Alexander Hendrie

House Blueprint Calls for Free Market, Patient Centered Healthcare Reform

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Posted by Alexander Hendrie on Monday, June 27th, 2016, 12:00 PM PERMALINK


Congressional Republicans recently unveiled their blueprint to repeal and replace Obamacare with commonsense free-market alternatives. Obamacare has approached healthcare with a “government knows best” mentality, and the GOP blueprint draws a sharp contrast by calling for increased choice and competition in order to lower costs, improve quality, and ensure all Americans have access to the healthcare that best suits their individual needs.

The blueprint starts by repealing Obamacare and its taxes, mandates, slush funds, and wasteful spending programs. The proposal replaces these failed policies with a series of conservative, free market reforms that end a number of distortions and promote individual choice and responsibility. The blueprint also strengthens Medicare and Medicaid to ensure these programs are equipped to provide for the most vulnerable in our society, and calls for promoting and protecting medical innovation to ensure America remains a leader in life-saving and life-improving medicines.

Repeals Obamacare Taxes, Mandates, and Slush Funds
The blueprint calls for repeal of ALL Obamacare taxes including the chronic care tax, the individual mandate tax, the tax on Flexible Savings Accounts, the tax on Health Savings Accounts, the Cadillac tax on employer health insurance, the tax on medical devices, the tax on prescription medicine, the tax on employers, and the tax on health insurers.

The proposal also ends wasteful spending programs by repealing the “Obamacare Public Health” slush fund, and stopping risk corridor and reinsurance corporate welfare payments. Finally, the plan repeals the individual and employer mandates which needlessly penalize individuals and businesses.

Provides Greater Flexibility
In place of Obamacare, the House GOP blueprint calls for a healthcare “backpack” – insurance that is tailored to individual needs and allows flexibility. One centerpiece of this proposal replaces the flawed and highly wasteful Obamacare tax credit with an efficient flat credit that is adjusted based on age. This credit is refundable so that if a plan costs less than the credit, the individual can spend whatever is leftover through an HSA-like account.

This replaces the restrictive approach taken by Obamacare with a flexible alternative that allows individuals to choose healthcare that best fits their needs.

Expands Health Savings Accounts
Health savings accounts, or HSAs are tax-advantaged accounts which are used to pay for routine, out-of-pocket medical expenses.  They are used in conjunction with insurance plans which tend to cover large and/or unexpected health events and allow individuals to make choices that best fit their needs.

The plan first eliminates the many restrictions that Obamacare placed on HSAs and then expands them to eliminate needless restrictions on contribution limits and accessibility. These reforms will better encourage healthcare freedom so Americans have access to patient centered care that best fits their needs.

Promotes Innovation
It takes about 14 years and $2 billion in research and development medical costs with more than 95 percent of drugs failing to make it through this long process. While this process is lengthy and costly, it inevitably leads to significant long-term health benefits and savings within the medical system. Obamacare has only made this arduous process worse with a tax on new medical devices, further slowing innovation.  

The GOP blueprint calls for reforms to medical innovation based off the bipartisan 21st Century Cures Act passed by the House last year. This plan calls for streamlining the innovation process by reforming the FDA so that new medicines can come online faster. The plan also calls for modernizing clinical trials, providing more appropriate incentives, removing regulatory uncertainty, and increased collaboration between stakeholders.

By protecting and promoting medical innovation this plan will allow for the creation of the next generation life-saving and life-threatening medicines that will ensure stronger, most cost effective healthcare solutions in future decades.

Protects Seniors
Medicare spending will double within the next ten years and the program is projected to become insolvent by 2030. This looming insolvency is addressed through a three step approach that also strengthens the program.

First, the plan repeals the needless Medicare regulations contained in Obamacare, like the Independent Payment Advisory Board and cuts to Medicare Advantage. Second, it adopts a series of smart reforms and updating out-of-date regulations that protect the patient doctor relationship and patient choice. Third, the proposal implements reforms that ensure Medicare is around for future generations by transitioning to a more competitive premium support model that does not disrupt the current program.

Reforms and Preserves Medicaid
This year, total Medicaid spending will reach $545 billion, even as the program has been plagued by high risk of fraud and inadequate oversight. For years, federal watchdogs have warned of millions in fraudulent or improper payments and countless cases of patient abuse, neglect, and theft. Under Obamacare, millions of able bodied adults have been added to Medicaid, even as the program is failing to provide care for our most vulnerable.

