Editorial: Repeal of IRS deductions for state and local taxes unfair to Nevada

Now that Democrats — who have made a career out of demanding soak-the-rich taxes in order to redistribute it to the poor — are in control of the U.S. House of Representatives, one of their first priorities will be to provide a tax break for the rich — in certain Democrat-controlled states.

According to Forbes magazine and others, a top priority will be a repeal of the $10,000 cap on IRS deductions for state and local taxes (SALT) that was part of the Tax Cuts and Jobs Act passed in December 2017.

According to the Tax Policy Center, three-quarters of any benefit from repealing the SALT deduction cap would go to households making $153,000 or more. The top 1 percent of households, those making $755,000 or more, would receive more than 56 percent of the benefit. The Center calculated repeal would cut federal tax revenues by $620 billion over the coming decade.

The Tax Foundation says 88 percent of the benefits of a repeal would flow to those making more than $100,000 a year.

So a repeal benefits the rich, but just the rich in certain states.

Nevadans — along with residents of New Hampshire, Florida, Wyoming, Texas, South Dakota and Alaska — used to be able to deduct about 1 percent or less of their adjusted gross income, while those who live in New York, Maryland, D.C. and California could deduct more than 5 percent.

Nearly one-third of the additional tax dollars generated by the SALT cap comes from Californians and New Yorkers, both heavily Democratic states.

Using 2010 statistical data from the IRS, the latest available, you find Californians who filed for state and local income tax deductions claimed deductions of $10,700 per return.

Nevadans who filed for the state and local sales tax deduction claimed only $1,430 per return.

Calculated on a per capita basis, Californians claimed $2,116 in federal income tax deductions, while Nevadans claimed only $166 per person for sales tax deductions.

Tax fairness? Not hardly.

Sounds like Nevadans would again be paying a disproportionately higher proportion of federal taxes if the SALT cap is repealed.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Democrats out to help the fat cats in certain ‘blue’ states

Of course, now that Democrats — who have made a career out of demanding soak-the-rich taxes in order to redistribute it to the poor — are in control of the U.S. House of Representatives one their first priorities will be to provide a tax break for the rich — in certain Democrat-controlled states.

According to Forbes, today’s Review-Journal editorial and others, a top priority will be a repeal of the $10,000 cap on IRS deductions for state and local taxes (SALT).

According to  the Tax Policy Center, three-quarters of the benefit of the SALT deduction goes to households making $153,000 or more. The Tax Foundation says 88 percent of the benefits flow to those making more than $100,000 a year.

So it benefits the rich, but just the rich in certain states.

Nevadans — along with residents of New Hampshire, Florida, Wyoming, Texas, South Dakota and Alaska — get to deduct about 1 percent or less of their adjusted gross income, while those who live in New York, Maryland, D.C. and California deduct more than 5 percent.

Nearly one-third of the dollars generated by the SALT cap is borne by Californians and New Yorkers, both heavily Democratic states.

Using 2010 statistical data from the IRS, you find Californians who filed for state and local income tax deductions claimed deductions of $10,700 per return. Nevadans who filed for the state and local sales tax deduction claimed only $1,430 per return.

Calculated on a per capita basis, Californians claimed $2,116 in federal income tax deductions, while Nevadans claimed only $166 per person for sales tax deductions.

Tax fairness. Not hardly.

Editorial: End racial discrimination in all iterations

Let’s face it. Racial discrimination is racial discrimination. Calling it affirmative action is just swinging the pendulum the other way.

The Department of Justice recently joined a group of Asian-American students in their lawsuit against Harvard University that claims the school’s use of a subjective “personal rating” in determining admissions discriminates against Asian-Americans.

Attorney General Jeff Sessions said, “No American should be denied admission to school because of their race.”

Harvard officials put out a statement this past week saying they are “deeply disappointed” in Justice’s action, but concluded it was to be expected “given the highly irregular investigation the DOJ has engaged in thus far.” A Justice official said the investigation is still ongoing and might result in a separate lawsuit or other action.

The personal rating is supposed to be based on character and personalty traits, but the lawsuit claims an analysis of data found Asian-Americans had the highest academic and extracurricular ratings of any racial group, but the lowest score on the personal rating.

The Supreme Court upheld affirmative action policies in 2016 in a case out of the University of Texas at Austin. Justice Anthony Kennedy, who announced his retirement earlier this year, wrote the opinion, which said “considerable deference is owed to a university in defining those intangible characteristics, like student body diversity, that are central to its identity and educational mission.”

Judge Brett Kavanaugh, Trump’s nominee to replace Kennedy, once described a government program pushing diversity as a “naked racial-spoils system,” and he predicted in a newspaper column that the Supreme Court eventually would rule that “in the eyes of government, we are just one race.”

