Social Security, Medicare are fast becoming insolvent, but nobody cares

You're cooking donuts in grease on your stove. The grease catches fire. What do you do first? Extinguish the fire? Mow the lawn?

Every day another Democrat announces he's running for president and, in the same breath, promises a new entitlement program.

Why don’t they first promise to fix Social Security and Medicare? On April 22, the Social Security Board of Trustees released its annual report on the long-term financial status of the two Social Security Trust Funds.


The combined asset reserves of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds are projected to become depleted in 2035.

the fact the reserves of both funds will be depleted, does not mean that all Social Security payments will cease. Rather, it means that they will come only from current revenues. Those revenues, however, will be sufficient to pay only about 80 percent of scheduled benefits. As such, a person slated to receive an OASI benefit of $1,800 per month will find his benefit reduced to $1,440 -- unless Congress provides the funds additional money.

In 2018, Social Security paid benefits of nearly $989 billion to about 63 million beneficiaries. An estimated 176 million people had earnings covered by Social Security and paid payroll taxes. The deficit over the next 75 years is projected to be 2.78% per year.


On April 22, 2019 the Medicare Board of Trustees released its combined annual report on the long-term financial status of Medicare. Medicare is the second-largest social insurance program in the U.S., with 59.9 million beneficiaries and total expenditures of $741 billion in 2018.

Since in 2002, there has been one combined report discussing both the Hospital Insurance Program (Medicare Part A) and the Supplementary Medical Insurance Program (Medicare Part B and Prescription Drug Coverage).

The hospital insurance (HI) trust fund, which provides the funding for Medicare Part A hospital and inpatient benefits, is expected to be depleted in 2026. At that time, all benefits will have to be paid from the funds current revenues. Current income will only cover 89% of fund costs, unless Congress provides additional money. Without additional funding, by 2034 current annual income will only cover 77% of current annual costs.

Supplementary Medical Insurance (SMI) Trust Fund, which covers Parts B & D, will remain adequately financed into the indefinite future because current law provides financing from beneficiary premiums plus general treasury revenues each year to meet the next year’s expected costs.However, the aging population and rising health care costs cause SMI projected costs to grow steadily from 2.1 percent of GDP in 2018 to 3.7 percent of GDP in 2038. The bottom line is this: The trustees project that total Medicare costs (including both HI and SMI expenditures) will grow from approximately 3.7 percent of GDP in 2018 to 5.9 percent of GDP by 2038.


So is there a problem? Social Security and Medicare trustees all agree that there is:


"Lawmakers have many policy options that would reduce or eliminate the long-term financing shortfalls in Social Security and Medicare. Lawmakers should address these financial challenges as soon as possible. Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare."


So what are congressional Republicans doing to fix Social Security and Medicare? Nothing! Every time they try, they hand Democrats a cudgel.

When President George W. Bush broached the subject, the bashing began: "Republicans want to privatize Social Security; undermine Medicare!” Bush's plan was more "roulette than reform!" quoth Sen. Harry Reid.

So, what are the congressional Democrats doing to fix Social Security and Medicare?

During the eight years of the Obama administration, Democrats did absolutely nothing. Now, instead of setting out a fix, they’re trotting out a blizzard of new free entitlement programs:

Tuition for All, $70 billion a year; Employment for All, $400 billion a year; Green New Deal, $600 billion a year; Medicare for All, $3.2 trillion a year; reparations to descendants of deceased slaves, Interned Japanese-Americans, and descendants of Native Americans; and forgiveness of student debt, $640 billion.


Rather than shoring up the two great programs we already have that need it, 20-plus Democrats are bounding about the county as if running to be the next Santa Claus. So, what happens if you ignore a grease fire in your kitchen?

Posted: QCOline.com   June 6, 2019

Copyright 2019, John Donald O'Shea

Ocasio-Cortez's "Modern Monetary Theory" is a Fool’s Gamble

The U.S. government predicts that in 2020 it will have a deficit of $1.1 trillion: Revenues of $3.6 trillion and expenses of $4.7 trillion.

