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$572 Million Net Federal Spending in Taxpayer’s Tab
Posted By: Dan Barrett - 11/09/10

Tab Insert

The NTU Foundation’s Taxpayer’s Tab is back to its regular schedule and format, highlighting four newly scored Congressional bills.

Covering veterans educational benefits, the Most Expensive Bill of the Week would allow certain service members to transfer benefits to their dependents. The Least Expensive Bill of the Week would establish a comprehensive energy plan, including more domestic oil exploration, alternative technology development, and a natural gas vehicle demonstration project provision. The House version of the Prevention First Act was found to increase federal spending by $417 million in the first year.

Bills covered in the latest Taxpayer’s Tab include:

  • HR 3577, Education Assistance to Realign New Eligibilities for Dependents (EARNED) Act of 2009
  • HR 3505, American Energy Production and Price Reduction Act
  • HR 463/S 21, Prevention First Act
  • S 3078/HR 4757, health Insurance Rate Authority Act of 2010
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Election 2010: What a night
Posted By:  - 11/03/10

Oh what a night!


As of this morning, Republicans won 60 additional seats and control of the U.S. House of Representatives. Also, Republicans expanded the size of their caucus by six in the Senate. These two changes that will have serious implications for a host of economic policies at the national level, including energy production, taxes, entitlements, and the debt. My colleague Jordan Forbes will have more to say about the federal results soon.


But for all of the dramatic change at the federal level, what happened in Congress pales in comparison to the changes that voters made at the state level. Republicans picked up nine governorships, including several in the economically important Midwestern states, and won control of 18 state legislative bodies, including chambers in North Carolina and Alabama; today marks the first time since Reconstruction the GOP has controlled those chambers. The larger number of fiscal conservatives in state legislative chambers will have a significant impact on the next round of budget negotiations, when states will have to face no easy choices to balance the budget in the midst of uncertain economic times.


Voters also weighed in on hundreds of state and local ballot measures that affect tax and budget policies. There were several setbacks for taxpayers yesterday. It appears as though voters rejected efforts to reduce taxes income and property taxes in Colorado and sales taxes in Massachusetts. Additionally, California passed a measure that would allow the legislature to enact a budget with a simple majority vote, which will likely open the door to more tax hikes. Unfortunately, Californians also rejected an effort to repeal a costly cap-and-trade emissions program in the state. However, at the same time, Californians voted to require supermajority votes on fees and to prevent the state from raiding funds for local government.


But taxpayers did score several important victories. Despite rejecting a broad reduction in the sales tax, Massachusetts approved a cut in the sales tax on alcoholic beverages. Washington voters resoundingly rejected an effort to enact a new state income tax and approved a measure rolling back a tax on soda, candy, and bottled water. Washingtonians also voted for a measure to require a supermajority in the legislature for any tax increase. Missourians voted overwhelmingly to require votes on local earnings taxes. Meanwhile, Indiana approved a measure to enshrine caps on property tax increases in the state’s constitution.


Elsewhere, Arizona and Oklahoma approved measures that projected the right to choose a health care plan from the individual insurance mandate in Obamacare. Several states, including Oklahoma, South Carolina, and Virginia approved measures to increase the size of their rainy day funds to weather bad economic times. Other states also approved measures that would provide property tax exemptions, impose term limits, and improve government accountability.


Of course, these are just a sample of the hundreds of measures that NTU is analyzing for its report showing how taxpayers fared at the ballot box yesterday. Stay tuned.

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Obamacare Threatens Additional Health Plans
Posted By:  - 10/29/10

I realize you all may be tired of the many, many Obamacare blog posts but, hey, I promised I’d keep you apprised of developments! And sadly, there is further evidence that the health care overhaul could cause you to lose your current coverage.

The non-partisan National Association of Insurance Commissioners (NAIC) sent a letter to Health and Human Services warning the agency of potential “unintended consequences” (yes, I know you’ve heard that term once or twice before) from Obamacare. More specifically, NAIC cited concerns over “insurance markets where consumer choice is limited and the solvency of insurers is undermined.” The NAIC also wrote that “those who lose coverage may be unable to find or afford other coverage.” We appreciate the House Ways and Means Committee Republican staff for bringing this letter to our attention.