The GOP blueprint calls for addressing these issues through reforms to the funding structure that set more appropriate incentives that encourage resources to the nations most vulnerable. The program also provides states with better tools, resources, and flexibility by giving them the choice of a block grant or a per capita allotment. Streamlining the funding process will not only ensure that Medicaid enrollees have access to more appropriate care, it will also cut down on waste and promote more efficient allotment of resources.

 

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ATR Applauds House Republicans’ Tax Blueprint

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Posted by Natalie De Vincenzi, Alexander Hendrie on Friday, June 24th, 2016, 10:19 AM PERMALINK


ATR together with 9 free market organizations today applauded the House Tax Reform Working Group blueprint.

Standing at 74,000 pages, the U.S. tax code is too complex. Americans waste billions of hours and dollars trying to comply with the tax puzzle and the U.S. faces a serious global disadvantage with the nation’s high corporate tax rate. Tax reform is necessary to make American lives easier and to reestablish America’s global competitiveness.

The full letter is here and below.

Dear Speaker Ryan and Chairman Brady,

On behalf of the undersigned organizations, we write to applaud the efforts of the House Tax Reform Working Group. The Blueprint you have released today outlines a thoughtful approach to tax reform that would greatly benefit the individuals, families, and businesses that are hampered by a broken tax code.

Tax reform was last passed three decades ago and our code is woefully uncompetitive, overly complex, and out of date. It urgently needs to be fixed, and the working group’s Blueprint ensures this issue remains center stage. Unfortunately, the current President has proven unwilling to seriously address the issue of our uncompetitive and unfair tax code, instead deriding the pressing need to update it as a “race to the bottom.” Given the urgency of this problem, we believe it is vital that pro-growth tax reform is passed within the first hundred days of the next Congress.

While tax reform touches many issues by necessity, it is crucial that any new code prioritizes competitiveness, simplicity, and growth.

Simplify the Tax Code The tax code is more than 74,000 pages long and Americans spend over 6.1 billion hours complying with it each year, resulting in an annual economic loss of $234.4 billion. The reality is, it is difficult or impossible for American families to properly comply with the tax code. Your Blueprint takes significant, important steps toward simplicity and fairness by consolidating seven individual income tax rates into three, eliminating the alternative minimum tax, and completely killing the death tax, which has destroyed over $1.1 trillion of capital in the U.S. economy. Additionally, it streamlines individual deductions and exclusions and consolidates numerous, overlapping tax benefits for higher education. All of these changes would help reduce the monstrous tax code to a more manageable size and decrease the amount of confusion and frustration that Americans face every year when they file their taxes.

Reducing Rates to Address America’s Competitiveness Problem. Under our current system, American businesses simply cannot compete with the rest of the world. We have business taxes far higher than the rest of the developed world with a statutory corporate rate exceeding 39 percent, more than 14 points higher than the developed average. Other countries are taking advantage of our inaction as they aggressively lower their tax rates to lure American jobs and businesses to their soil. Your Blueprint reduces the corporate tax rate to 20 percent – a change that would act as a powerful economic stimulus by encouraging domestic businesses to grow and foreign businesses to relocate

to the U.S. Further, it would reduce the top rate on pass-through entities, many of which are small businesses, to 25 percent.

Tax reform must encourage economic growth, jobs and innovation. For years, growth has remained stagnant, as new jobs have failed to materialize and wages remain unchanged. Just 38,000 jobs were added in May and labor force participation has continued to drop. Congress can reverse this trend with the type of pro-growth tax reform outlined in your Blueprint. In addition to reducing rates, your plan would provide full expensing for businesses – a change that would incentivize capital investment and lead to significant economic expansion. Additionally, it would transition from a worldwide tax system to a territorial system, thereby aligning our code with much of the industrialized world and, more importantly, allowing companies to reinvest foreign earnings back into our domestic economy. Also, under your plan, the top tax rate on long term capital gains and qualified dividends is cut from 23.8 percent today to 16.5 percent, a powerful pro-growth reform.

