Your Obamacare Plan May Become Unaffordable

Obamacare has been slowly chipped away since its conception. In 2011, the Supreme Court allowed states to opt out of Medicare expansion. A month ago, the Supreme Court ruled that corporations with religious disagreements could opt out of the contraception mandate. This week, a 2nd Circuit appeals court panel ruled that the IRS cannot extend tax credits to lower the cost of health insurance if the insurance was purchased through the federal government.

obamacare may become unaffordableFor example, let’s say we have a family of four in Illinois who make less than $94,200 a year. If this family signs up for health insurance through the federal government’s website, the IRS will give this family a $202 tax credit. This lowers their monthly premium from $316 to $114 a month. According to the 2nd Circuit appeals panel in D.C., the IRS cannot give this tax credit because Obamacare says that only state run health insurance programs qualify for such tax credits.

So why can’t our hypothetical family buy insurance from the state of Illinois instead of the federal government? The problem is that Illinois, like thirty-five other states, were depending on the federal program to make healthcare affordable for their citizens. In other words, thirty-four states don’t have programs to sell health insurance that can take advantage of the tax subsidies.

Another appeals court, the 4th Circuit, came to the opposite conclusion about Obamacare: the tax credits could be given through the federal program. When there’s a split among the circuit courts, the Supreme Court will typically hear the case. If the Supreme Court agrees with the 2nd Circuit, then up to five million people could lose their tax credits. The Affordable Care Act would become unaffordable.

What Can I Do?

The 2nd Circuit panel issued its ruling, but it has agreed to delay enforcement until the Obama administration appeals the decision. So if you have health insurance through the federal website, you will likely keep your tax credits for the remainder of 2014, if not 2015.

If you live in California, Colorado, Connecticut, District of Colombia, Hawaii, Kentucky, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, or Washington, you can register for health insurance through your state’s program. These 15 states and D.C. will offer the same tax credits that the federal programs currently use, so the residents of these states can sleep easy.

If you live in one of the other thirty-four states, you should write to your state legislator(s) about creating a state marketplace website. Writing to your Congressional representative might be an option, but it’s probably easier to create a state healthcare program than repealing Obamacare.

Finally, if the IRS are withholding your tax credit, you should contact a tax attorney. If you like your plan, you should fight to keep it.

California’s Death Penalty Declared Unconstitutional by a Federal Judge

In a decision being described as “stunning” and “path-breaking,” U.S. District Judge Cormac J. Carney issued an order on July 16, 2014 declaring California’s death penalty system unconstitutional. Not surprisingly, the decision has been met with a considerable degree of shock, with many commenters calling the move judicial activism.

greenbiz sanquentinThe opinion was rendered in the context of a federal appeal by the defendant, Ernest Dewayne Jones, in the case of Jones v. Chappell. Jones has been on death row since 1995 – almost 20 years – and the sentence in his case has yet to be settled. Jones’ lawyer argued, and Judge Carney agreed, that the length of delay and degree of uncertainty surrounding Jones’ sentence constitutes cruel and unusual punishment under the Eighth Amendment.

Background: California’s Death Penalty System

Jones’ case is not a unique one. Since California reinstated the death penalty in 1978, of over 900 inmates sentenced to death, only 13 have been executed. It takes, on average, more than 25 years for a death sentence to be finalized. A common misconception is that this delay is due to the number of appeals filed by death row inmates. As Judge Carney points out, the delay is actually caused by the state appellate system.

Inmates spend years waiting for a court-appointed attorney to be assigned to their case, they spend years waiting for the California Supreme Court to set a date for their hearing, and they spend years waiting for the court to issue a decision. This backlog is caused by a lack of funding. Budget cuts have forced the State Public Defender’s Office to reduce its staff, while private attorneys are discouraged from taking penalty appeals due to the low pay offered by the State.

At the Federal level, additional delay is caused by exhaustion rules that often send inmates back to the backlogged state court system to present newly discovered claims and evidence. Further delay is caused by state courts’ failure to publish their decisions or hold evidentiary hearings, requiring federal courts to conduct their own investigations to understand the state court decisions.

While the average death row inmate spends about 17 years moving through the state appellate system and another 10 years on federal appeals; the majority of this time is actually spent, not fighting convictions or appealing sentences, but waiting for a dysfunctional bureaucracy to make the next move.

Further complicating things, since the 2006 case Morales v. Tilton, executions have been halted in California due to risk of extreme pain from the state’s lethal injection protocol. Amending the protocol has taken years and still has not been accomplished.

Legal Support for Judge Carney’s Decision: The Furman Case

In holding that the current death penalty system violates the Eighth Amendment, Judge Carney relied heavily on the 1972 United States Supreme Court case Furman v. Georgia. This well-known case famously invalidated the death penalty as it was then being imposed across the United States.

In 1972, judges and juries had unchecked discretion over when to impose the death penalty, making a convict’s chances of being sentenced to death completely random. The Supreme Court, in Furman, held that courts have an obligation under the Eighth Amendment to ensure that punishment is not arbitrary and will further societal interests.

