Академический Документы
Профессиональный Документы
Культура Документы
for 2015:
AmericanEncore1
@AmericanEncore
AmericanEncore.org
Introduction
Sometimes big ideas come from seemingly small irritations.
Blueprint for 2015: Setting the Stage for the Next Session was a big idea hatched
by American Encores Policy Director, Patrick Hedger. Throughout the course of
2013 and 2014, Americans watched as the Republican majority in the U.S. House of
Representatives passed common sense legislation that would go to the U.S. Senate
and die. Then-Majority Leader Harry Reid refused to put these bills to a vote on the
floor of the U.S. Senate, because he knew that they would either pass forcing the
President to veto the legislation or his vulnerable members would be casting votes
that could be used against them in the 2014 elections.
This process irritated Patrick, and thus the idea of putting forward a policy agenda that
could serve as a blueprint for how a majority should work was born. As you can see
from the length, its a tour de force.
This blueprint is a very useful tool for policy makers, Hill staff, think tanks, university
faculty, and students. But it is especially useful for every day hard working taxpayers
who want to better understand the problems we face, what policies are failing, and
what the solutions are.
For example, the first section covers one of the major concerns of most Americans:
jobs. It lays out the reasons this is still the primary problem in the minds of most
Americans, how the data has been gamed by Washington, and some common-sense
solutions to help job growth.
Next the blueprint tackles federal spending, debt, and deficits. Washington has a
spending problem. Its a problem that is seemingly so big no one really knows where
to start. One recommendation provided in this document is what is called the penny
plan. Its remarkable in its simplicity. In the first year, just freeze spending to the
previous years level no real dollar cuts. The next year, find one penny out of every
dollar spent at the federal level that could be cut. One percent.
And guess what? You only have to do that for two years to reach a balanced budget.
Given that most American families have had to cut 5%, 10%, or even more of their
previous years spending, it seems a small sacrifice for the federal government to
make.
Regulation plays a large role in American life and business. Frankly, there is too much
of it. Our blueprint lays out solid recommendations that would help streamline the
regulatory structure and make it more responsive to the modern era.
Remember the all of the above strategy to energy production promised by President
Obama? Well, it wasnt so much of all as what we prefer namely green energy
that necessarily will cause energy prices to skyrocket, to quote our President. With
Americans now enjoying some relief at the gas pump, the alternative energy subsidies
pushed by this Administration seem even more absurd than they did when Solyndra
was failing. We must get back to allowing the free market to determine what will
succeed and fail in the energy sector, not having the government pick winners and
losers.
And speaking of government injecting itself in a way that hurts every American, the
government takeover of health care has been terrible for doctors, patients, and
employers. After watching the failures of socialized health care in England and
Canada, you would be think the U.S. would be pushing toward more market-based
care. But, as a result of ObamaCare, we are headed in the direction of Canada. This
has a pinch of irony because if we become Canada, where will Canadians go to get
the care they need after being denied services? It is humorous, but actually deadly
true. Just ask the tens of thousands of Canadians who have come to the U.S. for lifesaving surgeries. We must replace ObamaCare, sooner rather than later.
Of course, what policy agenda would be complete with out a discussion about
taxes. Here is a sneak peek we think tax rates are too high, the tax code is an
incomprehensible maze, there are too many special interest tax loopholes, and wed
like to see a lower, flatter rate for everyone.
Our Blueprint for 2015: Setting the Stage for the Next Session is just the first of
what promises to be many other policy ideas and proposals that American Encore
promotes in the future.
Thanks for reading welcome to the discussion.
Sean Noble
President
American Encore
BLUEPRINT
for 2015:
Table of Contents
JOBS
FEDERAL SPENDING, DEBT & DEFICITS
1-8
9-15
REGULATION
17-24
ENERGY
25-39
41-51
TAXES
53-67
BLUEPRINT
for 2015:
JOBS
unemployed persons facing repeated rejection or
a total inability to find job openings even remotely
relevant to their experience and skills. Naturally, at
some point, such individuals would likely give up
looking for work. If this period of frustration lasts
longer than a single month, then these people who
tried so desperately to find a job before, only to fail,
are thus no longer unemployed in the eyes of the
BLS. The degree of such an issue is impossible to
precisely calculate. However, looking at trends in the
size of the raw labor force, that is the employed and
unemployed alike, can give us a general sense of
the extent of the problem of severe discouragement.
