Justin Sykes

Obama Loots $716 Billion from Medicare

Posted by Justin Sykes on Tuesday, August 14th, 2012, 11:42 AM PERMALINK

Senior Obama adviser David Axelrod attacked Romney and Ryan this week with the accusation that a repeal of Obamacare would bankrupt Medicare. David Axelrod however is misinformed, as the real threat to Medicare is President Obama, who has taken billions of dollars from Medicare to fund Obamacare.

Medicare cost saving measures could be beneficial, however such measures should be used to make the Medicare guarantee stronger for tomorrows' seniors while preserving contemporary enrollee's plans. Instead, President Obama took Medicare dollars from today's seniors to fund Obamacare.

A report issued by the Congressional Budget Office (CBO) finds that the amount of money President Obama has taken from Medicare to fund Obamacare totals $716 Billion:

Obama's Cuts to Medicare: Total Amount Cut by Service:
Hospital Services $260 Billion
Medicare Advantage (MA) $156 Billion
Home Health Services $66 Billion
Skilled Nursing Services $39 Billion
Hospice Services $17 Billion
Medicaid/CHIP $114 Billion
Other Services $33 Billion
DSH Payments $56 Billion

Senger, Alyene, Heritage.org, "Obamacare Robs Medicare of $716 Billion to Fund Itself".

Worst of all, President Obama has taken $56 Billion from Disproportionate Share Hospital (DSH) Payments. DSH payments go to Hospitals that primarily serve low-income patients.

In addition to billions in Medicare pillaging to fund Obamacare, President Obama has essentially circumvented the law and future presidential vetoes by using the Independent Payment Advisory Board (IPAB) to insure all cuts to Medicare "must become law by August 15th, 2014." 

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5 Important Numbers on Obama

Posted by Justin Sykes on Monday, August 13th, 2012, 4:03 PM PERMALINK

Following Governor Romney's announcement that Rep. Paul Ryan would be his running mate, President Obama has been on the offensive, attacking Gov. Romney and Rep. Ryan on healthcare. The Obama White House has gone so far as to outline 5 Important Numbers on Health Reform on its website. The 5 numbers referenced by President Obama are misleading and ignore the 5 numbers which truly characterize the Obama Administration:

  1. $500 Billion in Tax Increases
  2. $62 Billion in New Regulations
    • $46 Billion  in new regulations since President Obama took office.
    • $16 Billion  in new regulations in 2012 thus far.
  3. 8% Unemployment
    • America is experiencing the longest period of unemployment above 8% since the Great Depression under President Obama.
  4. 11 Hours - The Buffet Rule
    • Gov. Romney's statement that the revenue raised by the Buffet Rule would "pay for 11 hours of government."
    • The fiscal year 2013 federal budget is projected to have $3.803 trillion in outlays. So, dividing $5 billion into that figure, you end up with the Buffet Rule covering 0.131% of the budget.
    • There are 8,760 hours in a year, that works out to just over 11 hours.
  5. 7 Tax Hikes on under $250,000-A-Year-Earners:
Obamacare's 7 Tax Hikes On Under $250,000-A-Year Earners
Obamacare Tax Hike Effective Start Date
1. The Indoor Tanning Services Tax July 1, 2010                                       
2. Health Savings Account Withdrawal Penalty Jan. 1, 2011
3. The Over-The-Counter Drugs Trap Jan. 1, 2011
4. The Medical Itemized Deduction Hurdle Jan. 1, 2013
5. The Healthcare Flexible Spending Account Cap Jan. 1, 2013                                             
6. The Individual Mandate Excise Tax Jan. 1, 2014
7. The Cadillac Health Insurance Plan Tax Jan. 1, 2018

 Ebeling, Ashlea, Forbes Staff - "Obamacare's 7 Tax Hikes On Under $250,000-A-Year Earners".



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Obamacare Doubles Premiums for Many Americans

Posted by Justin Sykes on Friday, August 10th, 2012, 5:42 PM PERMALINK

In a recent campaign speech in Cincinnati Ohio President Obama claimed "premiums will go down."

However, studies on the effects of Obamacare evidence premiums will not go down but will increase for "a material portion of the population." Specifically the young and healthy will be burdened by exponential increases in their premiums as a result of Obamacare.

An article published by the Washington Post today compiled numerous studies from around the country, all of which indicated that Obamacare will lead to sharp premium increases for young and healthy Americans.

