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Insider Report from Newsmax.com Headlines (Scroll down for complete stories): 1. Obamacare Devastates Tanning Industry 2. Free College a 'Massive Subsidy' for the Wealthy 3. New Overtime Rule Could Lower Base Pay 4. Bishop: Christianity 'Burning Out' in Middle East 5. 33% of Americans Ignorant About First Amendment 6. Cato: Plan Could Replace Federal Income Tax
1. Obamacare Devastates Tanning Industry The Affordable Care Act imposed a tax on tanning salons that has devastated the tanning industry and led to the loss of some 80,000 jobs. Obamacare stipulated that beginning in 2010, the so-called Tanning Tax imposed a 10 percent excise tax on tanning bed services, in addition to state sales taxes and taxes paid by the tanning salon owner. "As it turns out, Obamacare has not been 'affordable' (as the official name Affordable Care Act would imply) for women who own tanning salons — or their customers," according to Cherylyn Harley LeBon, a former senior counsel to the U.S. Senate Judiciary Committee, writing in TheBlaze. The tax was regarded as a way to help pay for increases in government healthcare spending due to Obamacare. "But like almost every other aspect of the ACA, its advocates had to eat crow. Revenues shrank to less than half of the anticipated $200 million per year," The Hill observed. "The ACA's designers failed to anticipate the elasticity of tanning bed demand. The less necessary an item, the more likely the market will stop using it once taxes or higher prices are imposed." According to the American Suntanning Association, since the tax was imposed in 2010, about 10,000 tanning salons have closed. This has resulted in a loss of 81,000 jobs. In California in 2009, tanning salons employed 8,649 people. Now there are 4,617, according to LeBon. The impact has been especially hard on women, who own 75 percent of tanning salons, while 95 percent of salon employees are women and 75 percent of customers are women. "There is a ripple effect: The owners, the employees, and the customers have become a casualty of the Tanning Tax," LeBon stated. The Daily Caller noted: "It’s not as if the tanning tax is unique. Obamacare is loaded with bad ideas that will require decades of untangling, including taxes on medical device manufacturers, innovator drug companies, charitable hospitals, and even patients with high medical costs. "But the tanning tax does provide an excellent case study into what happens when political optics and expediency are allowed to trump sound policymaking. There’s nothing stopping a more sober Congress from returning to the issue and repealing items like the Tanning Tax that have proven to be failures." Editor's Note: 2. Free College a 'Massive Subsidy' for the Wealthy President Barack Obama has proposed universal free community college for American students, and Sen. Bernie Sanders, a presidential candidate, has called for tuition-free college. Advocates of free tuition often cite the need to make college affordable for lower-income students. But free college would in fact offer a "massive subsidy" to wealthier Americans, according to a report by Patrick Holland for Economics21 at The Manhattan Institute. Although advocates point to the sharp rise in college costs in recent years, much of that talk is "apocalyptic rhetoric," Holland insists. "Headlines have recently proclaimed that college costs have increased by 500 percent since 1985. But the statistic does not take inflation into account," he said. "The real cost of college has only doubled since 1985. In addition, the real cost of attending a public two-year college has actually dropped since 1992." He added: "Public school is still quite affordable for the majority of Americans." There is no doubt that attending college is worth the expense, even if a student graduates with significant debt from student loans, he maintains. Graduates on average earn 83 percent more than high school graduates. But the way student loans are structured is often "unsustainable," according to Holland. Most grads don't immediately land a high-paying job after leaving school and new grads have an unemployment rate of about 10 percent. Grads who don't meet their obligations face mounting penalties and are often forced to default. But free tuition may not solve the debt problem. In Sweden, which abolished college tuition, many students still graduate with significant debt due to the high costs of room and board, which the government does not cover. "Advocates of free tuition often point out that the country has an obligation to make sure more low-income students go to college," Holland observes. But "currently 81 percent of college graduates come from families with above-average incomes. Free college wouldn't just make college affordable for low-income students. It would also offer a massive subsidy to the upper class. "More than $56 billion of the $70 billion it would cost to