Americans and business being driven away by taxes and regulations

Commentary by James Shott

It is frequently said and generally true, especially well into the 1900s, that America is a land of immigrants, due to the huge numbers of people that have flocked to the United States since the early 1600s when the Pilgrims began the process, crossing the ocean in a long and perilous journey seeking religious freedom. A major wave of immigrants arrived here during the colonial era, during which the United States of America was born, and another wave occurred from 1880 to 1920, as thousands arrived seeking greater economic opportunity.

While these periods saw immigrants voluntarily traveling to America, thousands of African slaves reached our shores, brought here against their will from the 17^th century well into the 19^th century.

Four hundred years after the Pilgrims sought freedom of religion, America is still a favored destination for people from many other nations, and many or most of them come from highly troubled circumstances in their home countries and seek a better life, and as we have seen more recently, many sneak across the borders, and some come here to cause trouble and pain.

Curiously today, we also find thousands of Americans voluntarily giving up their U.S. citizenship for that of other countries. This is a trend that has seen surprising growth over the last several years.

Looking back to 1998, 398 Americans gave up their citizenship, and through 2009 the number of American expats ranged from a low of 231 in 2008 to a high of 762 in 2005, which was the end of a slow but steady seven-year increase in expatriate activity, according to data from the U.S. Treasury Department. After that, the numbers bounced around below the 2005 high, but then in 2010 that number nearly doubled, with 1,534 Americans giving up citizenship. This was the start of a period of increasing numbers of expatriates for every year except one, until it peaked last year at 5,411.

Interestingly, more than one-third of those expats in 2016 took this step in the last quarter of the year when the presidential campaign ended and the election was held. This raises the question of whether so many did so in the last three months of the year because they feared Hillary Clinton would win the election, or whether they decided to split after Donald Trump defeated her to become president?

During the run-up to the election a long list of recognizable names threatened to leave the country if Trump won, including one Associate Justice of the Supreme Court, Ruth Bader Ginsberg. It is worth noting that Ginsberg and many, or perhaps all, of the others threatening to leave are still here.

As these personalities were advertising what turned out to be their idle threats, countries like Canada and New Zealand advertised themselves as desirable destinations for Americans ready to abandon ship. As it turns out, New Zealand is the third most popular destination for American expatriates after Malta and Costa Rica, and followed by Mexico.

Why are people who are citizens of perhaps the most sought-after destination for people leaving other countries willing to give up U.S. citizenship to live somewhere else?

There are several reasons, such as that some of them fell in love with the culture and history of another country while on a trip abroad, and decided to move there. Or perhaps some may be immigrants who came here, became citizens, and want to return to their native land.

But another reason explains expatriation: The escalation of offshore penalties over the last 20 years is likely contributing to the increased incidence of expatriation, in the judgment of the tax attorneys who track expatriate data on their International Tax Blog. And US News adds that “The U.S. is one of a very small number of countries that tax based on nationality, not residency, leaving Americans living abroad to face double taxation.”

The U.S. tax code once again rears its ugly head. Its irrational design not only encourages businesses to move to other countries, but encourages individuals with earnings in other countries to abandon their citizenship, as well. However, President Donald Trump has pledged to overhaul the tax code, reducing tax rates on businesses and individuals, among other changes, and that may make a difference for these people.

Inside the tunnel where the Left lives, peering out on the world with their narrow view of things, everyone that makes a lot of money and every large company is an evil thing that threatens survival, so tax breaks that help the wealthy and the rich corporations are a bad thing.

But moving past the liberals’ tunnel vision, removing tax provisions and regulations that punish businesses and creating an environment that invites businesses, will encourage those that left to return and will help domestic businesses to expand and produce the jobs the country so badly needs.

Lowering personal tax rates and raising the standard deduction will leave more hard-earned income in the hands of regular people, who will then spend and/or invest it, both of which help the economy grow. And doing away with taxing foreign income will remove a factor encouraging people and their money to seek greener pastures elsewhere.

Cross-posted from Observations

As the election approaches, let’s focus on what is really important

Commentary by James Shott

Even though the recession officially ended in June of 2009, America’s economy continues to languish:

• The national debt will have grown from $10.7 trillion at the end of 2008 to $15.8 trillion by the end of 2012 – that’s about $51,000 for every American citizen (adults and children) – and will exceed total Gross Domestic Product for the first time in the nation’s history.

• Of every dollar the federal government spends, 40 cents is borrowed.

• The unemployment rate has been above 8 percent since February of 2009.
• As of this July 13.4 million Americans were unemployed, and nearly 21 million others were underemployed or have given up looking for work, about 22 percent of the workforce, altogether.

• At July's rate of job growth – 163,000 new jobs – it would take more than eight years to get back to full employment.