We applaud the work of the Tax Reform Working Group and your efforts to keep this important issue at center stage. It has been far too long since Congress last passed tax reform and it is imperative that businesses and families receive relief soon. We understand that there are many details of the plan to be worked out and we look forward to participating in these discussions and working with you to enact pro-growth tax reform in the coming months and years.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

Pete Sepp
President, National Taxpayers Union

David Williams
President, Taxpayers Protection Alliance

Neil Bradley
Chief Strategy Officer, Conservative Reform Network

Jim Martin
Chairman, 60 Plus Association

Tom Schatz
President, Council for Citizens Against Government Waste

Karen Kerrigan
President & CEO, Small Business & Entrepreneurship Council

Christine Harbin
Director of Federal Affairs and Strategic Initiatives, Americans for Prosperity

Paul Gessing
President, Rio Grande Foundation 

Andrew Moylan
Executive Director, R Street Institute

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ATR Statement on House GOP Tax Reform Blueprint

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Posted by Alexander Hendrie on Friday, June 24th, 2016, 10:00 AM PERMALINK


The House Republican Conference under the leadership of Speaker Paul Ryan (R-Wis.) and House Ways and Means Chairman Kevin Brady (R-Texas) today released their blueprint to reform the tax code. This pro-growth plan cuts taxes for ALL American families and businesses, simplifies the code, promotes strong economic growth, and allows our businesses to better compete against foreign competitors.

“The Republican blueprint for tax reform is a clear and dramatic path to strong economic growth and job creation,” said Grover Norquist, president of Americans for Tax Reform. “When enacted it will steer America on a sharp U-turn from our present road to serfdom. America cannot limp along on its weak and weakening ‘recovery’ -- with this blueprint the path is clear.”

Norquist continued: “The blueprint is completely consistent with the Taxpayer Protection Pledge a majority of the members of congress have signed promising the American people that they will oppose and vote against any net tax hike.”

For the typical American family, this blueprint will simplify the code so that an annual tax return can be filed on a postcard. For businesses on Main Street, this plan will cut needless bureaucratic red tape and complexity. For iconic American businesses, this blueprint will ensure they can compete, and thrive against foreign competitors. And for the economy, this plan will replace the policies that led to seven years of stagnant growth with a vision that fixes our broken code and promotes opportunity for all.  

Importantly, this proposal takes the code much closer to a system that taxes in the fairest and most efficient way – by taxing once, at the point of consumption. Basic elements of the plan include:

Individual Tax Rates: Consolidates the existing seven tax brackets into three brackets – 12 percent, 25 percent, and 33 percent.

Full Business Expensing: 100 percent immediate, full business expensing, meaning businesses will be allowed to deduct purchases immediately rather than being forced to use the arbitrary and confusing system of depreciation which distorts investment.

Business Tax Rates: Under the current code, American businesses face the highest tax rates in the developed world. This plan ends that by cutting the corporate tax rate from the existing 35 percent rate to just 20 percent. The blueprint also cuts the tax rate on pass-through entities from more than 40 percent to just 25 percent.

International Tax System: Streamlines and overhauls the confusing, complex and uncompetitive international tax system.

- Replaces the worldwide tax system with full territoriality, meaning that American businesses will no longer be subject to double taxation – once when they earn this income overseas and again when this income is brought back to the U.S.

- As part of the shift toward a consumption based system, the blueprint calls for applying businesses taxes on a destination basis. This means that American exports will not be subject to U.S. income tax but products and services sold in the U.S. will be taxed regardless of whether they were produced here, or imported from a foreign country. This ends the competitive disadvantage our exports had when competing with the rest of the world, and that foreign imports had with local competitors.

Death Tax: Repealed

Capital gains and Dividends: Reduces taxes on investment income by creating a 50 percent deduction on a taxpayer’s bracket. This means cap gains/dividends rates of 6 percent, 12.5 percent, and 16.5 percent, far below the existing 23.8 percent. While the plan is silent on section 1031 “like-kind exchanges,” it does call for a tax code that promotes business investment.

Alternative Minimum Tax: Repealed

Individual Credits:  Consolidates five family deductions into two – a larger standard deduction and a child/dependent tax credit. Preserves tax incentives for charitable giving and homeownership and eliminates all other itemized deductions.

Business Credits: Calls for simplifying the code by eliminating the majority of deductions and credits, with the R&D tax credit being one notable exception.

Interest Deduction: Allows businesses to deduct interest expense from any interest income but disallows deductions from net interest expenses. This removes the distortions in the tax code that favor debt over equity toward the ideal consumption base.

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Leigh Rose MA

NO. 10% tax should not be increased to 12% but lowered to 5%.

richardsloat

Strong economic growth? Is that what we got with the Bush Tax Cuts, I believe it was called the Great Recession. Cutting taxes without cutting spending leads to DEBT. Even Reagan triple our Debt. No new taxes forever leads to more DEBT. Get real!!!

