My appologies to Mike Fallon. He has responded to my questions!

by Ben Hoffman

Thanks Mike!

Mike is running for U.S. House of Representatives, Colorado District 1. Here are the questions along with his responses.

1.In the first video on your website, you claim that Diana DeGette voted to enable the largest tax increase on small businesses in U.S. history. What are you referring to? She wants to extend the Bush era tax cuts to most small businesses.
My opponent, Diana DeGette, is in a position of leadership in the U.S. House, yet the leadership broke for election recess without voting to extend the Bush era tax cuts for anyone.
According to the Tax Foundation, because Congress didn’t vote to continue the tax cuts most Coloradoans will see an increased tax bill next year of $1,641 and for CD-1 it’s about $1,300 next year. Our families and neighbors are already struggling — I don’t think we should add to the burden. Here are some of the effects of the tax increase — because no matter how you frame it, that’s what it is:
Personal income tax rates will rise — specifically, the rate at which two-thirds of small business profits are taxes will increase from 35 to 39.6 percent. These are the people for which my opponent doesn’t support tax relief.
Even the lowest marginal tax rate increases from 10 to 15 percent.
Itemized deductions and personal exemptions will again phase out, which has the same effect as higher marginal tax rates.
In total the personal income tax rates are as such:
The lowest bracket increases from 10 percent to 15 percent.
The 25 percent bracket rises to 28 percent.
The 28 percent rises to 31 percent.
The 33 percent rises to 36 percent.
Perhaps some of these tax hikes seem trivial to some. For a small business owner who is earning $250,000 per year and would like to hire another employee, that translates to almost $13,000 per year or more that they cannot invest in their business or employees.
But, how does this affect families?
The marriage penalty will return from the first dollar of income.
The child tax credit will be halved from $1,000 to $500 per child.
The standard deduction will no longer be doubled for married couples relative to the single level.
Dependent care and adoption tax credits will be cut
And, the biggest one of all is the return of the Death Tax, which disproportionately affects family businesses. This year there is no death tax, but next year estates over $1 million will be charged with a whopping 55 percent top death tax rate. The deceased could be leaving behind two homes and a retirement account, or they could be passing along a capital-intense business, such as a car dealership or a ranch or farm.
Next year, capital gains taxes will increase from 15 percent to 20 percent, and dividends tax will rise from 15 percent to 39.6.
But, beyond the Bush tax cuts, I was referring to the following instances of additional financial burdens on small businesses. While health reform set out to do some noble things like increase access and ensure coverage for those with pre-existing medical conditions, the new law also came with a slew of taxes on businesses and families.
Americans will no longer be able to use health savings accounts, flexible spending accounts or health reimbursement pre-tax dollars to purchase the non-prescription, over the counter medicines that many families rely upon.
The $2,500 cap on flex spending accounts affects families with special needs children as they often rely on the flex spending accounts to pay for special education tuition, which can cost as must as college tuition.
Health insurance value will now be added to income that one must pay tax on. For some, this may mean an unexpected tax bill at the end of the year. For others, the insurance value may push them into the next tax bracket, causing their entire income to be taxed at a different rate.
These are just a few examples of some of the new taxes coming the way of Coloradans at a time when unemployment is now at 10 percent nationally. Let’s help our families and small businesses by cutting spending, not asking for more money out their pockets.

2.Only three Republicans in the House and two in the Senate voted for the Small Business Jobs and Credit Act of 2010. Would you have voted for or against it and why?
I would have voted against it. I agree that the premise of the bill was a great idea — to free up capital to assist small businesses. But, I don’t believe the government should pick economic winners and losers. The way to pay for this was not to increase taxes for other businesses, but to cut back spending in other ways.
I am also concerned that this legislation will only drive companies overseas. Our country needs to become business-friendly again to keep jobs here to help alleviate unemployment. Unemployment is a major driver of the poor economic numbers we are seeing as well as the housing crisis.

3.Many of what were decent paying manufacturing, engineering, and tech jobs have been outsourced overseas, contributing to our high unemployment. Is that a concern of yours and if so, what would you do to bring jobs back to the U.S.?
This is a big concern of mine. Over the past few years, our country has become business unfriendly. We have the second highest corporate tax rate among developed countries in the world. Let’s make taxation fair again. We should lower the corporate tax rate at the same time that we close special interest loopholes in the tax code. That way, we have more corporations paying a lower tax rate. For example, why does Exxon pay nearly nothing in corporate taxes, but the owner of the coffee shop down the street from my house pays nearly 40 percent? That’s unfair.
To bring corporations back to the United States, as I mentioned, we should make corporate taxes fair, which would encourage investment and level the playing field. Regulation must be responsible to prevent fraud and malfeasance, but not a hindrance to innovation, growth and investment.

4.You claim you watched thoughtfully as our Congress spent recklessly and answered to no one. What are you referring to?
I’m referring to the stimulus programs, which I don’t believe were beneficial (we’ll have to agree to disagree on this), in particular, I found the Cash for Clunkers and the bailout of the auto industry to be a huge waste of money and a payout to a failing industry, which rewarded bad corporate management at the expense of more responsible corporations and industries. And, what I mean about answering to no one the public was overwhelmingly against these bailouts as well as health care legislation, yet our Congressional representatives shoved these through Congress anyway.