Now Rep. Ocasio-Cortez, the new blithe spirit of the Democratic Party, wants to spend an additional $4.3 trillion on:

-- Free College Tuition for All: $70 billion a year.

-- Guaranteed Employment for All: $400 billion a year.

-- Green New Deal: $600 billion a year.

-- Medicare for All: $3.2 trillion a year.

And the best part of her plan is that nobody will have to pay for it! Instead of a $1.1 trillion deficit, the congresswoman would give us a $5.4 trillion deficit.

So exactly how would Ocasio-Cortez pay for her additional $4.3 trillion of goodies?

In the days of the kings, when a government wanted to spend money it didn't have, it would debase its coinage by substituting a bit of lead in its gold coins. In the 20th century, governments found if they needed more money, they could just run the printing presses! Then, when the "great recession" hit in the early years of the 21st century, U.S. Federal Reserve expanded the money supply by something called "quantitative easing."

In an effort to stimulate the economy, our Fed began purchasing assets from commercial banks and other private financial institutions: Treasury bills and notes, bonds and mortgage-backed security paper.

When the government issues a treasury bill, it promises to pay principle and interest to the bank that buys the bill. If the bank buys a bond, the issuer of the bond promises to pay back the purchase price of the bond plus interest to the bank.

Quantitative easing (QE) has been described as an "unconventional monetary policy used by central banks to stimulate the national economy when Conventional Monetary Policy (CMP) has become ineffective.

QE differs from CMP. When the Fed utilizes CMP, it does two things: It lowers interest rates, and it increases the money supply. QE became necessary because the Fed had already lowered interest rates to 0% and couldn't lower them further. QE, therefore, relied on the Fed's only remaining tool: increasing the amount or quantity of money in the system to stimulate the economy. The "quantitative" in QE refers to the "quantity" of money made available.

That's how Ocasio-Cortez plans to give free everything to everybody. She subscribes to something called Modern Monetary Theory.


Professor Stephanie Kelton, a former economic adviser to Sen. Bernie Sanders, has said that in accordance with that theory, “the government can afford to pay for any program it wants. It doesn’t have to raise taxes."

But if we can implement the Ocasio-Cortez $3.2 trillion Medicare-for-All plan without raising taxes, why did Sanders recently tell Martha MacCallum (Fox News) the following?

Sanders: "you're not going to pay any health insurance premiums."

MacCallum: "You're going to pay one way or another. Whether it's in your income tax, or your payroll tax, you're going to pay."

Sanders: "Health care is not free."

MacCallum: "You just said it was going to be free for everyone."

Sanders: "It's going to be free at the point at which you use it."

In comparing Kelton's remarks with those of Sanders, it seems rather clear that the professor and the senator are on very different Modern Monetary Theory pages.

So, is there a real difference between the government running printing presses 24/7, and the Fed creating trillions of dollars by clicking the computer?

If our government has revenue in the neighborhood of $4 trillion, can we have deficits of $5 trillion, $10 trillion, or $50 trillion? Or at some point does inflation set in and utterly destroy the earnings, savings and purchasing power of rich and poor alike?

What happened in the years following 1716 when France subscribed to John Law's paper-money policies? The Weimar Republic? The Soviet Union? Twenty-first century Venezuela?

In each case, the bubble burst. Modern Monetary Theory is a fool's gamble.

Posted: QCOline.com   May 23, 2019

Copyright 2019, John Donald O'Shea

Gov. Newsom: Save the Murderers; Execute Innocent Fetuses!

California Gov. Gavin Newsom has issued an "executive moratorium ... in the form of a reprieve for all people sentenced to death in California."

Does it really apply to "all people?" Or does it apply only to convicted murderers? Or just murderers who have intentionally killed one or more of their fellow human beings and whose convictions have been affirmed on appeal?

Are fetuses "people?" Are full-term babies minutes away from a normal delivery people? Are newborn babies who have survived botched abortions people?

When a California mother directs the abortion of such babies, and when her doctor acts as executioner, are these babies not "people" sentenced to death?


