—-
The above chart is taken from the article “Is Obama’s New Index the Right Fix for Social Security?” from the Wall Street Cheat Sheet’s website, which can be viewed below. It does start one to question just what has Social Security become and how should we fix it? (If it should be fixed).
Buy anything on the Internet lately without paying sales tax? In all but a few states, you’re probably a tax cheat.
That’s right, even if Internet retailers don’t collect sales tax at the time of the purchase, you’re required by law to pay it in 45 states and the District of Columbia.
Here’s the problem for states: hardly anyone pays the tax, and there’s not much states can do about it.
The Senate is expected to pass a bill Monday making it easier for states to collect sales taxes for online purchases. Some of the nation’s largest retailers are rejoicing. But small-business owners who make their living selling products on the Internet worry they will be swamped by new requirements from faraway states.
“It’s a huge burden for a company like ours,” said Sarah Davis, co-owner of Fashionphile.com, a California-based company that sells high-end pre-owned handbags and purses. “We don’t have an accounting department, we’ve got my father-in-law.”
Davis started the company in 1999 and now runs it with her brother-in-law. They have 26 workers and three stores, in Beverly Hills, San Diego and San Francisco. Last year, Fashionphile.com did $10 million in sales, the vast majority of it online, Davis said.
Fashionphile.com sells bags directly from its website and on eBay. The company collects sales taxes from customers who live in California, but not from people who live in other states, Davis said. Under the law, states can only require stores to collect sales taxes if the store has a physical presence in the state.
That means big retailers, such as Wal-Mart, Best Buy and Target, with stores all over the country collect sales taxes when they sell goods over the Internet. But eBay, Amazon and other online retailers don’t have to collect sales taxes, except in states where they have offices or distribution centers.
—-
Yet another story of MORE TAXES, MORE GOVERNMENT, and MORE HARM to small businesses. How original! Click below for the full article.
http://news.yahoo.com/tax-cheat-shop-online-tax-125303228.html
Last September when Reuters calculated that General Motors (NYSE: GM ) was losing almost $50,000 on every Chevy Volt it sold the carmaker was apoplectic with indignation at the “grossly wrong” numbers being thrown around. Sure they were losing money, every new technological advance does, but as they built more cars and then released Volt 2.0 they would become profitable.
Well, GM has certainly built more Volts over the last six months or so and they’ve even sold a few more, too, but then so has Tesla Motors (NASDAQ: TSLA ) and Nissan (NASDAQOTH: NSANY ) . In fact Tesla sold more of its all-electric Model S cars in the first quarter of the year than GM did with its Volt, and Nissan turned itself around enough so that its LEAF outsold the Volt in March.
We’ll get the April sales numbers in a day or so to see if any traction has been made as spring has gotten under way, and if GM was able to recover from March sales plunging 35%. One thing hasn’t changed month to month and that is that the Volt is still a money-losing proposition for GM and for the taxpayers who bailed it out.
In a presentation yesterday, CEO Dan Akerson admitted GM is still losing money on every Volt sold and will continue to do so for the foreseeable future. So what’s the solution? Not to admit defeat, that’s for sure, at least certainly not when the taxpayer is still nominally footing the bill for your company. Nope, what you do is double down and say you’re going to make even more of your money-losing cars than you did before and you’re going to make them even cheaper than they are now!
Akerson didn’t say how much GM was losing on each Volt, but he did say that if it ever hoped to make a profit on them the carmaker would need to cut as much as $10,000 from the cost of production. That, however, won’t be happening until the next-gen model is introduced, which won’t be until 2015 or 2016 at the earliest.
—-
Click below for the full article.
http://www.fool.com/investing/general/2013/05/01/gm-still-taking-taxpayers-for-a-ride.aspx
The issue:
As the population gets older, Social Security, Medicare and Medicaid are eating up more and more of the federal budget, squeezing the ability of the government to pay for other programs. Today, the three massive benefit programs account for 44 percent of federal spending. Left unchanged, they will account for more than 60 percent in 25 years, according to the Congressional Budget Office.
Unless Congress acts, the trust fund that supports Social Security is projected to run out of money in 2033. At that point, the retirement and disability program would collect only enough in payroll taxes to pay about 75 percent of benefits.
Medicare’s hospital insurance fund is in worse shape. It is projected to run out of money in 2024. At that point, it would only be able to pay 87 percent of costs, according to projections by the trustees who oversee Medicare and Social Security.
___
The campaign promise:
Obama rarely mentioned Social Security during his 2012 re-election campaign. Four years earlier, he was more forthcoming.
In a 2008 speech to AARP: “John McCain’s campaign has suggested that the best answer for the growing pressures on Social Security might be to cut cost-of-living adjustments or raise the retirement age. Let me be clear: I will not do either.”
