Tuesday, February 05, 2013
Investor Norman Lizt “shrugs” over taxes
"Why this fat cat likes Obama's tax plan" was the headline of a full-page ad investor Norman Lizt of La Jolla (San Diego County) took out in the New York Times in August.
No, it wasn't really an endorsement. Lizt wrote that he has been a successful investor over the years, but if Americans re-elected President Obama and his proposed tax increase became law, Lizt would face a marginal tax rate of "well over 50 percent. This represents the crossing of an inviolate threshold to me and is entirely unacceptable."
Lizt explained that he liked Obama's tax plan because it would prompt him to shutter his business, move his money into low-risk investments and give less to charity - while he would devote his time to traveling the globe with his fiancee, Rachel Martin.
I e-mailed Lizt to see if he had made good on his warning. When we spoke Tuesday, the 71-year-old told me that Rachel and he had just returned from a two-month trip around the world. He told me he had closed down his business that invested in small-capital concerns that created jobs, even medical breakthroughs.
"We did very creative work," said Lizt. "Now we're just going to do very boring, conservative land investment."
"Maybe I'll never have income again," Lizt told me. "That's the way I want it. 'No Income Norman.' "
In buying land, Lizt can increase his worth while minimizing what he has to pay to Uncle Sam. He'll still have enough assets to leave millions to those closest to him. The rest, he said, goes to his living and to charities.
ObamaCare: Two Ominous Signs
In the last few days, there have been two ominous signs about our future under ObamaCare. Both suggest the term "ObamaCare" is more accurate than the more-often used term "Affordable Care Act," because both suggest that the term "affordable" is strongly out of place.
1. The first is from Merrill Matthews, "The Most Ominous Sign Yet: Health Insurance Premiums Will Explode," Forbes.com, January 30. Matthews writes:
"Most health insurers in the individual market have stopped guaranteeing a person's premiums for a year. And as one commentator quipped: they aren't doing it because they expect to be lowering people's premiums.
Traditionally in the individual market, where people buy their own (i.e., non-group) health coverage, applicants sign a contract and the insurance company guarantees that premium for a year. I'm told that about 12 percent of individual applicants would write a check for the year's premium, rather than being billed monthly.
No more. Health insurers started sending out notices in January informing insurance brokers and agents that the companies will no longer guarantee that premium rate. From now on it's month to month."
2. The second is from the IRS's own proposed regulations. In laying out some examples of what kinds of penalties (even the IRS, interestingly, despite Judge John Roberts' claim that the penalty is a tax, doesn't call the penalty a tax) people will pay for not buying insurance, the IRS gives some hypothetical numbers for the cost of an insurance policy. In my experience, the IRS tends to come up with numbers that would apply relatively widely. So, in estimating the cost of a "bronze" health insurance policy that would satisfy the government's criteria (bronze is the lowest level of coverage allowed), what estimate does the IRS use for the cost for a family of five? The answer I found on page 70: $20,000. ["Affordable"?]
Retail Workweek Hits 3-Year Low In ObamaCare Shift
As employers begin to shift workers onto a 28 hour week, it drags the average down
The fly in the ointment of January's jobs report was the apparent shift to part-time work ahead of a key ObamaCare deadline. Although retail payrolls grew by 32,600, total hours worked in the industry dipped, Labor Department data out Friday showed.
The explanation? Rank-and-file retail workers logged the shortest workweek since early 2010: just 30.1 hours, on average, vs. 30.4 in December.
Remarkably, aggregate hours worked in the retail sector fell below their January 2012 level, even though industry payrolls are up 200,000 over that period.
A similar trend showed up in leisure and hospitality: January payrolls rose by 23,000 even as aggregate hours dipped 0.3%.
Meanwhile, the ranks of part-time workers due to business conditions or because they can't find full-time work, trending lower in the past few years, rose by 212,000 to 7.8 million.
While the data are volatile and the shift to shorter workweeks in January was less than dramatic, this may be the start of something big. All signs suggest that businesses are starting to adjust their employment policies in response to ObamaCare. It's possible that much of this shift may occur in the next few months.
New Treasury Department guidelines released early last month give businesses until June 30 before their staffing levels begin to influence fines that may apply in 2014 when the ObamaCare exchanges launch.
The law exempts companies with fewer than 50 employees from providing health care coverage. Firms with at least 50 workers face fines based on the number of employees who receive ObamaCare subsidies, which are only available to people who lack affordable coverage from an employer.
