Monday, June 15, 2015

The Government's Cruel Tax on the Dead

President Ronald Reagan famously said the government's view of the economy could be summed up in a few words.  "If it moves, tax it," he laughed.  But he could have added, Washington's insatiable appetite for Americans' money includes taxing things that don't budge, such as dead people.

Your government, not content with emptying your pockets while you are still breathing, uses its greedy hands to seize a large portion of your life's savings and other property after the undertaker has lowered your corpse into the earth.

Appropriately, this form of confiscation is known as the death tax. However, the government prefers to euphemistically refer to it as an estate tax because it promotes the idea that the levy applies only to grand mansions and obscene fortunes.

For that reason, many Americans never worry about this odious tax. They erroneously assume it only impacts those rich fat cats Democrats love to demagogue.  The dirty little secret is that the death tax's grisly tentacles touch far more farmers, ranchers and small business owners than the wealthy.

First, a history lesson is in order.  A form of the death tax was collected as far back as 1797 on bequests left by individuals.  It ranged from 25 cents to $100, depending on the size of the inheritance.  The tax was repealed in 1802 and reinstated and abolished over the decades.

The modern death tax was enacted in 1916.  Currently, individuals with estates worth more than $5.43 million, or couples with $10.87 million in assets, are socked with a 40 percent tax. Additionally, 19 states, plus the District of Columbia, double dip, assessing their own death tax.

Democrats claim this is some form of social justice.  Nonsense.  This is nothing more than a way to punish the successful, while stoking animosity and envy toward the wealthy.  No amount of justification for the tax, however, changes the reality that most super rich avoid paying the levy.

Those with means use a range of legal gambits to circumvent the death tax.  Armed with accountants, lawyers and financial advisers, they use insurance policies, gift transfers, complex trusts and tax free investments to enable them to pass on their wealth to their families and charities.

That's the irony of the death tax.  Democrat propaganda is aimed at convincing the uniformed and their sheep-like followers that anyone opposed to the tax is looking out for the evil rich, not the middle class. The facts, of course, offer a totally different picture.  

It is hard-working entrepreneurs, dedicated farmers, risk-taking small business owners and dogged ranchers who are hit the hardest.  They have spent their entire lives building businesses for their offspring to operate at their death, only to find out the government snatches 40 percent of it.

As a result, their children and grandchildren are forced to sell off hefty chunks of the inheritance just to pay the bloodthirsty Internal Revenue Service.  In the end, they are left with a shell of the original land or business.  More often, their only option is to get rid of the entire inherited estate.

The death tax issue looms large on the radar in states like North Dakota and Texas, where drilling for shale oil has suddenly propelled the value of rural farms.  What was once fallow farm land, is worth millions of dollars.  That is creating worries for farmers who want to leave their land to their families.
 
For once, a few in Washington appear to be attuned to their plight.  In April, the House of Representatives approved a bill to repeal the death tax, which has generated $269 billion over the last 10 years.  It was approved on a vote of 240-179, largely along party lines.

Naturally, President Obama acrimoniously accused Republicans of catering to the wealthy by eliminating the tax.  The narcissistic president couldn't resist adding , "I don't need a tax cut."  Well, the rest of us don't live rent-free in a mansion, fly on government aircraft and have a personal chef.

Despite the House vote, the death tax repeal faces an uncertain future in the Senate.  At last count, there were 53 Senators who supported the legislation.  Seven more are needed to get the law changed.

No family should have to visit the undertaker and the tax collector on the same day.  Make your voice heard on this issue before it's too late. One day your children, grandchildren or even great grandchildren will thank you for your foresight.  

Monday, June 8, 2015

CPI Hoax: How the Feds Mask Inflation

Like many government statistics, the Consumer Price Index, has been manipulated by the bureaucrats to render it inaccurate at best and misleading at worst.  Once CPI was a proxy measurement of inflation, but today it is disconnected from the actual price increases experienced by consumers.

According to the Bureau of Labor, the index is supposed to be "a measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services."  If that sounds like government gobbledygook, it is.  Simply put, the CPI is supposed to measure the cost of living.

Over the past 30 years, the BLS has altered the formula it uses to calculate the CPI at least 20 times.  As part of the new methodology devised by the bureau, the cost of food and energy have been deemphasized in determining the cost of living metric.