President Obama's campaign promise that "premiums will go down" finds no factual support. If legislative action is not taken to repeal Obamacare:

  • Nationwide Study - Premiums in the individual market would increase from 8 to 37 percent in 2014 - with a cumulative increase of as much as 122 percent between 2013 and 2017.
  • Ohio - A healthy young man would experience a rate increase of 90 to 130 percent.
  • Indiana - The law would boost premiums in the individual market on average by 75 to 95 percent and in the small employer market by 5-10 percent in 2014.
  • Ohio - Rates would go up 55 to 85 percent above current rates.
  • Minnesota - Individual market premiums will increase between 26 to 42 percent.
  • Maine - Individual premiums will increase on average by 40 percent and premiums in the small group market are likely to increase 8 to 9 percent...20 percent of the individual market would still experience premium increases even after subsidies.
  • Maryland - Individual premiums will go up on average by 34 to 36 percent.
  • Wisconsin - Before tax credits, the average premium increases in the individual market will be 30 percent.
  • Colorado - Individual premiums will go up on average 19 percent.
  • Rhode Island - Before tax subsidies, premiums for individuals will increase on average by 8 percent.

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Obamacare's Pizza Tax: Taxing an Even Larger Slice

Posted by Justin Sykes on Friday, August 10th, 2012, 11:33 AM PERMALINK

Papa John's founder John Schnatter caused a stir this week with his comment that the Obamacare law would cause a "hike in pizza prices." The most stirring thing about John Schnatter's statement is...that it's true. As a result of Obamacare employers such as John Schnatter will be forced to change their workforce strategy, which means increasing the costs of products offered to consumers as well as layoffs.

In a study recently released by Mercer, analysts surveyed 1,203 employers, 60% of which were preparing for an increase in cost as a direct result of Obamacare. Of employers hit the hardest by Obamacare, Mercer found the effects would primarily hit retail and hospitality employers who employ "the most part-time and low-paid employees."

To exemplify the effects Obamacare will have on employers:

  • Beginning in 2014 employers will be required to extend coverage to all employees working 30+ hours per week or face possible penalties.
  • A fourth of all survey respondents said they will have to take action to avoid...penalties.
  • Retail/ wholesale employers...are more inclined to change their workforce strategy.


The Cost of Obamacare is not reserved to retail and hospitality:

Cost impact of Obamacare by Industry
Retail and Hospitality 46%
Health Care Services 40%
Manufacturing 33%
Financial Services 32%                                                   
Transportation/ Communication/ Utility 31%
Other Services 29%
Government 24%


If legislative action is not taken, the effects of Obamacare will be widespread, hurting employers and potentially costing part-time and low-wage employees their jobs.

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New Study Confirms Death Tax Kills Jobs, Hurts Growth

Posted by Justin Sykes on Thursday, July 26th, 2012, 5:19 PM PERMALINK

A study released this week by the Joint Economic Committee found that the death tax fails to produce any recognizable benefits and significantly hinders economic growth in the U.S.

The study shows that the death tax fails to achieve any of the goals that it was intended to achieve.

Specifically, the death tax has: (1) reduced the amount of capital stock in the U.S.; (2) significantly hindered entrepreneurial activity; (3) prevented economic mobility; and (4) raised an insignificant amount of revenue.

The death tax has reduced the amount of capital stock in the U.S. Over the 96 years in which the death tax has been enacted, it has "reduced the amount of capital stock in the U.S. economy" by almost $1.1 trillion. This $1.1 trillion reduction in capital stock almost totals the entire amount of revenue raised by the death tax since its implementation in 1916.

The death tax has significantly hindered entrepreneurial activity. The JEC's study found that the death tax is the "overwhelming cause of dissolution of family businesses" because such businesses are likely unable to comply with estate tax liabilities. A study recently released by the Tax Foundation found that the estimated cost of complying with the death tax totals over $88 million, in addition to 2.3 million hours of average compliance effort. As such, the death tax remains a large hindrance to entrepreneurial activity.

The death tax has prevented economic mobility. The death tax discourages savings and instead encourages consumption. To exemplify this, the JEC study found that for persons faced with a potential 55 percent marginal tax rate, "it costs $2.22 for a decedent to give $1 of pre-tax assets as a result of estate and gift taxes." Thus the JEC reasons that people will spend assets as opposed to saving.

The death tax has failed to raise a significant amount of revenue. According to the most recent CBO estimates, the revenue from the death tax and gift tax combined for 2011 equaled out to "less than one-half percent" of all federal revenue, and a mere 0.05 percent of GDP. Relative to spending by the federal government, the revenue from the death tax "would cover less than one day of federal spending."

The JEC's report further points out that abolishing the death tax would raise revenue in two ways: (1) "the estate tax robs additional federal tax revenues from the collection of other taxes like the income tax; and (2) a larger total capital stock could increase income tax revenue."

Absent congressional action, the estate tax rates will soon revert back to pre-EGTRRA levels and the estate tax exemption will reach $1 million in 2013.