But those fines — up to $3,000 per ObamaCare subsidized worker — won't apply for part-time workers, which the law defines as 30 hours per week.
An obvious strategy to minimize fines is to cut some workers to just below the 30-hour threshold. Staying below the 50-worker threshold — based on total hours rather than a simple head count — also may be an option.
TrimTabs Investment Research CEO David Santschi said last week he expects sluggish growth as "businesses prepare for the full implementation of ObamaCare," adding to the impact of fiscal-cliff tax hikes.
The National Retail Federation on Friday urged President Obama to "delay health care reform mandates that will force employers to cut their payrolls or reduce hours for workers."
A number of larger retail and restaurant employers have signaled that they may keep a lid on worker hours to avoid the responsibility of providing coverage that meets ObamaCare guidelines.
What Planet Does John Kerry Live On?
The two-day old tenure of Secretary of State John Kerry got off to a flying start today with an astonishing statement from his ambassador to Egypt, Anne W. Patterson, at a joint ceremony in Cairo to mark the delivery of four American-made F-16 aircraft:
"Today's ceremony demonstrates the firm belief of the United States that a strong Egypt is in the interest of the U.S., the region, and the world. We look to Egypt to continue to serve as a force for peace, security, and leadership as the Middle East proceeds with its challenging yet essential journey toward democracy. … Our thirty-four year security partnership is based upon shared interests and mutual respect. The United States has long recognized Egypt as an indispensible partner."
(1) Is not anyone in the Department of State aware that Egypt is now run by an Islamist zealot from the bowels of the Muslim Brotherhood whose goals differ profoundly from those of Americans?
(2) Willfully ignorant, head-in-the-ground statements like this are the embarrassment and ruin of American foreign policy.
(3) What a launch for Kerry, whose mental vapidity promises to make Hillary Clinton actually look good in retrospect. (February 3, 2013)
It Took America’s Oldest President To Make Her Feel Young Again
Ronald Reagan’s birthday will be commemorated this week. He took office just a few weeks shy of his 70th birthday in 1981 making him the oldest man elected to serve as our Chief Executive and Commander-in-Chief, that is until he stood for re-election in 1984. In fact, one of the most well-known lines in Presidential debate history came in response to Reagan being questioned whether his age would be an important factor in his re-election campaign. Reagan, in his famous Irish wit, said, “I am not going to exploit for political purposes my opponent’s youth and inexperience,” which drew a roar of laughter from the crowd and even his opponent, Walter Mondale. Reagan won the election 49 states to 1. The irony is that it would take America’s oldest President to remind her what it means to be young again. The lessons he taught hold some key insights into not only renewing the American economy (showing strong signs of lethargy), but the American spirit.
A youthful spirit, which Reagan clearly possessed in great measure, has been described as “a quality of the imagination, a vigor of the emotions; it is the freshness of the deep springs of life" and manifests in a "temperamental predominance of courage over timidity of the appetite for adventure over the love of ease.” The former California Governor displayed this vitality when he made his announcement that he would seek the Presidency in 1980. He exhorted, “Someone once said that the difference between an American and any other kind of person is that an American lives in anticipation of the future because he knows it will be a great place.”
But, Reagan contrasted, “There are those in our land today, however, who would have us believe that the United States, like other great civilizations of the past, has reached the zenith of its power; that we are weak and fearful, reduced to bickering with each other and no longer possessed of the will to cope with our problems.” He continued, “They tell us we must learn to live with less, and teach our children that their lives will be less full and prosperous than ours have been; that the America of the coming years will be a place where – because of our past excesses – it will be impossible to dream and make those dreams come true. I don’t believe that. And, I don’t believe you do either. That is why I am seeking the presidency.”
Reagan handily defeated Jimmy Carter (44 states to 6) in 1980 and took up the challenge of re-invigorating a weary economy, once the envy of the world, now weighed down by over-taxation and over-regulation. The economic climate Reagan inherited was every bit as bad as Barack Obama’s. Unemployment peaked at 10.8 percent versus 10 percent in the recent recession. Further there were the pressures of double-digit inflation (13.5 percent) and interest rates (21.5 percent prime), so the quantitative easing seen throughout the Obama Administration, with the Federal Reserve financing trillions of dollars in deficit spending with money printed out of thin air, was not an option. Instead, the Fed had to do just the opposite and shrink the money supply in order to knock down inflation.