What makes this diabolical is those two components are among the most volatile. As every consumer knows, spikes in food and energy prices can leave the family budget in tatters.  Yet in its infinite wisdom, the BLS no longer includes the full impact of these items in the index.

To understand the issue, it helps to know how the bureau collects and analyzes the data.  The government uses samples from urban areas to collect price data.  About 15,000 families nationwide are selected to participate in a point-of-purchase survey to learn what goods and services are being bought.

Once the data is organized, the bureau picks more than 200 items and weights them according to how many and how often the products and services were purchased.  Over time, the methodology has changed to put less emphasis on food and fuel prices used to calculate the cost of living.

What would motivate the BLS to make such a move?  The answer can be found in the way the federal government uses the CPI.  For example, Social Security payments are tied to inflation.  So are benefits for retired military personnel, disabled veterans and federal government pensioners.

As the cost of living increases, these payments and benefits are supposed to be adjusted upward.  But that's only in theory.  The problem is that the current methodology engineered by government bureaucrats understates real inflation, negating the need to increase payments to vets and others.

Stagnant inflation helps reduce the impact on the federal budget.  But in real terms it hurts seniors and military veterans because their payments have less purchasing power and their benefits do not keep up with the mounting cost of medical care.

The Federal Reserve Bank also uses inflation as a key ingredient in determining monetary policy.  Its stated goal is to keep inflation at two percent or less over the long run.  One reason the Fed has kept interest rates low is because inflation has remained tepid.

However, the Fed uses a more reliable inflation tool.  Instead of the CPI, it looks to another gauge, the Personal Consumption Expenditures Price Index or PCE.  The measurement uses business surveys, rather than less reliable consumer surveys.  The formula also adjusts for changes in consumer behavior.

Interest rates effect every American.  When interest rates are low, saving money is less attractive, borrowing is cheaper and consumer spending usually rises.  Conversely, when interest rates spike, savers earn more on deposits and borrowing becomes expensive, which discourages spending.

There are also political reasons for the government to tinker with the CPI.  Rising inflation numbers never reflect well on the administration in power.  It most likely cost President Jimmy Carter a second term. When he left office in 1981, inflation stood at a whopping 10.3 percent.

With today's oil prices temporarily in free fall, conventional wisdom says inflation is low.  However, spiraling food costs continue to take a larger chunk out of family budgets.  Food prices in the United States climbed nearly seven percent last year.  That's inflation under any definition.

Even as food prices zoomed during the last 12 months, the official inflation rate averaged 1.6 percent for 2014 as measured by the CPI. That underscores the disassociation between the government index and the cost of living experienced by most Americans.

To address the situation, Congress should demand that the bureaucrats in the BLS include the full impact of food and gasoline prices in calculating the cost of living.   It is no longer acceptable to let unaccountable federal workers tamper with a critical measurement that impacts many Americans.

Tuesday, June 2, 2015

How To Get Amtrak Back On Track

Hours after a tragic rail crash in Philadelphia, tawdry Democrats bombarded the media with irresponsible claims that Republicans were to blame for the Amtrak accident.  Democrats pointed fingers at the GOP for slicing funding for Amtrak in a House vote on the very day of the derailment.

"It is deeply troubling that my Republican colleagues defeated an amendment to fully fund Amtrak just hours after this tragic rail crash," huffed Democrat Rep. Nita Lowey of New York.  She contended that the Congress was "starving Amtrak of funding."

Her remarks and those of her brethren represent a new low in demagoguery, even for Democrats.  Amtrak's financials had nothing to do with an engineer's decision to rev up his locomotive to 106-miles per hour as the train approached a curve with a 50-mile per hour speed limit.

Far from "starving" Amtrak, the American tax payer has forked over $66 billion to subsidize the national passenger railroad service since it was launched in 1970.  Despite increases in passenger revenues, Amtrak has continued to lose money in every single year of its existence.

In its most recent fiscal year, red ink flowed again as Amtrak posted a $227 million operating loss.  Amtrak uses a clever accounting scheme to hide their real losses.  If it were a public company, Amtrak's deficit would have topped $1.1 billion after depreciation and other non-cash items that it excludes.