In Newsom's California, it appears you have a choice: You can be logically and morally consistent, or you can be a progressive Democrat. You can't be both.

Let's examine Newsom's justifications for reprieving convicted murderers.


1. Newsom: "I just can't kill on behalf of the state. I have four young kids, and my daughter says to me, 'You teach us not to kill.' Yet here I am in a premeditated way killing other people."

Query: If allowing a convicted murderer to be executed according to law makes the governor guilty of killing on behalf of the state, why doesn't allowing a child to be executed according to California's abortion law make the governor guilty of killing on behalf of the state?

Query: Why is aborting a fetus any less "premeditated" than executing a murder?

2. Newsom: “If someone kills, we do not kill. We’re better than that.”

Query: The child in the womb or who has just been born has killed no one. Why should the governor not also logically say, “If someone has not killed (is innocent), we do not kill them. We’re better than that.”

3. Newsom: "California's death penalty system is unfair, unjust, wasteful and protracted, and does not make our system safer."

Query: Before anybody in California can be executed for murder does he not first have to be tried and convicted? Does he not get seemingly endless state and federal appeals? Can he be executed unless his conviction has been affirmed after that entire appeal process?

Query: Does a fetus or a baby born after a botched abortion have any comparable rights? Or is the baby condemned to die at the whim of its mother, without any semblance of due process? Does the fetus get an attorney? A trial? Any appeal?

If executing convicted murderers after they have been accorded all their constitutional rights is unjust, why isn't killing innocent fetus who have been accorded no constitutional rights outrageously unjust? If killing murderers is wasteful and does not make our system safer, why isn't abortion wasteful? How does abortion make California safer?

4. "The state's bedrock responsibility to ensure equal justice under the law applies to all people no matter their race, mental ability or where they live, or how much money they have."

If the bedrock responsibility is to ensure equal justice to all no matter where they live or how much money they have, what is the state's bedrock responsibility to a person living in its mother's womb, and who has no money? 

5. "Death sentences are unevenly and unfairly applied to people of color, people with mental disabilities and people who cannot afford costly legal representation."

Is not the act of aborting a death sentence? Are not abortions "unevenly and unfairly applied to people of color, people with mental disabilities and people who cannot afford costly legal representation"?

6. "The National Academy of Science estimates that as many as one in 25 people sentenced to death in the United States is likely innocent."

Are not 100 percent of children sentenced to death by their mothers and executed by attending doctors entirely innocent?

7. "I will not oversee the execution of any person while I am governor." 

Is not an abortion an execution? Is he going to resign his governorship?

Is not a fetus in the womb a person? Is not a full-term child minutes away from birth a person? Is not a child born after a botched abortion a person?

Scientists say that of the 3 billion letters (base pairs) that make up the human genome, some 15 million of those (1%) are what distinguish man from our nearest relative, the chimp. If the fetus shares those 15 million DNA letters, is it not as fully a human person as you? As Newsom's murderers?

Or are you a science denier?

4. Newsom: "The state's bedrock responsibility to ensure equal justice under the law applies to all people no matter their race, mental ability or where they live, or how much money they have."

Query: If the bedrock responsibility is to ensure equal justice to all no matter where they live or how much money they have, what is the state's bedrock responsibility to a person living in its mother's womb, and who has no money? 

5. Newsom: "Death sentences are unevenly and unfairly applied to people of color, people with mental disabilities and people who cannot afford costly legal representation."

Query: Is not the act of aborting a death sentence? 

Query: Are not abortions "unevenly and unfairly applied to people of color, people with mental disabilities and people who cannot afford costly legal representation"?

6.Newsom: "The National Academy of Science estimates that as many as one in 25 people sentenced to death in the United States is likely innocent."

Query: Are not 100 percent of children sentenced to death by their mothers and executed by attending doctors entirely innocent?

7. Newsom: "I will not oversee the execution of any person while I am governor."

Query: Is not an abortion an execution? Is he going to resign his governorship?

Query: Is not a fetus in the womb a person? Is not a full-term child minutes away from birth a person? Is not a child born after a botched abortion a person?

