The Census Bureau reported today that sales of new single-family homes in the U.S. reached an annualized level of 421,000 in August. That was up by almost 8 percent from July, but a whopping 15 percent below the 497,000 the bureau originally reported for June (two subsequent revisions have taken that number down to 454,000). Given the shock decline to below 400,000 in July, August’s bounceback was clearly inadequate. Additionally, as Zero Hedge noted this morning, the median new-home sales price fell to its “lowest level since January 2013.”
The column is here.
Cool. (Sept. 26: Here’s the last appearance per the archive before it went away. It was fun while it lasted.)
UPDATE: I must thank all who tipped Drudge to the column.
UPDATE 2: Instapundit has linked.
UPDATE 3: The Anchoress — “They can take our freedoms, but they can never take away a sacrament!” Heh.
UPDATE 4: Political Calculations weighs in with (what else?) a more comprehensive calculator.
UPDATE 5: Column linked by Doug Ross — “SHOCK REPORT: Obamacare punishes both marriage and work with thousands of dollars in a year in penalties.”
In a September 13 email, Erin Hannigan of Organizing for Action’s “Truth Team” excitedly told readers about how under the Patient Protection and Affordable Care Act, aka “Obamacare” (the term she used), “millions of Americans will be eligible for financial assistance, or tax credits.”
Since June 2012, thanks to Chief Justice John Roberts and his Supreme Court majority, the penalties the law will impose on individuals and families who do not purchase health insurance beginning next year have legally been considered “taxes.” So it’s only “logical” in the same convoluted sense that what most of us have been calling “premium subsidies” in Obamacare should really be considered “tax credits.” Consistently extending the Beltway “logic,” the premiums themselves should also be considered “taxes.”
Hannigan’s email proudly points readers to a “cool calculator from the nonpartisan Kaiser Family Foundation that shows how the tax credits work,” and encourages everyone to “share it on Facebook or Twitter.”
Obamacare opponents should eagerly take Hannigan up on her suggestions, embed the calculator on their own web sites, and encourage everyone who opposes the law’s implementation and supports its defunding to take it for a test drive. They should also demand that the law’s political defenders in Washington, as well as those who claim to oppose it but can’t find the courage to support its defunding, explain how they can, on top of the seeming inevitability that Obamacare will be incompetently implemented if allowed to go forward, permit the perverse results the calculator demonstrates to take effect.
You see, Kaiser’s “cool calculator” makes the exact points Robert Rector at the Heritage Foundation and yours truly have been arguing since early 2010, namely that the Affordable Care Act will deeply discourage work and virtually any other attempt at financial improvement. It will also throw new obstacles in the way of couples wishing to get and stay married, even to the point of encouraging marital breakups of families with children. I will cover the financial effects in the remainder of this column, and address the impacts on marriage in Part 2.
Millions of Americans who don’t have employer-provided or other group health insurance arrangements and who don’t purchase private non-Obamacare individual or family coverage before the end of 2013 — something most people don’t realize remains an alternative for just a few more months — will be legally required to enroll in the Affordable Care Act’s health insurance exchanges or face the penalties now characterized as “taxes.” The number of Americans forced to resort to the exchanges has, in my opinion, been artificially and deliberately juiced by the Obama administration’s arguably illegal decision to delay the imposition of the “employer mandate” until 2015. Many individuals and families who would have qualified for employer-provided coverage if the employer mandate had been enforced beginning in January 2014 will now have to go to the exchanges or face the penalties.
Those who enroll in Obamacare’s exchanges will be subjected to a brand-new system of income-based federal taxation (again, their word) over and above Uncle Sam’s existing income and FICA (Social Security and Medicare) tax regimes, complete with marginal rates for most enrollees ranging from 9.5 percent to 18 percent, along with myriad “cliffs” where premiums — er, taxes — skyrocket when a person or couple earns just one dollar of additional income.
The table tells us that in states which have chosen not to expand Medicaid, enrollment in that program will be mandatory for single people with annual incomes under $11,490, that group’s poverty line (some states have chosen to expand Medicaid access to everyone under 138% of the poverty level).