The labor force participation rate is the percentage
of Americans that are either employed or
unemployed and actively looking for a job
(meeting the BLSs four week criteria). The official
unemployment rate can actually be quickly derived
from the labor force participation rate. The BLS
measures both the labor force participation rate and
the employment to population ratio, which is simply
the percentage of all Americans that have a job.
The employment to population ratio over the labor
force participation rate reveals the employment
rate, and the difference from 100 percent is the
unemployment rate. For example, in September
2014, the employment to population ratio was 59
percent. In other words, 59 percent of all Americans
BLUEPRINT for 2015: Setting the Stage for the Next Session | JOBS 1
JOBS
2 JOBS | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | JOBS 3
JOBS
JOBS
56.1%
-4.8%
-0.5%
16 to 24
25 to 54
55+
4 JOBS | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | JOBS 5
JOBS
Recommendation:
JOBS
6 JOBS | BLUEPRINT for 2015: Setting the Stage for the Next Session
11
BLUEPRINT for 2015: Setting the Stage for the Next Session | JOBS 7
JOBS
JOBS
8 JOBS | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT
for 2015:
FEDERAL
SPENDING,
DEBT & DEFICITS
OMB Historical Table 7.1- Federal Debt at the End of the Year: 19402019. http://www.whitehouse.gov/omb/budget/Historicals
BLUEPRINT for 2015: Setting the Stage for the Next Session | FEDERAL SPENDING, DEBT & DEFICITS 9
Recommendation:
Kotlikoff, Laurence, Assessing Fiscal Sustainability, Mercatus Center, December 12, 2013. http://mercatus.org/sites/
default/files/Kotlikoff_FiscalSustainability_v2.pdf
10 FEDERAL SPENDING, DEBT & DEFICITS | BLUEPRINT for 2015: Setting the Stage for the Next Session
T H E P E NNY PLA N
What will it take to bring balance back to
the budget? The severity of the federal
governments budget situation lends naturally
to the idea that balancing the budget would
require severe cuts which would eliminate
the services and protections expected from
government. So how much would have to be
cut?
$5.5
4.903
$5.0
3.774
4.011
4.197 4.391
3.523
$3.5
3.305
$3.0
$2.5
5.162
4.649
$4.5
$4.0
5.920
5.701
3.475
3.621
3.764
3.927
4.099
4.284
4.486
3.032
$2.0
2014
Revenue
4.696
4.918
CBO August 2014 Update to the Budget and Economic Outlook: 2014 to 2024.
http://www.cbo.gov/sites/default/files/45653-OutlookUpdate_2014_Aug.pdf
OMB Historical Table 1.2 Summary of Receipts, Outlays, and
Surpluses or Deficits (-) as Percentages of GDP: 19302019
BLUEPRINT for 2015: Setting the Stage for the Next Session | FEDERAL SPENDING, DEBT & DEFICITS 11
Recommendation:
$5.0
$4.5
3.621
$4.0
$3.5
$3.0
3.488 3.453
3.032
3.764
3.475
3.305 3.419
3.592
3.754
3.927 4.099
3.917
4.284
4.084 4.255
4.486
4.433
$2.5
$2.0
2014 2015 2016
2017 2018
12 FEDERAL SPENDING, DEBT & DEFICITS | BLUEPRINT for 2015: Setting the Stage for the Next Session
T H E F U LL FA I T H A ND C R E D IT ACT
Prior to the last couple of years, it would
probably have surprised most Americans that
the federal government has a self-imposed
credit limit, better known as the debt ceiling.
That is probably because, historically, almost
every time the government gets close to hitting
its borrowing limit, Congress simply raises it
with little or no debate. In fact, the debt ceiling
has been raised or suspended around 80 times
since the 1960s.3 That does not mean that such a
mechanism is completely useless.
Of late, the debt ceiling has helped concerned
members of Congress raise the profile of
Americas debt problem. It has also served as a
tool to break the stubborn ambivalence of some
of our elected officials on the growing debt
problem and forced them to the negotiating
table in order to figure out ways to reduce
government spending. With sweeping changes
needed to fix Americas long-term finances, the
debt ceiling debate serves as an opening for
advancing those critical reforms. That being said,
prolonged debate carries a substantial risk.
Under current policy, failing to raise the
debt ceiling in time would result in the US
government defaulting on its obligations to
lenders, an event that would devastate both
the American and global economy because US
debt is largely seen as a safe haven for assets
at present time. It would also undermine the
value of the American dollar, which essentially
only derives value from the credit of the US
government. The details of the extent of the
economic cataclysm go on and on.
