Yesterday’s Washington Post has an in depth—and very depressing—piece about Medicare fraud. The piece focuses on scammers taking advantage of Medicare’s payment systems to buy unnecessary motorized wheelchairs and scooters for Medicare enrollees and stick American taxpayers with the bill.
Created in 2000 as part of the Community Renewal Tax Relief Act, the federal New Markets Tax Credit (NMTC) program provides tax credits to “spur new or increased investments into operating businesses and real estate projects in low-income areas.” Two new reports, one from the Government Accountability Office (GAO) and the secondfrom Senator Tom Coburn’s office, question the effectivenes
News outlets are running stories about the rise in corporate tax inversions. Inversions are financial reorganizations that place U.S. firms under foreign parent corporations. They are one of the many ways that companies are responding to America’s uniquely high corporate tax rate.
The Export-Import Bank of the United States is a government-run export credit agency, which provides access to favorable financing for the foreign customers of some U.S. companies. For several months, Washington has been embroiled in a debate over whether to reauthorize the Bank’s charter, which will otherwise expire on September 30. While Republican House leadership remains publicly committed to shutting down the Bank, a bipartisan group of eight senators introduced reauthorization legislation last night, setting the stage for a post-August recess showdown.
President Obama is not doing enough to rein in spending and deficits. He says the deficit has been cut in half since he came to office. But that is a cut from the giant 2009 figure of $1.4 trillion, which was so high partly because of his costly stimulus bill.
Today, the recession is long over, but the government will still run a $583 billion deficit this year, every dollar of which is an added burden on future taxpayers.
Rail advocates often call me “anti-transit,” probably because it is easier to call people names than to answer rational arguments. I’ve always responded that I’m just against wasteful transit. But looking at the finances and ridership of transit systems around the country, it’s hard not to conclude that all government transit is wasteful transit.
Numerous responses to my article in the New York Times yesterday about corporate tax inversions indicated a lack of understanding. Related articles by Levin, Johnston, and Huang similarly suggested that further enlightenment is needed.
The following chart should simplify the issue for NYT readers, columnists, and policymakers.
The corporate inversion trend tells us that global tax competition is intense and that U.S. tax reform is long overdue. Our combined federal-state corporate tax rate of 40 percent is far higher than the rates of our trading partners. Inversions are a bid by companies to create self-help tax reform while Congress sits on its hands.
Most politicians are optimistic about the government’s ability to intervene and solve problems. That’s one reason why they run for office. Neocons, for example, have excessive faith that foreign intervention can fix the world, while liberals embrace the misguided idea that subsidies and regulations can boost the economy.