Pre-Existing Conditions Important For Insurance

What is the definition of insurance?  Insurance is the transfer of risk from one party to another.  Usually, one party is willing to accept the risk of the other party by virtue of a premium.  For example, if the insured is wanting to insure his boat from natural disaster, the insurer will offer such protection (from property/monetary loss) at a rate deemed comfortable by the insurer.  A boat in the middle of New York is being insured and a boat on the Florida coast is being insured.  Which boat insurance policy is more expensive in our example?  Well, the boat that brings the most risk to the insurer will be the boat that maintains the most expensive policy.  So, the insurer is willing to accept both risks - but, if he is charging $300/annually (for a 50k damage policy) for the boat in New York and $300/annually (same 50k policy) for the boat in Florida, where is the insurer most likely to have to pay a claim?--Obviously in Florida.  Now, if insurer charged the same $300/annually for both New York and Florida, the insurer will take a very large hit once the next hurricane blows through Florida.  To which the Left would shout with joy that the insurance company is taking a hit - remember wise-guy, if they take a hit, all of the other policies they insure will take a hit as well. 

Anyway, so, for our example, the insurer must charge more for the same 50k policy in Florida than he would in New York.  Why?  Because the risk being transferred is greater in Florida than in New York.  Now, let's turn our attention to health.

(Let's assume health care operates as a lump sum benefit based on diagnoses.)  The policy sought after is the same 50k policy, but it is for health and not for boats.  Person A has Type II Diabetes.  Person B has Type I Diabetes, had a stroke 3 years ago and is about to go on dialysis.  Which person brings more known risk to the table?--Person B, obviously.  So, again, the insurer will charge more for higher risk.  Is this wrong?  No, absolutely not!  The only way an insurance company is able to pay its claims is by taking the premiums and investing them to make money.  So, if an insurance company is going to consider a high risk individual (a person they will more likely pay a claim on sooner) they need to be able to cover that loss.

Now, are there people with so great a risk that insurance companies are not comfortable with covering them?  Sure.  Is that wrong?  No!  It is a private company and it can set its own standards of risk tolerance.  So, what does Obama's plan do to this scenario?

Obama wants to eliminate pre-existing conditions.  By doing this, the risk transfer is 100% on the insurance provider.  Therefore, it is no more insurance, but simply reimbursement coverage.  Now, if an insurance company is required to pay claims for any and every thing, what do you think will happen to premiums?  Again, the company is trying to protect against loss.  Well, we would have our Florida example to the 10th power.  Insurance companies would raise premiums; possibly hundreds or even thousands of percents higher.  By the way, who pays these premiums?  We buy the policies, so we do!  If your premium jumps 1000%, what would you do?  Well, you'd still keep your cable, but you'd get rid of the insurance.  Taste it - because you know its true.  So, insurance policies are being dropped at a rapid pace.  With no client's paying premiums, the insurance companies do not make money.  Businesses that don't make money, fail.  Obama's plan is to destroy the insurance industry thereby leaving no other alternative but to rely on the sugar mama of Government.  However, the Government cannot pay for this without help from your taxes.  So, instead of paying premiums to an insurance company, you will pay higher taxes to cover this massive intrustion into capitalism.

Call your Congressman and demand a "no" vote on healthcare!

Dial: 877-762-8762 or 202-224-3121 or 202-225-3121

Jobs Bill Misses The Mark

Yesterday, the Senate was giddy about passing a "jobs creation bill." The media has been proclaiming how even Republicans are jumping on board with this bill. They are making a big deal out of Scott Brown, R-MA, voting yes since he just got to Congress. But, let's slow down. What is this bill about?

This bill is supposed to be a $15 Billion job creation package. First, let's remind our good friends in Washington that the only jobs Congress can create are Government jobs. Congress cannot create jobs in the private sector. Their policies can hinder or encourage job growth in the private sector, but they are not the ones responsible for any new jobs. Now, Congress wants the credit for jobs creation because then Obama can take credit for it as well.