On Medicare, Obama told the Democratic convention on Sept. 6, 2012: “Yes, we will reform and strengthen Medicare for the long haul, but we’ll do it by reducing the cost of health care, not by asking seniors to pay thousands of dollars more.”
___
The prospects:
Obama has already offered to break part of his 2008 pledge on Social Security. Twice in negotiations with GOP leaders, he agreed to adopt a new measure of inflation that would result in smaller cost-of-living adjustments, or COLAs, for Social Security recipients. Both deals fell apart. But now Obama has put forward the idea in his own proposed federal budget. If adopted, it would gradually trim benefit increases in Social Security, Medicare and other programs while raising taxes.
His proposed changes, once phased in, would mean a cut in Social Security benefits of nearly $1,000 a year for an average 85-year-old, $560 for a 75-year-old and $136 for a 65-year-old.
Obama and Republican leaders in Congress have held off-and-on talks about possible changes to entitlement programs since 2011, as part of their efforts to reduce government borrowing. But a deal remains elusive. Republicans insist any agreement must include deep spending cuts, while Obama says any deal must include more tax revenue. And many Democrats in Congress are protective of the entitlement programs that Obama now is willing to touch.
—-
Click below for the full article.
http://news.yahoo.com/promises-promises-social-security-pledge-173052710.html
In response to this week’s brouhaha regarding attempts by members of Congress to avoid having to enroll themselves and their staff members in Obamacare’s health insurance exchanges, Michigan Republican Dave Camp, Chairman of the House Ways and Means Committee, has offered a new proposal: Why not put all federal employees on the exchanges? It’s an attractive idea, but it has some downside: it would dismantle a popular model of market-based health reform.
“If the ObamaCare exchanges are good enough for the hardworking Americans and small businesses the law claims to help, then they should be good enough for the president, vice president, Congress, and federal employees,” said Camp’s spokeswoman in a statement.
The political principle is straightforward, but it would come at a price. Putting all federal employees on the exchanges would obliterate the most market-oriented insurance program run by the government, the Federal Employee Health Benefits Program, or FEHBP. Indeed, the FEHBP has long been considered a model for market-based reform of the Medicare and Medicaid programs.
In the FEHBP, employees get to choose amongst a wide variety of plans offered by private insurers. The employer–the government–then subsidizes about three-fourths of the cost to the employee. The employee can choose a more generous or expensive plan if he wants, but he has to pay for a portion of the difference in price, and vice versa. As a result of this approach, FEHBP plans have organically evolved to contain the benefits and financial features that consumers want. By contrast, any minor change to Medicare requires an act of Congress.
Obamacare’s exchanges are closer in concept to FEHBP than traditional Medicare, but the exchanges heavily constrain the ability of plans to alter their design as consumers’ preferences evolve.
—
Click below for the full article.
Members of Generation X, those born between 1965 and 1976, are planning to collect Social Security at an average age of 65, according to a recent survey. But that could be a mistake. Gen Xers won’t qualify for the full Social Security payments they have earned until age 67. Those who sign up for Social Security at age 65 will get permanently lower payments for the rest of their lives.
The Social Security full retirement age at which you can claim the entire benefit you have earned is 67 for everyone born in 1960 or later. Gen Xers who sign up for Social Security at age 65, as 29 percent plan to do, will see their monthly payments reduced by about 13.3 percent.
A GfK Custom Research North America survey of 1,000 adults ages 36 to 47 commissioned by the MetLife Mature Market Institute found that 18 percent of Gen Xers plan to claim Social Security benefits as soon as they are eligible at age 62. But workers who sign up at this age will see their payments reduced by 30 percent. For example, a worker who would be eligible for $1,000 per month upon retirement at age 67 would get just $700 per month is he signs up for Social Security at age 62. Another 16 percent of people in their late 30s and early 40s simply don’t know when they will start receiving Social Security benefits.
—
Click below for the full article.
Have the Obamacare winners become losers? When the Patient Protection and Affordable Care Act, or PPACA, was first passed, most analysts pegged hospital systems as obvious winners from the new law. That viewpoint also held true last year as the Supreme Court upheld much of Obamacare.
The stock market clearly agreed. Immediately after the Supreme Court decision, hospital stocks surged. Community Health Systems (NYSE: CYH ) jumped 8%. Health Management Associates (NYSE: HMA ) shares rose 7%. The largest private hospital chain, HCA Holdings (NYSE: HCA ) , soared by 10%.
Since the high court ruling, few sectors have performed as well as hospitals have. Community Health Systems shares rose as much as 88% by late March. Likewise, HMA stock nearly doubled. HCA shares rose more than 50% during the same period. No hospital stock performed better than Tenet Healthcare (NYSE: THC ) , though. Tenet’s shares skyrocketed 140%.
That was then. The performance of these stocks in the month of April thus far tells a much different tale.