Earlier this year Trump’s Justice Department rescinded an Obama-era policy that encourages colleges and universities to promote diversity by considering racial quotas.

In his “Dream” speech Martin Luther King, Jr., did say, “I have a dream that one day this nation will rise up and live out the true meaning of its creed, ‘We hold these truths to be self-evident, that all men are created equal.’ I have a dream that one day on the red hills of Georgia, sons of former slaves and the sons of former slaveowners will be able to sit down together at the table of brotherhood. I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice. I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”

Racial discrimination is abhorrent in all its iterations.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

ObamaCare repeal will not result in people dying in the streets

The Congressional Budget Office is out today with its doom and gloom projections of what would happen if ObamaCare is repealed:

The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026.

B Premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026.

One problem with this is that it is based on a law proposed a year ago that would repeal mandates and penalties under the law, but would leave in place so-called insurance market reforms, such as barring insurers from varying premiums based on an individual’s health care costs, requiring coverage of pre-existing conditions and requiring coverage of things like maternity care.

The CBO itself noted: “The number of people without health insurance would be smaller if, in addition to the changes in H.R. 3762, the insurance market reforms mentioned above were also repealed. In that case, the increase in the number of uninsured people would be about 21 million in the year following the elimination of the Medicaid expansion and marketplace subsidies; that figure would rise to about 23 million in 2026.”

Another problem with the projection is that CBO projections about ObamaCare have been remarkably inaccurate.

For example, the CBO 2010 projection of ObamaCare enrollment in 2016 overshot the mark by 120 percent, according to Forbes, and the CBO projected the Medicaid expansion would be much smaller and less expensive than it really is.

Cato’s Michael Tanner notes that ObamaCare’s health insurance coverage expansion was mostly due to Medicaid expansion and not through subsidies for private insurance.

Having insurance doesn’t necessarily mean having health care.

“There is ample evidence to suggest that Medicaid provides little if any benefit,” Tanner writes. “One notable experiment in Oregon found no improvements in health outcomes from Medicaid enrollment. But regardless, repeal of ObamaCare is unlikely to have any short-term impact on Medicaid.”

Tanner concludes:

The only workable answer is to take otherwise uninsurable people out of the traditional insurance market altogether and subsidize their coverage separately.

This may be done through the expansion and subsidy of state high-risk pools, much the way states handle auto insurance for high-risk drivers. Or sick individuals may be taken out of the insurance system altogether, with their health care paid for through a reformed Medicaid program.

However these changes play out, it’s important to realize that no one is going to have their health insurance suddenly snatched away. Some people may have to get their health care in different ways, and some, who can afford it, may have to pay more.

But the predictions that replacing ObamaCare will mean uninsured Americans dropping dead in the street are worth little more than fake news.

Don’t buy the vision of people dying in the streets.

Ramirez cartoon

Guess who made the list of Forbes’ most powerful people in the whole damned world

The editors at Forbes magazine like to list things — the richest people in the world, the highest paid athletes, the highest paid celebrities, the best colleges, the most valuable sports teams.

This year there is a new entry onto the Forbes list of the world’s most powerful people — you might have met him, you might’ve seen him in public, you might know someone who works for him.

For the fourth year Putin is No. 1, but Trump is No. 2, while Obama lagged down at No. 48. Obama did not warrant a mention in the story about the list. That story does mention the 11 new names on the list — including the new prime minister of the UK and the vice-president elect.

Landing on the list at No. 72 out of 74 is Las Vegas’ own Sheldon Adelson, CEO of Las Vegas Sands and owner of the Las Vegas Review-Journal.

The squib on Adelson notes that the 83-year-old Las Vegan is worth $31.3 billion and is on a number of other Forbes lists, including wealthiest.

The piece relates: “Political heavyweight Sheldon Adelson pledged allegiance to Donald Trump in May 2016, but ultimately promised the Republican nominee only $5 million in financial support — peanuts by Adelson’s standards. (He spent more than $100 million trying to elect a Republican during the last election.) This year he focused on congressional candidates instead, doling out $40 million to Republicans across the country. Adelson is making bigger investments in his business, Las Vegas Sands, the largest casino company in America. In September 2016 Sands opened its new Paris-themed Macau resort — a $2.9 billion bet on the world’s largest gambling market, which has suffered in recent years as Chinese officials cracked down on corruption. Las Vegas Sands itself has been under scrutiny for its relationships with government officials in Macau. In April 2016, it agreed to pay a $9 million penalty to the SEC to settle charges that it violated the Foreign Corrupt Practices Act. One month earlier, Adelson named his son-in-law CFO of Las Vegas Sands. The son of immigrants from Lithuania and Wales, Adelson grew up sleeping on the floor of a Boston tenement and bought his first newspaper corner with a $200 loan from his uncle when he was 12.”