eliminate tuition would go to families with above-average income." Instead of trying to subsidize college costs, he concludes, public policy should focus on reducing those costs — which are actually being driven higher due to the availability of government-sponsored student loans, according to a report from the Federal Reserve Bank of New York. "What will not work," Holland adds, "is free tuition." Editor's Note: 3. New Overtime Rule Could Lower Base Pay The Obama administration's plan to require overtime pay for more American workers isn't likely to boost their earnings because many employers could respond by lowering base pay, according to a Heritage Foundation report. Under existing regulations, most employers must pay time-and-a-half overtime to all hourly employees who work more than 40 hours a week, and must also pay overtime to salaried workers who earn less than $455 a week ($23,660 a year). The new regulations would raise the minimum from $455 to $970 a week ($50,440 a year). Employers would have to track the hours and pay overtime to any salaried employee making less than this amount. The Fair Labor Standards Act does exempt some employees from overtime requirements, principally executives, administrative and professional employees, and salesmen who work outside the office. Liberal groups have lobbied the White House to implement the changes, James Sherk of Heritage notes; their argument is that employers "misclassify" many salaried workers to exempt them from overtime pay requirements. The new regulations would force employers to pay salaried workers earning moderate incomes overtime regardless of their job duties, and the administration contends that the mandatory overtime pay will boost the earnings of 5 million salaried workers. But according to Sherk, economic research shows that expanding overtime coverage does not boost earnings because employers largely respond by cutting base pay, leaving total hours and earnings little changed. "Unless workers earn close to the minimum wage, in which case employers cannot offset the overtime with lower wages, overtime requirements have little effect on hours or earnings," the report states. Sherk cites the example of IBM, which recently reclassified 7,000 salaried and technical-support employees as eligible for overtime as part of a lawsuit settlement, and responded by cutting their base pay by 15 percent, leaving their total earnings unaffected. He concludes that the new requirement will have "unintended consequences," effectively converting millions of salaried professional employees into "hourly workers required to clock their time. "It will severely limit their use of the flexible work arrangements and telecommuting options that many rely on to balance their work and family lives. Expanding overtime regulations to more salaried employees will hurt the workers the White House wants to help." Editor's Note: 4. Bishop: Christianity 'Burning Out' in Middle East The Iraqi-born bishop of the Syriac Catholic Church in America warns that Christianity is "burning out" in the Middle East and is considered an "enemy of civilization" by many. Bishop Yousif Habash spoke on the second day of the Spring General Assembly of the U.S. Conference of Catholic Bishops in St. Louis, Mo. "I am 20 years here in America," he told the gathering with a heavy accent. "We heard all the talking about the freedom of religion, but in fact, on the ground, what happened? "I am burning. Christianity is burning out. It's smashed. It's denied. It's considered an enemy of civilization, of cultures, enemy of life, of humanity." Habash was born in 1951 and served in two parishes in Iraq until 1994, when he was assigned to the Syriac Catholic Mission of North America, CNS News reported. In 2010, he was appointed by Pope Benedict XVI to head the Syrian Catholic Eparchy of Our Lady of Deliverance in Newark, N.J. "Before 20 years ago, Christianity in the Middle East, the freedom of religion, was better than today," Habash said. "We were enjoying our churches, enjoying our faith. "Now the church is turning the last page of her history in that area." Many sources have reported on the persecution of Christians in Iraq, Syria, and Libya by ISIS and other Muslim jihadists. Thousands of Christians of all denominations, including Catholic, Orthodox, and Coptic, have fled from Muslim persecution. In April, the Orthodox Church's Patriarch Krill of Moscow and All Russia said: "I regularly get reports of horrible crimes that are committed there against Christians, especially in northern Iraq. I have visited those places and I remember that there were many churches there. The city of Mosul alone had 45 churches. Now there is not a single one. The buildings have been destroyed. Four hundred churches have been destroyed in Syria." As the Insider Report disclosed in February, Pope Francis called the beheadings of 21 Coptic Christians in Libya "barbaric murder" and stated: "The blood of our Christian brothers and sisters is a testimony which cries out to be heard." Editor's Note: 5. 