North State Journal for Sunday, May 22, 2016
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north STATEment Neal Robbins, publisher | Drew Elliot, opinion editor | Ray Nothstine, deputy opinion editor EDITORIALS | DREW ELLIOT
Raising the standard of fairness Income tax should be based on one’s income, not on the time and expertise required to fill out government forms.
IN DISCUSSIONS OF tax policy, increasing the standard deduction often gets short shrift as a topic for reform. It does not sound as powerful as “slashing rates” or even “closing loopholes.” Noting this rhetorical infirmity, many have begun to refer to the standard deduction as the “zero tax bracket,” which is accurate. But regardless of what it is called, boosting the standard deduction is a great way to add fairness to the tax code. Currently, the standard deduction on state income taxes means that taxpayers don’t pay anything on the first $15,500 of income (for married filers who file jointly). The North Carolina House this week passed — with broad bipartisan support — its version of the budget. The bill includes a boost to $17,500 over the next four tax years. (Single and other filers get proportional increases as well.) The state Senate is also looking to expand the standard deduction, getting to a $17,500 threshold too but on a more aggressive schedule. Before Republicans took control of the legislature, the standard deduction was a paltry $6,000 for married filers. With this in mind, legislators should index the level to inflation so that the real value of the zero bracket does not decrease over time — even if that means increasing the deduction more slowly. Liberals love to take the hard-earned income of the lower middle class and return it to them in ways only enlightened progressives see fit. But even they would find it hard to take an affirmative vote to halt the nominal annual increase in the threshold. The boost is a good idea for several reasons. But I should start by admitting what increasing the standard deduction does not accomplish before I examine what it does do. No tax policy expert will say the expanding the standard deduction is the most pro-growth way to reform the tax code. When tax policy changes are compared, increasing the standard deduction will almost always lose out to ideas such as reducing top marginal rates or slashing rates that directly affect investment — such as the capital gains rate — when one is looking for ways to spur the economy and help create jobs. But looking solely at economic and revenue projections ignores some other benefits of expanding the standard deduction. Obviously it will eliminate the tax bills of the lowest-income taxpayers, but what else? Raising the standard deduction will raise the number of filers who take it instead of itemizing. That’s important because there is disparity in who uses the standard deduction. Most taxpayers take the standard deduction — about 70 percent, according to staff at the General Assembly. Usually taxpayers use the standard deduction because it saves them money, but according to an analysis of federal returns by the Tax Policy Center, not all use it for this reason. Some choose it because it is easier, both in terms of record-keeping throughout the year and in terms of filing all the forms and schedules required. Others simply don’t know that they would save money by itemizing. It’s a matter of fairness. Younger, poorer, and less sophisticated taxpayers are more likely to skip itemization. Consider that on the federal level, a nonpartisan Congressional Research Service study found that 2.2 million federal filers in the 1998 tax year could have saved a cumulative $1 billion by itemizing, but didn’t. (True, that data is old. But it’s safe to say that the tax code has not gotten simpler since then.) A taxpayers’ income tax burden should be based on one’s income, not on the time and expertise required to fill out government forms. Expanding the zero bracket is the right thing to do. During a surplus year, it’s a great way to boost fairness in the tax code and add to the historic reforms conservatives have made to state taxes.
LETTERS Undermining patient safety and raising cost in N.C. Prescription drug abuse is a serious problem that deserves real solutions. Unfortunately, a proposal before the North Carolina legislature would put patients at risk and raise costs for employers and public health programs. The mandate, House Bill 1048, would force employers and others providing coverage to pay for expensive brand-name opioid medications — known as abuse-deterrent formulation (ADF) opioids — even when equally effective generics are available. In Illinois, lawmakers recently rejected an identical bill that would have raised premiums and increased costs at the federal, state, and local levels of government, including $55 million for Illinois Medicaid alone. Even worse, a recent study highlighted in the New England Journal of Medicine showed that
the ADF OxyContin often increased abusers’ use of alternative opioids, like heroin. Another problem is that H.B. 1048 would eliminate “step therapy,” one of the most proven tool employers use to protect patients and reduce costs. Step therapy is used to manage medications that may pose a safety risk, have a high potential for off-label or experimental use, or are much more expensive than competing options. Since H.B. 1048 would force employers to make it easier for ADF opioids to be prescribed despite how dangerous they are and regardless of costs, the big winner would only be the brand drug makers of ADF opioids, who could raise prices at will. North Carolina lawmakers should protect patients and employers by resisting this dangerous and costly proposal. Mark Merritt President and CEO, Pharmaceutical Care Management Association
BE IN TOUCH Letters addressed to the editor may be sent to letters@nsjonline.com or 819 Hargett St. Raleigh, N.C. 27603. Letters must be signed; include the writer’s phone number, city and state; and be no longer than 300 words. Letters may be edited for style, length or clarity when necessary. Ideas for op-eds should be sent to opinion@nsjonline.com.
VISUAL VOICES
EDITORIALS | RAY NOTHSTINE
The case against a stale, corrupt Hillary Clinton Clinton is the ultimate status quo candidate with little to offer America but a bland liberalism of the past with more corruption.
THE NOTORIOUSLY CORRUPT Edwin Edwards was pitted against former Klansmen David Duke in the infamous 1991 Louisiana governor’s race. Bumper stickers started popping up across the state saying, “Vote for the Crook. It’s Important.” Edwards, who went on to trounce Duke, later spent over eight years in federal prison. Despite wild comparisons of Donald Trump to Duke by some pundits, the semblance falls flat. But many have suggested, some even on the right, that Hillary Clinton deserves support because of her more measured tone, stability, and her strong ties to the political establishment. However, there is a solid case against Clinton given her stale politics and endless corruption. “If you crave presidential lawlessness, war crimes, and international mayhem, you should adore Democratic presidential aspirant Hillary Clinton,” declared legal scholar Bruce Fein. Clinton continues to laugh off the email scandal against her calling it a “security inquiry.” FBI Director James Comey immediately corrected the former senator and first lady,
saying, “I don’t know what that means. We’re conducting an investigation.” While its unknown if the probe has been expanded to include criminal charges against Clinton, over 100 FBI agents on the case testify to its seriousness and complexity. Those who remember the 1990s would do well to recall Whitewater, Travelgate, the FBI file controversy, and Clinton impeachment — among so many others. With current scandals such as Benghazi, which resulted in the death of four Americans, and the Clinton email controversy, why would Americans foist so much corruption and drama back on the national political stage? Long groomed for the White House, Clinton’s ideas and policies are stale, especially for a morally broken and declining federal government almost $20 trillion in debt. The English historian Paul Johnson summed Clinton’s candidacy for the White House this way in Forbes last month: The Democratic nomination seems likely to go to the relic of the Clinton era, herself a patiently assembled model of political correctness, who is
carefully instructing America’s most powerful pressure groups in what they want to hear and whose strongest card is the simplistic notion that the U.S. has never had a woman President and ought to have one now, merit being a secondary consideration. Even the economically illiterate Bernie Sanders has been consistently sounding the alarm about our rigged system of cronyism in government. While many of his solutions are worse than the disease, Sanders at least correctly diagnoses the problem. Clinton is the ultimate status quo candidate with little to offer America but a bland liberalism of the past with more corruption. American culture and decline will ultimately ensure it gets the president it deserves, a fate all but cemented by our current choices. But a return to the recent past is a sure guarantee of continued malaise and decline.