Posts tagged Tax
By Hunter Lewis
Why Are the Medical Insurance Companies Silent?
What exactly are they afraid of?
John Goodman, the leading medical care analyst in the country, asked this question a few weeks ago. His piece was entitled: None Dare Call It…. The missing words were economic fascism.
Economic fascism, the system developed by Italian dictator Mussolini and later adopted by Hitler, is a highly developed form of crony capitalism. It has its own code of silence, not unlike the oath of omerta associated with the Mafia.
Private interests and government officials make their deals behind closed doors and are then not supposed to talk about them. To break the oath of silence is considered a grave offense.
In the past, medical insurance companies have been regulated by the states. They enjoyed their crony capitalist deals, but principally with state officials and regulators.
The federal government could not easily bring the insurers to heel, despite periodic efforts to do so. They were quick to put up ads defending their interests. They were not the least bit silent.
For example, when Hillarycare was first proposed during the early years of the Clinton administration, the largest insurance companies came out in loud opposition. They spent huge sums advertising against it on television.
The Clintons were furious, but unable to do much about it. In the end, the insurance companies succeeded in humiliating the Clintons: Hillarycare couldn’t even get through a Democratic controlled Congress.
Perhaps remembering this history, President Obama took a very different approach to developing Obamacare.
First he announced that there would be a game-changing new federal program. Insurers knew this would make or break medical insurance company profits. The president then assembled at the White House the major medical players, including the hospitals and the American Medical Association as well as the insurers, in order to offer them a deal.
Out of hearing of press or public, the president in effect told the big special interests: You can help us craft the legislation, but if you later oppose it, you will be dead meat.
Only one insurance company failed to keep this “deal.” It was threatened with both Senate and Justice Department retaliation and quickly fell into line.
The medical equipment manufacturers alone failed to sign on to the deal at all. They were punished with a stiff new tax on medical equipment.
President Obama is now trying to shift the blame for millions of canceled policies onto the insurance companies. You would expect them to defend themselves. But they don’t, either because they are too deep in the deal or too intimidated– or both.
Thanks to Obamacare’s passage, the federal government has much more control over them than during the Clinton administration. They have in effect become government sponsored and controlled entities, and the days of their speaking out publicly against their federal overlords are over.
Do the insurance companies like the crony capitalist arrangements they have become party to, or do they think they have no choice but to go along?
No one can be sure. As Breitbart’s Wynton Hall pointed out, the medical insurers are enjoying both record profits under this administration and buoyant stock prices.
The S&P 500 healthcare stock index has so far this year gained 37.5%, making it the top performing sector. All public shares have benefited from the Federal Reserve’s money printing spree, but medical insurance companies are doing especially well, at least for now.
There is, however, a potential fly in the ointment. The new Obamacare policies are really bad medical insurance policies.
They are bad because they severely restrict your choice of doctor and hospital and often pay the doctor barely more than Medicaid. Paying so little means that doctors may not want you as a patient or will give you very little time.
Medicaid patients are familiar with not being able to find a doctor who will take them. Obama exchange policy holders will now often find themselves in the same boat.
These exchange policies are not private insurance in the traditional sense. As John Goodman says, they are “Medicaid Lite.”
Eventually the public will catch on to all this. There will be a lot of anger. At that point, the crony partners, government and business, will fall out, and insurance profits will be anything but safe.
For now and for the forseeable future, government remains the dominant crony. It is not the private interests controlling government, as much as they would like to. It is the government controlling private interests.
Growing government dominance of crony capitalist arrangements is also documented in a new book by Peter Schweizer called Extortion.
Image credit: http://www.againstcronycapitalism.org
About Hunter Lewis
Hunter Lewis is co-founder of AgainstCronyCapitalism.org. He is the former CEO of Cambridge Associates and the author of 6 books. His most recent book is Where Keynes Went Wrong. He has served on boards and committees of fifteen not-for-profit organizations, including environmental, teaching, research, and cultural organizations, as well as the World Bank.