My political satire, entitled "Taking the Tea Party Republican Tax Pledge", is on YouTube. Here is the link http://www.youtube.com/watch?v...


Conservatives Oppose Big Labor's "Take on Wall Street" Campaign

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Posted by Natalie De Vincenzi, Alexander Hendrie on Thursday, June 23rd, 2016, 2:00 PM PERMALINK


Today, ATR and more than 20 other conservative organizations have voiced opposition to Big Labor’s campaign “Take on Wall Street”.

Big Labor’s campaign is radical and out of touch.  Through tax hikes and increased government involvement, the five-part campaign will restrict the ability of Americans to access important investment and retirement advice to the benefit of big labor interests.

The full letter can be found here and is below:  

As organizations representing taxpayers, Tea Party activists, limited government conservatives, libertarians, and Americans across all 50 states, we write in opposition to the radical agenda proposed by Big Labor's latest campaign, "Take on Wall Street."

This campaign is a thinly-veiled attempt to push a radical liberal agenda on the electorate under the flimsy guise of fighting monied interests on Wall Street. Nothing could be further from the truth – this plan is really about restricting the ability of Americans to access important investment and retirement advice to the benefit of big labor interests.

Their agenda is a five-point recipe for financial ruin. It includes:

Forcing the most disadvantaged to bank with the United States Post Office (USPS). Many low income Americans don’t have access to banking services and decide to borrow from check cashing and payday loan businesses in their communities. Rather than promote time-tested, conventional banking options for the poor, Big Labor is pushing the ridiculous idea that the USPS should take on banking services for low income Americans. They want to have the government shut down private business and instead direct the poor to the local post office for banking needs. They even want them to be able to receive car loans at the post office. One Obamacare is quite enough--we don't need Obamacare for banks, too. If there's one thing most Americans know, it's that the USPS is the last place you'd want to keep your money. Yet that's exactly what Big Labor wants low income Americans.

Raising capital gains taxes. The ultimate goal of the Left is to tax all capital gains as ordinary income. They are content to do this one piece at a time. Their first target is taxing carried interest capital gains at higher rates. This would hurt pension funds, charities, and colleges that depend on these investment partnerships as part of their savings goals. It would also hurt small businesses who would find themselves increasingly shut out from investment money available to them from these partnerships.

Creating a financial transaction tax. Big Labor also wants to create a brand new kind of tax that does not exist today. Sometimes known as a "Tobin tax," a financial transaction tax would put a levy on every single financial transaction done every day. This would even include simple actions like investing in an IRA or saving for a child's college in a 529 plan.

Allowing the government to rip apart banks. "Breaking up the big banks" is a rallying cry of socialist Presidential candidate Bernie Sanders and at Big Labor conventions, but it makes no sense in the real world. A better solution would be ending “Too big to fail” and allow the free market, not big government to decide whether a business is too big or too small. Government's job is to fairly enforce basic laws and generally get out of the way of the market.

Imposing a tax hike "wage control" on CEOs. The government should not be allowed to tell businesses how much they can pay their employees, but that’s exactly what Big Labor wants to do by limiting the tax deductibility of CEO compensation. This was tried in the 1993 Clinton tax hike and resulted in an explosion in stock options, something Big Labor now also laments. The simple fact is it's not the government's job to say how much is too much to pay talent--that's the job of shareholders.

This five-point plan is completely divorced from reality. It is radical, out of touch, and would take our nation in the wrong direction.

Sincerely,

Jim Martin
Chairman, 60 Plus Association

Phil Kerpen
President, American Commitment

Grover Norquist
President, Americans for Tax Reform

Kevin Waterman
Chairman, Annapolis Center-Right Coalition

Justin Owen
President and CEO, Beacon Center (Tennessee)

Andrew F. Quinlan
President, Center for Freedom and Prosperity

Matt Patterson
Executive Director, Center for Worker Freedom

Chuck Muth
President, Citizen Outreach (Nevada)

Neil Bradley
Chief Strategy Officer, Conservative Reform Network

Tom Schatz
President, Council for Citizens Against Government Waste

George Landrith
President, Frontiers of Freedom

Sal J. Nuzzo
Vice President of Policy, The James Madison Institute (Florida)

Lisa B. Nelson
CEO, Jeffersonian Project

Brett Healy
President, The John K. MacIver Institute for Public Policy (Wisconsin)

Seton Motley
President, Less Government

Kyle S. Hauptman
Executive Director, Main Street Growth

Dee Hodges
President, Maryland Taxpayers Association (MD)