5.The stimulus bill is a five year program. So far, about $289 billion has been spent and $223 in tax cuts have been issued. Driving around Colorado, you can see those dollars at work on things like highway repaving and other infrastructure improvement. It has gone towards renewable energy research and development — an industry in which Colorado is a leader. Our electric grid is being upgraded, transportation improved, and many jobs have been created. Many economists claim the stimulus boosted GDP by some 2.7% and unemployment would have been 11% without it. Those things seem to be good for our country and Colorado, yet you oppose the stimulus bill. Why is that? Also, a recent Gallup poll showed that 60% of Americans favor more government spending to create jobs and stimulate the economy.
I don’t mind spending on infrastructure, but the harsh reality is that only seven percent was spent on infrastructure. One-third went to bailing out state and local government, which only temporarily supported jobs and alleviated budget short falls. That same investment in the private sector would have created long-term sustainable jobs that would bring in tax revenue and thus, support the firefighters, teachers and police upon which our communities rely. To give you an example, with $500,000 (the amount spent per claimed job saved), I was able to create a health care company, which created 50 jobs (and 50 additional taxpayers), who are still paying taxes today. And, I did that in three years.
The issue is that we’re spending money that only provides temporary gains, whereas private sector job creation provides long-term sustainable jobs and tax base. Any such future spending must be considered carefully against the negatives of increased public debt.

6.The majority of Americans disagree with the recent Supreme Court ruling on the Citizens United case that ruled, in effect, that corporations are people and have the same rights. How do you feel about that ruling?
I don’t mind if corporations give money (and just for the record, we have received no PAC dollars or money from corporations), but I believe there should be 100% transparency in campaign finance donations and no exceptions to the laws. For example, the DISCLOSE Act exempted the NRA and unions from disclosing who their funders are. As a society, we must stop allowing the government to pick winners and losers.

7.Are you concerned that foreign entities may be funneling money into our elections because of the Citizens United ruling?
Of course I’m concerned, but I think what you’re getting at here is the Chamber of Commerce issue. The money coming from foreign entities is less than one percent of the funds they receive, which they’ve vowed to keep separate from political funds. And, of course, the Chamber is a neutral group that gives to both Republicans and Democrats. They give money to pro-business candidates who the Chamber believes will be better for business interests.

8.You ask the question: Are we to become a people beholden to our government, or are we to continue as a self-determined people who crave freedom and independence? What are you referring to?
I am referring to the fact that the government is taking over more and more of our lives. Government programs, such as welfare and social security, were meant to act as a safety net in case of economic hardship, but were not meant to carry us for decades. The government has now taken over our health care and several other areas of our economy. We, not a government 1,600 miles away, know best what our families need.

9.How do you feel about the The Affordable Care Act recently signed into law? The Patient’s Bill of Rights will end much of the abuse by insurance companies. The bill also takes aim at some of the inefficiencies in health care such as redundant testing.
I think the health care reform set out to accomplish noble ideas — increase access and provide coverage for those with pre-existing conditions. These should have been addressed many years ago. But, the government didn’t include significant cost containment measures, which would help address the issue of access. We need free market principles to help bring down the cost of care delivery. For additional information on what I think the solution should have been, please visit my web site at I have posted several videos there explaining my solution.

10.You claim to want to balance the budget. The huge deficits we’re now experiencing are a combination of decreased revenues due to high unemployment, increased payouts for unemployment benefits, the Bush era tax cuts, the two wars, increased payouts for entitlement benefits, and a few hundred billion dollars a year for the stimulus. How would you balance the budget? Cutting government programs during the recession will create even more unemployment.
We need to return all spending to a historical average of 19% of GDP, which looks at discretionary, mandatory and military spending — it’s all on the table. I agree with your premise that we have had decreased revenues due to high unemployment, but I disagree with your claim that the Bush-era tax cuts. History tells us that when you decrease taxes, our economy grows and jobs are created. Look at the Kennedy response.
Just to give you an example, one of my volunteers has a small company in which she would like to hire another person, but the difference between her hiring another person and not is about $5,000 in revenue. When her taxes go up the scheduled 4-5%, she will no longer be able to hire someone. That’s a job loss.

11.Many wealthy people (including John McCain) collect Social Security, even though they don’t need it. The lower and middle class have their entire income taxed at a rate of 6.2% for Social Security but for the wealthy, only the first $102,000 is taxed. Eliminating the cutoff point for taxation and eliminating payouts to the wealthy would solve the upcoming Social Security balance problem. How do you feel about that or what is your solution?
I agree — partially. I think we must keep the promises to people who are currently retired or very close to retirement because they’ve made life decisions with the guarantee of these funds. But, we do have to increase the retirement age for the next wave of retirees who have time to adjust to the change. Because I just turned 46, I will volunteer to be the first group whose age is increased. I also believe we have to means test on the back-end, not the front end. There is no guarantee that the wealthy will continue to be financially solvent into their retirement, and social security, afterall, is meant to be a safety net program.

12.The Republicans in the Senate filibuster nearly every bill and nomination. While the House doesn’t have that problem, how do you feel about the behavior in the Senate at a time when we need action — not obstruction.
This is one of the reasons why I say that the process is broken. No bill is so good that every Democrat should vote for it and no bill is so bad that every Republican should oppose it. But, that goes both ways. Whatever happened to taking the best ideas from both sides of the aisle and coming up with compromises? I don’t see a lot of that happening — on either side. I am not beholden to anyone, so I plan to rely on my life experience, my business acumen and, most importantly, the opinions of the people of Colorado’s First Congressional District.

13.How would you make higher education more affordable?
We should start treating higher education as we do our businesses. We should eliminate redundancy of product, eliminate outdated programs, and reduce administrative costs, just like we would in any other business or service industry whose costs have become too high.

4 Comments to “My appologies to Mike Fallon. He has responded to my questions!”

  1. I’ve been impressed with Mike Fallon. This is great — thanks!

  2. How utterly refreshing and honest. Mike Fallon is the best candidate on the scene in a long time. The GOP needs to look at this man as the future of the Republicans.

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