taxes justify a subsequent claim to that money by Virginia? Who’s guaranteeing that President Obama won’t unilaterally change the Affordable Care Act like he’s done in circumvention of Congress numerous times already? What would be Virginia’s budgetary contingency plan should the feds fail on their funding commitment? And what would Virginia do if we continued experiencing annual budget shortfalls even after receiving kickback money from the fed? The real choice we have is whether we even want to pay the additional Federal tax in the first place, and we can own that choice by changing our financial behavior and/or congressional representation this November. Your editorial reeks that we need to expand Medicaid now now now while we can, conceding to the reality that you’re presenting said false choice.

State Republicans are prudent in supporting a budget absent this “contingent” federal funding and are astutely identifying yet another significant flaw within the ACA. I’d hardly call skepticism towards contingent funding a “pretense” of fiscal conservatism in light of the many instabilities evident within the Obama administration and his proclivity for making changes to Obamacare. Your editorial describes such prudence as a “foolhardy” view yet you don’t support your assertion with anything relevant, other than stating “other Republicans are supporting efforts to recapture federal tax dollars”, implying that we need to get on board simply because everyone else is. It’s not too far a stretch to see there’s a risk to the ACA standing as law following the next election cycle and we should not be building a new Medicaid program until our political climate shows signs of sanity and stability. The fact that your editorial goes out of its way to avoid naming the $10 billion federal tax law as one of the many tax increases embedded in the ACA itself further asserts that the prudent thing to do is wait.

Your promotion of false choices based on flawed premises do a great disservice to this community.


The Tax Myth

Always remember - taxing the rich would just make the stuff we buy more expensive.

Question #17 of a recent Washington Post/ABC News poll conducted on April 17, 2011 showed that 72% of respondents favored a tax increase on the “rich” as the most popular solution to reducing our national debt. A mere 27% of respondents opposed this idea. With 68% of those surveyed making under $75K per year, it’s no surprise that raising taxes on the rich is the popular response. But would that really solve our debt problem?

The CBO determined the cost of the Bush tax cuts to be approximately $80B per year. Contrast that to our current national debt of $14.3T and our current budget deficit of $1.35T. Taxing the “rich” by expiring the Bush tax cuts would reduce our deficit to $1.27T and would do absolutely nothing for our debt level. We’d have to tax the rich another 16 times each year for this solution to resolve just the deficit problem.

The second most popular solution illustrated in the poll was to find savings in defense spending. If we were to completely eliminate all defense spending in addition to taxing the rich, we’d save another $665B per year which would further reduce the current deficit to $605B. The poll showed overwhelming opposition towards involving social programs in debt reduction initiatives.

Although taxing the rich and cuts in defense are easy targets, they alone clearly fail to impact our mounting debt crisis. Our government has an unsustainable spending problem. Without immediate and meaningful changes to the sacred entitlement programs along with other sensible spending reductions, we are guaranteeing ourselves fiscal ruin no matter how much heavier we’re taxed.

Christmas in Washington

OK, so last week the Democrats were screaming about extending the Bush tax cuts adding $700 billion to our deficit.  So what do they do about it?  They rewrite the legislation and fill it up with another $157 billion in giveaways to environmentalists, Hollywood, and energy industries that certainly don’t need our tax dollars.  Now the perceived cost of this “tax rate extension” is a whopping $857 BILLION DOLLARS, and not a scream can be heard within the halls of Congress.  Bunch of hypocrites.

I urge the republicans, who are not exactly innocent here either, to do whatever’s necessary to kill this legislative attempt.  I also urge Obama to stand behind the verbal agreement he and the republicans reached and not support all of these democratic giveaways.  Next month when the republicans take the House and increase their numbers in the Senate, perhaps they can do this the honest way and leave all the BS out of the bill.  Heck, while you’re at it, why don’t you actually lower taxes rather than just leave rates where they are today.

Is it really that difficult for Congress to focus on a single issue and deal with that issue alone?  These pathetic politicians just can’t help themselves when it comes to resisting the urge to fatten legislation up with pork.  Using MY money no less……..

We can’t afford tax cuts?

Even the cupcakes are smart enough to understand this.

Congressional Democrats are screaming that we can’t afford to let the “Bush tax cuts” expire because that would add $700 billion to our deficit.  Let me translate this belief for you:

  1. Democrats believe your wealth belongs to them.  And they’ve already spent $700 billion that they hadn’t collected from you yet.
  2. President Obama himself has acknowledged previously that increasing the tax rates doesn’t necessarily increase tax revenue to the federal government.  Similarly, the CBO has many times in its budget baseline revisions recognized the unforeseen revenue increases that result from lower taxes.  These two realities contradict what the Democrats are currently screaming about.
  3. George Bush cut our taxes in 2001 and 2003.  This was in comparison to what we’d been paying in previous years.  Democrats today believe that leaving these current tax rates as-is equates to “giving tax cuts to millionaires and billionaires”.  Sorry guys, Bush already did that years ago, so if you let them expire, you are in fact raising taxes.
  4. “Millionaires and billionaires” really means any individual earning over $200,000, or couples earning over $250,000 per year – and small businesses in this income range too, since most small businesses report income on a personal tax return (usually the owner’s).
  5. Increasing the tax rates on the “rich” essentially means that the majority of “stuff” you buy will become more expensive.  The “rich” bake their tax expense into the price of the things they sell – and you pay their bill when you buy their stuff.
  6. You don’t hear the Democrats exploring ways to cut $700 billion in social spending as a way to “balance” the extension of current tax rates do you?
  7. Separately, Democrats want to give capital gains tax breaks to small businesses in hopes of stimulating job creation.  (Editor’s note:  do you know of any small businesses that actually pay capital gains taxes?  I don’t.)  At the same time, 3% of all small businesses will take it in the shorts if the “Bush tax cuts” for “millionaires and billionaires” expire.  While only 3% of small businesses may seem inconsequential, these 3% of businesses represent 48% of small business wealth.

So to recap, the Democrats are screaming to raise taxes knowing that would mean less money coming in to the government coffers.  They’re screaming to hit 48% of our job-creating wealth with a tax increase while also relying on these small businesses to create jobs.  Democrats are NOT screaming about the fact that stuff will be more expensive if taxes are increased on the rich, because lots of folks don’t seem to understand that concept themselves.  And Democrats are screaming that our wealth belongs to them and it’s not their fault they’ve spent more than we gave them.

Mamma always told me to not spend what I ain’t got.  Democrats don’t seem to understand that simple concept, and they’re more than willing to screw all of us with taxes while they pee on our leg and tell us it’s raining.  Yes, we can afford to keep tax rates where they are – and even lower them.  The problem is that Democrats can’t seem to keep their credit cards in their wallets.  Lots of votes to buy……….

Questions?  Leave a comment and I’ll be happy to clarify –

Taxes and Stimulus

Low taxes keep more money in our pockets, which we spend, which increases economic demand, which fuels productivity, which creates jobs. As we go back to work, the taxpayer base grows and revenues to the government increase. Lowering taxes and relaxing unnecessary regulation attracts businesses and wealth back from overseas.

Raising taxes has the exact opposite effect. As people lose jobs, the taxpayer base shrinks, increasing the burden on the working population to cover expenses previously shouldered by the now non-working. At some point the money will run out, as will the motivation for the working population to work harder. And in a tax-heavy and over-regulated environment, businesses flee.

When government does our spending for us through higher taxation, they control where the demand is created, thus picking the economic winners and losers. They also control whether the spending stays here or goes to some other foreign economy. Government stimulus only prolongs the inevitable simply because their spending is short term and unsustainable.

And speaking of stimulus, government stimulus spending does not stimulate the economy because that money is simply being taken (taxed) from some other area of the economy first. The net effect is zero. Here’s an illustration to help you understand:

You and I are standing in the checkout line at Walmart. I have a dollar that I earned and I’m preparing to pay for my widget. Before I can, the dollar is taken from me (tax) and given to you (social spending). I leave Walmart empty-handed while you spend my dollar and walk away with the widget. How has Walmart (the economy) received a net benefit from this transaction beyond what was there originally?

So as you hear the debates raging about whether the “Bush tax cuts” should expire at the end of this year, ask yourself how you’ll feel having that dollar, oops make that two dollars in 2011, stolen from you while you wait in line at Walmart. That’ll sure help the economy recover, won’t it?

Cap and Trade

Cap and Trade will empower our government to heavily regulate multiple industries with fees, permits, emission “credits”, and penalties. It also gives our government a hand in everything that produces, stores, transmits, consumes, or requires energy in some fashion. All of the costs as a result of this legislation will trickle down to the consumer in the form of more expensive utilities and consumables.

The bill was urgently rammed through Congress before anyone had read it – including our Congressional reps – because it would not have passed a sanity check if we saw what it contained. Using global warming as justification for the largest tax increase in history is meant to distract us in to believing we’re supporting something for “a good cause”. The reality is that this Bill is designed primarily to give the government more control over multiple industries in the US. Before you disagree with my summarization, please read the bill yourself. You’ll be pretty dang surprised at everything it encompasses.

Read my 15 Minutes letter for more information on this Cap and Tax scheme.

The beauty of the FairTax

I completely agree that “not all taxes are bad; especially if we share equally in the process.” That’s why I don’t support the idea of a VAT, because it only adds to the disproportionate tax structure of the US. Instead, I recommend we completely ditch our existing tax structure along with the IRS, and instead have ONLY a VAT that the feds and states divvy up. That way, we would all “share equally in the process” instead of relying on the top 10% of earners to pay 90% of the income tax (

Could you imaging bringing home every penny you earn in your paycheck? Could you imagine how we’d attract businesses back to the US if there was no corporate tax? If you like the sound of that, get to know the FairTax legislation (HR-25) and ensure your future elected representatives support it.

Here’s an overview of what the FairTax is.