Scientists say that of the 3 billion letters (base pairs) that make up the human genome, some 15 million of those (1%) are what distinguish man from our nearest relative, the chimp. If the fetus shares those 15 million DNA letters, is it not as fully a human person as you? As Newsom's murderers?


Or are you a science denier?


Posted: QCOline.com   May 9, 2019

Copyright 2019, John Donald O'Shea

Taxpayers Will Pay for 'Free" Health-care for All

Democratic presidential candidate Bernie Sanders, claiming that "health care is a right," wants the U.S. government to take over the entire U.S. health-care industry.

Sanders promises "Medicare-for-all," a national, single-payer Medicare system with "vastly expanded benefits." The senator admits his plan would exterminate all private insurance companies, so as to eliminate competition with his expanded Medicare program.

Deductibles and co-pays would be eliminated. The Sanders plan also calls for universal long-term care in home and community settings. Medicaid would continue to cover institutional care, and states would determine the standard of eligibility.

The conservative Mercatus Group estimates that the Sanders' plan would cost Americans $33 trillion over the next decade -- $3.3 trillion per year.

Health insurance is traditionally paid for by paying "premiums." But to pay for his Medicare-for-all insurance, Sander instead proposes tax increases.

Sanders states that to pay for Medicare-for-all, new taxes would be imposed on both employers and employees. Employers would pay a new 7.5% payroll tax (with the first $2 million in payroll exempted "to protect small businesses"). Employees would pay an additional 4% tax (but the first $29,000 of income would be exempted for a family of four).

Because these taxes will not be enough, Sanders also proposes raising a marginal tax rate of up to 70% on those making above $10 million, taxing earned and unearned income at the same rates, limiting tax deductions for filers in the top tax bracket, and establishing a tax on extreme wealth and making the estate tax more progressive, including a 77% top rate on an inheritance above $1 billion.

At present, workers in America pay a Social Security/Medicare tax at the rate of 15.3%. Our government tells us that 7.65% of that tax is paid by the employer, and 7.65% is paid by the employee. That is a fiction. The entire 15.3% is really paid by the employee.

It's a tax-accounting gimmick designed to convince the gullible that the employer is paying 7.65% in addition to the worker salary, when in reality the entire 15.3% is taken from the worker's salary with half labeled as a tax on the employer, and the other half as a tax on the employee.

Sanders is engaging in exactly the same legerdemain. He disingenuously claims the employer will be taxed an additional 7.5% and the employee only an additional 4%. In reality, the new 11.5% will be deducted from the employee's pay so that instead of paying 15.3% for Social Security and Medicare, the employee will have the high honor of paying 26.8%.

And, of course, the employee will also have the high honor of paying his federal income taxes with no deduction for what he pays for his new Medicare-for-all.

If the 2018 federal income tax rates remain the same, and if the Sanders' Medicare-for-all plan becomes law, a single man with a taxable income of $50,000 will pay federal income tax of $6,834 plus a real Social Security/Medicare-for-all tax of $13,400 -- 40.5% of his taxable income.


Rock Island County runs Hope Creek Care Center. County Administrator Jim Snider states that running a nursing home is "a tough business." Hope Creek, in three months, has increased its short-term debt from $4.6 million to $5.3 million. Net operating costs are running a loss of about $460,000 per month. The county, which can't print money, has to make up the shortfall.


And how is Medicare presently doing? In 2018, Medicare trustees, reported that the fund would become insolvent in 2026. (In 2017, they estimated insolvency would occur in 2029).


Rock Island County can't run a small nursing home. The present government-run Medicare system is seven years from insolvency. Congress can't get anything done. So why would any rational person risk putting nearly 20% of the U.S. economy in the hands of government bureaucrats who screw up everything they touch?


We have the lesson of U.S.S.R socialism: bankruptcy. We have the lesson of Venezuelan socialism: bankruptcy. We have the lesson of Cuba: a 1950s economy. Sanders goes blithely on, intentionally closing his eyes to the historical realities of Russia, Cuba and Venezuela.