Pete Sepp
President, National Taxpayers Union

Honorable Jeff Kropf (Ret)
Representative, Oregon U.S. House of Representatives
Executive Director, Oregon Capitol Watch

Paul Gessing
President, Rio Grande Foundation (New Mexico)

David Williams
President, Taxpayers Protection Alliance

Darcie Johnston
Founder, Vermonters for Healthcare Freedom

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Financial Services Appropriations Bill Reins in Obama Government Agencies

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Posted by Alexander Hendrie, Justin Sykes, Katie McAuliffe on Tuesday, June 21st, 2016, 1:10 PM PERMALINK


Later this week, the U.S. House of Representatives will vote on H.R. 5485, the Financial Services and General Government (FSGG) Appropriations Act, introduced by Congressman Ander Crenshaw (R-Fla.). This legislation allocates 2017 federal funding for numerous agencies including the Treasury Department, the IRS, the Securities and Exchange Commission and the FCC.

H.R. 5485 allocates this funding in a responsible, pro-taxpayer way and reins in out-of-control agencies to ensure they do not overstep their bounds and needlessly waste federal resources. ATR supports this legislation and urges all Members of Congress to vote for it when it reaches the floor.

Restrains IRS Overreach
H.R. 5485 contains several important policy riders to rein in the IRS. Under this administration, the agency has targeted non-profit organizations, families, and small businesses again and again in a concerted effort to limit free speech and harass taxpayers.

The legislation prohibits the IRS from implementing a new regulation on non-profit organizations, from giving bonuses or rehiring former employees without proper tax compliance measures, or from targeting individuals based on first amendment rights. In addition, the package implements extensive reporting on IRS spending to ensure the agency is wisely utilizing taxpayer resources.

Reins in SEC Funding and Improves Transparency
FSGG allocates $1.5 billion for the SEC, lowering the agency’s funding by $50 million from previous levels in fiscal year 2016. The legislation also creates new reporting requirements for the SEC, which would improve the transparency and fairness of the agency. One provision requires the SEC to report to Congress the cost associated with the regulatory burdens promulgated under the Dodd-Frank Act. 

The legislation also ensures First Amendment free speech is protected by prohibiting the agency from requiring the disclosure of political contributions in SEC filings. 

Responsibly Allocates IRS Funding 
The legislation provides $10.9 billion for the IRS, reducing their funding by $236 million compared to fiscal year 2016. In addition, the legislation funds the agency $1.3 billion below President Obama’s budget, which called for more than $1 billion in additional funding for the agency.

FSGG also allocates this funding in an efficient way. Of the $10.9 billion in funding, the legislation allocates $2.1 billion to taxpayer services and provides $290 million for the IRS to improve customer service, fight fraud, and improve cybersecurity.

Given the IRS's record of ineptitude and incompetence, the last thing the agency needs is more money. The agency’s woes are due to its management problems, not because of insufficient resources and this legislation will force the agency to spend its resources in a more responsible way.

Blocks Implementation of Obamacare
FSGG also contains important provisions that restrict the ability of the federal government to implement Obamacare. Specifically, this legislation stops transfer of funds between the Department of Health and Human Services and the IRS to fund Obamacare. Since passage of the law, the Obama Administration has funneled funds across agencies to hide the true costs of the law and pay out special interests at the expense of the American people.

Most importantly, the legislation restricts the use of funds to implement the individual mandate. Under current law, anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS. This year a family in the middle class will be forced to pay 2.5 percent of Adjusted Gross income or $1,390 if they do not have insurance. The Obama administration uses the Orwellian phrase “shared responsibility payment” to describe this tax.  

Increases CFPB Oversight and Accountability 
This legislation provides increased oversight over the Consumer Financial Protection Bureau, by subjecting the agency to annual congressional appropriations process, something that has not occurred since the CFPB was created in 2010. By bringing funding for the CFPB under the congressional appropriations process, this legislation increases the accountability of the CFPB to congress and taxpayers. 

Further, H.R. 5485 temporarily halts the CFPB’s costly and overreaching arbitration rule by requiring the agency to study the use of pre-dispute arbitration before issuing such regulations. The CFPB has not adequately justified the need for rule, and enactment would increase the costs of products and reduce access for the very consumers it would supposedly protect.  

Restrains FCC
The FCC’s snowballing regulatory binge continues to tighten its grasp on basic functions of the Internet and the free market.  The FCC's dubious interpretations of "ambiguous" legal language, even at the protest of Congress, leave no other options but for Congress to restrain and direct FCC spending as Congress is statutorily required to do.