Judge Carney’s Ruling: California’s Death Penalty System is Arbitrary and Violates the Eighth Amendment

The Furman Court found that the way the death penalty was being imposed at the time was arbitrary because there was no meaningful basis for distinguishing cases that warranted a death sentence from those that did not. Judge Carney believes that even though the Furman Court was talking about arbitrariness in handing out death sentences, the current state of affairs in California creates the same type of arbitrariness.

What makes California’s death penalty system arbitrary is that whether an inmate will be executed is based on random factors related to how quickly the inmate moves through the appellate system – when they are assigned counsel, when their hearing is scheduled, when a final decision is issued – and not anything to do with the severity of the inmate’s crime or even something neutral like when the inmate was sentenced to death. Most death row inmates will never realistically face execution and the few that do will basically be selected at random.

The Furman Court held that when the death penalty is imposed in only a trivial number of the cases where it is legally available, sentencing is reduced to “little more than a lottery system” and is being inflicted arbitrarily. With only 13 executions out of 900 inmates that have been on death row, the Furman Court could just as easily be describing the current death penalty system in California.

Understanding Judge Carney’s Ruling

One thing that should be noted is that this is not an “anti-death penalty” ruling in the traditional sense. Judge Carney did not hold that the death penalty itself is unconstitutional. What Judge Carney takes issue with is the fact that California’s death penalty system is so slow and unpredictable that it is practically meaningless.

This is not only unfair to the inmates on death row who wait decades to find out their fates. It is unfair to affected families and communities that deserve closure. It is unfair to juries whose careful deliberations over whether to impose a capital sentence are actually inconsequential. Not to mention, it is a huge waste of California taxpayers’ money.

Judge Carney takes care to point out the degree to which judicial backlog is being caused by the State. He references some of the reforms that have been recommended to the legislature –increasing funding for court-appointed attorneys, limiting the number of crimes that carry a death sentence, and even abolishing the death penalty altogether. He points out that even the most conservative reforms are estimated to reduce the appeals process down to 11-14 years, bringing California in line with the national average.

Whether you think Judge Carney’s holding is “judicial activism” or firmly based in constitutional law, the opinion definitely reads like a criticism of the State. What remains to be seen is whether the State will funnel resources into appealing a decision that, given the 2006 moratorium on executions, has few practical implications currently. Analysts are already predicting that the case will be appealed all the way to the U.S. Supreme Court. Perhaps it would be a better use of the State’s time and resources to actually begin to address some of Judge Carney’s concerns.

5 Reasons to Start a Food Truck Rather than a Restaurant

Starting a small business means conquering roadblocks: acquiring initial capital investments, finding a good location, purchasing overhead, hiring staff… Even the most ambitious entrepreneur may become frustrated when trying to start a traditional storefront business. Luckily, alternatives exist for starting a business with relatively low starting investments, maximum mobility, and a continually expanding market.

5 Reasons to Start a Food TruckPreviously, food trucks had been considered limited to the sale of fast food and ice cream. In the last decade, mobile food facilities, notably food trucks, food carts, and food trailers have caught the public’s attention, with an increasing amount of city-sponsored “food truck days” dedicated to promoting the variety of gourmet food that one can find at a food truck.

Starting and operating a food truck can be an exciting opportunity for an entrepreneur seeking to gain financial independence and have an outlet for creativity in preparing and selling gourmet foods to a growing market of connoisseurs.

1. Food Truck Businesses Offer Low Overhead Costs and High Mobility

Acquiring a food truck, purchasing the food, and finding a location to store the truck overnight constitute the main start-up costs. Common expenses for a normal “brick and mortar” restaurant business have electricity, premise liability insurance, employee benefits and taxes that food trucks simply do not have.

Also, food trucks are not confined to one address but can move to find people looking for food. In contrast, restaurants must remain fixed even in areas that do not contain a loyal customer base.

2. Mobile Food Facilities Promote Creativity for Budding Entrepreneurs

Since food trucks are mobile and can offer flexible menus, food truck owners can use their business as an outlet for endless experimentation. For example, owners can manipulate the way the food truck is designed, the level of unusual foods it serves, and marketing schemes.

3. The Mobile Food Industry Benefits from the Shortcomings of Traditional Restaurants

In a typical case where a restaurant is forced to close down because a lack of demand for the food it sales, a mobile food truck, in contrast, can simply relocate whenever the owner determines that it is cost-effective to do so.  Mudd Coffee, a food truck serving coffee in New York City, is famous for changing its location numerous times during a week in order to attract the greatest amount of customers.

The increased mobility of the food truck business allows some restaurant ideas to compete successfully with larger chain restaurants, as mobile food trucks can conveniently steer away customers who normally frequent chain restaurants and introduce them to the food truck’s food product.

4. Compliance with State and Local Health and Regulations Is Relatively Easy

Although local and state ordinances require food truck businesses to register with the city and state’s health agencies and obtain permission to serve food in the area in which they plan to operate, the registration procedures are not tremendously complicated. Further, many online resources exist with structured steps for registering one’s food truck business with the city and applying for all of the requisite health permits.