Spring backwards? Community Health Systems shares are down almost 13% since the beginning of April. HMA isn’t far behind, with shares falling 12%. HCA stock has dropped 7.5%. What about the biggest winner: Tenet? It’s now the biggest loser, with shares plunging more than 16% this month. Has the luster of Obamacare worn off?
Many hospitals wanted the ACA to succeed. The industry’s lobbying organization, the American Hospital Association, actively supported the legislation and even submitted an amicus brief to the Supreme Court in support of the individual mandate.
The primary reason behind support for the bill stemmed from the prospects of millions of currently uninsured Americans gaining insurance. Many hospitals must write off large amounts of money when individuals with no insurance cannot pay for the care provided. If more people gain insurance under Obamacare, hospitals hope that these write-offs will decrease significantly.
However, many currently uninsured Americans could choose to pay fines rather than obtain insurance. If this scenario becomes widespread, the benefits to hospitals could be dampened.
Others suspect that the costs of the ACA could minimize the advantages for hospitals. Bob Kirby, a director with Fitch Ratings, said last year that “it is unclear if the incremental revenue generated from increased utilization and lower levels of uncompensated care will offset the potential compression in margins.”
All in the timing Obamacare’s timing could also be problematic. Even if millions of uninsured Americans buy insurance as hoped for, that scenario won’t happen until 2014. In the meantime, hospitals are dealing with some of the challenges of the ACA.
—
Click below for the full article.
Recently, the CVS Caremark Corporation began requiring employees to disclose personal health information (including weight, blood pressure, and body fat levels) or else pay an annual $600 fine. Workers must make this information available to the company’s employee “Wellness Program” and sign a form stating that they’re doing so voluntarily.
CVS argues this will help workers “take more responsibility for improving their health.” At one level, this makes a certain sense. Because the company is paying for their employees’ health insurance, they naturally prefer healthier workers. But at a deeper level, CVS’ action demonstrates a growing problem with our current system of employer-provided health insurance. If our bosses must pay for our health care, they will inevitably seek greater control over our lifestyles.
Although most Americans take it for granted that they receive health insurance through the workplace, this is an artifact of federal tax rules from World War II. When the U.S. government imposed wartime wage controls, employers could no longer compete for workers by offering higher salaries. Instead, they competed by offering more generous fringe benefits such as health insurance. In 1943, the IRS ruled that employees did not have to pay tax on health benefits provided by employers; in 1954, the IRS made this permanent.
The federal government thus distorted the health insurance market in favor of employer-based plans. If a company paid $100 for health insurance with pre-tax dollars, the employee enjoyed the full benefit. But if the employee received that $100 as salary, he could only purchase $50-70 of insurance after taxes. Over time, this tax disparity helped employer-based health insurance dominate the private insurance market. In 2008, over 90% of non-elderly Americans with private insurance received it through their workplace.
Hence, government policy artificially injects the employer into the relationship between a patient and the health insurance system. Normally, what a worker ate or whether he smoked at home would be of no concern to his boss (unless it affected job performance). But U.S. government policy makes it the employer’s business.
To make matters worse, ObamaCare reinforces this status quo. ObamaCare requires large employers to offer health insurance to workers (or else pay a penalty). As a result, more people are discussing how best to link employment to healthy behavior. For example, the New England Journal of Medicine recently featured a pair of high-profile editorials debating the merits of allowing companies to discriminate against smokers, “for their own good.”
Furthermore, ObamaCare pays government grants to encourage companies to implement these “wellness programs.” Hence, employers who wouldn’t otherwise concern themselves with workers’ lifestyles now have an incentive to do so in order to collect federal funds.
—
This is very well written and informative article. For those that wonder why employers are involved in health insurance (and not home owners insurance, car insurance, etc.) it was simply because of government intervention. Salary freezes caused the creation of “benefit packages.”
What do you think about government intervention like price freezes and the constitutionality of them? Click below for the full article.
http://www.forbes.com/sites/paulhsieh/2013/04/25/big-brother-has-a-new-face-and-its-your-boss/
For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.
On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This “stimulus” spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.
On the other side were economists and politicians who wanted to cut spending to reduce deficits and “restore confidence.” Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and “confidence” would return.
This debate has not just been academic.
Those in favor of economic stimulus won a brief victory in the depths of the financial crisis, with countries like the U.S. implementing stimulus packages. But the so-called “Austerians” fought back. And in the past several years, government policies in Europe and the U.S. have been shaped by the belief that governments had to cut spending or risk collapsing under the weight of staggering debts.
—
Of course Keynesians are claiming victory. When the bill comes due on the national debt, inflation goes wild, and a dollar crisis happens, what will they claim then? What do you think about this writers victory claim?
Click below for the full article.
http://finance.yahoo.com/blogs/daily-ticker/economic-argument-over-paul-krugman-won-150247189.html