Sarah Feldpausch

Government Illegally Diverts Billions to Obamacare Reinsurance Slush Fund

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Posted by Sarah Feldpausch, Alexander Hendrie on Monday, February 22nd, 2016, 4:43 PM PERMALINK

In a late Friday afternoon news dump before the President’s day holiday weekend, the Obama administration announced that it would pay out $7.7 billion to Obamacare insurers through the reinsurance program – including $1.7 billion in illegal payments. In all, the administration has unlawfully funneled $3.5 billion into this program.

For 2015 Obamacare reinsurance, the administration will pay out $6 billion raised from a fee on private health insurance and an additional $1.7 billion that under federal law belongs to the Treasury department. Indeed, the decision by the Obama administration directly violates section 1341 of Obamacare which explicitly states “money shall be deposited into the general fund of the Treasury of the United States and may not be used for the [reinsurance] program established under this section.”

The Obamacare reinsurance program was one of three programs (together with risk corridors and risk adjustment) created to hide the true costs of coverage on the exchange and prop up insurers by redistributing funds from different groups to Obamacare exchanges. In the case of reinsurance, this took the form of a $44 assessment on each individual with private health insurance.

As Doug Badger of the Galen Institute explains, Obamacare reinsurance for 2014 was supposed to raise $12 billion, but fell $2 billion short. To deal with this shortfall, the administration simply decided not to pay Treasury what it was owed. Now, the administration is at it again.

In fact, according to the House Energy and Commerce Committee, the Administration has used Obamacare’s web of corporate welfare programs to unlawfully funnel $8.5 billion in taxpayer to the law.

Just last year, the government announced that the Risk Corridor program – a revenue neutral program that redistributed funds from Obamacare insurers on the exchange that made money to those that did not – could pay insurers just 12.6% of what they requested.

Despite a shortfall that totaled over $2.5 billion, Obamacare chief Andy Slavitt announced he would bailout insurers. Coincidentally, Slavitt is also a former VP for United Health, one of the largest insurers on the Obamacare exchanges.

Fortunately, Congress was able to block this textbook case of corporate welfare and stop the $2.5 billion in unlawful payments.

Indeed, despite this continued stream of corporate welfare premiums continue to skyrocket for those on the exchanges. For the 2016 coverage year, Obamacare premiums have increased by as much as 50 percent in some states, according to recently released data compiled by Freedom Partners. Of the 50 states, enrollees in 34 states saw a top increase in premiums of 20% or more.

Clearly, the Obama administration has no intention of following their own laws and is determined to provide billions upon billions of dollars in corporate welfare to Obamacare insurers. Given this reality, Congress has a duty to provide strong and aggressive oversight to protect taxpayer dollars from being wasted on this failed law.

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Grover Norquist Show: Huge Victory as WV Becomes a Right-to-Work State

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Posted by Sarah Feldpausch on Monday, February 15th, 2016, 5:28 PM PERMALINK

West Virginia recently became the 26th state to adopt the Right-to-Work statute.  Currently, if your state is not Right-to-Work and a union organizes your workplace, you can be forced to pay union dues as a condition of employment.

In the latest episode of the Grover Norquist Show, ATR President Grover Norquist sat down with Center for Worker Freedom’s Matt Patterson to discuss the successes and setbacks in the Right- to- Work movement.

Patterson praised West Virginia’s adoption of the Right-to-Work law stressing the importance of this labor reform: 

“This has become a prime issue for Republican governance. We want to send the signal to Republicans who might be squishing on this issue that everyone is watching. This is an absolutely crucial issue because it is the bank of the Democratic Party… the unions take money from people’s wallets against their will.”