The pertinent point is that while it is important
to retain the debt ceiling as a genesis point
for important debates about Americas fiscal
policy, defaulting on the national debt is not an
option. The Full Faith and Credit act ensures that
3
BLUEPRINT for 2015: Setting the Stage for the Next Session | FEDERAL SPENDING, DEBT & DEFICITS 13
Recommendation:
CBO August 2014 Update to the Budget and Economic Outlook: 2014 to 2024.
Brass, Clinton T., Shutdown of the Federal Government:
Causes, Processes, and Effects, CRS Report for Congress,
September 8, 2014. http://fas.org/sgp/crs/misc/RL34680.
pdf
14 FEDERAL SPENDING, DEBT & DEFICITS | BLUEPRINT for 2015: Setting the Stage for the Next Session
CBO August 2014 Update to the Budget and Economic Outlook: 2014 to 2024.
Levit, Mindy R., Clinton T. Brass, Thomas J. Nicola, and
Dawn Nuschler, Reaching the Debt Limit: Background and
Potential Effects on Government Operations, CRS Report for
Congress, November 21, 2013. http://fas.org/sgp/crs/misc/
R41633.pdf
8
9
BLUEPRINT for 2015: Setting the Stage for the Next Session | FEDERAL SPENDING, DEBT & DEFICITS 15
BLUEPRINT
for 2015:
REGULATION
than an Atlas Shrugged plus a War and Peace. At the
end of 2013, it was over 79,000 pages long.1 Once
proposed rules go into effect, they are filed into
the Code of Federal Regulations. That document,
currently, is about 175,000 pages long. Imagine a
book as thick as a two-story house is tall and youre
getting close. 2
It is hard to get an exact figure on how many unique
rules and regulations there are in a document that
size. However, a recent effort by the Mercatus
Center at George Mason University estimates that
at the end of 2012, the Code of Federal Regulations
contained at least 1,040,940 different restrictions.3
While all these rules arent laws in the traditional
sense of being passed by both chambers of
Congress and then signed by the president,
regulations carry the full weight of laws. Violating
federal regulations can result in enormous fines
and even imprisonment. Thus regulations greatly
alter behavior and economic decisions and greatly
1
2
BLUEPRINT for 2015: Setting the Stage for the Next Session | REGULATION 17
REGULATION
4
5
18 REGULATION | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | REGULATION 19
REGULATION
REGULATION
Recommendation:
T H E RE I NS A CT
20 REGULATION | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | REGULATION 21
REGULATION
REGULATION
Recommendation:
22 REGULATION | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | REGULATION 23
REGULATION
REGULATION
Recommendation:
24 REGULATION | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT
for 2015:
ENERGY
This set a dangerous precedent for government
and expectations from consumers leading into
major changes in the energy market and political
climate. Beginning in the 1950s, the US became
a net-importer of energy. Two decades later, the
governments market meddling came to a head that
has yet to be entirely reversed.
Domestic price controls imposed to keep prices
low in the wake of rampant inflation across the
economy lead to fuel shortages in the 1970s. Prices
subsequently skyrocketed, exacerbated by shocks
to global supply by the Organization of Petroleum
Exporting Countries (OPEC) Embargo and the Iranian
Revolution.
With its own policies rapidly failing, government
attempted a massive re-direction of the American
energy market. The peak-oil scapegoat emerged.
With the pain of fuel shortages and high prices fresh,
Washington peddled the theory fossil fuels were
running out. To this day, policy still reflects this view.
Yet, are we actually running out of fossil fuel?
Not quite.
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 25
ENERGY
ity
st
co
g ion
sin ct
ea tra
cr f ex
o
l
ua
rq
tte rce
Be sou
re
In
Low Concentrated
Difficult Extraction/access
Chart Source: Gene Whitney, Carl E. Behrens, Carol Glover, U.S. Fossil Fuel
Resources: Terminology, Reporting, and Summary, CRS Report for Congress,
Nov. 30, 2010. http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.
view&FileStore_id=04212e22-c1b3-41f2-b0ba-0da5eaead952
26 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
Historical Production:
Reserves:
Unproved Technically
Recoverable Resources:
2+ Trillion Barrels
Chart Sources: Historical production: EIA U.S. Field Production of Crude Oil, March 15, 2013.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=A
Reserves and Unproved TRR: EIA Annual Energy Review, Table 4.1, September 27, 2012. http://www.eia.gov/totalenergy/data/annual/
showtext.cfm?t=ptb0401
Discovered and unproved sub-economic resources: Birdwell, J.E., Mercier, T.J., Johnson, R.C., and Brownfield, M.E., 2013, In-place oil shale
resources examined by grade in the major basins of the Green River Formation, Colorado, Utah, and Wyoming: U.S. Geological Survey
Fact Sheet 20123145, 4 p., available at http://pubs.usgs.gov/fs/2012/3145/.
