Health Matrix Releases “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA”
Michael F. Cannon
Health Matrix: a Journal of Law-Medicine at Case Western Reserve University School of Law has released “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” a paper I coauthored with CWRU law professor Jonathan Adler. From the abstract:
The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying health insurance plans on state-run insurance exchanges. Contrary to expectations, many states are refusing or otherwise failing to create such exchanges. An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insurance in federal exchanges created in states without exchanges of their own. This rule lacks statutory authority. The text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is contrary to congressional intent and cannot be justified on other legal grounds. Because tax credit eligibility can trigger penalties on employers and individuals, affected parties are likely to have standing to challenge the IRS rule in court.
This paper led to one of the most important (and ongoing) legal challenges related to the PPACA. Access the full paper here.
View full post on Cato @ Liberty
Silver Institute Releases New Video on Silver
Washington, D.C. – February 4, 2013) The Silver Institute today released a new video entitled, “Silver: The Element of Change.” The video covers numerous facets of one of the most widely-used and indispensable precious metals: silver. The video explores silver’s role in history and how it changed the course of countless lives in times of the Greek and Roman Empires, when it was used to prevent infection.
Focusing on its remarkable properties as an element of change, the video looks at silver’s role in industry, highlighting its ability to make today’s mobile interconnected life possible as well as its use in medicine and water purification, which relies primarily on its natural antibacterial qualities. The video also notes silver’s importance to fashion through exquisite silver jewelry, and finally it speaks to silver’s intrinsic worth as well as its role as a store of value, given its historical and modern use as a popular investment.
Statistics: Posted by DIGGER DAN — Mon Feb 04, 2013 8:38 pm
View full post on opinions.caduceusx.com
New York Fed Releases Staff Report on Money Market Fund Reform
July 19, 2012
The Federal Reserve Bank of New York today released a staff report describing how a proposal for money market mutual fund (MMF) reform would make the financial system safer and more fair, reducing systemic risk and protecting small investors who do not redeem quickly from distressed funds.
The paper discusses a proposal to mitigate the vulnerability of MMFs to runs by introducing a “minimum balance at risk” (MBR) that that would provide a disincentive to withdraw funds from a troubled money fund. The MBR would be a small fraction of each shareholder’s recent balances that would be set aside in the event that they withdrew from the fund. Most regular transactions in the fund would continue as before, but redemptions of the MBR would be delayed for thirty days. The delay would ensure that redeeming investors remain partially invested in the fund long enough to share in any imminent portfolio losses or costs arising from their redemptions.
At present, investors in a troubled fund have a strong incentive to run because those that are first to the exit can get out with 100 cents on the dollar, leaving other investors in the same fund to bear any losses. The MBR proposal would substantially reduce the incentive to run and ensure more equitable distribution of any loss among investors in a fund. Under the proposal discussed in the paper, as long as an investor’s balance exceeds the MBR, the rule would have no effect on transactions and no portion of any redemption would be delayed if the remaining shares exceed the minimum balance.
Additionally, MBRs could strengthen market incentives for early market discipline for MMFs by clarifying that investors cannot quickly redeem all shares from a fund during a crisis. Investors would have strong incentives to identify potential problems well before any losses are realized. Furthermore, by discouraging investors from redeeming shares in a troubled MMF, the MBR would help the fund avoid the need for fire sales of assets to raise cash – an effect that not only benefits the fund and its investors, but also reduces contagion risk throughout the system.
"Further reform of money funds is essential for our nation’s financial stability. Proposals currently under consideration, that are consistent with the basic idea discussed in this staff report, would make the financial system much safer. I strongly endorse their adoption," said William Dudley, president of the New York Fed. Mr. Dudley noted that small investors could be exempted from the requirement to maintain a minimum balance as they were less prone to withdraw their money at the first sign of trouble.
The report, “The Minimum Balance at Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market Funds,” is coauthored by Patrick McCabe, Marco Cipriani, Michael Holscher, and Antoine Martin. Patrick McCabe is a senior economist in the Research and Statistics Division at the Board of Governors of the Federal Reserve; Marco Cipriani is a senior economist in the Research and Statistics Group at the New York Fed; Michael Holscher is an officer in the Markets Group at the New York Fed; and Antoine Martin is an assistant vice president in the Research and Statistics Group at the New York Fed.
The Minimum Balance at Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market Funds
Statistics: Posted by yoda — Fri Jul 20, 2012 7:39 am
View full post on opinions.caduceusx.com