To view a map of all the Right- to- Work states and forced union public sector states, click here. Listen to the full interview below:

permalink: http://norquist.radio.washingtontimes.com/successes-and-setbacks-in-right-to-work

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Cam Newton Takes a Tax Sack After the Super Bowl

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Posted by Sarah Feldpausch on Thursday, February 11th, 2016, 2:26 PM PERMALINK

As the Super Bowl weekend excitement fades and the Panthers have left California with a loss, at least one player takes a second hit. Since out-of-state athletes are levied with the ‘Jock Tax’, Cam Newton will pay $101,360 on his bonus of $51,000- effectively making his loss one championship ring and roughly $50,000. That’s a bad day.

The importance of understanding marginal tax rates and average tax rates plays into this seemingly odd mess for Cam Newton but also relates to the average taxpayer who travels for work and must comply with the heavy federal and state tax burdens. Let’s break it down.

Here’s an example from Dan Mitchell at the Cato Institute: Picture a taxpayer who earns $50,000 and pays $10,000 in tax. From this, we know the taxpayer’s average rate is 20%.

Consider these three simple scenarios with different marginal tax rates:

· Tax system A (Head tax)-$10,000 annual charge on all taxpayers. Under this system, our taxpayer gives the IRS $10,000 of his $50,000 income- making his average tax rate 20%. But what if he earns more than that? Any addition income over the first 10,000 will not be taxed. His marginal tax rate= 0%. In this scenario, the tax system does not discourage additional economic activity.

· Tax system B (Flat Tax)- flat rate of 20% on every dollar of income. Under this system, our taxpayer pays a 20% tax on every dollar of the $50,000 he made. Anything additional money made would still be taxed 20%.  His marginal tax rate= 20%. In this scenario, the tax system imposes a modest penalty on additional money earned.

· Tax system C (Personal exemption)- $40,000 personal exemption + 100% tax rate on all income over that level. Under this system, our taxpayer pays $10,000 of tax on $50,000 of income- average tax rate= 20%. His marginal tax rate= 100%. In this scenario, the tax system would destroy incentives for any additional money earned.

Back to Newton:

The marginal tax rate matters when evaluating tax systems and its effects. In Newton’s case, the Golden State tax system taxes out-of-state athletes by how many days they spend there and their earnings in addition to their total yearly income. The state is taxing Cam’s entire annual income based on the number of days he has worked in the state (Duty Days).

Being a professional athlete, he must play by the ‘Jock Tax’ rules and is taxed based on his yearly income.  To understand this tax, apply a duty day calculation.

Duty Days within the State      X     Player’s Salary

Total Duty Days of the Year      

There are about 206 total duty days during 2016 for the Panthers, which includes preseason, regular season, playoffs, and organized team activities, (Newton must attend or is fined $500,000). Seven of those days will be in California for the Super Bowl- making those days liable for the burden of California’s out-of-state athlete tax in addition to taxation on his entire income.

So while Cam Newton may have an average tax of 13.3% on his earnings in California, after the Super Bowl loss, Newton ‘won’ $51,000 and his net gain was taxed $101,360 for a marginal tax rate of 198.8%!

While Newton is not your average employee, the real lesson to be learned here is that higher federal and state tax burdens can have a huge impact on employees in jobs that require travel. What about the athletic trainers that followed the Super Bowl to California? What about the referees that worked in the state for a number of days? It is important to understand the implications of an average tax versus a marginal tax as the latter determines the undue burden on the taxpayer. 


Report Finds Half of Minnesota’s Obamacare Enrollees Were Ineligible for Program

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Posted by Sarah Feldpausch on Wednesday, February 10th, 2016, 5:10 PM PERMALINK

A recent auditor’s report examining Minnesota’s Obamacare exchange, known as MNsure, found the system was enrolling more than a hundred thousand Minnesotans who were ineligible for the program.

The report estimated as many as 132,140 individuals were not eligible for the program they had enrolled in and up to 107,870 individuals were not eligible for ANY program. The audit also estimated that there was an error rate of close to 50 percent, and the state may have overpaid up to $271 million over the five-month period that was analyzed by auditors.

The Office of the Legislative Auditor of Minnesota found that The Department of Human Services:

  • Failed to verify that people who enrolled in public health care programs through MNsure were eligible for those programs which prompted the department to overpay for healthcare benefits. The effective cost was nearly $11,000 just in January through May of 2015.