5
6
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 27
ENERGY
ENERGY
28 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
Brad Plumer, U.S. oil exports have been banned for 40 years.
Is it time for that to change?, The Washington Post, January
8, 2014. http://www.washingtonpost.com/blogs/wonkblog/
wp/2014/01/08/u-s-oil-exports-have-been-banned-for-40years-is-it-time-for-that-to-change/
Robert P. Murphy, Oil Export Ban is Bad Economics, IER, August 15, 2014. http://instituteforenergyresearch.org/analysis/
oil-export-ban-bad-economics/
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 29
ENERGY
Recommendation:
ENERGY
30 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
11
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 31
ENERGY
Recommendation:
ENERGY
32 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 33
ENERGY
ENERGY
34 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 35
ENERGY
ENERGY
36 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
P ER M I T TI NG R E FO R M
The Sixth Amendment to the Constitution
guarantees a number of rights for those accused
of a crime when it comes to the terms of their
trial. One of the guarantees, among the right
of the trial to be public, before a jury of peers,
and with the assistance of legal counsel, is
the explicit right to a speedy trial. Judicial
precedent explains that a speedy trial is an
important safeguard to prevent undue and
oppressive incarceration prior to trial.44 Like
the rest of the Bill of Rights, this provision is to
prevent powers in government from stifling
freedom in pursuit of their own agenda. Thus
the Constitution grants the right of a speedy
trial even to those accused of the most heinous
crimes imaginable. Yet, of late, it seems that
this principle of expeditious due process of law
has been lost on the Obama administration,
especially when it comes to the governments
dealings with perfectly lawful actors in the
energy industry.
Federal law requires that most of the more
crucial activities in the energy resource
production and trade industry receive the
blessings of the government before they
commence. Examples are things like oil and gas
drilling permits and leases for federal lands and
export licenses for liquefied natural gas (LNG).
Requiring some initial level of oversight and
review of these projects makes sense given the
inherent dangers. This is an appropriate function
of government. What is not appropriate, nor
makes sense, is how long various permitting
processes are taking under the Obama
administration. The most publicized example of
this is the ongoing indecision on the Keystone
XL oil pipeline. The proposed project of the
TransCanada Corporation to deliver reliable
44 Congressional Research Service Annotated Constitution,
Accessed at: http://www.law.cornell.edu/anncon/html/amdt6frag2_user.html
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 37
ENERGY
Recommendation:
ENERGY
38 ENERGY | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | ENERGY 39
ENERGY
BLUEPRINT
for 2015:
BLUEPRINT for 2015: Setting the Stage for the Next Session | HEALTHCARE & OBAMACARE 41
Coverage
As the CBO report on health care noted, prior
to the implementation of the Affordable Care
Act, over 40 million Americans were without
some form of health care coverage. Without
question, that is a lot of people without health
care coverage and an issue that most certainly
deserved the attention of policy makers. Yet
with a narrow focus on the tens of millions
without insurance, it is easy to forget that the
US population is over 300 million, which means
that hundreds of millions of people already had
coverage in the pre-ACA system. According
to the Census, in 2012, two years prior to the
implementation of the bulk of the ACA, roughly
85 percent of the American population had
some form of health care coverage.4 Whats
4
42 HEALTHCARE & OBAMACARE | BLUEPRINT for 2015: Setting the Stage for the Next Session
Prescription drugs
Rehabilitative and habilitative services and
devices
Preventive and wellness services and chronic
disease management
Pediatric services, including oral and vision
care
Plans sold in the individual or small group
markets that did not cover one or more of
these EHBs became illegal under ObamaCare.
Some of these EHBs reveal why so many
plans were cancelled. It doesnt make much
sense for adults without children or with grown
children to have pediatric oral and vision care.
Or, why would any single young male request
maternity and newborn care? Indeed, per a
2011 HHS report, 62 percent of individuals and
families that purchased their own health care
coverage did not choose to purchase maternity
coverage, 34 percent forewent substance
abuse coverage, and 18 percent passed on
mental health coverage.6 ObamaCare not only
deprived these people of their existing coverage,
it also eliminated their freedom to not have to
purchase coverage for health care services they
will likely never need.