To enhance transparency and public participation, funds must be used for the agency to make all proposed regulations public three weeks before the final legally binding vote.  It constrains some of the agency’s overreaches on policy, by preventing the agency from using any appropriated funding for “Net Neutrality” regulations until court proceedings conclude. 

The dollars in the public pot are limited. While the agency does receive less money for operations than it asked for, and the is an overall decrease in funding of $25 million, the FCC maintains an ample budget of $315 million to aptly pursue its core functions and target waste fraud and abuse within its programs. 

 

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Senate Legislation Would Destroy Contact Lens Consumer Choice and Restrict Free Market

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Posted by Alexander Hendrie on Tuesday, June 21st, 2016, 12:11 PM PERMALINK


Legislation before the United States Senate, S.2777 the Contact Lens Consumer Health Protection Act (CLCHPA) needlessly reduces choice, increases costs, and may even threaten eye health for the 41 million Americans that rely on contact lens.

CLCHPA, introduced by Senator Bill Cassidy (R-La.) would turn back to clock and reinstitute anti-competitive practices under the flimsy guise of public safety. Specifically, this legislation requires any contact lens prescription to be given under “direct verification,” meaning that an optometrist needs to prescribe a product over the phone or in person. Current law allows for the far more commonsense “passive verification,” which gives consumers the flexibility of a written prescription. 

Optometrists are one of the few medical professions that are allowed to sell the products they prescribe. While there should be no restriction on professionals selling these products, this has led to a conflict of interest where patients are sometimes not given the option to choose between similar products. This conflict of interest was addressed in 2003, when lawmakers passed the Fairness to Contact Lens Consumer Act (FCLCA) legislation allowing passive verification and allowing patients a written prescription to shop where they wanted.

Prior to FCLCA, bad actors could hold their patients hostage by blocking or implicitly denying their patients the right to choose who to buy from. This concern is not hypothetical – there have been several well documented cases of bad actors conspiring to limit consumer choice and access to contact lens for personal enrichment. 

While this legislation clearly undermines free market competition, supporters claim it is necessary for safety reasons. This line of reasoning is completely without merit.

In the decade since FCLCA passed, alternative contact lens retailers have been closely monitored by the Federal Trade Commission, yet there is no evidence of adverse health effects caused by purchasing contact lenses from other sources. If anything, consumers would be more likely to wear clean lens if they have more avenues to access the product.

FCLCA eliminated barriers to competition and empowered the free market. The law is a success and it allows consumers to purchase contact lenses where they choose. Unfortunately, Sen. Cassidy’s misleadingly named Contact Lens Consumer Health Protection Act seeks to undo this free market law by restoring a barrier to competition that in-turn will reduce consumer choice and lead to higher prices.

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Medical Innovation Leads to Long-Term Healthcare Savings

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Posted by Alexander Hendrie on Tuesday, June 21st, 2016, 11:20 AM PERMALINK


The cost of purchasing new medicines is often subject to harsh media coverage, even as the long term health benefits receive far less recognition. While the price of new drugs appears high in isolation, medical innovation leads to substantial savings elsewhere, as noted in a new study released by Frank R. Lichtenberg of the Montreal Economic Institute.

As the study notes, the health benefits have been demonstrated in Canada, America, and the rest of the world using countless health indicators including longevity, overall health, use of other health services, and rate of hospitalization.

For instance, long-term investment developing cancer medicines has resulted in significant savings for the Canadian healthcare system decades after this investment. As the report notes, current savings to the healthcare system totaled almost a billion dollars more than overall spending on new medicines today, close to three decades since the period of medical innovation analyzed. As the report notes:

“If no new drugs had been registered during the 1980-1997 period, there would have been 1.72 million additional cancer patient hospital days in 2012, at a cost of C$4.7 billion in hospital expenditure, whereas total spending on cancer drugs (old and new) in 2012 was an estimated C$3.8 billion.”

This is not unique to the Canadian healthcare system. As the report notes, the correlation between medical innovation and long-term reductions in illness or injury has been proven in the U.S. system:

“Work days lost and school days missed per year because of illness or injury in the U.S. declined more rapidly from 1997 to 2010 for medical conditions with larger increases in the mean number of newer prescription drugs consumed.”