 

  • Failed to provide the county human service eligibility workers with sufficient training on MNsure. This generated incompetent workers likely to make errors in determining the enrollee eligibility status for public health programs.

 

  • Failed to resolve discrepancies with social security numbers, citizenship or immigration status, or household income that MNsure identified for further verification within the correct amount of time. This dramatically slowed enrollee application processes and furthered the risk of fraud

 

  • Paid Medical Assistance and MinnesotaCare benefits for enrollees whose incomes exceeded federal and state program limits. A sample portion of enrollees concluded almost 27% exceeded the income thresholds for the program in which they were enrolled. This resulted in an overpayment of $94,409 by the Department of Human Services.

 

  • Improperly used federal funds to pay for health care costs for MinnesotaCare enrollees age 65 and older. An estimated $1.2 million of federal funds were incorrectly allotted to age 65+ misclassified enrollees due to the system defect.

 

This black mark is not an isolated case when it comes to Minnesota’s Obamacare exchange. Enrollees in the state have faced a top premium increase of nearly 50%, according to recent data compiled by Freedom Works. Across the nation, enrollees in 34 states saw a top premium increases of 20% or more.

Alarmingly, Minnesota is not the only failed or failing Obamacare state exchange across the country. Exchanges in Oregon, Hawaii, Nevada, and New Mexico are costing taxpayers $733 million.

Of these, the most troubling is Oregon. The state’s $305 million exchange failed to work by the November 2013 deadline – or months later, and the system was soon shut down by then-Governor Kitzhaber, at an additional cost of $41 million in mostly federal funds.

Recently discovered emails suggest that the Cover Oregon debacle can trace its origins to the Governor’s partisan political advisors who closely managed the project and made the call to shut down the exchange in order to assist the Governor’s reelection campaign. It appears that Cover Oregon's infrastructure was close to 90 percent complete when this happened.

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Hillary’s “Free College” Plan May Increase Taxes On Over 21,000 New Hampshire Families

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Posted by Sarah Feldpausch on Friday, February 5th, 2016, 5:00 AM PERMALINK

Hillary Clinton’s proposed “New College Compact” is estimated by her campaign to cost $350 billion over ten years. Where will the money come from? According to the Clinton campaign, every cent of the $350 billion will come from tax increases on the American people. A review of the proposal by Americans for Tax Reform shows that as many as 21,330 New Hampshire households will be stuck with a higher tax bill.

The $350 billion tax hike over ten years comes in the form of a 28 percent cap on itemized deductions. The Clinton spending plan reduces the income tax deductibility of countless deductions including charitable donations, high medical bills, mortgage interest, and state and local taxes for Iowa families in the 33-percent, 35-percent, or 39.6 -percent brackets, limiting their value to just 28 percent.

According to IRS Statistics of Income Data for 2013 (the most recent year available), this Hillary tax hike will hit about 21,330 New Hampshire households, based on the number of families who earned over $200,000 and itemized their deductions.

The proposal in effect would create a new Alternative Minimum Tax (AMT).

"By capping itemized deductions -- which already phase out based on income -- Clinton will complicate the tax code and bring back the AMT for millions of families," said Grover Norquist, president of Americans for Tax Reform. "The original AMT targeted 155 individuals but grew to target 40 million families. Hillary's new idea is the old AMT that starts as a $350 billion tax hike and will certainly grow.”

Clinton’s attempt at “free” college through increasing taxes aligns with her threat: “We’re going to take things away from you on behalf of the common good.” This remark was made during a speech to her financial backers and was overheard and reported by the Associated Press. Unaware there was a reporter present, then-Senator Clinton felt free to spell out her true tax worldview.

This is not the only tax hike Clinton has proposed. When the campaign launched, Clinton spokesman Brian Fallon warned of upcoming “revenue enhancements” – and the campaign has not disappointed. With almost ten months till Election Day, Clinton has already proposed over $1 trillion in tax increases.

