In a bold move to look like your cool uncle who sadly still rocks the mullet, Donald Trump has removed the Obamacare tax penalty for not carrying insurance by way of executive order. This was probably one of the more hated parts of a plan that was not at all the single payer (or even public option) platform Obama ran on in 2008. Despite holding a majority for two years in both houses, the ACA was what we got stuck with.
What Exactly is ACA?
The GOP’s recent drubbing in the Senate was well earned; in their repeal/replace debacle, they had a “continuous coverage penalty.” I’m sure their mamas were proud; it increased premiums for people buying insurance, if they had no coverage for 63 consecutive days within the previous 12 months. In other words, losing your job or your provider bailed out of the ACA, meant that you’d be facing an increase, regardless of how long you were previously covered…So thankfully, their Ebenezer Scrooge bill went south, hard!
However, this is a double edged sword; while the tax penalty is gone, many are still under insured, or uninsured. This screams the question; since we had to buy insurance, under law, why weren’t carriers, who were paid subsidies by the government, not mandated to participate for pre-determined amounts of time? If business owners were mandated (over 50 employees) to provide benefits, why weren’t carriers mandated to stay in a plan that they made billions from?
That’s more than I have room for here. However, consider this; you have a break in your taxes but you still need coverage. Alternative methods include non-profit, reference based pricing organizations that can provide quality health care for as low as $100 a month. What is reference based pricing? Simply put, if I ask the Blues (Shield and Cross) if they ever find errors in billing, they’ll say, “NO!” Ask Medicaid if they find errors and their answer is always.
In reference based pricing, the carrier rides the provider like Zorro. I know of one case where a woman had an $80,000 knee surgery knocked down to $17,000 through Christian Healthcare Ministries. She had this plan while unemployed, covering her and her husband for $150 a month! Even after she got another job, she kept the plan because it cheaper than her employer paid health plan. A 20% deductible on $17,000 is less than on $80,000…
Watch this video from Fox News regarding the ACA reform:
There secular versions like Medical Cost Share. Companies have been using this for years and with these lower cost non-profits, available to self- employed and unemployed people, we don’t need no stinkin’ ACA…
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Even The Stock Market Doesn’t Want “Sleepy Joe” Biden As President
Add “bad for the stock market” to the long list of reasons why nobody wants “Sleepy Joe” Biden to win the election in November.
Biden has said he would partially reverse the Tax Cuts and Jobs Act put into place by President Trump. He would also enact other measures like higher taxes on capital gains and dividends for high earners and changes in non-tax regulatory policies.
In 2017, the Tax Cuts and Jobs Act lowered the US corporate tax rate. It went from the highest in the world, at 35 percent, down to 21 percent. Analysis by the Tax Foundation shows that Biden’s plan would increase the corporate tax rate to 28 percent.
According to David Kostin, chief U.S. equity strategist at Goldman Sachs, the Tax Cuts and Jobs Act has reduced the effective tax rate of S&P 500 companies by 8 percentage points to 19 percent while also boosting S&P 500 earnings by 10 percent.
Biden’s plan to raise the corporate tax rate will act as a bucket of cold water on the stock market. It would do so by dragging down corporate earnings.
Michael Wilson, the chief US equity strategist at Morgan Stanley, says “Extrapolating current multiples on that kind of earnings decline makes 100-150 points on the S&P 500 a baseline for the impact of a tax cut rollback, all else equal.”
“Of course, any impact on investor confidence that drags the multiple lower, or business investment, that drags economic growth lower could compound this effect,” Wilson added.
Higher corporate taxes also further burden companies that are still struggling to recover from the economic lockdowns due to COVID-19.
Expectations are for our country’s output to fall as much as 50% in the second quarter due to the restrictions. This comes with a 20-30% rebound in the third quarter and a modest 5-10% rebound in the fourth quarter. All this assumes that we don’t experience a second outbreak this fall.
“Although the coronavirus has caused the sharpest decline in economic activity on record, in some ways tax policy represents a larger risk to earnings and consequently to equity prices,” added Kostin.
Greg Valliere, chief U.S. policy strategist at Ontario, Canada-based AGF Investments, shared a warning. He says that if that Biden wins the November election, he shouldn’t be in a rush to raise taxes. He deems this idea bad, given the uncertainty of our economic recovery.
Valliere says Biden “needs to be careful in talking about a big tax increase early next year. I’m not sure a tax increase is a good idea in early 2021 as the jury will still be out on the extent of the recovery.”
Matt Gertken, a geopolitical strategist for BCA Research, says you can watch the market over the next month or two. Doing so will let you have an idea of who Wall Street thinks will win the election.
“Either the market sells off in the short run to register the currently likely victory of Joe Biden, who will hike taxes, wages, and regulation, or the market rallies all the way till the election, increasing the chances of President Trump’s reelection, which would revolutionize the global system, especially on trade, and would require a selloff around December.”
Trump Changes Course, Shows Support For More Stimulus Checks
There’s some positive news for the tens of millions Americans who are still struggling to make ends meet as the coronavirus pandemic lingers for the third month.
It appears President Trump has changed his mind, and is now in favor of sending out an additional round of stimulus checks to help Americans get through the economic uncertainty created by the coronavirus pandemic.
