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Tags: Dodd | Frank | Fleeces | Poor | Calif. Mandates Gay Fertility Benefits Calls for Third Party Mount | Wyoming Best State for Business | New York Worst

Dodd-Frank Fleeces the Poor; CA Mandates Gay Fertility Benefits; Calls for Third Party Mount

By    |   Saturday, 19 October 2013 07:15 PM

Insider Report

Headlines (Scroll down for complete stories):
1. Call for Third Party Hits New High
2. Dodd-Frank Act Hammering Low-Income Americans
3. Economist: Canadian Healthcare 'Anything But Free'
4. New Corporate Tax Dodge: Foreign Mergers
5. Calif. Mandates Fertility Coverage for Same-Sex Couples
6. Wyoming Best State for Business, New York Worst

1. Call for Third Party Hits New High

A majority of Americans now say Democrats and Republicans do such a poor job that a third major party is needed, a new Gallup poll reveals.

Respondents were asked: "In your view, do the Republican and Democratic Parties do an adequate job of representing the American people, or do they do such a poor job that a third major party is needed?"

The result: 60 percent say a third party is needed, the highest percentage in the 10 years since Gallup first asked the question. Only 26 percent say the two parties adequately represent Americans, a new low.

Republican and Democratic respondents basically agree — 52 percent of Republicans and 49 percent of Democrats say a third party is needed. This marks the first time a majority of either party's supporters have said a third party is needed.

Among independents, 71 percent say the country needs a third major party.

The prior highs came in August 2010, shortly before the midterm elections when the tea party movement was emerging as a political force, and in 2007, when the newly elected Democratic congressional majority was battling with President George W. Bush, Gallup disclosed. Both times, 58 percent of respondents believed a third party is needed.

Support for a third party was lowest in 2003: 40 percent.

Gallup cautioned: "The desire for a third party is not sufficient to ensure there will be one. Structural factors in the U.S. election system and the parties' own abilities to adapt to changing public preferences have helped the Republican and Democratic parties remain the dominant parties in U.S. government for more than 150 years.

"Third parties that have emerged to challenge their dominance have not been able to sustain any degree of electoral success."

Editor's Note:

2. Dodd-Frank Act Hammering Low-Income Americans

The Dodd-Frank Act was designed to reform Wall Street and protect consumers, but in fact it is making lower-income Americans worse off financially and cutting them off from traditional banking services.

"Dodd-Frank punished Wall Street at the poor's expense, turning mainstream banking into a luxury available only for the middle class and rich," says Abby McCloskey, program director of economic policy at the American Enterprise Institute.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama in July 2010 in response to the late-2000s recession, made changes in the regulatory environment that affect almost every part of the nation's financial services industry.

It is estimated to cost the eight largest banks alone up to $34 billion a year. Those costs are passed along to consumers.

As banks "hunker down amid Dodd-Frank uncertainty, they have cut $70 billion in credit cards in three years," McCloskey writes in Forbes. As a result, 40 percent of low-income families report their credit cards were canceled, limits reduced, or applications for new cards were denied, a survey revealed.

The act also capped the fees bank-sponsored payment companies such as Visa and MasterCard charge retailers to process debit card purchases.

To make up for lost revenue resulting from Dodd-Frank, banks have raised fees sharply on a variety of products. In 2009, 76 percent of banks offered free checking; in 2012, only 39 percent did.

"Priced out of mainstream banking, low-income earners are turning to alternative finance measures, such as payday lending and check cashers," McCloskey points out.

Payday lenders charge from $15 to $100 on average to lend a borrower $100 for two weeks, equal to an APR of as much as 391 percent — if the money is paid back on time.

McCloskey concludes: "There must be broad reform to lift the costly regulatory apparatus that is stifling financial services for low-income consumers."

Editor's Note:

3. Economist: Canadian Healthcare 'Anything But Free'

Many Americans who argue in favor of Canadian-style universal healthcare likely entertain the "mythical notion" that our neighbors to the north enjoy access to "free" quality care, according to a Canadian economist.

Healthcare in Canada is delivered through a publicly funded system, which is mostly free at the point of use. Most services are provided by private entities.