It makes no mention of his latest newspaper investment, which was considerably more than $200. That apparently had nothing to do with him qualifying as one of the most powerful people in the world.

Sheldon Adelson as portrayed on Forbes magazine website.

 

Net neutrality … or government confiscation of private property?

NY Times photo

The socialist editorialists at The New York Times never miss an opportunity to miss the point.

The Times is praising the U.S. Court of Appeals for the District of Columbia Circuit for upholding the Federal Communications Commission’s Obama-backed net neutrality rules that treat Internet providers like monopoly utilities. The 2-to-1 decision forbids Internet service providers to offer upgrades in delivery speeds for a price.

“The decision helps to ensure a level playing field for smaller- and start-up internet businesses because it precludes larger, established companies like Amazon and Netflix from simply paying broadband companies for faster delivery,” the editorial states. “Equally important, it ensures reliable service and choice for consumers by acknowledging that the internet, now a requisite of modern life, is akin to a utility, subject to regulation in the public interest.”

Isn’t there a public interest in food? So why do grocers charge more for beef than chicken? It’s all meat.

Forbes contributor Hal Singer labeled the decision economically illiterate.

“In an ideal regulatory regime, (1) the FCC would be compelled to apply cost-benefit analysis, showing that the benefits of the ban exceed the costs (and that no less-restrictive alternative generates even greater net benefits); and (2) a reviewing court would scrutinize the FCC’s cost-benefit analysis,” Singer writes. “Neither happened here.”

Just like the old Ma Bell had to reason to innovate, Internet providers will now have less incentive to improve services for anyone and everyone since there is no more profits to be netted.

Singer quotes a passage from the 69-page dissent of Judge Stephen Williams to make this point:

The Commission’s disparate treatment of two types of prioritization [paid peering versus paid prioritization] that appear economically indistinguishable suggests either that it is ambivalent about the ban itself or that it has not considered the economics of the various relevant classes of transactions. Or perhaps the Commission is drawn to its present stance because it enables it to revel in populist rhetorical flourishes without a serious risk of disrupting the net.

Democrats won’t stop until there is no private property left, and, once there is no private property, all other rights are in jeopardy.

As economist Milton Friedman once said:

Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government– in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.

ObamaCare proving to be unsustainable for insurers or insured

Tim Hartman cartoon

This is not exactly the best business model one could create — the businesses can’t sell the product at a profit and the customer can’t afford to buy it.

But when the facts hit your eyes like a big pizza pie, that’s ObamaCare.

The Wall Street Journal reports that UnitedHealth Group’s $425 million downgrade in forecasted earnings for 2015 was almost entirely due to losses on the ObamaCare exchanges. As a result the company is threatening to stop selling on the exchanges in 2017. It has already suspended advertising the product and stopped paying commissions for new policies. “It literally doesn’t want consumers to buy its products,” WSJ observed.

The company said the payouts for ObamaCare coverage are exceeding premium income and there is no turnaround in sight. This doubtlessly happening with other insurers as well.

Meanwhile, The New York Times is reporting that many people are deciding to forego health insurance because of the high deductibles under ObamaCare. In order to keep premiums low, insurers are charging outlandish deductibles before coverage kicks in.

The Times found one family of four that paid premiums of $1,200 a month with an annual deductible of $12,700. That means they would have to pay out of pocket $27,100 before seeing a dime of coverage.

The newspaper said people are dropping coverage and risking paying the penalty under ObamaCare. It is cheaper.

Aren’t there truth in labeling laws? Affordable Care Act indeed.

Forbes points out how few are really signing up for ObamaCare.

While the Congressional Budget Office had projected that 14 million enroll this year, it looks like the number will be about 9.5 million. Of those, only 2 million will be getting refundable tax credit subsidies. “That means that Obamacare is quickly turning into a Medicaid expansion,” the article explains. The single payer is the taxpayer.

Meanwhile, the co-ops set up under ObamaCare with taxpayer loans to provide competition and keep prices lower are going broke, including Nevada’s.

David Catron at The American Thinker offered this summation: “If you increase the cost of doing business for insurers, they’ll raise premiums and deductibles. If you make it impossible for them to make a profit selling coverage through exchanges, they’ll pull out. If you make coverage too expensive, people won’t buy it. If that coverage pays doctors less than it costs to treat a patient, doctors won’t treat them. If you pass a law that ignores such realities, it will be subjected to fact after brutal fact until it finally dies.”

The UnitedHealth Group is threatening to drop ObamaCare coverage. (AP photo)

 

 

Reporting on solar power plants — a week late and few dollars short

Ivanpah Solar Electric Generating System just across the California border. (AP file photo by John Locher)

The Las Vegas newspaper finally got around to printing an AP story about the fact that huge solar thermal power plant just across the border in California is not performing as advertised.