The two men fundamentally disagreed over the role the federal government should play on the stage of American life. President Obama announced in his First Inaugural Address, “The question is not whether government is too big or too small, but whether it works, ” Reagan said, “In this present crisis, government is not the solution to our problem, government is the problem…. It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government.” He reminded America, “We are a nation that has a government—not the other way around.” In short, Reagan wanted to reduce the role of the federal government, so the roles played by the American people could increase. He knew their combined creativity and industry trumped the collective wisdom of a few “elite” Washington bureaucrats trying to tax, spend and borrow us into prosperity.
The results speak for themselves. The Reagan economy brought about the greatest economic expansion in American history. It created 18 million new jobs (with a population of 85 million less than today.) In his re-election year of 1984 alone over 4 million new jobs were created, which was the amount added during Obama’s entire first term. The unemployment rate dropped in half to 5 percent; unemployment ticked back up again last month to 7.9 percent, and if the labor participation rate were the same as when Obama took office, it would be 10.8 percent. The Reagan economy grew an entire third larger with GDP growth hitting 7.2 percent in his re-election year versus 2 percent for Obama in 2012, (-0.1 percent for the last quarter). Additionally, revenues to the federal treasury nearly doubled during the 1980s. Under Obama, revenues still have not reached the 2008 level.
For Reagan, it was all just "common sense." When you tax something more, you get less of it. Following his cutting of taxes and burdensome regulations, “the economy bloomed” like a pruned plant that could now grow “quicker and stronger.” When he left office in January of 1989, he could report with the deep satisfaction that the American dream was restored and the story of the greatest nation in the history of the world would continue. “My friends: We did it. We weren't just marking time. We made a difference. We made the city stronger, we made the city freer, and we left her in good hands. All in all, not bad, not bad at all.” Reagan believed that America could be young again, and that faith was so deep and abiding in political truth, he convinced her too.
A Pyhhric victory for liberals?
Let’s face facts. In many ways, the liberal’s cultural narrative has prevailed regarding gays, minorities, and the role of women (including single mothers). That’s not to say that conservatives are somehow anti-minority or anti-women – the Democrats have pushed that nonsense even as they eagerly embraced the likes of Exalted Cyclops Robert Byrd and noted feminizer Ted Kennedy. Now, states are allowing gay marriage not just via liberal judges but in the right way – through referendum and legislatures. Whether conservatives like it or not, the narrative the liberals have marketed themselves as backing is largely winning. And it’s potentially a big political problem for liberals down the road.
In 2012, the Democrats certainly had a field day beating on the Republicans, but this time it was on the cultural issues that America – for better or worse – seems to have made up its mind about.
All their work over the years to normalize homosexuality, to promote acceptance of minorities, and to redefine the roles of women has succeeded. The liberals have largely won these fights – to the extent they were even being fought other than on some issues regarding gays. But that success may turn out to be a problem for them in the coming years.
After all, besides savaging Republicans for all sorts of imagined oppressions, what more remains for the left to talk about? Republicans are too sensible with our money? They want America to be too powerful and too free? Maybe immigration, except the Republican establishment is generally so eager to reform the system that Obama seems to be trying to torpedo the entire endeavor in order to keep it around to milk with chants of “¡Sí se puede!”
What’s left after the cultural issue scourging strips away the issues that most Americans hate? What remains are positions most Americans love?
In future elections, the Democrat desperately seeking to tar his opponent as anti-gay, anti-minority or anti-woman is going to have to contend with a Republican who is gay, a minority, a woman or even all three. Then what will the Democrat have to talk about? His party’s record on job creation? Ha!
Politics aren’t static – people and societies change, and what is a powerful line of attack in one election cycle may very well become a hackneyed cliché in the next. The fact is that even many conservatives are slowly embracing the cultural consensus – or just conceding the field by figuratively muttering “Whatever” (although how society is generally moving in a conservative direction on issues like life and religion is another subject entirely). Pretty soon, the liberal’s tired attacks on conservatives as culturally out of touch may draw shrugs instead of votes.
One moment, the liberals have harnessed a powerful meme; the next, it’s gone in a puff of smoke.
There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc
For more blog postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena . GUN WATCH is now mainly put together by Dean Weingarten.
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Posted by JR at 1:37 AM