Free Markets, Free People

Daily Archives: July 4, 2012

Happy Dependence Day!

My how things change over the course of 200+ years.

Back at the beginning of this experiment, people rejected a large and intrusive government.  They’d been the victims of one and threw off that yoke.  They acclaimed freedom as their goal and chose liberty as their battle cry.

When they finally got around to forming their own government, they carefully wrote a document which I’m sure they figured was an iron-clad guarantee that this country’s future would never see the same sort of tyranny they’d suffered under.

I just wonder what they’d think of this sprawling, debt ridden and intrusive mess we have now?  I wonder what they’d think of over half the population getting some sort of compensation from government. 

I wonder what they’d think of a Supreme Court Chief Justice more worried about what they’ll say about him and the court on the cocktail circuit and in the media than he is about upholding the Constitution, his sworn duty.  I think I know.

And I’m pretty sure I know what they’d think of this:

Our nation’s current debt, nearing $16 trillion, and our annual budget deficit of $1.2 trillion, indicate that our government’s addiction to spending is nowhere near its limit.

Of that $16 trillion debt, the U.S. owes more than $5 trillion to foreign nations, an all-time high. So much for independence. We’re now a debtor nation, and unless we get our fiscal house in order, that debt will endanger our nation’s prospects for long-term growth.

If that sounds alarmist, consider this: In August 2011, Vice President Joe Biden visited China. This wasn’t just any diplomatic visit — it was the supplication of a debtor, in which Biden undertook to reassure our Chinese debtors that their investment is sound.

Biden assured his hosts that they had "nothing to worry about" when it comes to the U.S. honoring its obligations. It wasn’t the first time a high-ranking U.S. official has had to offer soothing words to our creditors, and at this rate it won’t be the last.

Let’s be clear.  This administration isn’t the cause of all that debt.  It’s just the latest (and the worst) to add to it, to the point that our debt now stands at more than our GDP.  We are indeed a debtor nation.

That’s not at all how this began is it?  Nor was that ever the plan.

I’m also pretty sure I know how they’d feel about the level of intrusion government now routinely practices (and increases) in this country.  For example:

IRS officials on background tell FOX Business the U.S. Supreme Court ruling on health reform gives the IRS even more powers than previously understood.

The IRS now gets to know about a small business’s entire payroll, the level of their insurance coverage — and it gets to know the income of not just the primary breadwinner in your house, but your entire family’s income, in order to assess/collect the mandated tax.

Plus, it gets to share your personal info with all sorts of government agencies, insurance companies and employers.

And that’s just the tip of the iceberg. "We expect even more lien and levy powers," an IRS official says. Even the Taxpayer Advocate is deeply concerned.

As government takes more and more control of your lives, it intrudes deeper and deeper into them:

The TAO [Taxpayer Advocate Office] says that the “IRS will need to determine a taxpayer’s compliance with the individual [insurance] mandate and assess a penalty if coverage is inadequate.”

However, the penalty isn’t based on just your personal net income. The penalty will be based on an entirely different number that is more than just your paycheck earnings — your ‘household income.’

“This determination is based on a concept of ‘household income,’” TAO has said, adding, “this may differ from the income reported on the taxpayer’s return, because it is a composite of all of the income reported by members of a taxpayer’s household — information that may not be readily accessible to the IRS."

If the IRS finds you have fallen short of the law, it would hit you with a penalty tied to your household income (which may be that of an individual or several family members).

Under the new health law, the IRS penalty would be based on “modified adjusted gross income,” not adjusted gross income that you normally report at the bottom of the first page of your tax form 1040, before you take deductions or personal exemptions.

The modifications add back in things like non-taxable interest and excluded foreign income to this number.

Meaning:

Health reform’s insurance mandate says if you do not have “adequate” insurance, you’ll have to pay a fine as part of your tax return. If your business doesn’t provide “affordable” coverage,  that business may have to pay a fine to the IRS, too, as part of its tax return filings.

The TAO has noted Americans must now tell the IRS under the new law:

    *Insurance plan information, including who is covered under the plan and the dates of coverage;
    *The costs of your family’s health insurance plans;
    *Whether a taxpayer had an offer of employer-sponsored health insurance;
    *The cost of employer-sponsored insurance;
    *Whether a taxpayer received a premium tax credit; and
    *Whether a taxpayer has an exemption from the individual responsibility requirement.

The TAO has warned: “This is different from the type of information the IRS typically deals with, and some taxpayers may feel uncomfortable about sharing it with the IRS.”

In fact, it is incumbent upon you to prove to the IRS that you have “adequate coverage”, whatever that ends up meaning. And:

The TAO has also reported that “obtaining this new information will require the IRS to communicate with entities and government agencies that it may not deal with now,” including:

    *New state-run insurance exchanges;
    *Employers;
    *Insurance companies; and
    *Government insurance programs.

But remember the sales pitch – government will make health care simpler, more cost effective and better.

Congratulations to all the simpletons out there who bought into this scam and ended up foisting this intrusive monstrosity on the rest of us.  In fact, thanks to all, who through out the 200 years it has taken us to to get to this point, worked so hard to achieve it “for the common good”.  </sarc>  Nice mess you’ve given us.

As for the rest of you, happy Dependence day!

Forward.

~McQ

Twitter: @McQandO