Despite this evidence, presidential candidates on both sides of the aisle have called for price controls in some form or another this election cycle. While the proposals put forward may decrease the costs of drugs in the short term, it would do so in an artificial way that would increase healthcare costs in the long run. Medical innovation would decline because the profits made from medicines in the U.S. are utilized to finance the next generation of life-saving and life-improving prescription medicines. In turn, this results in higher long term healthcare costs due to a lack of cures for a variety of illnesses.

This is more than theoretical, as the Lichtenberg study notes. If the market was suddenly flooded with price-distorted drugs from all around the world, it would cause a decline in medical innovation. As the Lichtenberg study notes, a 10 percent reduction in drug prices through re-importation would cause a 5-6 percent decline in medical innovation in the U.S. using conservative estimates.

Undoubtedly, the costs of new medicines are offset through the savings they cause downstream in the healthcare sector. Before rushing to propose ill thought out price controls, candidates should consider the long-term health benefits that medical innovation causes.  

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Like-Kind Exchanges are a Model for All Capital Gains

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Posted by Alexander Hendrie, Natalie De Vincenzi on Tuesday, June 21st, 2016, 10:54 AM PERMALINK


Like-kind exchanges, a provision existing under section 1031 of the tax code allows an investor to defer paying capital gains taxes on certain assets when they use those earnings to invest in another, similar asset. This can be done again and again until the investor ultimately cashes out and protects against a needless lock out effect that would discourage investment.

In the perfect world, income from capital gains would not be taxed at all.  The 23.8 percent tax hits income that has already been subjected to income taxes and is then reinvested to help create jobs, grow wages, and increase economic growth. This double taxation makes no sense from the perspective of encouraging investment and stronger growth.

The importance of like-kind exchanges led to 19 Members of Congress writing to urge the preservation of section 1031 like-kind exchanges in a letter to ways and Means Committee Chairman Kevin Brady (R-Texas). 

In the absence of full repeal of the capital gains tax, Section 1031 is both vital and commonsense from an economic perspective. Because there is a continuity of investment from any 1031 eligible transaction, there is no reason to arbitrarily punish reallocation of resources. If anything, this provision should be expanded so all capital gains are treated the same as like-kind exchanges.

In fact, repealing this provision would have a damaging impact on our economy, resulting in lower investment and less incomes as proven by a study by Ernst and Young. If used to finance more government spending, repeal of section 1031 would cost the U.S. economy $13.1 billion in lost GDP year after year. Using like-kind exchanges as an offset for tax reform would be only marginally better, reducing annual GDP loss over the long term by $8.1 billion. This GDP loss would also result in investment falling by $7 billion every year and reduce labor income by an estimated $1.4 billion.

Because repeal would subject many business to higher taxes, it would reduce capital stock, labor productivity, and output. These factors would consequently result in longer holding periods and slow or restrict the transfer of capital within our economy because businesses would become arbitrarily discouraged from making investment decisions due to the tax consequences.

Until we abolish the capital gains tax within businesses, lawmakers should keep section 1031 because it reminds us of how moving in the right direction creates jobs, increases national income and wealth. It also serves as a good example. We should expand and enlarge, not repeal this provision. 

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ATR Urges Support for Rep. Steve King’s Cap Gains & Death Tax Amendments

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Posted by Alexander Hendrie on Tuesday, June 21st, 2016, 10:33 AM PERMALINK


This week, the U.S. House of Representatives will consider H.R. 5485, the Financial Services and General Government Appropriations Act, introduced by Congressman Ander Crenshaw (R-Fla.). This legislation allocates 2017 federal funding for numerous agencies including the Treasury Department, the IRS, the Securities and Exchange Commission and the FCC.

Two amendments, proposed by Congressman Steve King (R-Iowa) would block the IRS from collecting the capital gains tax and the Death Tax. Both taxes are a double tax on Americans – one on after tax income that is reinvested in the economy, and the other on all your assets when you die.

ATR has long supported full repeal of these taxes. In lieu of that, these amendments provide an avenue to stop the needless double taxation on Americans by prohibiting the federal government from using funds to collect both taxes. ATR supports both amendments, urges they be made in order by the House Rules Committee, and strongly encourages all members to vote and support both amendments.

Below is more information on ATR’s position on both the Death Tax and the capital gains tax:

Death Tax

One of the most intrusive and unfair taxes is the Death Tax, which requires your loved ones to tell the IRS about everything you own at the moment of death – your bank accounts, investments, the value of your home and business, and more.

Right now, the tax sits at 40 percent with an exemption threshold of $5.43 million, meaning the tax burden for families is significant. Those who are hit hardest generally are first and second generation families with a small business, because the truly wealthy can avoid the tax through an army of accountants, attorneys, and charitable planners.