It is argued that our present insurance system is expensive. But you get what you pay for. Before you believe people who claim "our system is the worst among developed countries," check the details, e.g., what is counted as a "live birth" in America? In France? How you count makes a big difference. If you count a child delivered before 22 weeks which quickly dies as a live birth, and France doesn't, we look worse.

Posted: QCOline.com   May 2, 2019

Copyright 2019, John Donald O'Shea

Pause

Current Time0:00

/

Duration Time0:00

Stream TypeLIVE

Loaded: 0%

Progress: 0%

0:00

Fullscreen

00:00

Mute

Sanders is engaging in exactly the same legerdemain. He disingenuously claims the employer will be taxed an additional 7.5% and the employee only an additional 4%. In reality, the new 11.5% will be deducted from the employee's pay so that instead of paying 15.3% for Social Security and Medicare, the employee will have the high honor of paying 26.8%.

And, of course, the employee will also have the high honor of paying his federal income taxes with no deduction for what he pays for his new Medicare-for-all.

If the 2018 federal income tax rates remain the same, and if the Sanders' Medicare-for-all plan becomes law, a single man with a taxable income of $50,000 will pay federal income tax of $6,834 plus a real Social Security/Medicare-for-all tax of $13,400 -- 40.5% of his taxable income.

Rock Island County runs Hope Creek Care Center. County Administrator Jim Snider states that running a nursing home is "a tough business." Hope Creek, in three months, has increased its short-term debt from $4.6 million to $5.3 million. Net operating costs are running a loss of about $460,000 per month. The county, which can't print money, has to make up the shortfall.

And how is Medicare presently doing? In 2018, Medicare trustees, reported that the fund would become insolvent in 2026. (In 2017, they estimated insolvency would occur in 2029).

Rock Island County can't run a small nursing home. The present government-run Medicare system is seven years from insolvency. Congress can't get anything done. So why would any rational person risk putting nearly 20% of the U.S. economy in the hands of government bureaucrats who screw up everything they touch?

We have the lesson of U.S.S.R socialism: bankruptcy. We have the lesson of Venezuelan socialism: bankruptcy. We have the lesson of Cuba: a 1950s economy. Sanders goes blithely on, intentionally closing his eyes to the historical realities of Russia, Cuba and Venezuela.

It is argued that our present insurance system is expensive. But you get what you pay for. Before you believe people who claim "our system is the worst among developed countries," check the details, e.g., what is counted as a "live birth" in America? In France? How you count makes a big difference. If you count a child delivered before 22 weeks which quickly dies as a live birth, and France doesn't, we look worse.

When Can President Declare a "National Emergency?"

The U.S. president takes an oath to "faithfully execute" his office, and "to preserve, protect and defend the Constitution."


President Donald Trump has declared a national emergency to prevent an invasion of one million immigrants expected to illegally cross our border with Mexico this year. He also plans to utilize roughly $6 billion from the Defense Department budget, as well as, lesser amounts from other sources to "build the wall."


Opponents of his emergency declaration insist the president has no constitutional power to appropriate moneys from the U.S. Treasury or to use moneys appropriated by Congress for one purpose for another purpose that the president likes better.


If the president is doing either of those things, his critics are correct. Attorney General William Barr disagrees and says that the president's order is “clearly authorized under the law and consistent with past precedent.”


Barr states that the situation at the border “is exactly the type of situation the president is allowed to address” under the National Emergencies Act of 1976, which sets out a president’s emergency powers.


In this regard, a brief examination of the powers expressly given to the president by the Constitution is helpful to understand the contrary positions.


The Constitution gives the president power to:


-- Approve or veto laws passed by Congress;


-- Be commander-in-chief of the Army, Navy and state militias when in federal service;


-- Require written opinions from principal officers of the executive department;


-- Grant pardons and reprieves, except in case of impeachment;


-- Make treaties, with the consent of two-thirds of the Senate;


-- Nominate ambassadors, Supreme Court judges, etc.;


-- Give Congress information, re: the State of the Union.


-- Recommend measures he deems necessary to Congress and limited powers to convene and adjourn Congress;

-- Receive ambassadors;


-- Commission officers of the United States;


-- Take care that the laws be faithfully executed.