• Gross Domestic Product was negative for several months and has been mostly 1.0 to 2.5 percent for the last three years. In only two of the last 13 quarters has GDP been what is regarded as relatively strong growth of 4 percent or more.

• The United States’ economic freedom score of 76.3 puts it in 10th place in the 2012 Index. Its score is 1.5 points lower than last year, reflecting deteriorating scores for government spending, freedom from corruption, and investment freedom. The U.S. is among 23 countries rated “mostly free.”

• Social Security owes $11.3 trillion more in benefits than it will receive in taxes. That includes $2.7 trillion to repay special-issue bonds and $6.5 trillion for benefits after the trust fund is exhausted in 2033. That is an increase of $2.2 trillion from last year’s report, and is the largest one-year drop in the program’s finances in nearly two decades. The system ran a deficit for 2011 of $11.5 billion.

• The U.S. Senate has not acted on proposed budgets in over three years.

• One of every three Americans – more than 100 million of us – receives some form of support from the government, and nearly half of American workers pay nothing to support the federal government.

In 1992, when Bill Clinton was running for president against incumbent George H.W. Bush in a much stronger economy than we have today, the major focus of Democrats was, “It’s the economy, stupid.” That is not their focus today. Mitt Romney’s tax returns are far more important to them.

If you are one of those wondering about Mr. Romney’s tax returns, ask yourself this question: If the tax laws are written to encourage people to do certain things that limit their tax liability through deductions or credits (such as charitable contributions), and if a high earner like Mitt Romney does some or all of those things the tax laws encourage taxpayers to do, and by doing those thing he pays little or no taxes to the federal government, why should anyone be concerned about that, or try to make Mitt Romney out to be some sort of un-American tax-dodger?

The answer, of course, is that Democrat’s record provides nothing for them to talk about. They have made little if any progress against the nation’s substantial economic problems.

Actually, if it was just that Democrat policies haven’t improved things, we would be better off than we are. But Democrat policies have made things worse, and more bad news is on the horizon.

A July survey by the National Federation of Independent Business revealed that the top three concerns of small businesses were taxes, regulations, and poor sales. These concerns pose a significant problem, because small businesses are America’s job creators, the engine of the American economy. The Small Business Administration estimates that small businesses create about 65 percent of the nation's net new jobs, or jobs created minus jobs eliminated.

There are 1.2 million small businesses that employ workers and make more than $200,000 a year, and which pay taxes as individuals. The expiration of the “Bush tax cuts” raises their taxes and Ernst & Young estimates that more than 700,000 jobs will be lost.

The Heritage Foundation reports that "During the first three years of the Obama Administration, 106 new major federal regulations added more than $46 billion per year in new costs for Americans. Hundreds more regulations are winding through the rulemaking pipeline as a consequence of the Dodd–Frank financial-regulation law, the Patient Protection and Affordable Care Act, and the Environmental Protection Agency's global warming crusade, threatening to further weaken an anemic economy and job creation."

Businesses are also suffering from reduced sales, since so many people are out of work, and further impacted by rising fuel prices. This forces businesses either to raise prices to recoup the additional costs, which further discourages sales, or to absorb the costs, affecting profitability. Higher costs discourage hiring, and lower profits put businesses at risk of closing.

But let’s not let these dire circumstances cause us to take our eye off the ball. As the election approaches, we have to focus on Mitt Romney’s tax returns and other similar less significant things than the horrible economic and jobs pictures.

Cross-posted from Observations

Tortured reasoning transforms an unconstitutional mandate into law

 

Commentary by James H. Shott

Last week U.S. Supreme Court Chief Justice John Roberts joined Justices Antonin Scalia, Clarence Thomas, Samuel Alito and Anthony Kennedy in correctly identifying the individual mandate in the Patient Protection and Affordable Care Act as unconstitutional. That is what the Supreme Court is expected to do: follow the original intent of the authors, who created a document to protect America from over-reaching government actions like this one.

Writing for the Court’s majority, Chief Justice Roberts said: "The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce." He continued, correctly identifying the chaos that would result from finding the mandate constitutional: "Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority." Exactly. But the majority didn’t stop there.

Instead they decided the individual mandate is not really a mandate, it is a tax, essentially rewriting the statute and thereby making “Obamacare” the law of the land. But if, as Justice Roberts wrote, you cannot regulate individuals “because they are doing nothing,” how then can you tax individuals because they are doing nothing? This turns the definition of “taxation” on its head, taxes typically being levied on working, buying and owning, as opposed to levying taxes on not working, not buying, or not owning.

What exactly caused the Chief Justice, criticized by liberals for his judicial conservatism, to depart from his expected position? Many of those familiar with his thinking say the decision is in keeping with his values — conservative in his judicial views, but also considering the Court’s reputation. If the Court is seen as too conservative – adhering to the Constitution’s original intent too often – it may become unpopular with liberals.

