Medicare Premiums Increase $5 a month in 2013

An early Happy New Year to retirees in Kentucky and across America. The Associated Press is reporting a five dollar monthly increase in MEDICARE premiums is set to go in effect for 2013.

According the AP report,

"Medicare premiums are going up $5 a month in 2013, the government said Friday. It's less than expected, but still enough to eat up about one-fourth of a typical retiree's cost-of-living raise next year."

Read more at:
http://www.wkyt.com/wymt/home/headlines/Medicare-premiums-going-up-5-a-month-for-2013-179697211.html

40 Million in Tax Credits for Investors

(Proposed Angel Investor Act)

The Kentucky Online Action Group found the pre-filing of Angel Investment Act (shown on the right), which is the result of a proposal submitted by the Kentucky Blue Ribbon Tax Reform Commission. The act provides 40 million in tax credits for investors.

While proposing tax credits for investors, the commission recommended some very serious tax changes for the rest of Kentucky citizens. Some of which include: 

- taxing retiree Social Security benefits, which were previously exempt from the state income tax;

- taxing Military retirees, IRAs, and other pension plans starting at $15,000 instead of the current level of $41,110;

- eliminating 75% of the total in itemized deductions for things like home mortgage interest and charitable contributions.

Looking at the proposals by the Blue Ribbon Commission, it seems obvious that it overlooked one important detail; the 2012 poverty level, which is currently set at $11,860 dollars for an individual.  Therefore, taxing retirees making about $15,000, is basically taxing people who earn just $3,140 dollars above the poverty level.

Will Kentucky Rob Poor to Fund Rich?

A report by Kentucky Online Action Group on Saturday, November 17, 2012 at 2:03pm 

KY TAX REFORM UPDATE: The Governor’s Blue Ribbon Tax Reform Commission recently voted to support an “angel investor” tax credit, giving wealthy investors "up to a 40% tax break" on monies used to fund start-up businesses. Meanwhile, the Blue Ribbon Tax Reform group still supports the proposal to "broaden the tax base" by including retirees earning $15,000 or less. This appears to be a prime example of how government takes from the poor and gives to the rich, through the tax code.



How does the government rob the poor to pay the rich? Through the tax code, of course. Under the "angel investor" tax credit, strongly supported by the Governor's tax reform group, a person with the money to do so, may fund a person, or group, to start a new business. In return, the person funding the new business receives part ownership, part of the profits, or another form of return from the new business. Now, in addition to getting some form of payback from the new start-up business, the Blue Ribbon Tax Commission wants to give "angel investors" a tax credit for up to 40 percent of the money put into the new start-up.

We do not have all the details on the tax commission's proposal, however, as an example, let us say the "angel investor" provides $100,000 dollars to a new start-up business. When the angel investor files state taxes,  he/she would receive a 40% tax credit on the $100,000 dollars. In other words, the angel investor receives a $40,000 reduction in taxes. Put another way, that is $40,000 dollars not collected in state income taxes. And Kentucky taxpayers will have to pay for that $40,000 tax credit. Under the Blue Ribbon Tax Commission's proposal, those Kentucky tax payers would include retirees making as little as $15,000 dollars a year, which is only $3,140 over the national poverty level.     

Kentucky's Tax Base, Broad as the Grand Canyon

The Kentucky Blue Ribbon Tax Reform Commission is looking for ways to "broaden the tax base." Well, if anyone pays taxes, it is almost everyone in Kentucky. 

How broad is the tax base? I conservatively estimate that well over 90 percent, if not 100 percent, of Kentucky's citizens pay at least some form of the various taxes, surcharges, and fees levied by the commonwealth.

In fact, if the overall breadth of Kentucky's tax base was compared to a landmark, it  may well be called the Grand Canyon of the Commonwealth. And with good reason, after reviewing just some of the obvious taxes paid by Kentuckians, which currently include: payroll taxes (medicare, social security, etc.); federal, state, and local income taxes; sales taxes on homes, autos, clothing and household items purchased; taxes and surcharges on cell phones, home phones, internet; cable, DSL, and satellite TV; sewer, electricity, and water; property taxes, or if you rent, the owner tacks that on. You pay taxes to get marriage licenses, driver licenses and pet licenses, you pay taxes each time you renew your vehicle, boat, or motorcycle registration. You pay taxes on dental, medical, auto, home, and life insurance, as well as gasoline, kerosene, diesel, propane, and every other form of fuel available. And if you think death is the only way out, you are wrong, because that is taxed too.

It seems the commonwealth already has has an extremely broad tax base. However, the Kentucky Blue Ribbon Tax Reform Commission recently proposed taxing retiree income starting at $15,000 dollars, basically $3,140 dollars above the 2012 U.S. individual poverty level of $11,860. This is little more than the poor feeding the poor, and far from a solution to the problem of free fall government spending.

 In conclusion, I offer a simple question to all who read this. At what point should the government spend less? When everyone, except the government, is living in poverty? That seems to be the plan, because the Blue Ribbon Tax Reform Commission failed to make a single recommendation to reduce government spending.