5. Entrepreneurs Who Start Food Trucks Develop an Aptitude for Business Operations

Entrepreneurs who start and successfully operate food truck businesses tend to develop an aptitude for running a business. The average food truck business owners lack much familiarity with business management or business law but gain their training in the operation of their food truck business. So, running a food truck business can be a valuable exercise in understanding the role of production, management, investment, marketing and expansion.

New York Legalizes Medical Marijuana (with Strings Attached)

New York became the 23rd state to legalize medical marijuana when Governor Andrew Cuomo signed the Compassionate Care Act (CCA) into law. In 2015, New Yorkers who suffer from cancer, AIDs, ALS, Parkinson’s disease, multiple sclerosis, spinal cord damage, epilepsy, and inflammatory bowel disease can use marijuana to help treat their conditions.

medical marijuana in New YorkHowever, the CCA has a number of differences which make it unique compared to medical marijuana programs of other states.

  1. The Department of Health has the power to price the medicine purchased. New York will start with a 7% tax.
  2. Even qualified patients aren’t allowed to smoke marijuana. Patients will be forced to mix marijuana with food, ingest pills, or breathe vapors instead. The only other state which legalizes medical marijuana but prohibits smoking is Minnesota.
  3. New York patients can’t grow their own marijuana. They must buy it from a state regulated dispensary. Finally, physicians who prescribe more than 2.5 ounces will be subject to penalties.

In short, New York will have the most regulated medical marijuana program in the country. Governor Cuomo and state legislators believe the law strikes an appropriate balance between medical need and public health. “Public health” means making sure people don’t abuse marijuana or use it as a gateway drug to more dangerous substances like heroin.

The problem is that the rules don’t correlate with public health. The smoking prohibition looks like a means to protect public health, but bans on tobacco smoking in public areas could easily be extended to marijuana. The ban on smoking will not guard against second-hand smoking. Forcing patients to ingest rather than smoke marijuana will cause patients to spend more money on the drug.

It is also difficult to understand how a tax would prevent addicted potheads from spending all their cash on weed. Given that patients must buy from state approved dispensaries, the CCA looks more like a way for the state to make money than to help sick patients. Of course, any amount of medical marijuana is better than none.

The Beginning of the End for Public Unions

Tired of unions taking money from your paycheck every month? The Supreme Court might have the answer soon.

OLYMPUS DIGITAL CAMERAStephanie Yencer-Price provides in-home care for her daughter, who requires constant care due to certain medical conditions. Illinois pays Stephanie and many others for this type of work. In 2003, Illinois began classifying personal assistants as public employees solely for the purpose of collective bargaining. As a result, personal assistants like Stephanie had to pay “agency fees” to public unions. The problem is that Stephanie and personal assistants like her are not union members. The workers took their case against the unions all the way to the Supreme Court.

Public unions are able to extract fees from non-union members because there is a “free-rider” problem. In theory, unions represent all the workers of a company or government agency. When the union negotiates for higher pay or other benefits, all workers will obtain the benefits. However, even if some workers refuse to join the union, the benefits that the union negotiates for will still go to the non-union workers. In short, the union would be representing people who are not part of the union. To ensure that workers don’t reap the benefits of union representation without paying for fees, the Supreme Court allowed unions to collect “agency fees” from non-members in a 1977 case.

The recent case of Harris v. Quinn undermines this union structure by keeping personal assistants away from the long arm of union fee collection. The Court decided that since personal assistants are hired and fired by the people they serve – rather than the state – personal assistants are not full public employees, exempting them from union fees. This case still scares union leaders though because it could easily snowball into a national right to work.

The right to work means that each individual worker has the right to choose whether he or she wants to be represented by a union. This “right” would shield non-members from union collection fees. The Court supplied the justification for this right by ruling that coerced union fees violates the 1st Amendment.

Modern Slavery

It was bold for the Court to restrict union agency fees through the 1st Amendment, but the Court used the wrong constitutional amendment. Instead of using the 1st Amendment, the Court should have based its decision on the 13th. The 13th amendment is the amendment which banned “slavery” and “involuntary servitude” in the United States. Traditional 13th amendment interpretation defined slavery as the inability to quit work. That’s exactly what mandatory union fees are.

When a worker is hired to work for a company, the worker expects to exchange labor for the company’s money. The third wheel of the relationship, the labor union, takes a portion of the worker’s pay, regardless of how the worker feels about it. The worker can’t leave the unhappy relationship with this third party and thus the worker is forced to work on the union’s behalf.

Union proponents might say that the union is also working for the non-member worker. If the worker stops paying fees, it would the union which labors on the non-member’s behalf without ability to stop. The problem with this argument is that the union is not directly laboring for the non-member. The union bargains with the employer and the employer is the one giving the benefits. In contrast, the non-union worker who is forced to give up fees is directly contributing to the union’s coffers.