Opponents of the president's declaration argue that if Congress appropriates money for one purpose, none of the previously listed powers would authorize the president to take that money and use it for a different purpose.


That argument, as far as it goes, is correct. When you deposit money in your savings account at the bank, you do not authorize the teller to use your money to take a personal vacation to Hawaii. That would be embezzlement, and the president using funds appropriated for one specific purpose for another would be roughly akin to embezzlement.


But what if Congress appropriates funds for the president to use according to his discretion to meet national emergencies? Barr is saying the president is not using moneys appropriated by Congress solely for purpose A, for purpose B. He is saying three other things:


1. Congress gave the president express power to declare national emergencies.


2. This president's national emergency declaration is an exercise of presidential discretion entirely consistent with past precedents.


3. Congress has specifically appropriated funds to be used at the president's discretion to meet national emergencies.


When Congress gives a president express power to exercise his discretion to declare a National Emergency, and when the president declares an emergency, the president is not operating under a vague claim of "inherent" or "implied" presidential powers. He is acting under a specific delegation of power granted by Congress.


One thing is absolutely clear in this political battle: Congress has given presidents broad discretion to say what amounts to a national emergency. The 1976 National Emergencies Act vested that discretion in the president, and not in any federal judge or anyone else.


And there is no claim that the act anywhere states that the president cannot exercise his discretion if he adjudges that one million people entering this country illegally is a national emergency.


The real question, therefore, that will come before the courts is: Did Congress appropriate funds, or authorize the president to re-allocate appropriated funds to be used at the president's discretion to meet a national emergency?


If it did, the president wins. If not, he loses. When Congress specifically directs the president to exercise his discretion when he finds that a national emergency exists, when he does so, he operates under his express Constitutional power to "take care that the laws be faithfully executed.”


Similarly, if he is given discretion to use funds appropriated for defense as he deems best, and he does so, he is also operating under his express Constitutional power as commander-in-chief.

Posted: QCOline.com   April 18, 2019

Copyright 2019, John Donald O'Shea

Pause

Current Time0:00

/

Duration Time0:00

Stream TypeLIVE

Loaded: 0%

Progress: 0%

0:00

Fullscreen

00:00

Mute

-- Receive ambassadors;

-- Commission officers of the United States;

-- Take care that the laws be faithfully executed.

Opponents of the president's declaration argue that if Congress appropriates money for one purpose, none of the previously listed powers would authorize the president to take that money and use it for a different purpose.

That argument, as far as it goes, is correct. When you deposit money in your savings account at the bank, you do not authorize the teller to use your money to take a personal vacation to Hawaii. That would be embezzlement, and the president using funds appropriated for one specific purpose for another would be roughly akin to embezzlement.

But what if Congress appropriates funds for the president to use according to his discretion to meet national emergencies? Barr is saying the president is not using moneys appropriated by Congress solely for purpose A, for purpose B. He is saying three other things:

1. Congress gave the president express power to declare national emergencies.

2. This president's national emergency declaration is an exercise of presidential discretion entirely consistent with past precedents.

3. Congress has specifically appropriated funds to be used at the president's discretion to meet national emergencies.

When Congress gives a president express power to exercise his discretion to declare a National Emergency, and when the president declares an emergency, the president is not operating under a vague claim of "inherent" or "implied" presidential powers. He is acting under a specific delegation of power granted by Congress.

One thing is absolutely clear in this political battle: Congress has given presidents broad discretion to say what amounts to a national emergency. The 1976 National Emergencies Act vested that discretion in the president, and not in any federal judge or anyone else.

And there is no claim that the act anywhere states that the president cannot exercise his discretion if he adjudges that one million people entering this country illegally is a national emergency.

The real question, therefore, that will come before the courts is: Did Congress appropriate funds, or authorize the president to re-allocate appropriated funds to be used at the president's discretion to meet a national emergency?

If it did, the president wins. If not, he loses. When Congress specifically directs the president to exercise his discretion when he finds that a national emergency exists, when he does so, he operates under his express Constitutional power to "take care that the laws be faithfully executed.”