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Roberts Clarifies: Mandate is a Tax...Not a Penalty

Posted by Justin Sykes on Thursday, July 26th, 2012, 2:43 PM PERMALINK

In the weeks following the Supreme Court's ruling on the healthcare mandate, President Obama and House Minority Leader Nancy Pelosi have repeatedly stated to the public that the individual mandate contained in Obamacare is not a tax. The Democrats' hard line stance that the mandate is not a tax is illogical, as evidenced by Chief Justice Robert's constitutional analysis of the individual mandate.

Contrary to President Obama and the Democrat's interpretation of the mandate, Justice Roberts made ten key points in his analysis on why the mandate is a tax, and not a penalty:

  1. The Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a tax on those who do not buy that product.
  2. According to the Government...the mandate can be regarded as establishing a condition - not owning health insurance - that triggers a tax - the required payment to the IRS.
  3. [The mandate] makes going without insurance just another thing that the Government taxes, like buying gasoline or earning income.
  4. The Government asks us to interpret the mandate as imposing a tax, if it would otherwise violate the Constitution.
  5. The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects.
  6. The process yields the essential feature of any tax: it produces at least some revenue for the Government.
  7. The same analysis here suggests that the shared responsibility payment may for constitutional purposes be considered a tax, not a penalty.
  8. The reasons the Court in Drexel Furniture held that what was called a "tax" there was a penalty support the conclusion that what is called a "penalty" here may be viewed as a tax.
  9. The shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.
  10. We have already explained that the shared responsibility payment's practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power.


Justice Robert's concluded his analysis by stating that Obamacare's "requirement that certain individuals pay a financial penalty for not obtaining health insurance may...be characterized as a tax."  


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Boehner Seeks to Close Loopholes and Lower Taxes

Posted by Justin Sykes on Thursday, July 19th, 2012, 3:51 PM PERMALINK

In a press briefing last week, House Speaker John Boehner (R-Ohio) asserted that he is standing with taxpayers against the spending interests in Washington who want to raise taxes on families and employers. Boehner made his position clear by stating that any increase in tax revenue must be offset by tax cuts.

Speaker Boehner called for Republicans and Democrats to oppose the efforts of Senator Lindsey Graham (R-S.C.) and Senator John McCain (R-Ariz), who want to offset defense spending cuts with revenue raised from closing tax loopholes.

Speaker Boehner advocated that any revenue from closing tax loopholes should be offset by tax cuts, specifically cuts to the corporate and individual income tax rates. Boehner stated that if "we're serious about bringing down rates, both corporate rates and individual rates, closing those loopholes, those special deals and other credits that are in the tax code, needs to come as part of overall tax reform."

The hard line stance that tax loopholes should be closed and those revenues used to offset reductions in the corporate and individual income tax rates, makes it clear that Speaker Boehner is in touch with taxpayers. His stance on overall tax reform is one that should guide other members of Congress going forward.

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Voters Favor Extending Tax Cuts for Everyone

Posted by Justin Sykes on Thursday, July 19th, 2012, 10:46 AM PERMALINK

In an article published by the Washington Post this week, reporter Chris Cillizza commented on the percentage of voters who favor a tax increase on incomes over $250,000.

Cillizza writes that Democrats have publicly proclaimed their willingness to jump off the fiscal cliff this year in defiance of Republicans refusal to end tax cuts for those making over $250,000, and that "the public is on their side."

However, according to a recent McClatchy-Marist poll it is clear this is not the case. As evidenced by the poll results, the majority of voters support extending tax cuts for everyone, including those making over $250,000:

  • 52% of voters polled were in favor of extending the tax cuts for everyone; and
  • 53% of independent voters polled favored extending tax cuts for everyone.


Additionally, Marist University polled voters based on household income, education, race, and age:

  • 53% of voters making less than $50,000 were in favor of extending tax cuts for everyone;
  • 58% of voters with no post secondary education favored extending tax cuts for everyone;
  • 62% of Latino voters polled favored extending tax cuts for everyone; and
  • 69% of voters polled between the ages of 18-29 supported extending tax cuts for everyone.


The voter sentiment in the McClatchy-Marist poll is echoed in a study released last week by Ernst & Young. The study found that not extending tax cuts for those making over $250,000 "would translate into a decline in GDP of $200 billion and employment by roughly 710,000 jobs."

It is obvious from recent polling that a strong majority of voters favor extending all tax cuts, including those for persons earning over $250,000.

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Don't Raise the Dividend Tax on Middle Class Seniors

Posted by Justin Sykes on Tuesday, July 17th, 2012, 5:01 PM PERMALINK

In a study released by Ernst & Young last week, analysts profiled qualified dividend shareholders based on age and income. Their findings indicate that the benefits of continuing the 2003 Dividend Tax Rate Reductions for qualified shareholders would be far reaching.