The Death Tax is counterproductive to growth – it is a tax you pay on savings you have already paid taxes on at least once. As a result, the Tax Foundation predicts repeal would add 150,000 jobs and raise $8 billion in annual revenue over the long term.

Capital Gains Tax

A key policy goal should be incremental progress toward a consumption base of taxation and therefore cutting the tax rate on capital gains (and dividends, distributed after-tax corporate earnings) to zero. The capital gains tax hits income that has already been subjected to income taxes and has been reinvested to help create jobs, grow wages, and increase economic growth. This double taxation makes no sense from the perspective of encouraging investment and stronger growth.

At present, the code taxes a dividend or capital gain (a profit derived from the sale of a stock, bond or other asset) at a lower rate, with a top rate of 23.8 percent for assets held longer than a year. Ideally, the tax code should be based on consumption and income derived from investments (as well as income saved) would be not be taxed at all. 

Photo Credit: 
Gage Skidmore

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Bob Zimmerman

Steve King is the worst example of a politician. I live in his district. He's done nothing for it, He's a real sleaze ball because he loves to rant and rave about illegal immigrants (knowing that nothing he supports will pass) but his district employs thousands of them in meat packing plants. If he was true to his word, he would shut down those plants, right? But of course, he won't, He's a sleaze ball.

He helped shut down the federal govt in 2013 with his goofball colleague, Ted Cruz. Think about this: if you are an elected official and can pick the day to shut down and then re-start the federal govt, is that not the same as "inside information" for trading? Can you pick the days you go short and long on the markets and make a killing? And Ted Cruz's wife works for Goldman Sachs.

Just try to find ONE significant legislative accomplishment for this bozo. Nothing.

Thab Lynch

Steve King believes in farm subsidies. Farm subsidies are a Marxian, socialist redistribution of wealth from America's hard working east and west coasts to America's heartland.

Pearl

Steve King is one of a handful of politicians I trust. He has integrity and looks out for the citizens of the U.S., unlike the majority of our elected.


Congress Should Censure IRS Commissioner John Koskinen

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Posted by Alexander Hendrie on Tuesday, June 14th, 2016, 11:59 AM PERMALINK


The House Committee on Oversight and Government Reform will tomorrow consider H. Res. 737, a resolution condemning and censuring IRS Commissioner John Koskinen, introduced by Chairman Jason Chaffetz (R-Utah). ATR urges all members of the Committee to vote yes on this resolution and urges all members of Congress to support and co-sponsor H.Res. 737.

This resolution puts Congress on the record that Koskinen engaged in a pattern of conduct inconsistent with his position as a public servant. In addition, the resolution urges for his resignation or removal and requires the forfeiture of his government pension and any other federal benefits for which he is eligible.

“In the real world, people get demoted, censured or fired for incompetence,” said Grover Norquist, president of Americans for Tax Reform. “In Washington D.C. it takes someone like John Koskinen to go beyond incompetence to destruction of our constitutional liberties for congress to act so boldly as to censure them.”

The IRS’s coordinated effort applying improper, politically motivated scrutiny to tea party and conservative organizations, meant that just one conservative non-profit was granted tax exempt status over a three year period between 2009 and 2012. Following these revelations, Koskinen was appointed head of the agency promising reform and transparency. Koskinen has failed:

  • Throughout the investigation into the targeting scandal, Koskinen’s IRS continually failed to provide important information or perform basic due diligence.

 

  • Koskinen has made several misleading or incorrect statements while under oath testifying before Congress.

 

  • The IRS failed to search five of six possible sources of electronic media for Lois Lerner’s emails. The only source they bothered to search – her hard-drive – was destroyed after a cursory search deemed information unrecoverable. In hindsight, documentation suggests that more could have been done to recover data.

 

  • The agency’s ineptness -- or corruption -- resulted in 24,000 Lerner emails being lost when they were “accidentally” destroyed despite the existence of an agency-wide preservation order.​

 

  • Koskinen then withheld from Congress both the preservation order and destruction of tapes during sworn testimony. He also failed to disclose details regarding Lois Lerner’s mysteriously destroyed hard drive during testimony.

 

The carelessness of the agency means that important information is no longer available to Congress and the American people because of the actions of the IRS, while countless misleading statements and dodges have caused investigations to drag on for years.

 

Photo Credit: 
Paul Morigi Photography

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gunner48

Burn him!


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