 

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What is Your Vote-Moving Issue?

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Posted by Sarah Feldpausch on Thursday, January 28th, 2016, 5:24 PM PERMALINK

The ‘Leave Us Alone’ coalition relies on a number of diverse groups with distinct vote-moving issues. With the goal of pro-liberty policies, every American vying for control of their personal and professional growth may be considered part of this strengthening coalition to fight for freedom from government intervention.

The keys parts of this growing coalition include:

Taxpayers: those who find themselves in this group dictate votes on keeping their taxes low. These voters believe the money they earn is theirs and will vote against any initiative to take further from their paycheck. They maintain that the government’s ability to control their lives comes from the ability to tax.

Businessman and -Women: this group is made up of small business owners, independent contractors, and entrepreneurs who do not want their establishments overtaxed and over regulated. They will vote against intrusion that hampers their productivity and advancements. 

Second Amendment Supporter: these voters have a strong support for all initiatives to protect the constitutional right of gun ownership.

Property Rights Activists and Homeowners: individuals in this groups have the sole vote-moving issue of protecting their property from expropriation for political reasons. They wish to be rightfully left alone on their own land.

Homeschoolers: this group is generally made up of parents who wish to educate their children without monitoring interference from the government. They simply want to transfer family values in the safety of their home and wish to reject the state’s mandated coursework. 

Communities of Faith: those who believe in the free practice of faith and relaying this message to their children are found in this group. The specific religious difference within this group are not important to its members as they are unified in the right to practice and teach freely.

Ownership Society: this is the investor class who own stock, maintain retirement funds, savings accounts, and mutual funds that wish to be left alone from crippling taxation and inflation. They also wish for the strength and prosperity of the companies they own stock in- which means less government involvement in those groups.

Public Servants: most specifically, this group consists of the police and military who wish to properly limit government and their role in protecting the life, liberty, and property of its citizens. As their career has been dedicated to protecting Americans, they vote to keep these citizens safe from overreaching government as well.

While each group has differences, their votes are driven by the desire to be left alone- from the government, from over taxation and regulation, from diminishing rights, and from political agendas. The power of this coalition has come from its committed members to vote true to their cause and its existence continues only with this strength in unity. 

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IRS Fails to Screen 2.2 Million Tax Returns for ID Theft, Blames “oversight”

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Posted by Sarah Feldpausch on Thursday, January 28th, 2016, 2:02 PM PERMALINK

A report on IRS identity theft protections by the Treasury Inspector General for Tax Administration was publicly released today, revealing that an estimated 2.2 million tax returns were not entered into a key system used in fraud detection.

According to the report, the 2.2 million returns were not uploaded into the Dependent Database, known as DDb, due to “an oversight.” The IRS was not aware of its failure to load the returns into DDb until notified by TIGTA on Feb. 13, 2015. The IRS eventually corrected the issue three weeks later, on March 6, 2015.

The TIGTA report, titled “Continued Refinement of the Return Review Program Identity Theft Detection Models Is Needed to Increase Detection” notes the failure to recognize some legitimate identity theft cases and failure to properly maintain taxpayer data between the DDb system and an additional fraud detection filter, the Return Review Program (RRP), occurred in part because the IRS did not fully implement all capabilities of the selection models such as filters and flagged selection groups.

TIGTA stated:

“Internal IRS guidelines require tax examiners to monitor the taxpayer’s account to determine whether the taxpayer updated their address or provided a reasonable explanation of why the refund was returned undeliverable. If after 30 calendar days the taxpayer has not satisfactorily resolved the issue and the refund has not been reissued, the IRS will treat the refund as being associated with an identity theft tax return and reverse the fraudulent tax return’s data entries from the taxpayer’s account and place an identity theft indicator on the taxpayer’s account. When we brought this to IRS management’s attention on July 10, 2015, the IRS responded that it had not started this process nor has a start date for this process been established.”