While the NAIC-specific health care provision does not go into effect until next year, thousands of Americans are already starting to lose their insurance. We’ve touched on specific groups already, but here are a few additions, courtesy of the House Ways and Means Republicans:

  • National Health, Aetna, and John Alden in New Mexico are no longer offering insurance to people who purchase individual insurance or insurance through a small business;
  • Principal Financial Group announced that it will stop selling health insurance, thereby causing 840,000 Americans to lose their coverage;
  • Maine’s Superintendent of Insurance has said one-third of Mainers with private insurance could lose their health plans if Maine is not granted a waiver;
  • Virginia-based nHealth is closing; and
  • Major insurers like Anthem BlueCross and BlueShield, Aetna, Cigna, CoventryOne, Humana and UnitedHealthCare are going to stop selling child-only health plans in several states.  

I hope this information helps you stay informed. Make sure your elected officials are aware of Obamacare’s unintended consequences, and hold them accountable at the polls this Tuesday, November 2.

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State Ballot Measures Challenge ObamaCare
Posted By:  - 10/21/10

As Americans learn more about ObamaCare, the more they realize they don't want it.

My colleague Jordan Forbes has been blogging on a regular basis (most recently here) about the ever-growing costs and problems with ObamaCare, especially the mandate for all Americans to have health insurance. The impact of ObamaCare on the states will be significant as Medicaid enrollments increase and the federal government expands its power into areas traditionally reserved for the states, as documented by this Heritage Foundation study.

But, as the study points out, the states don't have to take ObamaCare lying down. In fact, several states are already looking for ways to mitigate the harmful impact of ObamaCare through passing memorials asking Congress to make changes and using their policymaking and regulatory authority to shape how the law is implemented. Some states are even taking the federal government to court to challenge the individual mandate and others are asking the voters to render judgment on ObamaCare

In less than two weeks, residents of Arizona, Colorado, and Oklahoma will vote on ballot measures that would protect one's right to choose a health plan by prohibiting the government from requiring anyone to join a health plan or participate in a healthcare system. These measures follow on the stunning success of Missouri's Proposition C, the Health Care Freedom Act, which passed with the support of more than 70% of the one million votes cast.

Since the passage of ObamaCare, we have seen seniors lose Medicare Advantage, studies that show the cost of health care will increase, and employers like McDonald's request a waiver from federal requirements because they were at risk of dropping their coverage. Given all of these problems, is it little wonder that Americans do not wish for the states to be agents of this change?

As I said when Missouri passed Proposition C, "As more Americans learn that the federal health care takeover will boost government spending by $2.6 trillion over the next decade, raise taxes, create new penalties, and interfere with the doctor-patient relationship, the likelier they will be to take the same stance Missouri voters did [on August 4, 2010]. Whatever their success may be in repealing or overturning the new law, one thing is certain: this truly historic movement, aimed at changing policy, not just politics, is gathering a level of strength that federal officials can ill-afford to ignore."

I'm confident that I'll see more of this historic movement on Election Day.

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Got questions about ballot measures? NTU's Ballot Guide has answers
Posted By:  - 10/14/10

Voters face many important decisions in the upcoming elections, which are now less than three weeks away. But many of these critical decisions will not involve choosing between the names of candidates. Instead, voters will have to choose between letters and numbers identifiying hundreds of state and local ballot measures, many of which could have an especially profound impact on tax, spending, and other fiscal policies for years to come and regardless of which political party triumphs in the state houses. To help taxpayers better understand these measures, NTU has produced and made available on our website "The 2010 Ballot Guide: The Taxpayers Perspective."

Our Guide is more than just a list of measures. The Guide is an analysis of these measures on the state and local ballots across the country, providing evaluations of how these measures grow the size of government and increase the tax burden on hard-working families. Unfortunately, there are many such measures on the ballot according to the Guide. However, many other measures on the ballot will give taxpayers opportunities to exercise a greater degree of control over government tax, spending, and regulatory powers.

