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Deroy Murdock Talks Clear and Present Debt Danger, GOP Failures on Spending
Posted By: Douglas Kellogg - 03/21/14

"Speaking of Taxpayers" has a special guest this week! Fox News Contributor & syndicated columnist Deroy Murdock joins the podcast to talk about his latest piece in National Review on the importance of shifting the debt debate to the present, and not pretending it is a problem that we can wait to handle in the future. Pete & Doug update you on the latest news from around the country, & we have an update on a Taxpayer's Tab redesign. Plus, the Outrage of the Week!

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Governor Scott Walker to Sign Half-a-Billion Dollar Tax Cut Package
Posted By: Lee Schalk - 03/20/14

Just two months after outlining his plan to further slash taxes in Wisconsin, Governor Scott Walker is poised to sign his tax cut into law, which would reduce the cost of government by more than $500 million in the Badger State.

The package, which awaits Walker’s signature after passing the Wisconsin Assembly and Senate, contains the following taxpayer-friendly provisions:

  • Income tax reforms
    • Reduces the rate for lowest income tax bracket (applying to income up to $10,910) from 4.4 to 4 percent, saving taxpayers $46 per year, on average
    • Tweaks withholding rates so that a working class family of four is able to keep an extra $58 per month
    • Lowers income taxes for factory and farm owners
  • Property tax reforms
    • Lowers property taxes by $406 million, saving an average homeowner $101 per year

Thanks to Walker and the taxpayer advocates in the Wisconsin State Legislature, these tax cuts equate to hundreds of extra dollars each year for Wisconsinites who agree that lightening the tax burden is the best way to fuel economic growth, yet, like most Americans, are struggling in the current economic climate.

With Walker’s signature on this half-a-billion dollar tax cut package imminent, the governor has fired up the grassroots, both at home and throughout the country and proven once again that he is a taxpayers’ friend.

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Latest Taxpayer's Tab: Overtime Pay Reform
Posted By: Michael Tasselmyer - 03/16/14

Tab Insert

As in the private sector, certain government employees can receive additional pay if their work leads to "administratively uncontrollable overtime" hours (AUO). The problem? Many agencies abuse the allowance, to the tune of $8.7 million according to recent reports. The issue was addressed on Capitol Hill recently in the form of H.R. 3463/S. 1691, as featured in this week's edition of The Taxpayer's Tab.

Congressman Jason Chaffetz (R-UT) and Senator Jon Tester (D-MT) introduced the Border Patrol Agent Pay Reform Act of 2013 in order to curb some of the overtime pay abuses that were recently brought to light. Investigations revealed millions of dollars in overtime pay had been wrongfully awarded to employees within the Department of Homeland Security, particularly the Customs and Border Patrol (CBP) agents stationed at the agency's headquarters. The bill would reduce spending by $125 million per year ($625 million over five years) by reworking the current CBP pay scale.

Also featured in this week's Tab:

  • Most Friended: Congressman Lou Barletta (R-PA) and Senator Mark Warner (D-VA) introduced H.R. 3979/S. 1798 to make sure that volunteer firefighters and medical personnel won't be counted as full-time equivalents under the Affordable Care Act's employer mandate. The Protecting Volunteer Firefighters and Emergency Responders Act had 106 cosponsors as of this publication.
  • Wildcard: Wyoming's Representative-at-large Cynthia Lummis (R) and Senator John Barrasso (R-WY) introduced the River Paddling Protection Act to allow managers more freedom in deciding where to allow boating, kayaking and canoeing in Yellowstone and Grand Teton national parks. The administrative requirements in H.R. 3492/S. 2018 would require about $1 million per year in additional spending.
  • Budgetary Discrepancies? The White House's economic projections in the FY 2015 budget differ markedly form those released by the Congressional Budget Office last month. NTUF put together an infographic to demonstrate what that means for taxpayers.

For more, check out the latest edition of The Taxpayer's Tab.