When questioned, IRS officials “did not have an explanation as to why procedures were only changed for checks returned undeliverable”.

The Office of Audit commented on this problem:

“Review of the 70 accounts found that 61 did not have the required undeliverable tax refund check process identity theft indicator. For the remaining nine, the indicators were added subsequent to the completion of our analysis”-- meaning these taxpayers did not get their refund and accounts were flagged as fraudulent.  

Failure to protect taxpayer data is not an isolated case when it comes to the IRS. Last year, the agency’s ineptitude resulted in the taxpayer data of 330,000 filers being stolen, despite countless watchdog warnings.

Since 2007, the IRS was warned at least seven times by watchdog groups that it needed to strengthen its protections of taxpayer information. Most recently:

  • In a 2014 report, the Treasury Inspector General for Tax Administration (TIGTA) warned that if stronger protections are not implemented, “taxpayers could be exposed to the loss of privacy and to financial loss and damages resulting from identity theft or other financial crimes.”  
  • 2013 report found that the IRS had failed to fully implement eight recommendations that would increase security over taxpayer data despite telling TIGTA they had been implemented.
  • 2011 report found that taxpayer data was vulnerable to hackers and stronger security measures were needed.
  • In 2010, TIGTA found that the agency had inadequate safeguards to protect taxpayer information from contract workers.

 

See Also:

 

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Judicial Watch: Obamacare Website Launched Despite Security Official’s Warnings

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Posted by Sarah Feldpausch on Thursday, January 28th, 2016, 9:38 AM PERMALINK

 The federal Obamacare website launched in 2013 without authorization to operate and against the judgment of security agency officials.  This left millions of Americans that enrolled on Heathcare.gov vulnerable to possible fraudulent activity – risks that continue to this day for the more than 6.5 million federal enrollees. Although the Obama administration knew about the security risks, the site was launched anyway. 

To determine the safety of Healthcare.gov, Judicial Watch filed a lawsuit, in accordance with the Freedom of Information Act (FOIA), against the Department of Health and Human Services to obtain all records related to security. This came after HHS officials failed to comply with requests in 2013 for these documents. 

The FOIA request found countless problems in the initial months of exchange which verify the administration’s knowledge of risks:

September 21, 2013- The Center for Medicare and Medicaid (CMS) Information Security officer, Tom Schankweiler, expressed concern to the Healthcare.gov project manager Henry Choa stating there was 17 initial “moderate” security issues and two “high” security issues within the Obamacare website. These concerns included issues with contractors, staff shortages, and software malfunctions. This resulted in CMS Security Officer, Teresa Fryer, denying Healthcare.gov the authorization to operate.

September 30, 2013- Just one day before the site’s launch, a private contractor testing the security of Healthcare.gov found that the site did not have the proper ability to handle “specially crafted messages – warning that this would likely cause the site to crash and furthered the lack of security.

October 1, 2013- Healthcare.gov launched even though it was not authorized to operate by government IT security officers. As a result, the website crashed on day one as millions of Americans tried in vain to sign up for healthcare.

November 6, 2013- The chief of technology officer of CMS was reminded that Healthcare.gov was in service without the authorization to operate – This posed a serious issue that “represents a high risk to the agency”.

November 6, 2013- An email correspondence between a CMS security testing officer and a federal programmer for the site, there detailed a warning: “it is possible for anyone to run a brute force attack against Healthcare.gov to obtain the results of their eligibility.” This meant that personal information of enrollees such as household income, social security numbers, wage and tax statements, home and mailing addresses, was at risk.

In the months following, the Obama Administration contracted various groups in an attempt to remedy the quality assurance issues of Healthcare.gov. Despite spending a further $2.14 billion in taxpayer dollars, they failed to fix some of the most serious security concerns. 

Two years later, and after persistent and detailed warnings were directed to administration officials, Healthcare.gov was hacked by an outside source.