Here are some highlights from the pages of the Guide:

  • In Washington State, Initiative 1098 would impose a state-level income tax there for the first time, beginning on individuals with incomes above $200,000 but later possibly extending to other groups at the Legislature’s discretion.  This would knock Washington off the list of just nine states without a broad-based income tax. On the other hand, Initiative 1053 would require two-thirds of the Legislature or a majority of voters to raise taxes in the future, while Initative 1107 would roll back taxes on candy, bottled water, and soft drinks.
  • In California, Proposition 23 on the statewide ballot would suspend the California Global Warming Act, and all of its mandates until unemployment eases. Taxpayer advocates in the state argue that this measure would prevent substantial hikes in energy costs on struggling consumers. Meanwhile, Proposition 25 would do away with a two-thirds legislative vote requirement to pass a budget but Proposition 26 would extend a two-thirds vote stricture on increases in many fees.
  • Voters in Massachusetts will consider a measure that would reduce the state’s sales tax from 6.25 percent to 3 percent, as well as one repealing in most cases the sales tax on alcoholic beverages.
  • Proposition A on the Missouri statewide ballot would take away the authority for cities to levy an earnings tax, require voter approval for the continuation of earnings taxes where they currently exist, and provide for their eventual phase-out.
  • At the local level, voters in California's San Diego County, as well as voters in Illinois' DuPage County, will vote on measures that would either require voter approval for increases in public safety pension benefit formulas or call upon the state to undertake serious pension reforms immediately.

We hope you find the Guide useful in evaluating the choices awaiting you at the polls. Be sure to check back with NTU after the election for our report on how taxpayers fared.

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NY Promises $205 Billion It Doesn't Have
Posted By:  - 10/14/10

Just when you thought things could not get any worse in New York, they do. A new report by the Empire Center for New York State Policy shows that New York's state and local governments have promised their employees $205 billion in retiree health benefits, but have not set aside any of the funds necessary to pay for those benefits.

"New York taxpayers spend billions of dollars a year on health insurance coverage for retired state and local government employees, many of whom are too young to be eligible for Medicare," the report states. "But the mounting “pay-as-you-go” bill for retiree healthcare is just the tip of a much larger iceberg. Now, thanks to a new government accounting standard, the true cost of this long-term entitlement is finally emerging from the murky depths of state and local finances."

The report finds that for New York City, the largest local governments and school districts outside New York City and the largest public authorities, the unfunded liabilities total $165.3 billion. For all other local governments and school districts in New York State, the unfunded liabilities amount to an estimated $39.7 billion.

While New York does not have to come up with the $205 billion right away, the huge cost could be unsustainable over the long term. New York's state and local governments have not shown much willingness to reduce benefits or take other measures necessary to bring the costs of the health benefits under control. The rising cost of health care could reach a level above what the state can afford, leading to a default on the benefits. The prospect of what a default might mean for the state and taxpayers in terms of litigation, higher taxes, loss of benefits, and turmoil in municipal bond markets, is worrisome.

 At some point, New York's state and local governments have to get serious about reforming public employee benefits. Hopefully, this report will get them thinking about it sooner rather than later.

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Obamacare Tax Hikes
Posted By:  - 10/08/10

I’ve blogged about several of the new taxes and hidden fees in the new health care law, but you should take a look at one of the National Reviews’ most recent posts. It comes in response to a piece in the Kiplinger letters that highlights thirteen tax changes found in Obamacare. Yes, there are a couple of credits for those who enroll in PPACA-sponsored state-based exchanges, but they only apply to businesses with 25 or fewer employees (and yearly wages less than $50,000) and individuals making between $11,000 and $44,000. The problem is that Obamacare will unleash ten tax increases designed to help raise the trillions of dollars necessary to fund the aforementioned subsidies as well as the law's massive Medicaid expansion.