Currently, the tax cuts created by The Jobs Growth and Tax Reconciliation Act of 2003 are set to expire on December 31, 2012. Ernst & Young found that "if current rates expire, dividend income will be taxed as ordinary income, with rates rising to as high as 39.6 percent" in addition to a 5 percent increase in the top tax rate on capital gains.

The expiration of current rates on dividend income and capital gains rates will also be further increased by the 3.8% Obamacare surtax on portfolio income. "Obamacare in 2013 also imposes a 3.8 percentage point surtax on" investment income, which would thus make the top dividend rate 43.4% and the top capital gains rate 23.8%.

The study's results from analyzing those who qualify for the lower tax rates on qualified corporate dividends found 25.4 million tax returns included qualified dividends in 2009 which represented "$123.6 billion of qualified dividends."

Overall, the study found that tax returns with qualified dividends had the following age and income profile:

  • 63% are from taxpayers age 50 and older
  • 32% are from taxpayers age 65 and older
  • 68% are from returns with incomes less than $100,000
  • 40% are from returns with incomes less than $50,000


In a second study released by Ernst & Young this week, analyst forecast that the long-run macroeconomic impact of not extending the 2003 tax rate increases would "result in significant increases in the average marginal tax rates (AMTR) on business, wage, and investment income." The study found that the tax rate increases would lead to fewer jobs, lower wages, less investment, and an overall smaller economy.

If nothing is done to extend the tax cuts of 2003 prior to the Fiscal Cliff in 2013, an enormous, far reaching sector of the population will be affected. As Americans for Tax Reform has previously stated, "capital gains and dividend rates" should remain at the 15% taxation levels currently in place.

As evidenced by both Ernst & Young studies, the 2013 increase in taxation of dividends as ordinary income, the increase on capital gains rates, and the Obamacare surtax on portfolio income would amount to a top dividend rate of 43.4% and a top capital gains rate of 23.8%. Taken together the tax increases and expirations under Obamacare would deal a crushing blow to the American economy, and stifle economic growth thereby negatively impacting a large portion of the American population.


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Conservative Governors Remain Opposed to Obamacare's Medicaid Expansion

Posted by Justin Sykes on Thursday, July 5th, 2012, 3:46 PM PERMALINK

In an article published by the Hill today, 15 Governors were described as expressing opposition to the Medicaid expansion under Obamacare. Half of these Governors have out rightly stated they will not choose to participate in the Medicaid expansion.

Most of those in opposition to the Medicaid expansion cite budget cuts in education and tax increases which will be necessary to sustain such a massive overhaul as their motivation.

Nebraska Governor Dave Heinemen released a statement last week citing his concern that the expansion will cause budget shortfalls, such that if the Medicaid expansion were implemented, "aid to education and funding for the University of Nebraska will be cut or taxes will be increased."

Florida Governor Rick Scott has also made it clear Florida will not participate in the Medicaid expansion, stating "Florida will opt out of spending approximately $1.9 billion more taxpayer dollars required to implement a massive entitlement expansion of the Medicaid program." In a press release following the Supreme Court ruling, Governor Scott cited job creation and cuts to education spending as his primary concern in opposing the Medicaid expansion.

Governor Scott Walker of Wisconsin released a statement following the ruling in which he outlined concerns that Wisconsin's participation in the Medicaid expansion would not only drive up the cost of health care for citizens of Wisconsin, but that participation would "increase the size and cost of government, decrease the quality of health care and, in our state, reduce access for those truly in need of assistance."

Kansas Governor Sam Brownback has also joined the fight against implementing Obamacare's Medicaid expansion, stating on the Governor's website that "stopping Obamacare is now in the hands of the American People. It begins with electing a new president this fall."

Similar to Governor Brownback's call to arms, Governor Bobby Jindal of Louisiana made it clear that "the American people did not want or approve of Obamacare then, and they do not now. Americans oppose it because it will decrease the quality of health care in America, [and] raise taxes."

Governor Terry Branstad of Iowa expressed passionate opposition to the idea of Iowa participating in the Medicaid expansion, stating in a recent press release that "the Supreme Court handed down a disastrous decision to uphold President Obama's destructive health care law, which means a future of higher costs, higher taxes, and increasing debt for Iowans."

In a letter to Senator Jim Demint, Governor Nikki Haley wrote that "South Carolina stands with you and your cosigners in opposing implementation of state-based insurance exchanges." Governor Haley's letter references Senator Demint's efforts to oppose the expansion within Congress.

In addition to the Governors cited above, the Governors of Alabama, Georgia, Indiana, Mississippi, Missouri, Nevada, Texas, and Virginia have informally joined in the opposition to the Medicaid expansion under Obamacare.

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