Income right at the poverty line triggers exchange enrollment and an immediate $230 premium. The premiums increase by $1 for each $50 of additional annual earnings up to $15,281. At the next dollar, the premium jumps from $306 (2 percent of $15,281) to $458 — a $152 tax on $1 of earnings. (Believe me, we’re just warming up with examples of “cliff” taxation.)
The next level is also intriguing, given that Obamacare is supposedly a masterpiece of “progressive” thought. The average marginal rate on earnings between $15,282 and $34,369 is 14.7%. As the footnote above explains (fully illustrated here), “marginal rates vary between 11% and 18% (rounded), and gradually increase as income increases.” But from $34,370 to $45,960 in income, as seen above, the marginal rate drops to 9.5 percent.
Thus, the “tax credits” OFA’s Hannigan thinks are “cool” are regressive, taking a higher percentage of additional earnings from lower-income working class people and a lower percentage from those with mid-range earnings.
Then look at what happens once a single person who is 50 or older hits annual earnings of $45,961. At that point, what remains of those wonderful “tax credits” goes up in smoke. (Speaking of smoke, you won’t believe how steep Obamacare’s tobacco surcharges are. But I digress.)
For a 50 year-old single person, dollar number 45,961 causes their annual exchange premium (i.e., “tax”) to increase from $4,366 to $5,390. That’s because what Kaiser calls Obamacare’s “government tax credit subsidy” (they’re also having a hard time with the language) goes from $1,024 to zero. For a 64 year-old, a “tax credit subsidy” of $4,688 gets zeroed out. The marginal tax rate on dollar number 45,961 for that person is a whopping 468,800%.
Now let’s look at the Silver Plan situation for a married couple with no children:
The song is mostly the same, with only the brackets changing, with one big exception: The subsidy losses at the cutoff threshold, in this case annual earnings of $62,041, affect every age group, and are far more brutal. Those looking for a Guinness Book of Records entry for the highest marginal tax rate ever imposed on a significant number of people will probably have to search far and wide to beat the 1,221,400% rate ($12,214 on a $1 income increase) a 64 year-old couple faces on dollar number 62,041 in annual income.
At most earnings levels below the two “cliffs” identified above ($45,961 for singles and $62,041 for married couples), the combined effect of the federal income tax, Obamacare’s “tax credit” reductions, and FICA will cause everyday working Americans to incur marginal federal tax rates ranging from 32 percent to 50 percent: 15 percent to 25 percent income, 9.5 percent to 18 percent Obamacare, and 7.65 percent FICA. Even before considering state and local income taxes, those marginal tax rates are among the highest in the world, and are restricted in most countries to far higher income levels. Many will conclude that earning extra money isn’t worth it — or will strive mightily to find ways to earn income under the table. This is not the recipe for growing an economy which already more resembles the awful 1930s in key statistical aspects than it does any other seen since World War II.
Even if they somehow stay motivated while the government is taking one-third to one-half of each additional dollar they earn, what single person in their 50s or 60s who understands all of this is going to move to a new position or accept a promotion which increases their salary from $46,000 to $50,000? What sane married couple in their 50s or 60s will want to increase their family’s income from $60,000 to $70,000, when doing so means either taking home almost nothing extra or losing money in the bargain?
Let’s look at a chart of a 60 year-old married couple’s Silver Plan premiums at different income levels:
Is there anything a couple with income in the mid-$60K range who will be socked by the $10,000-plus “cliff” illustrated above can do to get around that awful situation?
Well, there is, but, as will be seen in Part 2, the “best” alternative is something most people would not consider “cool.”
Back in June, Texas State Senator Wendy Davis became a national darling of the left when she filibustered in opposition to legislation, ultimately passed in July, which bans most abortions in the Lone Star State after 20 weeks of pregnancy and “requires doctors performing an abortion to have admitting privileges at a hospital within 30 miles of the abortion clinic.”