After every financial report, Amtrak's executives chatter about its glowing prospects.  While its losses have narrowed in recent years, the railroad still requires millions of dollars in taxpayer funding.  At its inception, lawmakers envisioned the railroad would one day stand on its own without federal subsidies.

That will never happen as long as it continues to operate as a quasi-government agency, much like the U.S. Postal System.  Amtrak is long overdue for an overhaul.

For one thing, the passenger rail system is too large to ever be profitable.  Amtrak operates more than 300 trains each day over 21,300 miles of track with connections to 500 destinations in 46 states. However, with few exceptions, most of Amtrak's routes are money-losers.

An examination of Amtrak's latest fiscal results underscores the problem.  Amtrak actually turned a $496.7 million operating profit from its routes in the Northeast Corridor, which stretches from Washington, D.C. to Boston.  The profit eclipsed the previous year's net of $390.1 million.

However, Amtrak's long-distance routes outside the Northeast Corridor dug a deep financial hole for the railroad.  Operating losses hit $507.5 million.  Ridership on long-distance trains has barely inched up over the years, while the Northeast Corridor has enjoyed a 7.5 million bump in passengers.

As a first step, Amtrak executives need to lop off unprofitable routes, much like the airlines have done.  In the past, there has been little political will to reduce services, particularly in rural areas.  That must change if Amtrak is ever to become a self-sustaining operation that doesn't need a government handout.

Once that is achieved, Amtrak should re-price its remaining routes.  The railroad's rates for service need to more closely mirror its costs. Instead, what Amtrak has done is to continue to raise ticket prices on its profitable routes to subsidize the money losers.  As rates continue to increase, ridership will suffer.

Amtrak, like the U.S. Postal System, also has a lousy reputation for service.  Just over three-fourths of its trains ran on schedule in 2014. Instead of improving each year, its on-time performance is slipping.  By focusing on service, Amtrak could attract more passengers.

In terms of its costs, Amtrak has a long way to go. The railroad's labor costs are out of line with its revenues, accounting for 50 percent of its expenses.  Overly generous benefits need to be pared and Amtrak must reduce its personnel to achieve cost savings that will allow it stop the hemorrhaging.

Even with these changes, Amtrak still faces financial hurdles.  For example, massive infusions of cash are required to update the aging tracks that Amtrak owns.  Without upgrades, Amtrak will never be able to offer high-speed rail service that could build ridership and revenues.

Instead of trying to turn the latest rail disaster into a political advantage, Democrats need to join hands with Republicans to produce a plan to privatize Amtrak and to open passenger rail service to increased competition.  That's the only way to snip Amtrak's dependence on taxpayers.

Yeah, that likely won't happen either.

Monday, May 25, 2015

Memorial Day: A Union General's Vision

The bloodiest conflict in American history became the impetus for one of the country's most solemn observances.  Known originally as Decoration Day, it was an occasion for festooning soldiers graves with flowers and for reciting prayers.  Small flags often garnished the cemetery plots.

The tradition, begun in the 1860's, honored those who died in the American Civil War.  Official estimates of that era calculated that 620,000 young men lost their lives in the struggle that sometimes pitted brother against brother. Historians today put the unofficial death toll closer to 850,000.

The casualties represented roughly two percent of the country's entire population.  At the height of the war, which lasted from 1861 until April of 1865, there were more than 3.2 million Union and Confederate soldiers waging battles across 34 states (the number at the start of the war.)

It was a brutal conflict where an estimated 1.5 million people were either killed, wounded, captured or reported missing.  For every three soldiers killed in battle, five more died of disease.  The physical and psychological damage inflicted by the violent war was keenly felt for many decades.

In the aftermath of the Civil War, the nation's first national cemeteries sprouted in cities and towns.  The first official celebration of Decoration Day took place in Waterloo, New York, on May 5, 1866. The observance had its roots years earlier in 1862, thanks to the efforts of a Union general.

General John A. Logan, leader of a group called the Northern Civil War Veterans, urged a nationwide day of remembrance for those who had perished in the nation's great war.  He suggested the "strewing with flowers or otherwise decorating the graves of comrades who died" defending their country.