Similarly, if he is given discretion to use funds appropriated for defense as he deems best, and he does so, he is also operating under his express Constitutional power as commander-in-chief.

The Green New Deal, Socialism and Slavery

What exactly is slavery? Who is a slave?

Most Americans undoubtedly define slavery with reference to our own experience in the antebellum South, where the black population, with few exceptions, was stripped of all civil rights and forced to labor as legal property on their masters' plantations.

But can one be a slave without being the legal property of another? What if one retains at least some civil rights?

The Book of Exodus paints a somewhat different picture of slavery: "The Egyptians made the Israelites their slaves. They appointed brutal slave drivers over them. ... They forced them to build cities ... worked the people of Israel without mercy ... made their lives bitter, forcing them to mix mortar, make bricks and do all the work in the fields."

The people enslaved in Egypt did not live on plantations. They had their own homes. They weren't the property of a particular slave owner; they were forced to labor for the Egyptian state. They enjoyed at least some civil rights. They could own homes and personal property. They could marry, at least bear female children, and practice their Jewish religion. So you doubt that the state, as opposed to an individual, can be a slave owner?

Were the Russian people forced to do hard labor in the gulags anything other than slaves? The question, really, is at what point does the state so control a man's life as to render him a slave?

Nobody seriously believes that when the state imposes a tax in the amount necessary to provide for the national defense, or the necessary expense of government, that such a tax makes citizens slaves. During WWII, the top marginal federal income tax rate, was 94 percent on income over $200,000. Nobody cried slavery! Everybody knew the war had to be won. Young men were "financing" it with their blood. Rich older men, by their taxes.

As early as 1828, the use of tariffs (taxes) to support Northern manufacturers provoked bitter protest from the South. The South argued that the tariff was imposed, not to support the general welfare of the entire nation, but to subsidize New England manufacturers, at the expense of southern farmers. It made them slaves of the north -- like the Jews in biblical Egypt.

Now, Sen. Elizabeth Warren, D-Mass., believes the top marginal tax rate should be more than 50 percent. Rep. Alexandria Ocasio-Cortez believes it should be 70 percent. Julian Castro, a former Obama administration cabinet member, wants 90 percent.Warren has also proposed an additional wealth tax on billionaires.

But if you labor to earn money, where is the justice in the government seizing 70 percent or 90 percent of it? It is robbery when your neighbor seizes for himself 70 percent to 90 percent of your earnings at gunpoint. A claim that the taking was a mere act of social justice affords him no legal justification. So what principle justifies the government doing for your neighbor via taxation what he can't do for himself with a gun?

In Rerum Novarem, Pope Leo XIII (1891) wrote, "The Socialists, working on the poor man's envy of the rich, are striving to do away with private property, and contend that individual possessions should become the common property of all, to be administered by the State."

Pope Leo rejected that as "emphatically unjust." 

Compare AOC's notion of social justice, as embodied in her Green New Deal, with Pope Leo's in Rerum Novarem. AOC and her GND would guarantee economic security for all those who are "unwilling to work." Pope Leo, by way of contrast, wrote "if a family finds itself in exceeding distress ... without any prospect of extricating itself, it is right that extreme necessity be met by public aid, since each family is a part of the commonwealth."

Those who espouse the GND will insist that it is meant only to provide a basic minimum income for those "unwilling to work." Rather like the minimum wage.

Nobody quarrels with the need to provide a basic income for the aged and disabled. But why does society have any duty to any able-bodied person who chooses not to work? Doesn't every able-bodied citizens have a duty to do his fair share to provide for the general welfare?

Why does one who earns have any duty to share his earnings with a neighbor who chooses not to work and do his fair share as a citizen? If 90 percent of Americans choose not to work, should the remaining 10 percent support them? What if 50 percent make that choice?

At what point does taxing the laborer to support the parasite transform the U.S. government into Pharaoh's Egypt?


Posted: QCOline.com   April 11, 2019

Copyright 2019, John Donald O'Shea

In Illinois - Beware "Tax Tigers" and "Trojan Horses!"