The tax hikes are as follows:

1. 10% tax on indoor tanning services;
2. Eliminate tax deduction for those employers who provide Medicare prescription drug coverage;
3. Increase HSA penalties by 50% to 20%;
4. Cap employer contributions to tax-free FSAs at $2,500. As of now, the “limit” is determined by your business;
5. Prohibit HSA funds from being used to purchase over-the-counter drugs;
6. Medicare surtax for individuals making $200,000 and families earning $250,000, as well as a 3.8% Medicare tax on investment income for these taxpayers;
7. You will have to spend 10% of your income on medical expenses before making itemized deductions. Currently, the starting point is 7.5%;
8. Employer mandate. All businesses with more than 50 employees will have to offer approved health plans or pay a tax of $2,000 per employee;
9. A Cadillac tax will charge high-value plans ($10,200 for individuals and $27,500 for families) a 40% excise tax;
10. Individual mandate. Everyone much purchase health insurance or pay a fee. According to the National Review, it “starts in 2014 at $95 or 1 percent of gross income, whichever is greater; and maxes out in 2016 at the greater of $695 or 2.5 percent of income.”

The 13th change would require employers to disclose health costs on W-2s.

While we have discussed many of these provisions before, I think the National Review provides a nice snapshot of the dire reality we face. We still have a few years before some of these tax hikes kick in and their details are specified, so it’s not too late to push for repeal. If we don’t halt full implementation of Obamacare, or at a minimum defund it, there will be tremendous, unwarranted consequences for American taxpayers.

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More Unintended Consequences
Posted By:  - 09/30/10

Back in June, I wrote about a Politico article, entitled “Health care law could ban low-cost plans,” that highlighted Obamacare's risk to mini-med plans and the potential for more than 1 million people to lose their current insurance. Here’s an excerpt from that post:

There is a niche insurance market, called mini-med plans, which many employees (retail, restaurant workers, etc.) have come to depend on. While these plans do offer limited benefits, they are priced low for low-wage workers who may not be able to afford more comprehensive health care. If caps are eliminated, it could force insurance companies to significantly raise costs or eliminate the plans altogether. That would be detrimental to many of these low-wage workers since insurance exchanges and tax credits will not be available until 2014.

Need specific examples? No problem.

Today, the Wall Street Journal published a story with the headline “McDonald’s May Drop Health Plan.” Talk about getting your attention! According to the WSJ, McDonald’s Corp. has “warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. Health overhaul.” A McDonald’s official says their insurance company will not meet the requirement that businesses exhaust 80% to 85% of its revenue on health care.

The fate of the McDonald’s waiver request remains uncertain. The WSJ reports, “Federal officials say there’s no guarantee they can grant mini-med carriers a waiver” and that Kansas Insurance Commissioner Sandy Praeger (former President of the National Association of Insurance Commissioners) does not believe mini-med plans deserve an exemption.

Time will tell, but let’s chalk this up to yet another unintended consequence of Obamacare. Did you know there would be so many?

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Water Protection, Textile Tariffs Featured in Latest Taxpayer’s Tab
Posted By: Dan Barrett - 09/28/10

Tab Insert

The latest Taxpayer’s Tab-- the NTU Foundation’s up-to-the-minute BillTally research newsletter -- brings you four more Congressional bills, all of which might affect you if they were enacted. One bill would mandate private insurers to expand breast cancer treatments. That bill was our Most Friended bill of the week with 252 House cosponsors. If you follow the NTUF Twitter feed, you would know the most expensive bill of the week would take new tax dollars and create a trust fund for water research and development.

Another bill would institute another tax on clothing importers, where the money would research US textile competitiveness. Is a friend looking to buy some Underarmor? Forward the Taxpayer’s Tab so they’ll know what Congress plans to tailor for us all.

The bills covered in the newest Taxpayer’s Tab include:

  • HR 3202, Water Protection and Reinvestment Act
  • HR 6134, To provide for a 10 percent reduction in pay for Members of Congress; to make Federal civilian employees subject to a period of mandatory unpaid leave, and to reduce appropriations for salaries and expenses for offices of the legislative branch, during fiscal year 2011; and for other purposes
  • HR 1691/S 688, Breast Cancer Patient Protection Act
  • S 1439/HR 3168, United States Optimal Use of Trade to Develop Outerwear and Outdoor Recreation (OUTDOOR) Act

With 34 days till Election Day 2010, are you aware of Congress’ potential spending agenda? If not, subscribe to the Tab and arm yourself with the best information from THE source of Congressional research: NTU Foundation.

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