The Coming Shortage Of Physical Gold That Will Change Everything
Is the paper gold scam about to be brutally crushed by a crippling shortage of physical gold? If so, what will that do to global financial markets? According to the Reserve Bank of India, “the traded amount of ‘paper linked to gold’ exceeds by far the actual supply of physical gold: the volume on the London Bullion Market Association (LBMA) OTC market and the major Futures and Options Exchanges was OVER 92 TIMES that of the underlying Physical Market.”
In other words, there is a massive amount of paper out there, but very little actual physical gold to back it up. And right now, we are witnessing voracious hoarding of physical gold all over the globe. This is especially true in Asia. Just see this article and this article. All of this hoarding is putting a tremendous amount of pressure on those that have made all of these “paper promises”, because the truth is that there really isn’t all that much physical gold on the planet. In fact, Warren Buffett once estimated that if all of the gold in the entire world was brought into one place, it could be formed into a cube that would only be 69 feet long by 69 feet high by 69 feet wide.
As the emerging shortage of physical gold becomes increasingly apparent, the massive Ponzi scheme that the bullion banks have been running for decades is going to completely fall apart. The following is what Egon von Greyerz told King World News the other day…
Governments and central banks have, for decades, leased or sold their gold to the bullion banks. So they are very likely to own very little of the 23,000 tons that Western central banks are said to hold.
But now bullion banks also have a problem: They tried to replenish their (physical gold) coffers during the massive manipulative selling that we’ve seen over the last few months in the paper market. Although they took the price down, most of the physical (gold) that was released by selling from ETFs and hedge funds was absorbed by Asia.
So the bullion banks are still massively short of physical gold.
Right now there simply is not enough physical gold out there and the bullion banks and the central planners are starting to panic. One of the individuals that really has his hand on the pulse of what is going on is billionaire Eric Sprott…
We have seen the COMEX inventories decline rapidly. We know that all of the dealer inventory on the COMEX has already been spoken for by delivery notices, so essentially there will be zero (inventory) if they ever make the delivery.
And the central planners (also) went to India and said, ‘Look, you’ve got to do something about all of this gold buying in India.’ So we’ve had ten different steps by the Indian government to try to curb demand — a 2% tax, a 4% tax, a 6% tax, an 8% tax, and a ruling that banks couldn’t lend money for people to buy gold.
They also convinced the Jewelers Association that as of July 1st they couldn’t sell gold bars and coins. Just last week there was a new rule implemented that if you are importing gold you have to prove that a certain amount is being re-exported. We’ve probably had ten or twelve things (restrictions) happen in six months, all of which is a huge attempt to get the second biggest buyer of gold in the world, after China, to decrease consumption because the gold isn’t around.
The central planners have arranged all of these things. I think it’s just been one big scheme to try to get people dissuaded from owning gold and to cause supply to come out. As you mentioned, because of it (central planner actions) we have the gold forward rates (for gold) being negative, backwardation, and inventories plunging, all of which have been manifested because there is a shortage of gold.
Already the emerging shortage of physical gold is starting to cause some very unusual things to happen in the financial markets. A recent article by Reg Howe did a good job of explaining what we have been witnessing lately…
By undercutting normal gold lease rates, these super low interest rates have forced central banks to reduce their lease rates to nonsensical levels in order to prevent gold futures from going into overt backwardation. Recall that GOFO, the gold forward rate, is the interest rate for a given maturity less the lease rate for that maturity, and that a negative GOFO represents backwardation. See Gold Derivatives: GLD and Ass Backwardation (5/24/2010); Gold Derivatives: The Tide Turns (5/25/2009). Passing the argument that widely reported premiums for spot physical delivery represent a form of backwardation, figures from the LBMA have now shown a negative GOFO at the shorter maturities for almost three weeks (July 8 through July 25) due to a surge in lease rates, which still remain below more normal historical levels.