When asked about the likelihood of additional checks, the President replied, “I think we will. I think we’re going to be helping people out. We’re gonna be getting some money for them during the artificial — cause it really is it’s an artificial closure — and now we’re gonna be able to open it up,” Trump told reporters while he was in Michigan touring a Ford factory.
“I would say there could be one more nice shot. One more nice dose,” Trump said about a potential stimulus bill as the country struggles to recover from historic job losses and businesses are faced with an uncertain future.
Trump’s comments were echoed by White House staff, including economic advisor Kevin Hassett, who said during a CNN interview that another round of checks is “pretty likely,” and says “it’s coming sooner rather than later” before adding that if there are indications the economy is recovering quickly as more states reopen, the White House may look at other relief options.
Also supporting Trump’s outlook is Treasury Secretary Steven Mnuchin, who said Thursday that there’s a “strong likelihood” the U.S. will send out another round of stimulus checks.
“I think there is a strong likelihood we will need another bill,” he said during an online event hosted by The Hill newspaper, but added that the stimulus may not be needed immediately.
“We’re going to step back for a few weeks and think very carefully if we need to spend more money and how we’re going to do that,” Mnuchin said.
The change in course comes after Republican lawmakers were originally hesitant to continue adding to the deficit while attempting to generate an economic recovery. But with job losses continuing to climb every week and estimates for the second quarter GDP to plunge as much as 40%, the Senate GOP leaders are warming to the idea of an additional stimulus package.
While Democrats have pushed a $3 trillion plan through the House, Senate Majority Leader Mitch McConnell reportedly told President Trump last week any stimulus bill should not cost more than $1 trillion.
McConnell has also openly opposed the Democratic plan to extend the $600 per week additional unemployment benefit by six months when it expires in July.
Republicans have also shown little interest in the Democrat’s proposal of nearly $1 trillion in aid for state and local governments to offset increased costs and lower revenues due to the pandemic, mainly citing that the budget issues the cities and states are facing pre-date the pandemic and relief funds shouldn’t be used to fix old problems.
The White House and Republican leaders would also like to pass liability protection for businesses that reopen, shielding owners from lawsuits should an employee claim they contracted the virus while on the job. Democrats, however, have opposed the idea.
Trump Advisor: Pelosi’s ‘Bodacious Plan’ Only Helps Her Left-Wing Interest Groups
As we mentioned Wednesday, House Speaker Nancy Pelosi unveiled the Democrats’ latest stimulus plan, and it carried a hefty $3 trillion price tag.
According to Stephen Moore, the bill seems to be nothing more than a way for Pelosi to bail out her favorite special interest groups.
Pelosi had mentioned to reporters last week that one of her motivations for being in politics is to make sure children are fed, saying “One in five mothers report that their children are not getting enough food. Three times the rate during the Great Depression.”
She added, “So in addition to putting money in people’s pockets – direct payments, unemployment insurance, some other tax credits, etc. – we really also have to put food on the table.”
Moore says Pelosi seems more interested in putting food on the tables of the wealthy than the poor she says she is motivated to protect.
Putting Food On The Wrong Table
Moore’s spending plan is a “goodie bag” that “pays off nearly every imaginable left-wing interest group,” she says. This includes teacher unions, trial lawyers, arts groups, environmental activists, postal employees and even super-rich Democratic donors.
He added, “This is a bodacious plan, preposterous in its financial irresponsibility, but the speaker and her colleagues see in this terrible disease the opportunity for a fiscal sweepstakes. She seized the moment.”
Amazingly, even a $3 trillion price tag isn’t enough for some of the more liberal Senators in Washington.
Bernie Sanders says the bill should be revised to “adequately” help Americans get through the crisis.
“[T]he Senate must improve this legislation if we are to adequately address the two most urgent needs facing working families right now: health care and economic security,” Sanders said in a statement.
Moore takes particular offense to certain items in the bill. He says none of them have anything to do with the coronavirus. He also believes that they don’t have anything to do with providing relief from the effects of the ongoing pandemic.
The list includes:
- Some $1 trillion for blue state budget repairs and pension bailouts.
- $50 million for “environmental justice grants to prevent, prepare for, and respond to coronavirus.”
- Restoration of the state and local (SALT) tax deduction for blue state millionaires and billionaires. This would be the biggest tax cut in history for the top 1 percent in income.
- $20 million for the National Endowment for the Arts and the National Endowment for the Humanities
- Extension of the $600 unemployment insurance supplement (on top of 100 percent replacement of wages through direct UI benefits. This is the scandal-ridden program that in some 30 states pays people more money to stay unemployed than to get back to work.
- $100 million for OSHA funding — we should be deregulating not increasing regulation
- Extending unemployment benefits and financial aid to illegal immigrants
- A postal service bailout.
Congressional Republicans and President Trump should “unanimously and loudly denounce this New New Deal scam,” Moore also says. He adds that these “would pad the wallets of those who are funded by programs that have zero to do with the virus itself. Coronavirus didn’t create the $100 billion Illinois and New Jersey pension deficits.”
What would help this country recover isn’t a massive payment to special interest groups. Instead, the country needs to come up with a solution for the working man, according to Moore. This includes “a payroll tax holiday that will most benefit low-income workers, deregulation, and lawsuit shields for workers and employers.”
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