Others believe he worked a brilliant bit of judicial magic by striking down the mandate, but upholding the statute’s constitutionality as a tax, preserving President Barack Obama’s signature accomplishment and allowing him to save face, but at the same time giving the law’s opponents a way to correct its many flaws.

Whatever the motivation, the ruling unfortunately opens the door for darn near any activity – or lack of activity – to be taxed by the federal government. As the legendary Chief Justice John Marshall famously said, “The power to tax is the power to destroy.”

Andrew P. Napolitano, former judge of the Superior Court of New Jersey, writing in The Washington Times, sees it this way: “If the feds can tax us for not doing as they have commanded, and if that which is commanded need not be grounded in the Constitution, then there is no constitutional limit to their power, and the ruling that the power to regulate commerce does not encompass the power to compel commerce is mere sophistry.”

This statute epitomizes dishonorable legislative methodology and bad law-making. Obamacare has been very unpopular with the public since it was first hatched, and it still is. Yet the Democrat majority in the House of Representatives lurched ahead, conceiving the bill behind locked doors, and the 2,700-page monstrosity was passed by the House before members even had time to read it. Remember then-House Speaker Nancy Pelosi arrogantly telling American citizens that they couldn’t know what was in the bill until Congress passed it? Senate Democrats bought enough votes with pricey concessions to key states to eventually pass the bill.

The measure was advertised vociferously by President Obama and his fellow statists as a mandate, not a tax, and it would not cause any American “making less than $250,000 a year to pay one dime more in tax.” The Act has now been upheld by the highest court in the land because it is a tax, not a mandate, and among the 21 new taxes are seven affecting those making less than $250,000 a year, some already in effect, according to Forbes.com.

They are: 1. The Individual Mandate Excise Tax, the higher of $1,360 or 2.5 percent of adjusted gross income; 2. The Over-The-Counter Drugs Trap denying use of pre-tax funds in special accounts to buy over-the-counter medicines for allergy relief and the like without a doctor’s prescription; 3. The Healthcare Flexible Spending Account Cap of $2,500; 4. The Medical Itemized Deduction Hurdle, increased from 7 to 10 percent of adjusted gross income; 5. The Health Savings Account Withdrawal Penalty of 20 percent, up from 10 percent; 6. The Indoor Tanning Services Tax of 10 percent; 7. The Cadillac Health Insurance Plan Tax of 40 percent.

The Democrats are celebrating their prize legislation’s Alice-in-Wonderland survival of judicial review, but now have to figure out how to explain to the American people that the bill they swore was not a tax on the poor and middle class really is a tax on the poor and middle class, in fact, the biggest tax hike in history.

You cannot sensibly praise the Supreme Court for upholding your flawed law, and then claim that the basis upon which it was upheld was incorrect. That twisted logic is beyond even the Obama administration.

Cross-posted from Observations

Taxed For Living

By Findalis

That is the ruling of the Supreme Court.  Today in a 5-4 decision, the US Supreme Court just told the citizens of the United States that they not only must buy health insurance, but if they don't they will be taxes for the crime of living.

The Supreme Court has upheld the centerpiece of President Obama's health care overhaul, in effect allowing the law to survive.

In a 5-4 decision unveiled Thursday, the court ruled as constitutional the so-called individual mandate requiring most Americans to obtain health insurance starting in 2014.

The ruling is a victory for the president, ensuring for now that his signature domestic policy achievement remains intact.

It also ensures that the law will play a prominent role in the general election campaign, as Republican candidate Mitt Romney vows to repeal the law if elected.

Chief Justice John Roberts, who was appointed during a Republican administration, joined the four left-leaning justices on the bench in making the decision.

The ruling relied on a technical explanation of how the individual mandate could be categorized. Roberts, in the opinion, said the mandate could not be upheld under the Constitution's Commerce Clause. However, it could be upheld under the government's power to tax.

"The Affordable Care Act is constitutional in part and unconstitutional in part The individual mandate cannot be upheld as an exercise of Congress's power under the Commerce Clause," Roberts wrote. "That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Congress's power to tax."

Source

The clock is reset.  It is 2010 once again.  It is time to get out, vote the Donkeycrats out of office, vote Barack Hussein Obama out of office.  That is the only way to repeal this monstrosity of a bill.

We can now expect higher premiums.  Few doctors practicing, fewer new doctors.  We can now expect Obama and the left go farther and demand a single payer system.  G-d forbid that ever happens.

We need to get angry.  Angry enough to go to the polls.  We need to be so angry that this will be the last hurrah for Obama and the Donkeycrats!