Indeed, this unusual event has attracted considerable attention even from those outside the narrow world of gold. See, e.g., J. Skoyles, Backwardation, negative GOFO and the gold price, The Real Asset Co. (July 24, 2013); M. Kentz, Gold futures hiccup indicates demand outpacing supply, Reuters (July 19, 2013); G. Williams, What If, Things that Make You Go Hmmm, Mauldin Economics (July 15, 2013).
The bottom line is that there is a very serious shortage of physical gold, and as this becomes increasingly apparent to the rest of the world, this is likely to cause a tremendous amount of instability in the financial markets in the months ahead.
For much more on this, please see the recent interview with Alasdair Macleod of goldmoney.com that is posted below…
Right now we are also witnessing tremendous demand for physical silver as well.
For example, the U.S. Mint is going to break the all-time record for July by a very wide margin, and it is being projected that sales of Silver Eagles will likely be above 45 million for the entire year.
And remember, unlike gold, silver is used in thousands of different consumer products. So silver is continually being used up and taken out of the overall global supply.
Image credit: http://endoftheamericandream.com
Posted by Judy Morris
Spain Levies Consumption Tax on Sunlight
Proving that idiocy truly has no bounds, Spain issued a “royal decree” taxing sunlight gatherers. The state threatens fines as much as 30 million euros for those who illegally gather sunlight without paying a tax.
The tax is just enough to make sure that homeowners cannot gather and store solar energy cheaper than state-sponsored providers.
Via Mish-modified Google Translate from Energias Renovables, please consider Photovoltaic Sector, Stunned The Secretary of State for Energy, Alberto Nadal, signed a draft royal decree in which consumption taxes are levied on those who want to start solar power systems on their rooftops. The tax, labeled a “backup toll” is high enough to ensure that it will be cheaper to keep buying energy from current providers…..
Posted by Judy Morris
Spain’s Black Market Economy Is Worth 20% of Its GDP
The Atlantic reports:
Spain’s illicit economy–all that is unaccounted for because it’s illegal or unreported–is worth an unseemly 20% of the country’s GDP, according to a new report by Spain’s Foundation for Financial Studies (FEF). That’s higher than every other country in the European Union except Italy, with 21%.
Illicit activity, while technically illegal, doesn’t necessarily mean drug-related or violent. Much of Spain’s unreported business is due to labor law and tax circumvention, which varies widely from industry to industry. Some sectors are relatively clean, like Spain’s financial industry, where the rate of illegal activity is believed to hover below 10%; others are ridden with messy, unreported business, like the country’s construction industry–Spain’s most flagrant offender–whose rate clocks in at 35%.
The effects of such a massive, underground economy are substantial–for example, more than a million Spaniards are believed to be employed by the country’s unreported economy, and thus, unemployed by the country’s official economy.
Read the rest at The Atlantic, here.
Should anyone be taxed over 100% of income? Happened to some in France for tax year 2011.
Vive le France? Well, one of the reasons there is less “vive” in France these days is because of asinine policies such as the one imposed by France’s current Socialist government which is highlighted below.
Eat the rich? See how many of the rich stick around to be eaten.
How on earth would a country ever turn itself around with this sort of economic mentality? The French are basically saying that they don’t want capital creation within their borders.
“…the exceptionally high level of taxation was due to a one-off levy last year on 2011 incomes for households with assets of more than 1.3 million euros ($1.67 million).
President Francois Hollande’s Socialist government imposed the tax surcharge last year, shortly after taking office, to offset the impact of a rebate scheme created by its conservative predecessor to cap an individual’s overall taxation at 50 percent of income.”
Cody Wilson Responds To Congress Shutting Down Website With 3D Printer Gun Designs
By Tyler Durden
In just under 30 minutes, Peter Schiff and Doug Casey muse on many facets of the crumbling edifice of the status quo that is our current world.