In fact, the Ivanpah Solar Electric Generating System  is producing half of its expected annual output, the story says, though others have put the output at 30 percent of rated capacity or even one quarter — and that was more than a week ago.

Though the story relates that the $2.2 billion project was built by BrightSource Energy with a $1.6 billion federal loan guarantee, it doesn’t bother to mention that the billionaire owners are not paying loan payments and are seeking a $539 million cash grant from the Treasury Department, as reported by The Wall Street Journal on Sept. 23.

Though it has been reported that the plant has applied to use more natural gas to get its boilers operating when the sun fails to do the job, the story details that operators had thought they would need to use natural gas an hour a day, but instead are using gas an average of 4½ hours a day. So how much of the plant’s half-capacity production is from solar and how much from gas? Perhaps that’s were the one quarter figure comes from.

The story also makes no mention of the thousands of birds that have been killed in 800-degree heat of the sun’s rays focused by thousands of mirrors on the plant’s 450-foot tall towers.

Harry Reid was once quoted in a BrightSource press release about the Ivanpah project: “I am very happy to see utility-scale solar projects like this one moving forward with strong Administration support, and I am hopeful that this project will serve as a cornerstone of the clean energy economy in the Southwestern U.S. I look forward to BrightSource and other solar companies putting more Nevadans to work by building major projects like this in Nevada very soon.”

In 2010 Harry held a fundraiser at BrightSource’s headquarters in California, shortly after the firm got the $1.6 billion loan guarantee.

A website called The Party Blog reported on some other cozy relationships. Brightsource reportedly paid $40,000 to R&R Partners, supporters of Reid, to work on stimulus funding matters. BrightSource also had a deal with Harvey Whittemore’s moribund Coyote Springs Land Company — Whittemore was tight with Harry until he went to prison for illegal contributions to Reid — for the lease of some land for further solar projects.

 

 

Solar plant producing less power than expected, so owners seek more tax money

BrightSource’s Ivanpah solar power plant.

As you drive south on I-15 and cross into California you can’t help but be mesmerized by the three shimmering towers that are the focus of an array of mirrors and squint to try to catch a glimpse of a smoking bird plummeting to earth, cooked in the 800-degree heat that also boils water and generates a bit of electricity.

But the plant may turn out to be more of a black hole for taxpayer and ratepayer money. After getting a $1.6 billion loan from the Energy Department to build the $2.2 billion plant its owners — NRG Energy, Google and BrightSource Energy — now are seeking a $536 million federal grant to help pay off that federal loan, according to an article in Forbes.

This because the sun has not cooperated with an adequate amount of sunshine. Instead of operating at 30 percent of its rated capacity as anticipated, it is operating at a mere 12 percent. Earlier this year the plant owners asked to be allowed to use more natural gas than had been planned due to this underperformance.

The plant has contracts with California utilities to sell power for 12 cents per kWh, about three times the cost of a natural gas plant, but even if the plant were operating at full capacity its construction cost would be 9 cents per kWh, according to the Forbes write. With operating costs the fact it is underproducing, this would appear to leave no room for something we like to call profit, with which I’m sure the plant’s billionaire owners are familiar, though risk is something to which they are averse.

The plant also uses something the desert doesn’t have much of: water. It sucks 32 million gallons of groundwater a year for its boilers, and that is more than can be naturally replenished. That is called water mining. Eventually, they will run out.

Now, how did this project get built on federal public land in the first place?

According to an Inspector General report, Steve Black, at the time a senior counselor to former Interior Secretary Ken Salazar, pressed scientists to soft pedal their estimates of the damage Ivanpah would cause to endangered species, such as the desert tortoise.

The Crescent Dunes power plant near Tonopah is scheduled to go online after the first of the year. It will use focused sun rays to melt salt instead of boil water. We shall see how it does. It was built with more than $700 million in federal loans.

 

 

Will this break those Tesla eggs in Nevada’s economic basket?

So, Tesla thinks it can cut the cost of lithium-ion batteries for its electric cars in half and make the cars affordable?

That’s why it plans to build a battery plant in Nevada and why Nevada offered $1.3 billion in tax give-aways.

According to Forbes, the Tesla hopes to cut the cost from $500 per kWh to $250, but a company has announced that it plans to produce batteries that cost $100 per kWh.

This the crux of the piece:

Musk is betting big on traditional lithium-ion technology. And he may be right. One risk, however, is that some other technology may achieve through engineering what he’s trying to do through sheer volume. And that’s where Sakti3 comes in with its new solid-state battery. Tesla’s batteries, which are made by Panasonic, currently cost around $500 a kilowatt-hour. Vishal Sapru, the energy and power systems research manager at research firm Frost & Sullivan, believes that Tesla at best can get that down to $250 by the end of the decade. Sakti3 claims that its batteries will reach $100 a kWh.

Nevada knows boom or bust. Will that $100 million road lead to a ghost town?