Tag: taxes

The Great Society Meets the Taxpayer

President Lyndon Johnson’s legacy was the so-called Great Society (read: entitlement programs). As these programs have matured, along with the U.S. population, the proportion of the people dependent on the State has soared. Indeed, spending on entitlement programs gobbles up bigger and bigger chunks of the federal budget.

As the population grows older, entitlements will grow. Worryingly, the ratio of people receiving government benefits to those paying taxes will continue to climb, too. As the accompanying chart shows, those who receive government goodies already number the same as those who pay taxes (the ratio is one). With the steady progression of the ratio, it will be very hard to put the genie of the Great Society back in the bottle. Can you just imagine how difficult it will be to cut entitlement programs when those who are dependent on the government outnumber taxpayers by two to one?

Demand for Smaller Government Remains Strong

Whether the recent election was good news for tea party Republicans, establishment Republicans, or activist Democrats, the Washington Post notes that 

Obama’s larger project of redefining what government should do has been stymied by steady Republican opposition and public disenchantment with political leaders….While Obama has framed the question in different ways over the past five years, he has consistently sought to convince Americans that well-run government is uniquely positioned to help secure their economic prosperity. 

A sidebar graphic reminds us that

Majorities have consistently preferred a smaller government with fewer services to a larger one with more services. 

Here’s the chart accompanying the article:

Smaller Government Polls

The “smaller government” question is incomplete. It offers respondents a benefit of larger government–“more services”–but it doesn’t mention that the cost of “larger government with more services” is higher taxes. The question ought to give both the cost and the benefit for each option. A few years ago a Rasmussen poll did ask the question that way. The results were that 64 percent of voters said that they prefer smaller government with fewer services and lower taxes, while only 22 percent would rather see a more active government with more services and higher taxes. A similar poll around the same time, without the information on taxes, found a margin of 59 to 26 percent. So it’s reasonable to conclude that if you remind respondents that “more services” means higher taxes, the margin by which people prefer smaller government rises by about 9 points. With that in mind, I’ve adjusted the Post’s poll numbers by four points in each direction, to approximate what the numbers would look like if the Post included “higher taxes” in its question. The revised figure makes even more clear why presidents have difficulty persuading people to increase the size of government:

Smaller Government with Taxes

Transit Spending Slows Urban Growth

Contrary to the claims of many transit advocates, regions that spend more money on transit seem to grow slower than regions that spend less. The fastest-growing urban areas of the country tend to offer transit service mainly to people who lack access to automobiles. Urban areas that seek to provide high-cost transit services, such as trains, in order to attract people out of their cars, tend to grow far slower.

Transit advocates often argue that a particular city or region must spend more on urban transit in order to support the growth of that region. To test that claim, I downloaded the latest historic data files from the National Transit Database, specifically the capital funding and service data and operating expenses by mode time series. These files list which urbanized area each transit agency primarily serves, so it was easy to compare these data with Census Bureau population data from 1990, 2000, and 2010.

The transit data include capital and operating expenses for all years from 1991 through 2011. I decided to compare the average of 1991 through 2000 per capita expenses with population growth in the 1990s, and the average of 2001 through 2010 per capita expenses with population growth in the 2010s. In case there is a delayed response, I also compared the average of 1990 through 2000 per capita expenses with population growth in the 2000s. Although it shouldn’t matter too much, I used GNP deflators to convert all costs to 2012 dollars.

Obama to NBA: I’m Not Done Raising Your Taxes, Now Help Me Sell ObamaCare

President Obama has a lot of nerve asking the National Basketball Association to help him sell ObamaCare to their fans.

It’s not just that President Obama is asking the NBA to lend its credibility to the least popular thing this side of Tim Donaghy. Obama has spent his political career trying to take more money from high-income earners like NBA players, executives, and owners. ObamaCare is one of his great successes in that effort. Another is the recent fiscal-cliff-avoidance deal. Yet Obama isn’t satisfied; he wants to take even more of their money. 

NBA players, owners, and executives are extremely talented and productive people. They create lots of jobs. They earn lots of money because they make other people happy. For this crime, they already pay more in taxes than almost anyone, and pay more than they receive from the government in benefits.

Yet President Obama seems to spend every waking moment trying to figure out how to take even more from them. And then he turns around and asks them to help him sell his train wreck of a health care law. Chutzpah.

Before the NBA casts its lot with ObamaCare, every NBA player, executive, and owner should ask their accountant exactly how much this president has cost them. I’m looking at you, Lebron.

Do the American People Agree with Obama?

News reports quote President Obama, in discussing the debt ceiling and the ongoing argument over tax and spending policy in his press conference yesterday, saying:

It turns out the American people agree with me. 

Do they? It’s true that a majority of respondents told pollsters that they wanted to raise taxes on someone else. And Congress did that in the “fiscal cliff” legislation.

But what about the president’s insistence on a larger government and essentially no cuts in federal spending? The election day exit polls shed some light on those questions.

51 percent of voters polled said the government is doing too many things better left to businesses and individuals—8 points higher than in the 2008 election. Only 43 percent of voters said they believe government should be doing more.

49 percent said the 2010 health care law should be repealed, with only 44 percent of voters supporting it.

And 51 percent said they prefer smaller government with fewer services, while 43 percent prefer larger government. As usual.

There are many reasons that Mitt Romney lost the election, from the Republicans’ alienation of everyone except straight white men, to an effective campaign of demonization, to “legitimate rape.” But the polls don’t show that voters agree with President Obama on constant expansion of the size, scope, and power of government.

Laszewski on ObamaCare: ‘Get Ready for Some Startling Rate Increases’

The invaluable Robert Laszweski:

The Affordable Care Act: Ten Months to Launch “Obamacare”––Get Ready for Some Startling Rate Increases

[…]

I conducted an informal survey of a number of insurers…None of the people I talked to are academics or work for a think tank. None of them are in the spin business inside the Beltway. Every one of them has the responsibility for coming up with the correct rates their companies will have to charge…

On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms…

In states with the least mandates or for health insurance companies with the tightest underwriting now, the increase could be a lot more…

[E]xpect individual health insurance rates for people in their 20s and early 30s to about double…

Will the feds be ready to provide an insurance exchange in all of the states that don’t have one on October 1, 2013?

I have no idea. And neither does anyone else I talk to inside the Beltway. We only hear vague reports that parts of the new federal exchange information systems are in testing.

The former CIA director couldn’t get away with an affair in this town but the Obama administration has a complete lid on just where they are on health insurance exchanges and haven’t shown any willingness to want to talk about their progress toward launching on time––except to tell us all not to worry.

We are all worried. I would not want to be responsible for the work that remains and only have ten months to do it…

The Republicans said this would not work. If it does not launch on time, or does with serious problems, I would not want to be an incumbent Democrat.

I told them not to call this the “Affordable Care Act.”

ObamaCare’s Magical Premium Tax

The Department of Health and Human Services has announced it will unilaterally impose a (legally questionable) 3.5-percent premium tax on health plans purchased through the ObamaCare Exchanges it operates.

According to The New York Times, an HHS spokeswoman “predicted that insurers would not raise prices” in response to the tax.

If that’s the case, why not make it 35 percent?

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