Illinois Gov. J.B. Pritzker wants to replace Illinois's flat-rate income tax with a "graduated income tax."


Here are his proposed tax brackets on every dollar earned:


-- Up to $10,000, 4.75 percent



-- $10,001 to $100,000, 4.9 percent


-- $100,001 to $250,000, 4.95 percent


-- $250,001 to $500,000, 7.75 percent


-- $500,001 to $1 million, 7.85 percent


-- $1 million-plus, 7.95 percent.


So what would the savings be to the taxpayer who earns exactly $10,000? $20! What would the savings be to the taxpayer who earns exactly $100,000? A tad less than $50. (The first $10,000 would be taxed at 4.75 percent.)

Those paying the tax up to $250,000 would also see their taxes decrease exactly the same as those paying taxes on $100,000.


Since I believe I should not be able to vote to raise your taxes, unless I at the same time vote to raise my own taxes by the same percentage, I oppose any graduated income tax and strongly support keeping the Illinois flat-rate income tax.


A quick look at the graduated federal income tax makes clear the reason for my concern. Approximately 76.4 million, or 44.4 percent of Americans will pay no federal income tax in 2018. Yet that 44.4 percent can vote to raise their neighbor's federal income tax, while at the same time exempting themselves.

Illinois now has a Democratic governor. Democrats outnumber Republicans in the Illinois Senate 40-19, and 74-44 in the Illinois House. If Democrats stick together, Republicans can't stop Democrats from recommending a Constitutional amendment to Illinois voters to replace the current flat-rate tax, with a graduated income tax.

If 60 percent of both Senate and House members vote to put the issue before the voters, it will be on the ballot in the 2020 Election. All it will take is 36 of 40 Democrats in the Senate, and 71 of 74 Democrats in the House. (I give Republicans a pass as an Illinois "endangered species!")

Once the Legislature is given power to enact a graduated state income tax, all of Pritzker's promises -- his proposed rates -- mean absolutely nothing. The following, day, the General Assembly will have unfettered power to enact a truly progressive graduated income tax with whatever rates it pleases.


If you want to see how the old shell game is played, just stand back and watch. You'll get a lesson from professionals in the art of bait and switch.


Our Democratic Legislature will have power, for example, to exempt the first $50,000 of income from the new Illinois income tax while, at the same time, taxing incomes over $50,000 at 10 percent, incomes over $100,000 at 20 percent, and incomes over $1 million at any rate it chooses (to the extent it is not already taxed by the feds). The Democrats will be able to create a whole new class of voters who pay no tax, but have power to vote to tax their neighbors without taxing themselves.


How long will it take for millionaires who object to paying higher taxes to move to Florida and other states without income taxes? Why would any millionaire in his right mind pay a 10 percent, 20 percent or 33 percent tax in Illinois when he escapes the tax altogether by leaving Illinois?


And do you really trust our Democratic Legislature to retrench? To use the new tax revenues to pay off Illinois debts? To shore up our foundering pension system? Or will this be a blank check for "progressives" to plunge headlong into implementing an Illinois version of the Green New Deal?


When the federal income tax was enacted in 1913, the lowest tax rate was 1 percent; the highest, 7 percent. Then, once the Trojan Horse was within the walls, things changed.

By 1918, a 77 percent tax was imposed on incomes over $1 million to finance WWI. (When young men are shedding their blood to save the country, fairness requires the rich to shed their income to save the country.)


Today every Progressive Democrat has his own soak-the-rich proposal. Rep. Alexandria Ocasio-Cortez, D-N.Y., is calling for a 70 percent rate on incomes in excess of $10 million. Not content with taxing incomes, Sen. Elizabeth Warren, D-Mass., wants to tax "wealth."


You cannot escape paying federal income tax by moving from Illinois to Florida, but you can escape Illinois income taxes by moving. And once the rich flee, who do you think will be left to pay?


Dining with tigers is dangerous!


Posted: QCOline.com   April 4, 2019

Copyright 2019, John Donald O'Shea