But Bacchus Barua, a senior economist with Canada's Fraser Institute, declares: "Healthcare in Canada is anything but free."

He disclosed that the average Canadian family of four pays about $11,320 a year in taxes for hospital and physician care. Many Canadians also pay for private insurance to cover such things as dental care and outpatient prescription drugs.

"Surely such expenditure is justified if Canadians receive a stellar healthcare system in return for their tax dollars," Barua writes in an article for The American. "Unfortunately, that simply isn't the case."

He offers some specifics:

  • Canada has fewer physicians, hospital beds, and diagnostic imaging scanners, and performs fewer medical interventions than its American and European counterparts.
  • Canada has one of the lowest physician-to-population ratios in the developed world.
  • A recent survey found that Canadians must wait an average of about 4 1/2 months for medically necessary elective procedures after referral from a general practitioner.
  • The wait for diagnostic imaging technologies like MRIs is over two months on average.
  • Patients in Canada are likely to wait two months or more to see a specialist, six days or more to see a doctor when sick or needing care, and four hours or more in the emergency room.
  • Due to the lengthy waits, about 40,000 Canadians leave the country for treatment elsewhere each year.
  • Public drug plans covered only about a quarter of the new drugs approved for sale in Canada between 2004 and 2010.

Barua concludes: "These realities serve to dismiss the mythical notion that a Canadian-style healthcare system" is highly desirable.

Editor's Note:

4. New Corporate Tax Dodge: Foreign Mergers

American corporations are increasingly turning to a new tactic for avoiding high U.S. corporate taxes: merging with foreign companies and then reincorporating abroad where taxes are lower.

In one recent case, California chip maker Applied Materials merged with a smaller Japanese rival and will reincorporate in the Netherlands. The move will reportedly save the firm about $100 million a year in taxes.

In July, the American advertising firm Omnicom announced plans to merge with France's Publicis Groupe and establish the combined company's headquarters in the Netherlands, which has a 25 percent statutory corporate tax rate versus 35 percent in the United States.

Omnicom's CEO John Wren confirmed that the Netherlands was chosen for tax purposes, CNBC reported.

Also in July, Michigan-based pharmaceuticals maker Perrigo agreed to buy the Irish drug company Elan for $6.7 billion and set up residence in Ireland, which has a corporate tax rate of 12.5 percent.

"From New York to Silicon Valley, more and more large American corporations are reducing their tax bill by buying a foreign company and effectively renouncing their United States citizenship," according to The New York Times.

Ian Shane, a tax lawyer at Golenbock Eiseman Assor Bell & Peskoe, told CNBC: "Without tax reform in the United States, I think you will see more of these types of deals."

Reincorporation in tax havens such as Bermuda and the Cayman Islands, known as "inversion," has been going on for decades. But regulations have made the process more difficult over the years.

The Jobs Creation Act of 2004 required that in order to invert, companies needed to have substantial business activity in the country where they reincorporate.

And the Internal Revenue Service stated that "substantial business activity" means in most cases that a firm must have 25 percent of assets, income, and employees in the target country.

"After these successive rounds of legislation and rule tightening, the only effective way for an American company to invert is by increasing foreign ownership of its stock to more than 20 percent," The Times observed. "And the only feasible way to do that is by reincorporating abroad as part of a merger or acquisition."

Companies are frequently choosing low-tax European nations to avoid the scrutiny that might come by moving to an offshore tax haven such as Bermuda.

"Countries in Europe and elsewhere are competing with each other with lower tax rates to bring in firms and have them headquartered there," Shane said.

"Just look at the Netherlands. Firms headquartered there don't have to face rigid tax rules. They can apply for a ruling on the amount they want to pay and get it approved or not, just as long as they pay some taxes."

The average corporate tax rate in Europe is about 20.6 percent, and worldwide it is 20 percent. During the 2012 presidential campaign, Republican Mitt Romney called for lowering the U.S. rate to 25 percent.

Editor's Note:

5. Calif. Mandates Fertility Coverage for Same-Sex Couples

California Gov. Jerry Brown has signed a bill requiring health insurance plans in the state to offer fertility treatment coverage for same-sex couples and unmarried people.