The other main driver behind cancellations is
ObamaCares new standards for actuarial value.
According to Americas Health Insurance Plans
(AHIP), the industry trade group representing the
health insurance industry, the actuarial value of
an insurance plan is defined as follows:7
Actuarial value is a summary measure of
a health insurance plans benefit levels
measuring the relative percentage paid by
a health benefits plan and its enrollees for a
standard/average population. For example, a
plan with an actuarial value of 70% means that
the insurance plan would pay 70% of covered
health care expenseswhile the enrollee
6
ASPE Issue Brief, Essential Health Benefits: Individual Market Coverage Department of Health and Human
Services, December 16, 2011. http://aspe.hhs.gov/health/
reports/2011/IndividualMarket/ib.shtml
AHIP Brief of Essential Benefits, Accessed here: http://www.
ahip.org/Issues/Essential-Benefits.aspx
BLUEPRINT for 2015: Setting the Stage for the Next Session | HEALTHCARE & OBAMACARE 43
would pay 30% out-of-pocket in the form of copayments, co-insurance, and deductibles.
One of the chief complaints about the Affordable
Care Act is the fact that it forces Americans
to buy health insurance under the terms of
the individual mandate. Many Americans,
mostly young and healthy, have expressed
their frustration with such a provision given
the fact they largely have no need for the kind
of comprehensive coverage that ObamaCare
mandates. These people have, in the past,
either gone without insurance entirely or
only purchased catastrophic plans designed
to protect the otherwise healthy from the
unimaginable. These catastrophic plans thus
have a very low actuarial value.
The Affordable Care Act sets completely new
standards for what constitutes an acceptable
insurance plan based on actuarial value. The
minimum actuarial value allowed under the law
is about 60 percent.8 Any plans that do not reach
this actuarial value threshold face cancellation.
According to the American Action Forum,
over half of the plans offered on the individual
health care insurance market did not meet this
standard in 2013.9
Thus, to be brief, despite the distinction between
the EHBs and actuarial value regulations, the
primary reason that at least 4.7 million people
had their insurance cancelled is because
ObamaCare eliminated categories of insurance
coverage that people voluntarily purchased.
We say at least because the actual number of
cancellations that were sent out is undoubtedly
much higher and still climbing.
Only 32 states were actively tracking the number
of cancellations in their states. Major population
centers like Texas, Ohio, and Virginia are
included in the 18 states that did not precisely
8
9
Ibid.
Sam Cappellanti, Health Insurance Cancellation Notices:
Coming Soon to a Mailbox Near You?, American Action
Forum, October 22, 2013. http://americanactionforum.org/
weekly-checkup/health-insurance-cancellation-noticescoming-soon-to-a-mailbox-near-you
44 HEALTHCARE & OBAMACARE | BLUEPRINT for 2015: Setting the Stage for the Next Session
Cost
The main promise of the Affordable Care Act is
right in its name. Its also where the law seems to
fall flat on its own face the hardest.
At the outset, the fundamental problem with
ObamaCare is that it really is not a health care
reform bill. It is a health care insurance reform bill.
None of the major provisions of the law, from the
exchanges, to the subsidies, to the mandates, to
the regulations on what constitutes a health care
plan, actually go after the root of the problem.
The Affordable Care Act really doesnt attempt to
make the cost of health care administration and
delivery more affordable. Instead it works entirely
around trying to hide or divert the cost of health
insurance from the policyholder. Again, AHIP does
an excellent job at briefly explaining the issue:18
The ACA provides premium and costsharingsubsidiesto help low- and moderateincome Americans purchase insurance. Subsidies
will clearly help many families pay for health
care coverage, but subsidies will do nothing to
bring down the actual cost of that coverage.
Suggesting that they will is comparable to saying
that Pell Grants reduce the cost of college tuition.
Pell Grants enormously help families afford the
high cost of education, but they do not lower
tuition levels. Meanwhile, tuition prices soar.