From Gold’s relatively imminent rise to $5,000 and beyond, to investor ignorance of reality, Casey & Schiff swing from discussions of the US as political entity going forward to ‘escape from America’ plans for personal and wealth assets, and the realization that the biggest casualty (of US indebtedness), aside from individual liberty, is the value of the dollar – as taxing the middle class is unpopular with both parties – leaving only one route for the government – the inflation tax. Owning gold, silver, and foreign assets is preferred and while the rest of the world is also printing, the US is likely to beat them all.
People “are clueless with respect to the true state of the global economy,” with regard to inflation, fiat currencies, and specifically what will happen to the dollar. The conversation is wide-ranging and absolutely must-see as they remind market-watchers that “the whole thing is artificial,” as you can’t just keep printing money and monetizing debt without the dollar imploding with monetary policy descending (along with its trillion dollar coin) into ‘Three Stooges’ comedy.
The conversation weaves to some endgame discussions which bring Peter to discuss his father, who he sees as a political prisoner, and his views on the future…
“the biggest change that is coming to the global economy is a realignment of global living standards.”
There is something here for everyone…
Please note Ron Paul’s message regarding the site that this article was originally posted and linked below.
***Please note: This is the temporary home for my weekly column until my personal web page is up and running.***
Ron Paul’s Texas Straight Talk
By Ron Paul
Last week the Senate and House demonstrated again why their approval ratings are so low. The 154 page “fiscal cliff” bill was made available to Senators just three minutes before the vote was taken on the legislation. No one can read 154 pages in three minutes, so it is safe to assume that the legislation was passed without being read.
Then the House brought the lengthy and complicated bill to a vote just 22 hours after the text had been available, meaning a full reading of the legislation was not likely possible. This was a clear violation of the “three day rule” adopted by the 112th Congress, which in the name of transparency ordered the House to make legislation available to the public a full three days before a Floor vote.
Perhaps this race to a vote, amid cries of the end of the world without a solution to the manufactured crisis, explains why an even greater than usual amount of special-interest carve-outs made it into the bill.
Article 1, Section 7 of the US Constitution clearly states that “All bills for raising Revenue shall originate in the House of Representatives,” but as has been done many times, the Senate simply attached its bill to an existing House bill and claimed that this Constitutional requirement had been satisfied.
If the process was dishonest and unconstitutional, the content of the bill was even worse.
The “rescue” legislation was packed full of special tax deals for well-connected corporations with the money to hire high-profile lobbyists – usually those who have spent a good deal of time as legislators themselves.
The principle of tax cuts and breaks themselves are not the problem, however. It is incorrect to view any return of tax money to its rightful owner as money taken from the government. Wealth belongs to those who generate it not to government. However, while well-connected special interests like Hollywood and rum manufacturers were being granted targeted tax assistance, the vast majority of Americans were being hit with a significant tax increase in the form of higher payroll taxes. Rather than cut a dime from federal spending, this bill granted breaks to the corporate elites and paid for the “lost revenue” by passing the costs on to the rest of us.
The “fiscal cliff” bill also rescued other corporate interests. Included in the text was a nine-month extension of the 2008 Farm Bill. This is corporate welfare at its worst, spending billions to enrich big corporate farms with direct subsidies at the expense of small farmers — and the taxpayer.
Last week’s last minute deal was the worst of both worlds: higher taxes on nearly all Americans now and a promise to begin thinking about modest cuts in spending growth two months down the road. While there was much hand-wringing over the “draconian” cuts that would have been imposed by sequestration, in fact sequestration would not have cut spending at all. Under the sequestration plan, government spending would increase by $1.6 trillion over the next eight years. Congress calls this a cut because without sequestration spending would increase by $1.7 trillion over the same time frame. Either way it is an increase in spending, however.
I have little hope that a majority of Congress and the President will change their ways and support real spending reductions. Fortunately, increasing numbers of Americans are awakening to the dangers posed by the growth of the welfare-warfare state. Hopefully this movement will continue to grow and force the politicians to reverse course before government spending, taxing, and inflation destroys our economy entirely.