The arch-liberal Huffington Post was among those losing all perspective over the alleged wonders of Wendy Davis. An astute tweet carried at Twitchy.com (original tweet here) notes that at one point it headlined Davis’s stalling tactics as “THE FILIBUSTER HEARD ‘ROUND THE WORLD.” Now let’s compare how HuffPo is treating Texas Senator Ted Cruz’s filibuster:
Given July’s disaster, August’s new home sales report from the Census Bureau has outsized importance.
July’s 394,000 seasonally adjusted annual rate of sales came in over 20% below June’s original number, which was itself revised down 8%. The previous three months (April, May, and June) were revised down by a total of 69,000 units.
So here’s the “before” shot:
Business Insider is predicting 420,000, which would be an improvment, but still the second worst number this year.
HERE IT IS (link):
Sales of new single-family houses in August 2013 were at a seasonally adjusted annual rate of 421,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 7.9 percent (±14.6%)* above the revised July rate of 390,000 and is 12.6 percent (±15.3%)* above the August 2012 estimate of 374,000.
So the prediction for August was on target, but July dropped back a bit more. So did June (-1,000) and May (-10,000 to 429,000), for a total three-month fallback of 15,000. That’s on top of the 69,000 in April-June downward revisions turned in last month.
The raw data tells us that only 35,000 homes were actually sold in August. That’s lower than the 36,000 sold in August 2009, shortly after the recession officially ended.
What was that about a “housing recovery”?
I wrote last week that Ben Bernanke’s move to keep QE where it is shouldn’t have been such a surprise. This news confirms that contention. As Bernanke himself said a few months ago, “the economy would tank” without it.
UPDATE, 10:50 p.m.: Zero Hedge — “Median New Home Price Drops To Lowest Since January 2013″
Expectations, per Business Insider:
Economists predict total orders fell 0.2% last month after dropping 7.4% in July. Durable goods orders excluding transportation are expected to have risen 1.0% after falling 0.8% the month before. Nondefense capital goods orders excluding aircraft (a.k.a. “core capex”) are expected to have risen 2.0% in August after falling 4.0% in July.
Per the report just issued at 8:30 a.m. ET:
- Total orders increased 0.1% — beat, but negated by the next item.
- July was revised down to -8.1% — ouch.
- Excluding transportation was down 0.1% — big miss.
- Nondefense excluding aircraft (“core capex”) increased 1.5% — miss, but offset by upward revision to -3.3% in July.
The downward revision to July negates any enthusiasm one might have for the August.
It will go up here at BizzyBlog on Friday (link won’t work until then) after the blackout expires.
But don’t wait until Friday — go there to see examples of marriage penalties which make those currently embedded in the federal income tax system look like child’s play.
Speaking of embedding, what follows after the jump if you’re on the home page is the Kaiser Family Foundation calculator which generated the information supporting the column and the one which preceded it.
This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.
Sep 24, 2013 / 04:23 pm
The new head of a Catholic communications training group says he hopes to help the faithful present the complex truths of the Gospel in understandable ways amid a sometimes hostile modern world.
“I’m very excited to begin my work at Catholic Voices USA,” said Scot Landry, new executive director of the organization.
“Catholic Voices offers communication tools and approaches that allow lay people to confidently share Catholic teaching on hot-button issues in a concise and compassionate manner,” he told CNA on Sept. 24.
“Given the speed of communications today and the shorter articles and attention spans common in new media, these tools for communicating a few key points about a topic can help readers and listeners grasp our main messages.”
“There are many issues today that Catholics want to speak out about in a persuasive manner, such as the growing threats to religious liberty, care for immigrants and all the vulnerable, and many others,” Landry explained. “These issues are complex, yet the Catholic Voices approach can help present the main messages in a way that others can understand our respect our point of view.”
Modeled after its British counterpart, Catholic Voices USA trains lay people to present Catholicism in a positive way, countering misrepresentations and making the case for the Catholic Church in the public square, through debates, media interviews and informal discussions with friends.
Before coming to Catholic Voices, Landry was the president of iCatholic Media and secretary for media at the Archdiocese of Boston. Prior to his work with the archdiocese, the Harvard graduate worked in marketing, brand management, consulting and executive positions at companies including Procter and Gamble, Parthenon Consulting, and Eze Castle Software. …
Go here for the rest of the story.
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