Importantly,according to the CBO, millions of
people are not eligible for subsidies and the
amount of the subsidy declines significantly as
incomes rise. The CBO states that more than 40
percent of people purchasing coverage in the
individual market today would be ineligible for
premium subsidies. Individuals with incomes
between 250-300 percent of the federal poverty
line (FPL) would receive subsidies sufficient
to cover 42 percent of the cost of the second
lowest-cost silver plan while those with
incomes between 350-400 percent of the FPL
would receive subsidies sufficient to cover just
13 percent of the premium. Moreover, due to
how the subsidies are indexed,CBO statesthat
18 AHIP, Time for Affordability, Accessed here: http://ahip.org/
Issues/January-1-2014-Provisions.aspx
BLUEPRINT for 2015: Setting the Stage for the Next Session | HEALTHCARE & OBAMACARE 45
Average Monthly Premium Costs Before and After the Affordable Care Act
$800
$741
$741
$700
$603
$600
$539
$500
$258
$300
$200
$292
$292
$400
$178
$258
$216
$168
$145
$100
$0
Women
Age 23
Men
Age 23
Women
Age 30
Men
Age 30
Women
Age 63
Men
Age 63
2013
2014
Outcomes
The Affordable Care Acts problems with
coverage and costs are actually intertwined.
The minimum benefits and value that the
Affordable Care Act dictates for plans offered
in the exchanges are primarily responsible for
the upward pressure on premiums.22 These are
costs that insurance customers and companies
alike cannot avoid, as law mandates them to
be incurred. Thus the insurance companies, in
the competitive exchange model that the law
sets them up in, must look elsewhere to reduce
costs.
The volume of complaints from ObamaCare
exchange-based insurance plan customers has
been steadily growing, as patients have found
it difficult to find health care providers of their
preference that actually accept their plans. Its
a policy conundrum. Narrow networks help
contain health care costs. If state or federal
21 Kevin Coleman, Without Subsidies Women & Men, Old &
Young Average Higher Monthly Premiums with Obamacare,
HealthPocket, October 29, 2014. http://www.healthpocket.
com/health care-research/infostat/obamacare-2014-premiums-higher-than-pre-reform-market
22 AHIP Brief of Essential Benefits
46 HEALTHCARE & OBAMACARE | BLUEPRINT for 2015: Setting the Stage for the Next Session
Brett Norman, Obamacare: Anger over narrow networks, Politico, July 22, 2014. http://www.politico.com/
story/2014/07/obamacare-health-care-networks-premiums-109195.html
24 John R. Graham, Research Suggests Los Angeles Has
No Cardiologists in Obamacare Networks; Chicago
No Diagnostic Radiologists, National Center for Policy
Analysis, September 26, 2014. http://healthblog.ncpa.
org/research-suggests-los-angeles-has-no-cardiologists-in-obamacare-networks-chicago-no-diagnostic-radiologists/
25 Barbara Boland, Over 214,000 Doctors Opt Out of
Obamacare Exchanges, CNS News, October 28, 2014. http://
cnsnews.com/mrctv-blog/barbara-boland/over-214000doctors-opt-out-obamacare-exchanges
BLUEPRINT for 2015: Setting the Stage for the Next Session | HEALTHCARE & OBAMACARE 47
Less
than 4
weeks
2 months
or more
Country
Less than
4 weeks
2 months
or more
Australia
54%
28%
Australia
53%
18%
Canada
41%
41%
Canada
35%
25%
France
53%
28%
France
46%
7%
Germany
83%
7%
Germany
78%
0%
Netherlands
70%
16%
Netherlands
59%
5%
New Zealand
61%
22%
New Zealand
54%
8%
Norway
50%
34%
Norway
44%
21%
Sweden
45%
31%
Sweden
34%
22%
Switzerland
82%
5%
Switzerland
55%
7%
United Kingdom
72%
19%
United Kingdom
59%
21%
United States
80%
9%
United States
68%
7%
48 HEALTHCARE & OBAMACARE | BLUEPRINT for 2015: Setting the Stage for the Next Session
BLUEPRINT for 2015: Setting the Stage for the Next Session | HEALTHCARE & OBAMACARE 49
Recommendation:
50 HEALTHCARE & OBAMACARE | BLUEPRINT for 2015: Setting the Stage for the Next Session
31
32 Phil Galewitzand Lexie Verdon, FAQ: Selling Health Insurance Across State Lines, Kaiser Health News, January 25,
2011. http://kaiserhealthnews.org/news/selling-insuranceacross-state-lines/
BLUEPRINT for 2015: Setting the Stage for the Next Session | HEALTHCARE & OBAMACARE 51
Recommendation:
BLUEPRINT
for 2015:
TAXES
enforces these laws. Finally, the judicial branch deals
with adjudicating violations of and discrepancies
with the law. In addition, the Constitution authorizes
the creation of a military to protect the nation from
external threats. Of course, the US government
has grown into a massive entity that now certainly
does things that are well outside of these roles. It
is hard to see how building interstate highways, for
example, fits in with the creation, enforcement, and
adjudication of law. Regardless, most are happy that
the government does do things from building and
maintaining the highways to outer space exploration.