A few of the states remaining in the Union heeded Logan's clarion call. Loosely organized events were held in scattered towns and hamlets. The states of the Confederacy honored their dead separately.  It wasn't until after World War I that all the states held joint nationwide remembrances on the same day.

On the first official Decoration Day in 1866, General James Garfield spoke eloquently at the Arlington National Cemetery, where more than 20,000 Union and Confederate soldiers are buried.  A crowd of 5,000 attended the service, a large gathering considering the hardships of travel of that era.

With the passage of time, the commemoration became known as Memorial Day to honor those who died in subsequent wars.  In 1968, Congress passed a law establishing Memorial Day as the last Monday in May.  But it wasn't until 1971, that it officially became a federal holiday.

Today the country honors the more than 1.2 million soldiers who have died in the nation's wars.  While the Civil War deaths still represent the majority of those killed, not many Americans are aware of that fact.  Most memorials today honor the 405,399 soldiers who died in World War II.

Often forgotten are the 116,516 Americans who lost their lives in World War I.  The Vietnam War's death toll was 58,209.  The Korean War terminated 36,516 American lives. The wars in Iraq and Afghanistan added 6,626 lives to the list of casualties.

None of those statistics tell the real story of Memorial Day.  It is a day to remember with reverence each and every service man and woman who sacrificed their lives for the United States. They all deserve a grateful nation's thanks.

Take time today to visit a war memorial or a cemetery.  Touch the name of a fallen soldier etched in stone or marble.  Bow your head and voice a silent prayer.  Remember the name of that soldier and keep that individual near to your heart.

Monday, May 18, 2015

Obama's Unprecedented Media Censorship

President Obama swept into office in 2008 on a tide of promises, including a commitment to usher in a new era of unprecedented transparency.  Even before his first year in office had drawn to a close, he discarded his vow of openness and adopted a hostile policy of government censorship.

In a blink of an eye, Obama and his team clamped down on the media's access to government records.  In its first year, the secretive administration denied 466,872 media requests under the Freedom of Information Act (FOIA), double the rejections in the last year under President George W. Bush.

Since that time, the administration has made few meaningful improvements, according to a recent analysis of federal data by the Associated Press (AP).  The news gathering organization has documented that the rejection of FIOA requests has skyrocketed in the last few years.

In March of this year, the AP's analysis of FIOA requests lodged with 100 federal agencies found the Obama Administration responded to even fewer than in past years.  The government either censored or denied access to 250,581 requests, which represented 39 percent of all applications for information.

Furthermore, the AP reported that the government's own data verified that the backlog of unanswered requests for information had swollen 55 percent.  There are more than 200,000 requisitions gathering dust in agencies' files. There are another 215,584 appeals that have been lost in the bureaucracy.

By way of explanation, the Freedom of Information Act, signed into law in 1966, provides for the full or partial disclosure of previously unreleased documents and information under the control of the government.  Although the law contains exemptions, it mandates greater access to federal records.

In its coverage of the administration's secrecy, the AP noted that Obama's government had "set a record again for censoring government files or outright denying access to them" in 2014.  Obama's reaction to the report was to dispatch his mouthpieces to deny the interpretation of his government's data.

But secrecy isn't the only weapon the president has used to shield his administration from legitimate news coverage.  His minions have launched attacks on news media critical of its policies, vigorously prosecuted journalists who attempted to expose wrongdoing and criminalized federal whistle blowers.

Instead of transparency, President Obama's record for accessibility, openness and honest communications has been the worst since President Richard Nixon.  That analysis is not a Republican talking-point.  It is the conclusion of the Committee to Protect Journalists.

The prestigious committee, an independent, non-profit organization that promotes press freedom worldwide, has taken the Obama Administration to task for its heavy-handed treatment of the media's efforts to uncover government information and its lack of transparency.

In a scathing report issued in 2013 that was covered up by the mainstream media, the committee had this to say about the administration's dealings with the media: 'the war on leaks and other efforts to control the information are the most aggressive since the Nixon administration.'

James Goodlae, the former general counsel of The New York Times, chastised the president for attempting to "criminalize the reporting of national security information."  Under Obama, the Department of Justice has pursued journalists who have relied on government leaks for stories.

Last year, thirty eight leading media organizations scolded the administration for its increased reticence. These influential media groups, including the Society of Professional Journalists, called on the administration to end "politically driven suppression of news and information about federal agencies."