One of the focal points of this bill is that it frees any company that hires the unemployed from paying their 6.2% social security tax for 2010. If the company retains the employee for at least a year, they get a $1,000 tax break.

So, with less money going into Social Security, Congress will have to go after it somewhere else. And, that somewhere else will be from those who are already employed. Secondly, a $1,000 tax break?! Is that per new hire? And, by the way, companies don't pay taxes anyway - we pay them through their prices they set for their goods and/or services. So, giving a company a "tax break" would actually be giving us a tax break. But, a $1,000 tax break isn't a tax break. That's like letting the couch cushions fund your kid's allowance. If you want to encourage more corporate participation in the hiring game, then do something big. How about eliminate a lot of the taxes and regulations that are imposed upon them and that stifle their ability to be able to afford to hire additional help. Why not suspend and even eliminate the federal income tax - give people more of their money to spend in the economy. This is the real issue, folks. Giving companies "tax breaks" is only a symptom of the problem.

Jobs are created based on two simple things: Supply and Demand. If demand is higher than supply, then companies need to hire more workers to get supply back even with demand. If we had more of our own money to spend, demand would start to increase, companies would begin to hire more to meet the demand with more supply and two things ultimately happen: the economy is back on its feet and unemployment falls. Companies do not just arbitrarily decrease their work force. This bill suggests they do by virtue of it focusing on the corporations and their hiring practices. Jobs exist for one reason - a company needs to make money and they need workers to make supply to meet demand. If the demand isn't there, then the need for employees decreases. Companies are not going to keep an employee on the books at 20k/year or 30k/year just to get a 1k tax break. That's like the common practice of hanging on to a mortgage because of the tax write off. So, you send 10k to the bank in interest so you don't have to send 3k to the IRS in taxes?! (By the way, if your CPA suggests that you do that, then fire their sorry carcass and get one that can actually do math.) Frankly, this bill is insulting to private business.

The Government that has given us this economy and this deficit are now the ones who are going to fix it?! The Government that hates the private sector now are seen as their savior? Don't fall for it - these people want one thing only and that is full government control over business industry - and you take that to the bank...well, don't take it to the bank because they will be taxed more for the TARP money they've already paid back.

Middle Class Tax Cuts? You Lie!

I think this needs to be revisited. Earlier this month, Reuters reported that Obama's budget was full of back-door tax INCREASES for the middle class. The White House promptly grabbed Reuters by the crotch and demanded they pull the story. (So much for freedom of the Press). Reuters, with a backbone the consistancy of jello, pulled the story. But, what do you expect from the State-run media?! So, the story is only found on blogs at this point. (i.e http://www.thehotjoints.com/2010/02/02/reuters-does-story-on-obamas-backdoor-tax-increases-then-withdraws-it/). The portion I want to focus on is the actual tax increases for the middle class. Now, on Feb. 11th, 2010, Obama said he was going to be "agnostic" on tax increases. He was going to establish a "bi-partisan" group to investigate debt reduction proposals. This "bi-partisan" group is 60% Democrat and they are going to demand tax increases to fix the debt problem. Obama is going to play dumb and say "Well, uh, we've made progress, and un, the commission has worked hard, uh, and, they've determined, that uh, we need to increase taxes to pay for this debt." THE VERY DEBT YOU'VE CREATED! This way, he can say he didn't flipflop on his no taxes for the middle class promise. Come on, folks - his promises are about as pointless as Russian Roulet with a semi-automatic pistol. So, without further delay, here, again, is some insight to what will be coming down the pike to us middle class folk. Here is the story that wasn't protected under freedom of the press.

NEW YORK (Reuters.com) –The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.

In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.

While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.
The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.

If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.

Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.

Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a "patch" that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.

Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year’s levels, the tax will hit American families that can hardly be considered wealthy — the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.

Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:

* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;

* The $250 teacher tax credit for classroom supplies;

* The tax deduction for up to $4,000 of college tuition and expenses;

* Individuals who don’t itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;

* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.