Many are also unhappy with a lot of the other things
government does, such as the ridiculous examples
of federal spending that often appear in the news
from time to time. Regardless, the Constitution allots
specific roles for the government to serve and the
people have instituted others. Agree or disagree with
the various examples of the latter, at the very least
the specifically enumerated powers of government,
the mechanisms through which Americans have
agreed to stabilize their society, must be funded
somehow. This makes taxation, to some extent,
necessary. That extent, however, is entirely up for
debate.
According to Joseph Minarik, formerly the chief
economist at the Office of Management and
BLUEPRINT for 2015: Setting the Stage for the Next Session | TAXES 53
TAXES
Simplicity
1
2
4
5
Joseph J. Minarik, Taxation, A Preface, The Library of Economics and Liberty. http://www.econlib.org/library/Enc1/
TaxationAPreface.htm
Jennifer Harper, 4 Million Words: the U.S. Tax Code is seven
times the length of War and Peace, The Washington
Times, April 15, 2014. http://www.washingtontimes.com/
news/2014/apr/15/4-million-words-us-tax-code-seventimes-length-war/
2014: How Many Pages in the U.S. Tax Code?, Townhall,
April 13, 2014. http://finance.townhall.com/columnists/
politicalcalculations/2014/04/13/2014-how-many-pages-in-the-us-tax-code-n1823832
Jennifer Harper, 4 Million Words.
TownHall, April 13, 2014.
54 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
Revenue Sufficiency
Evaluating revenue sufficiency is difficult, given
that the federal budget has run at a deficit all
but 12 years since World War II. On the surface,
clearly, revenue to the federal government
has been insufficient to cover the money the
government distributes to its various offices and
programs. That being said, the primary drivers
of federal spending are well outside of the
previously discussed role of the government as
an agent of enforcing rule of law and protection
from outside disruptors.
Federal spending in 2014 totaled $3.65 trillion.
Of that, roughly $1.9 trillion, or just over half, was
spent on the big three entitlement programs,
Social Security, Medicare, and Medicaid, plus
net interest on the debt owed by the federal
government. In 2014, the government collected
just over $3 trillion in various taxes and other
revenue generating programs. Personal income
taxes, corporate taxes, excise taxes, and
other functions collected $1.98 trillion.9 This
excludes revenue specific to programs like
Social Security and Medicare. After excluding
spending on the entitlements and net interest,
the federal government spent about $1.75 trillion.
Technically, the tax code brought in enough
8
9
Efficiency
The reason why the tax code scores so poorly
on simplicity is the same reason why it scores
poorly on efficiency. Tax efficiency is defined as
how little tax policy drives decision making by
actors in the economy. Unfortunately, Congress
has been unabashed in its use of taxes to
engineer the economy throughout history.
Washington has been able to both encourage
and discourage various activities and behavior
simply by raising taxes on that particular activity
or allowing for people to deduct expenses they
incur from behaving a certain way from their
owed taxes. A perfect example of this is the
exclusion for employer-provided health care.
Employers can compensate their employees by
purchasing health insurance for them without
either the employer or the employee facing
taxes on that compensation.
These forms of engineering the economy
through the tax code are called tax
expenditures. They are called this because tax
expenditures are technically a way for Congress
to direct funds without actually appropriating
money already collected. Tax expenditures are
the primary cause of the tax codes complexity.
The number of tax expenditures in the code
has been growing steadily over the last three
decades. Tax expenditures have made the tax
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TAXES
TAXES
Fairness
Unlike the other three criteria, fairness is much
more difficult to define and there exists deep
disagreement over what exactly fairness in the
tax code looks like.
People expect others in the society to pay their
fair share for the benefits of government that
are enjoyed universally and equally. It is hard to
say, for example, that someone with $1 million
dollars benefits any more or less than someone
with $10,000 dollars from military protection or
law enforcement.