As one example of the administration's overzealous persecution, the Justice Department has relentlessly  dogged James Risen, The New York Times reporter who is accused of using information from a Central Intelligence Agency source to write an article about an attempt to sabotage Iran's nuclear program.

This is the same administration that clandestinely subpoenaed and seized the telephone records of more than 100 Associated Press reporters in its Washington Bureau and elsewhere to determine the source of leaks to the wire service.  That Nixonian action had a chilling impact on Washington news sources.

Like many promises Obama made before his election, he has thumbed his nose at his pledge of running the "most transparent administration in history." His record is shameful.  Journalists who cover the administration should have the last word on the subject.

The New York Times David Sanger recently assessed the Obama government as the "most closed, control-freak administration" he has ever covered.  Listen and you will be able to hear a loud chorus of "Amens" echoing in newsrooms across America.

Monday, May 11, 2015

Genome: Emergence of Precision Medicine

Twelve years ago the Human Genome Project, an international collaborative research effort, made headlines with the mapping of every gene that exists in human beings.  It remains one of the most stunning scientific achievements in world history, comparable to America's moon landing.

Studies performed at 20 universities and research centers in six countries, including the U.S., produced complex details about the structure, organization and function of an estimated 20,500 human genes.  Each human has a unique set of more than three billion pairs of these genes.

Once the intricate mapping was completed, scientists had a blueprint of the order or sequence of genomes in the body.  For the first time, researchers were able to generate linkage maps, which allowed them to track inherited genetic diseases over generations.

With massive amounts of data in hand, the real work of science began.  How to use this voluminous  amount of data to treat, prevent and cure disease?  Within a few years, the first fruits of the Human Genome Project were harvested when scientists used the information to improve the treatment of cancer.

Today many patients with cancer are having their own genes mapped, which helps researchers predict how these individuals will respond to chemotherapy drugs.  Doctors can also ascertain which drugs might produce the least side effects for patients.

Gene data allows oncological specialists to target the specific molecular mechanism of a cancer tumor with drug treatments.  Their goal is to be able to identify the right drug for the right patient at the right time.  Before the Human Genome Project, this would have been all but impossible.

Some genes have already been identified as predictive of certain diseases.  For example, researchers have pinpointed the mutated genes that often are found in women with breast cancer.  With this information, doctors can screen women for the genes and recommend a proactive treatment and a health regiment.

Cancer isn't the only disease where genome sequencing has proved beneficial to patients.  Tests can be used as a tool to detect, identify and quantify viruses.  Increased data obtained from next-generation sequencing is providing insights into genomic components that underlie cardiac diseases.

Armed with genome data, doctors can prescribe individual approaches for disease treatment and prevention which take into account the genes, environment and lifestyle of each person.  This is the antithesis of medicine's one size fits all approach.  

Testing might not help every person, especially healthy individuals with no family history of disease.  Nonetheless, if gene mutations were identified in only two or three percent of the population, that would mean 10 million Americans would have advance warning about the potential for disease.

The good news is that the costs for individual genome sequencing is plummeting.  Twelve years ago the price tag was $1 billion.  In the intervening years, the expense has nosedived to about $5,000. However, new advancements in technology are driving the costs closer to $1,000.

One American company, Illumina, has been on the cutting edge of developing tools and systems for large-scale analysis of genetic variations and functions.  The firm's extensive line of sequencing systems are advancing the understanding of genetics and health.

Illumina, headquartered in San Diego, has rolled out a fleet of new products that feature the next generation sequencing (NGS).  The systems offer more speed and scalability which enables researchers to study genomes at a level never before possible.

Employing the sophisticated technology, specialists are able to figure out the order of DNA nucleotides, or bases, in a genome order.  Even with the data, scientists must still decode the genome sequence to understand the relationship and interaction of genes.

Less costly technology is making genome sequencing more accessible and practical for more researchers. That means more studies, experiments, trials and research will be launched as the data becomes more affordable and ubiquitous.

Human genome sequencing offers great promise for the treatment and prevention of disease.  In the future, an annual physical at the doctor's office may include a whole genome sequencing for the patient. Just twelve years ago that would have seemed like a preposterous idea.