Reuter's pulled this story and promised a new story to run in its place a week later. No such story ever was ran.

An Eye Opener About Taxes

(Click on pictures to see larger image. Also, click on the Taxation link at the top of the blog to see the actual numbers from the IRS.)

Remember when Bush cut taxes and Al Gore was running around talking about how the tax cuts only benefited the top 1% of wage earners in this country? Well, aside from being a flat out lie (it was an across the board tax cut), the numbers would show there is a reason the top 1% "benefited" more than the rest. It is because they pay more! According to the IRS, the latest numbers (as of 2007) show that the top 1% of wage earners are paying a very hefty part of the income tax bill for all Americans. But, is it right that they benefit more, in the sense that the tax cuts were designed to solely give the rich more money? Well, let me create a scenario.

(For the purpose of our scenario, we will assume a 15% tax bracket for Person A and a 35% tax bracket for Person B; we will also assume a ficticious tax cut of 10% across the board as well as each person filing as single). Person A makes 20k a year while Person B makes 350k a year. Before the tax cut, Person A would owe $3,000 in income tax for the year. Person B would owe $122,500 in income tax for the year. Even before we enact the tax cut, we obviously see Person B is paying much more in taxes. However, for our argument, let's cut taxes!! The bells of heaven just rang and doves are flocking all around. Spring is in the air and the economy is roaring - yes, all because we cut taxes! So, now Person A has a 5% income tax responsibility and they now owe $1,000 for their income tax. That's a $2,000 savings! Person B has a 25% income tax responsibility now (remember, we cut taxes 10% across the board) and they owe $87,500 for their income tax. That's a $35,000 savings!

OK - question - who benefited more? In pure tax savings, who benefited more? The rich did! Were these tax cuts designed to help out the rich? No - they were fair and even. But, naturally, if one person pays more than the other, any tax break would cause the person who pays more to feel more relief. So, yes, it is fine to say they benefited the Top 1%. But, that's an analytical approach, which is foreign to the mind of Gore. He was twisting this to make a political pander to the less fortunate that he claims he fights for.

But, notice the second chart. 97% of the TOTAL FEDERAL INCOME TAX BURDEN is carried by the Top 50% of Wage Earners. Half of the wage earners in this country are expected to shoulder 97% of the tax burden. On the flip side, a wimpy 3% of the Federal Income Tax burden is shared by the Bottom 50% of wage earners. And, a good number of the Bottom 50% don't pay taxes anyway! Now, if you were in college and had a lecture class for Biology and the class was 200 people. Let's say the grade was determined by an entire class effort. In other words, you didn't receive a grade based on your individual work, but you received a grade based on the work submitted by the entire class. If you were in the top 100 students, how would you feel if you had to shoulder 97% of the work? You'd probably feel like you were being cheated and would promptly expect the Bottom 100 students to pick up their share of the load. Why then, do we not expect the same in the world of taxes?

Just remember this when you are filing this year. It should make it much more enjoyable of an experience!

Economic Stimulus Wrapped in Crime

http://www.cnn.com/2010/POLITICS/01/07/immigration.economy/index.html

According to CNN.com, a study finds that if we just legalize all illegal immigrants, it will boost the economy. Of course, if we let all of the criminals out of prison, that will help with our prison over-crowding issues too. However, the real problem is being avoided in favor of a very short-term political cure. This has its roots in the idea that there are too many illegals now to round up and ship back so we should just legalize them. Now, to put the pressure on, it is being suggested that by legalizing these sovereignty-ignoring folks we can have a positive impact on our economy. Notice cutting taxes doesn't even cross their minds. Let's examine the so-called results that this study is putting forth.