10 William McBride, A Brief History of Tax Expenditures, The
Tax Foundation, August 22, 2013. http://taxfoundation.org/
article/brief-history-tax-expenditures
56 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
40%
35%
30%
25%
15%
21.4%
19.6%
20%
20.9%
16.3%
11.1%
21.9%
15.0%
11.0% 11.2%
10.8%
10%
5%
0%
2.8%
Bottom 50%
50% to 25%
25% to 10%
10% to 5%
5% to 1%
Top 1%
BLUEPRINT for 2015: Setting the Stage for the Next Session | TAXES 57
TAXES
TAXES
58 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
TAXES
Recommendation:
R ED U CE T HE CO R PO RAT E TAX
Recently, many corporations with household
name recognition have been gaining notoriety
for reasons other than the products and services
they offer. Corporations such as Apple and
Burger King are being criticized and called
unpatriotic for engaging in practices designed
to reduce their own corporate tax liability. Apple
has been accused of shielding liquid assets in
offshore accounts to avoid taxes on repatriating,
or returning, those funds the United States while
Burger King is in the process of simply moving
its headquarters out of the country through
a process called an inversion. Why is this
happening? Are these companies really being
unpatriotic?
15 Ibid.
BLUEPRINT for 2015: Setting the Stage for the Next Session | TAXES 59
TAXES
60 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
2.
3.
4.
1980
1983
1986
1989
1992
% new firms
1995
1998
2001
2004
2007
2010
% closed firms
BLUEPRINT for 2015: Setting the Stage for the Next Session | TAXES 61
TAXES
TAXES
62 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
TAXES
Recommendation:
R EP EA L T HE D E AT H TA X
Most are familiar with some variation of the
phrase, There are only two certainties in
life: death and taxes. (Some feel that such
a grouping is an insult to death.) However
most Americans are probably not aware that
a combination of the two exists. The Estate
Tax, also known as the death tax, is literally a
tax owed to the government on estate or net
assets upon death. More explicitly, the death
tax is a percentage of the value of everything
owned, tangible and intangible, above a certain
threshold that is owed when a person dies.
Per theIRS itself, It consists of an accounting
ofeverythingyou own or have certain interests
in at the date of death.18
Right away, its hard not to get a sense that there
is something deeply flawed with such a policy,
even if its just on moral grounds alone. By its
very nature, there are a few fairly reprehensible
givens with such a policy. First off, where every
other tax on the books is prompted by a gain,
such as new income or a new purchase, the
death tax is the only one triggered by not only
a loss, but by tragedy itself. Further, because
the person who the death tax is being levied on
is, of course, dead, it falls on their survivors to
orchestrate all of the necessary procedures for
compliance with the tax.
Whether it comes by natural causes, sickness,
an accident, or something unspeakably worse,
the death of a loved one is something that
brings about unimaginable pain and stress.
Putting aside all other differences, there should
be broad agreement that the last thing anyone
needs following the loss of a loved one is
endless meetings with lawyers, accountants,
and IRS agents to figure out how large of check
needs to be cut to Uncle Sam.
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64 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
21 Seattle Times Editorial, Death tax imposes cost on family business stability, The Seattle Times, August 14, 2014.
http://seattletimes.com/html/editorials/2024313850_estatetaxeditxml.html
22 Federal Estate and Gift Tax Rates, Exemptions, and Exclusions, 1916-2014, The Tax Foundation, Accessed here: http://
taxfoundation.org/article/federal-estate-and-gift-tax-ratesexemptions-and-exclusions-1916-2014
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TAXES
TAXES
66 TAXES | BLUEPRINT for 2015: Setting the Stage for the Next Session
TAXES
Recommendation:
R EP EA L T HE A M T
One of the big problems with the tax code is that
many wealthy individuals are able to utilize tax
expenditures to end up having very little, if any,
tax liability. This has been a problem for decades.
At one point, in the mid-20th Century, the top tax
rate in the United States was 90 percent, if you
can believe that. The only reason the economy
didnt implode is because 1. it applied to very
few people and 2. those people it did apply to
exploited tax expenditure programs to escape
liability. So unfairness in the tax code, especially
in the progressive sense, has been a problem for
decades. Congress sought to correct this issue
in 1969 when it created the Alternative Minimum
Tax (AMT).28
The problem with the AMT however, is that in an
attempt to make the tax code fairer, it sacrificed
its simplicity. Ultimately, both were still lost.
The AMT is essentially a separate income tax
system, requiring individuals to calculate their
owed taxes under the normal income tax rules
and then again under the AMTs rules. The AMT
simply allows for fewer of the usual deductions.
Once your liability is calculated under both
systems, you then owe the higher of the two.
This essentially doubles the complexity of an
already tortuous system.
BLUEPRINT for 2015: Setting the Stage for the Next Session | TAXES 67
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