Monday, May 4, 2015

"Hands Up, Don't Shoot" and Other Lies

As images of smoldering police cars and rock-throwing punks in Baltimore went viral, many Americans were reminded of the race riots that metastasized across the country during the Civil Rights era. Those were dark days for the nation, marked by toxic rhetoric and overzealous police.

Since that era, the United States has enjoyed a period of relative racial calm.  There have been occasional incidents, but cities have not erupted in violence.  That now appears to be changing as race relations have deteriorated after a handful of high-profile police shootings.

In the wake of these episodes, the media, race-baiters such as Al Sharpton, the Justice Department and President Obama have helped fan the flames of discord instead of calling for peace, justice and patience.  They all share in the blame for the angry outbursts that have scarred American cities.

The most notorious case was the shooting of African-American Michael Brown by a white police officer in Ferguson, Missouri, in August of last year.  Immediately, the media and those with racial agendas declared the officer guilty of murder, although the facts remained in dispute.

In the aftermath, a media portrayed Brown as a "gentle" giant who raised his hands and pleaded with the officer, "I don't have a gun." Protestors took to the streets of Ferguson chanting, "Hands Up. Don't Shoot."  That slogan became a rallying cry for those with axes to grind against police.

The president, Attorney General Holder and Al Sharpton all weighed in on the incident even before all the facts were known.  Their words often were critical of police and demanded justice for the victim. This fueled more anger and protests, which eventually spiraled out of control in Ferguson.

When a grand jury refused to indict the white police officer Darren Wilson, the media was incredulous. Indignation turned to hatred and unruly crowds burned and looted the city.  Their hopes of a conviction had been raised by those who spread the falsehood about "Hands up. Don't Shoot."

Turns out eyewitnesses who started the "Hands Up. Don't Shoot" narrative were thoroughly discredited by police.  In fact, on March 4 of this year, even Holder's Department of Justice issued a report saying there was no credible evidence of those words ever being uttered by Michael Brown.

Yet today there are still those who use the slogan to tar police as killers of black suspects.  Just like there are race hustlers whose con includes the claim police shooting victims are mainly black.  That is patently untrue.

According to a nationwide study by the Justice Department's Bureau of Justice Statistics, the research showed that 44 percent of police homicide victims are white, 32 percent black and 20 percent Hispanic.  In a three-year period, there were 2,002 police homicides out of almost 40 million arrests.  

Ferguson should have been a lesson for those responsible for stirring up passions before the facts are vetted.  But politically-motivated partisans could not resist beating the drums of animosity in the death of African-American Freddie Gray at the hands of Baltimore police.

While the investigation into Gray's death was underway, the mob mentality ruled in the streets of Baltimore.  Guilt was presumed and thugs went on a rampage in Baltimore, hurling rocks at police, breaking windows, setting cars on fire and storming the streets. Neighborhoods were destroyed.

Baltimore Mayor Stephanie Rawlings-Blake exacerbated the incendiary circumstances by ordering police to stand down and allow the unruly mob to run amok.  Although she tried to walk back her statement, police sources confirmed her orders were to give space to those who "wished to destroy."

Instead of taking its time to conduct a thorough investigation, State Attorney Marylyn Mosby announced criminal charges against six cops in rapid fashion, claiming they were responsible for Gray's fatal spine injury while in police custody.

After the charges were announced, renowned civil rights lawyer Alan Dershowitz was critical of the due process exercised by the state attorney.  "Today had nothing to do with justice.  Today was crowd control.  Everything was motivated by a threat of riots and a desire to prevent riots," he said.

Dershowitz also lambasted Baltimore's mayor.  "The mayor outrageously said we're going to get justice for the victim, the family and people of Baltimore, never mentioning the defendants.  Under our Constitution, the only people who are entitled to justice are the defendants."

The famed lawyer is right.  Of course, that matters not one wit to the president, his Justice Department, the Al Sharpton's of the world or a media invested in promoting racial divisions.  They have shown no interest in the Constitution or justice.  They want the police punished, regardless of the facts.

It is time to hold the media and others accountable. Instead of pointing fingers and leaping to conclusions, the so-called leaders should be out front pleading for calm and reason.  It would also help matters if everyone told the truth for a change.