With the legalization of 11 million illegals, the study is suggesting that wages would increase. First of all, it is illegal for companies to higher illegals, so there shouldn't be any wage info to even make that claim from. Secondly, people will work for what it takes to take care of themselves and their families. Just making someone legal doesn't automatically increase their wage. Now, let's assume that all 11 million illegals are currently not working and that making them legal would put them into the job market. With the roaring Obama economy flailing about like a fish out of water, a sudden influx of 11 million (assuming these 11 million are all of age to work) would have what effect? Right now, the demand for jobs is high and the supply is low. So, a flood of 11 million would increase demand rapidly. What happens when demand outweighs supply? The price of the good, in this case the salary, goes up. So, this is the answer they are hoping for. But, here's the problem. Jobs and the ability to pay a salary depends on the company's needs and financial strength. If there is no money for new employees, it doesn't matter how much the demand increases, no one is getting a job! Secondly, there is an influx of teenagers each year into the work force – does that mean McDonald's is now hiring cashiers at $20/hour?! No. Again, it still rests in the hands of the companies.

The second proposition is that by legalizing these illegals it would cause an increase in consumption. I guess this is based on the first theory that there would be higher wages, therefore, more money circulating in the economy. The majority of the illegals that work in this country are working for a family...and that family is often quite large. Therefore, the consumption that is taking place is already relative to the amount of illegals in the country. Secondly, with many of them already enjoying Government handouts at our tax dollar's expense, what would be the incentive to move away from that? Heck, once they are legal, there is so much they could get from the Government. Therefore, the majority of any increase in consumption would be subsidized by our tax dollars.

The last idea they propagate is that this will create many new jobs and increase tax revenue. Now, before I'm accused of believing that illegals are only valuable for a certain line of work, forget it! I do not hold to that position. However, based on where you find them working, it is reasonable to assume that they will not fall into a taxable bracket anyway – so, no increased tax revenue. Secondly, job creation is again at the mercy of the company. Just because there are people available for work doesn't mean there are jobs available to put them in.

This whole idea, again, is not about boosting our economy. (Tax cuts and decreased corporate regulations would do that). This is about pardoning criminals on a grand scale – probably just to secure more votes. This also smacks the faces of all those who went through our citizenship process legally. There is only one thing to do with illegals – send them back and tell their Government that we will take action to defend our boarders and if you want your citizens to remain happy, then encourage them to come here the legal way. (Not hand out maps of secret routes across the boarder as President Fox did in Mexico). At any rate, expect Obama to jump all over this one.

Let's Get Colonial!

In 1774, after much oppression from the British Government, Parliament decided to tighten the vice even further by passing a series of Acts known as the Intolerable Acts. These Acts paved the way for colonial outrage and eventually the Revolution that happened just a year later. What exactly led to the implementation of these Acts and how did the Americans respond?

The concepts of exploration and colonization were surely wrapped in a struggle for power and control. But, we also know these actions happened because of the desire to obtain certain goods. Gold, spices, fabrics, etc. were a strong secondary focus of these exploration efforts. One of these goods was tea. By 1698, the British Parliament had given the East India Company a complete monopoly on tea importation. Fearing open-market competition, Great Britain required the colonists to only purchase their tea from Great Britain. This legislation was passed in 1721. As time went on, taxes were raised on tea and tea importation. This in turn caused a recession of the tea market (go figure). Therefore, to help raise revenue for Parliament, they passed tax laws on tea sold in the colonies. This tax was known as the Townshend Act of 1767. The colonists fought over the idea that Britain could tax them without giving them any representation in Parliament. This was voiced the loudest by the Whigs so said that Parliament had no right to do anything outside of what the Constitution mandated. (Hmmm...sound familiar). Parliament, however, served up a hefty "screw you" and said that they have this ability in "all cases whatsoever." (Hmmm...also sounds familiar).

The Whigs met these acts with oppositions and boycotts. Many merchants organized agreements that they would not import tea from Britain. By 1770, the Townshend Act was repealed in all manner except for its taxation of tea. The British Prime Minister, Lord North, asserted that this is still showing that the British have the right and the power to tax the Americans. The colonists celebrated the reduction in taxes and British tea was once again common place in the market. (imagine that - reduce taxes and business picks back up). However, with the ascendancy of King George the III, the tax on tea under the Townshend Act was reinstituted. Lord North was warned that this might cause colonial resistance again, but he stubbornly pressed for this legislation. This, along with other methods of oppression imposed on the colonies, led to the iconic revolt in Boston's harbor.