Posted by Lew Rockwell
(Thanks to Travis Holte)
By Lori Stacey
Every single member of Congress knows or should know the very basic rule stated in the US Constitution regarding which chamber can originate revenue raising bills (tax bills). But that seems to have not stopped any of the 535 members of the US Senate and US House of Representatives from once again proving that they have absolutely no intention of obeying even the most basic procedures for a tax bill becoming a legitimate law.
As many of us wrote about months ago, after the Supreme Court issued its ruling regarding Obamacare being declared a tax, millions of Americans should have been celebrating how Chief Justice Roberts had just in essence invalidated the entire bill. See my previous article, “Is Chief Justice Roberts actually sly as a fox?” That’s right. There should be absolutely NO reason for any state government or any business in America to be forced to move forward with any provisions contained in the Affordable Care Act.
Again, the constitution is very clear in this matter and every member of congress knows what type of bills each is allowed to originate. It is one of the most basic clauses in the US Constitution governing the actions of members of Congress.
Article I, Section 7, Clause 1 of the US Constitution clearly states:
All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.
After watching the deafening silence within the mainstream national news organizations and by all Democrats and Republicans in congress, I published a follow-up article as to possibly the political reasons none of them were going to even whisper the truth about Obamacare being dead in the water and can be found titled, “Demand Congress start telling the truth about Obamacare”.
As usual, there was no massive effort by We The People to demand that congress or anyone else elected to office start telling the truth about anything or even begin to adhere to our constitution for which they take an oath to obey, uphold and defend. So as a result, here we go again, all over again.
UPDATED PARAGRAPH: Unlike the Obamacare bill which was in every way a Senate bill and was not expected to ever be ruled a tax, the Senate worked out a “deal” with the Obama administration on their own version of the fiscal cliff bill which ILLEGALLY (referred to as “unconstitutionally” so as to not make it sound so bad) submitted a complete substitute tax bill knowingly in deceptive defiance to the supreme law of our land. In a late-night vote reported by the Washington Post, the House apparently went along and hurriedly passed the Senate’s version of the bill without time for any amendments by the House. This should have been the full content of the House bill with the Senate adding amendments and then going back again for another vote by the House and then back to the Senate for a final vote. In all intent and purposes this was a “Senate bill” regardless of what bill they had to gut out and substitute it with. The House would not have been voting last on a bill they were just seeing the language of for the first time if they REALLY originated its content.
In the case of Obamacare however, there is no arguing over details. It was a Senate bill that was later ruled a tax by the US Supreme Court so there was no need at the time of its passage to play switch-aroo or rope-a-dope with which bill the language would be slipped into. When it was ruled a tax, it was no longer a valid law which may explain one reason why there was so much insistence by the Obama administration that it should not be ruled a tax.
Anyone with an ounce of common sense should realize by now that the fiscal cliff bill will not solve any of our financial woes. It should not even be spoken of as a band-aid as it is nothing but a theatrical performance. Our economy is still going over the ultimate cliff and time will tell just when that occurs. For now, a more serious issue should be to raise cane about congress boldly thumbing its nose at our constitution and placing themselves above the law. Do we really want them thinking we are all so ignorant that we just don’t know any better?
Writing as a child screaming in the wilderness: If we do not finally unite in insisting that our elected leaders obey our laws, then we deserve exactly the corrupt and tyrannical government that we surely will have coming our way. The constitution cannot police itself. It needs the masses to be united in demanding that it is obeyed or suffer the rightful and lawful consequences. Just tar and feathers at this point is not going to cut it.
Lori Stacey, DC Conservative Examiner
Lori Stacey has been passionate about politics all her life. She started working on political campaigns going back to Ronald Reagan’s 2nd bid for the White House while growing up in Sacramento. In November 2010, she ran for Secretary of State of South Dakota for the Constitution Party. Lori…