This latest news comes after multiple alarms were raised regarding the site’s safety measures including the ability of Healthcare.gov to safeguard personal documents and legitimacy of citizenship. Today, the site continues its service without “authorization to operate” from agency information security. Anyone currently enrolled on the Obamacare website may be subject to these risks. 

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Hillary’s “Free College” Plan Puts 35,000 Iowa Families in the Tax Hike Crosshairs

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Posted by Sarah Feldpausch on Tuesday, January 19th, 2016, 10:10 AM PERMALINK

Hillary Clinton’s proposed “New College Compact” is estimated by her campaign to cost $350 billion over ten years. Where will the money come from? According to the Clinton campaign, every cent of the $350 billion will come from tax increases on the American people. A review of the proposal by Americans for Tax Reform shows that as many as 35,000 Iowa households will be stuck with a higher tax bill.

The $350 billion tax hike over ten years comes in the form of a 28 percent cap on itemized deductions. The Clinton spending plan reduces the income tax deductibility of countless deductions including charitable donations, high medical bills, mortgage interest, and state and local taxes for Iowa families in the 33-percent, 35-percent, or 39.6 -percent brackets, limiting their value to just 28 percent.

According to IRS Statistics of Income Data for 2012 (the most recent year available), this Hillary tax hike will hit about 35,000 Iowa households, based on the number of families who earned over $200,000 and itemized their deductions.

The proposal in effect would create a new Alternative Minimum Tax (AMT).

"By capping itemized deductions -- which already phase out based on income -- Clinton will complicate the tax code and bring back the AMT for millions of families," said Grover Norquist, president of Americans for Tax Reform. "The original AMT targeted 155 individuals but grew to target 40 million families. Hillary's new idea is the old AMT that starts as a $350 billion tax hike and will certainly grow.”

Clinton’s attempt at “free” college through increasing taxes aligns with her threat: “We’re going to take things away from you on behalf of the common good.” This remark was made during a speech to her financial backers and was overheard and reported by the Associated Press. Unaware there was a reporter present, then-Senator Clinton felt free to spell out her true tax worldview.

This is not the only tax hike Clinton has proposed. When the campaign launched, Clinton spokesman Brian Fallon warned of upcoming “revenue enhancements” – and the campaign has not disappointed. With almost ten months till Election Day, Clinton has already proposed over $1 trillion in tax increases.

For more information, visit www.HighTaxHillary.com

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Obamacare Premiums to Rise by up to 50 Percent in 2016

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Posted by Sarah Feldpausch on Monday, January 18th, 2016, 2:44 PM PERMALINK

 In his final State of the Union Address, President Obama touted the success of Obamacare in lowering healthcare costs. In reality, the opposite is true – healthcare costs are becoming more and more unaffordable – as shown by recently released data on 2016 Obamacare premiums, compiled by Freedom Partners. Of the 50 states, enrollees in 34 states saw a top increase in premiums of 20% or more.

At a high of nearly 50% rate increase, Minnesota’s market premiums top the chart. Minnesota is followed by Alaska with a 39.6% increase- Oregon and Tennessee trail closely with 37.1% and 36.3%, respectively. The premium percentage increases from private insurance companies are broken down by state, proving that Obama’s claim that “healthcare inflation has slowed…” is clearly false.

With Obamacare’s mandate forcing individuals to buy increasingly unaffordable health insurance or pay a tax, Americans are finding themselves stuck between a rock and a hard place. With insurance premiums (and also deductibles) increasing at such a rapid rate, many in the middle class are faced with higher and higher bills when visiting their doctor or a hospital.

The top ten states with premium increases are as follows:

-Minnesota: 49.0%

-Alaska: 39.6%

-Oregon: 37.1%

-Tennessee: 36.3%

-Oklahoma: 34.4%

-Hawaii: 34.4%

-Texas: 34.0%

-Montana: 34.0%

-North Carolina: 32.5%

-Ohio: 32.0%

 

To see the full Obamacare Premium Increase Tracker- click here.

 

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