When the Dartmouth arrived in Boston Harbor, a Whig, Samuel Adams, called a meeting in which thousands attended. They resolved to have the Dartmouth sent back to England without collecting any of the tea tax; as well as assigning 25 men to stand guard by the ship to make sure it wasn't unloaded. Governor Hutchinson declared that the Dartmouth would not leave until the tax was paid. Then, on December 16th, 1773, about 7,000 men gathered outside the Old South Meeting House demanding that Governor Hutchinson release the ships without paying the tax. He again refused and Samuel Adams declared that these meetings could do nothing further to "save the country." Some believe this was a pre-established slogan to initiate the tea party. Adams could not keep control over the meeting and many headed out to Boston Harbor. That evening, many boarded the ship and began to dump the tea into Boston Harbor. Britain was outraged and decided to punish the colonies with the Intolerable Acts.

The Intolerable Acts consisted of these facets:

1. The Boston Port Act - The port of Boston was closed until the East India Company was reimbursed for all the tea lost at sea

2. The Massachusetts Government Act - The Massachusetts government was brought under complete control of the British Government. Any positions in the government were to be appointed by the King.

3. The Administration of Justice Act - This allows the Massachusetts Governor to move the trials of royal officials to other colonies or even to England. This was thought to allow British soldiers the opportunity to harass Americans and then escape justice.

4. The Quartering Act - This Act gave the British soldiers the legal right to be quartered in the homes of the colonists without their consent. (Note the 3rd Amendment to the US Constitution.)

5. The Quebec Act - This Act took away colonial settled land and gave it to Quebec.

These Acts were the spark that lit the fuse on the American Revolution. The colonists had had enough. They knew they wanted freedom and remaining under the rule of the King wasn't going to supply such freedom. The colonists understood that as Government expands, liberty contracts. They knew that their freedom was being strangled by massive Government regulations on their lives. Ultimately, they knew that you cannot be diplomatic with a tyrant. They rose up and fought off the greatest military power of the day.

Right now, we have tyrants running our Government. They are imposing massive Government regulation by means of health care, the environment and global warming, taxes, etc. Our freedoms are voted away each day by those we voted into office. As long as we have the right to vote, we have the ability to produce revolution again. However, if the day comes that we cannot change Government with the ballot box, rest assured we will change it then with the cartridge box.

Catch the fire of freedom!

Another Backhand to America

Another nail in the coffin of freedom and liberty was fastened tight as the Senate approved their version of the health bill. CNN.com reports that Congress will be enjoying their holiday break after this "exhausting" work. Yeah, it can take a lot out of you to strip the American people of freedom and to increase their taxes. You guys do deserve a break -- a break from office altogether. I'm telling you, folks--Americans will only take so much until they begin to fight back. Congress isn't representing America right now. They are representing their own self-desires and political careers. Typical Democrat ploy - offer a handout to get more votes. This handout is supposed to be a measure of compassion...but, those that take these handouts are still there to take the next one. These handouts just keep people poor. And, the sad part is, many impoverished people can't resist. Thus the representation we have in Congress. If you teach people that they are to rely on the Government and then they hear the Government promising handouts, what do you think the outcome is going to be?

Come on 2010! Let's take back Congress and let's impeach Obama for blatantly ignoring his Presidential Oath to "...preserve, protect, and defend the constitution of the United States..." You certainly aren't preserving it by bypassing it to get health care passed. You certainly aren't protecting it by pretending it doesn't exist. And, you certainly aren't defending it because that would require you to vote against your own plans. Don't be fooled by this impostor. He will talk to you as if he is the smartest guys in the world because he thinks you are too stupid to catch on that he's a phony.

Let's hope the Supreme Court will bat this one down as unconstitutional...and that's a big hope...