33% of Americans Ignorant About First Amendment The majority of Americans know that the First Amendment to the U.S. Constitution guarantees freedom of speech, but fewer than one in five know that it also protects religious freedom, a new poll reveals. The Newseum Institute in Washington, D.C., has conducted a national survey of American attitudes about the First Amendment since 1997. The First Amendment states: "Congress shall make no law respecting an establishment of religion, or abridging the free exercise thereof, or abridging the freedom of speech or of the press, or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." The 2015 survey of more than 1,000 adults asked respondents to name the five specific freedoms in the Amendment, and 33 percent were unable to cite a single right that was guaranteed. The most cited freedom was freedom of speech, which was named by 57 percent of respondents, but just 10 percent mentioned freedom of the press, 10 percent cited the right to assemble, 2 percent mentioned the right to petition, and 19 percent cited freedom of religion. In fact, about half of respondents, 51 percent, mistakenly agreed that the Constitution established a Christian nation, including 35 percent who strongly agreed. After respondents were read the words of the Amendment, they were asked: "Based on your feelings about the First Amendment, please tell me whether you agree or disagree with the following statement: The First Amendment goes too far in the rights it guarantees." The result: 19 percent agreed that it goes too far, while 75 percent disagreed. Just 9 percent of those under 30 years old agreed, compared to 22 percent of seniors. The highest percentage of Americans in the Newseum survey who agreed that it goes too far was 49 percent in 2002, several months after the 9/11 attacks. In a question relating to freedom of speech, respondents were asked if students should be able to express their opinions about teachers and school administrators on social media without fear of being punished, and 60 percent agreed that they should, compared to 33 percent who disagreed. Sixty percent of those surveyed also agreed that cartoonists should be allowed to publish images of the Prophet Muhammad even if those images could be offensive, and 32 percent disagreed. Editor's Note: 6. Cato: Plan Could Replace Federal Income Tax A U.S. state could effectively end the federal personal income tax by using two surprisingly simple legislative maneuvers, according to a proposal cited by the Cato Institute. Ryan H. Murphy, a research associate in the O'Neil Center for Global Markets and Freedom at Southern Methodist University, offers the example of Texas, where residents pay no state income tax but do pay the federal income tax. The state could choose to send its federal taxpayers a check in the form of a state tax credit equal to their federal income tax liability. And it could pay for the credit by increasing the state sales tax in a revenue-neutral way. "Effectively, that would mean the end of all income taxes in the state while significantly raising sales taxes," Murphy writes. "This isn't about cutting taxes per se; rather, this is the tax swap to end all tax swaps." The plan would work well in Texas because the state's population centers — chiefly Dallas-Fort Worth, Houston, and San Antonio — are far from its borders with other states, so residents are unlikely to travel to a neighboring state to take advantage of lower sales taxes. It would also work well in most of California, in Central and Southern Florida and some other states, but not well in a state like New York, where New York City residents could choose to shop in New Jersey. "Such a change would profoundly improve the prospects for economic growth, even from the perspective of very orthodox economists," Murphy maintains in his Cato article. "The resulting inflow of investment from other states, and other countries, would be unprecedented." Also, the difference between a consumption tax (sales tax) and an income tax is that a consumption tax encourages saving and thrift and an income tax discourages it. Murphy cites research indicating that consumption taxes and property taxes are distinctly superior to income taxes. The plan would not discourage charitable giving, since taxpayers would still have to file a federal tax return. Murphy concludes: "The only real obstacle to this policy change is the tyranny of the status quo. If states want to unilaterally end inefficient federal taxation from taking place within their borders, they can do it." Note: Newsmax magazine is now available on the iPad. Find us in the App Store. Editor's Note: Editor's Notes:
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Sunday, July 12, 2015
INSIDER REPORT FROM NEWSMAX 07/12/2015
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