The bill, which goes into effect in January, states that "coverage for the treatment of infertility shall be offered and, if purchased, provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex, or sexual orientation."

According to the bill, treatment for infertility means procedures "including, but not limited to, diagnosis, diagnostic tests, medication, surgery, and gamete intrafallopian transfer."

The law covers artificial insemination, but not in vitro fertilization, which can cost more than $20,000 per attempt.

The legislation was introduced by Assemblyman Tom Ammiano, a San Francisco Democrat and gay rights activist, CNS News reported. (Ammiano portrayed himself in a movie starring Sean Penn as openly gay San Francisco Supervisor Harvey Milk, who was killed by a disgruntled former city supervisor.)

"To restrict fertility coverage solely to heterosexual married couples violates California's non-discrimination laws," he said in a statement. "I wrote this bill to correct that."

The bill does contain provisions allowing certain entities to opt out of providing coverage.

It states that the law "shall not be construed to require any employer that is a religious organization" or "any plan, which is a subsidiary of an entity whose owner or corporate member is a religious organization, to offer coverage for treatment of infertility in a manner inconsistent with that religious organization’s religious and ethical principles."

Roger Good, chief executive officer of HRC Fertility, which runs nine clinics in Southern California, told The Associated Press that about 65 gay women and 275 gay men or gay couples have been treated at his clinics in the last year.

Editor's Note:

6. Wyoming Best State for Business, New York Worst

The Tax Foundation's 2014 State Business Tax Climate Index has been released and it shows that Wyoming has the nation's best tax environment for business.

The foundation compares the states on more than 100 variables in five important areas of taxation — corporate tax, individual income tax, sales tax, unemployment insurance tax, and property tax — to compile an overall ranking.

All states have property taxes and unemployment insurance taxes, but several do not levy one or more of the other three taxes.

Businesses large and small are "tending to locate where they have the greatest competitive advantage," the foundation states. "The evidence shows that states with the best tax systems will be the most competitive in attracting new businesses and most effective at generating economic and employment growth."

Overall leader Wyoming has no corporate tax and no individual income tax, and ranks No. 14 in the sales tax category, No. 31 in unemployment insurance tax and No. 34 in property tax.

South Dakota is No. 2 overall. The state has no corporate or individual income tax and ranks No. 18 in property tax.

Third-ranked Nevada also has no corporate or individual income tax and ranks No. 9 in property tax, but No. 40 in sales tax.

Alaska is No. 4. It has no individual income tax and no state-level sales tax. Fifth-ranked Florida has no individual income tax and ranks No. 6 in unemployment insurance tax.

Rounding out the top 10, in order, are Washington, Montana, New Hampshire, Utah, and Indiana, based on their business tax climates as of July 1, 2013, the first day of the standard 2014 state fiscal year.

"The states in the bottom 10 suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates," according to the foundation.

New York is at the bottom, ranking 49th in individual income tax, and 45th in both property tax and unemployment insurance tax.

New Jersey is at No. 49 overall thanks in large part to its 50th ranking for property tax and 48th ranking for individual income tax.

The third worst businesses climate is in California, which has the highest individual income tax and ranks No. 41 in sales tax.

The rest of the bottom 10, in ascending order, are Minnesota, Rhode Island, Vermont, North Carolina, Wisconsin, Connecticut, and Maryland.

The Tax Foundation points out: "It is important to remember that even in our global economy, states' stiffest and most direct competition often comes from other states. The Department of Labor reports that most mass job relocations are from one U.S. state to another, rather than to a foreign location."

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Editor's Note:

Editor's Notes:

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Insider Report Headlines (Scroll down for complete stories):1. Call for Third Party Hits New High2. Dodd-Frank Act Hammering Low-Income Americans3. Economist: Canadian Healthcare 'Anything But Free'4. New Corporate Tax Dodge: Foreign Mergers5. Calif. Mandates Fertility...
Dodd,Frank,Fleeces,Poor,Calif. Mandates Gay Fertility Benefits Calls for Third Party Mount,Wyoming Best State for Business,New York Worst,New Corporate Tax Dodge Foreign Mergers,Canadian Healthcare Anything But Free
Saturday, 19 October 2013 07:15 PM
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