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"Speaking of Taxpayers" from CPAC 2014, Part 2
Posted By: Douglas Kellogg - 03/14/14

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It's part 2 of our special CPAC podcast! We talk online freedom, Internet Sales Tax/Marketplace Fairness Act, and growing the relevance of fiscal issues with a younger crowd; with a great lineup: Seton Motley of Less Government, Michael Ostrolenk of the Liberty Coalition, and Casey Given with Students for Liberty!

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Obama Administration Backs Away from Costly Proposed Rule Change
Posted By: Brandon Arnold - 03/14/14

Taxpayers dodged a multi-billion-dollar bullet this week when the Centers for Medicare and Medicaid Services (CMS) indicated that it no longer intends to implement a costly package of changes to Medicare Part D.

The decision by CMS came just hours before the House of Representatives planned to vote on H.R. 4160, the Keep the Promise to Seniors Act, sponsored by Congresswoman Renee Ellmers (R-NC). This bill, which NTU enthusiastically supported, would have blocked the proposed rule.

I blogged about the issue last week and noted the strong opposition that was mounting against the rule changes:

[A] bipartisan group of 20 Senators led by Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) recently expressed very strong objections to the proposed rule in a letter to CMS Director Marilyn Tavenner.

Though NTU has had our fair share of concerns about Medicare’s prescription drug program, we were very pleased to see CMS reverse course on a plan that would have cost taxpayers an additional $1.6 billion per year, according to the Milliman actuarial firm. However, as I noted in my earlier post, taxpayers must remain vigilant, as this was “yet another example of the Obama Administration’s over-utilization of the rulemaking process.”

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Internet Sales Tax Supporters’ Fantasies Cannot Quell Concerns as Alternatives Take Center Stage
Posted By: Douglas Kellogg - 03/13/14

Yesterday’s House Judiciary Committee hearing about alternatives to the Marketplace Fairness Act’s (MFA’s) brand of Internet sales tax mandate offered several options that Congress could focus on, the best of which would be “origin sourcing” – yet, the most imperative statements remain the prudent warnings about the risks posed by MFA, and the need for the House to avoid this legislation first and foremost. 

Indeed, the hearing was more of a referendum on MFA than anything, and for good reason since MFA represents such a dangerous departure from traditional taxpayer protections and interstate competition. National Taxpayers Union (NTU) submitted comments to the Committee arguing against MFA and providing observations on other policy avenues, and late last year commissioned a poll with the R Street Institute finding at minimum 57 percent of respondents opposed MFA (the level of opposition rose when they were presented with “pros and cons” of the proposal).

Those testifying in favor of MFA, or nominally a Streamlined Sales and Use Tax Agreement (SSUTA), joined some of the lawmakers on the Committee in making many misguided points. The most oft-repeated of them warrant a response:

1)  “Leveling the Playing Field.” We heard multiple times that “leveling the playing field” or protecting brick and mortar establishments was the major motivation behind an MFA-type policy.

Yet, the number of brick and mortar stores that do not also sell their wares online is smaller than ever; as of 2010 they represented 38 percent of online sales. Online sales and storefront sales have both similarities and differences in their business models, so “leveling the playing field” in the way MFA does could carelessly plow under job creation and other activity that benefits the economy – and, indirectly, benefits government coffers.

Nonetheless, it is possible for sellers to participate in both kinds of retailing. Government cannot turn back the technological tide, and it cannot be valid to simply note change as a reason for panicked action.

2) The Massive Compliance Burden for Small Business. There still was no answer to the compliance burden question. Despite repeated attempts at creative explanations by several panelists -- Mr. Kranz, Mr. Crosby, and Mr. Moschella -- the main response to the threat of being subject to the rules (and audits) of nearly 10,000 taxing jurisdictions seemed to be “software.”

A 2006 PricewaterhouseCoopers study demonstrated that small businesses with sales between $1 million and $10 million still face enormous costs that would threaten profitability, causing significant harm to interstate commerce and the economy during an especially fragile time.

Even more striking, a coalition of “e-tailers” wrote lawmakers warning that MFA could cost the signatories some 220,000 jobs.

Mr. Crosby expressed faith that Congress could craft a bill combined with software that would alleviate any problems. But, unless Congress somehow took on legal liability for any failure of this software, businesses will be on the hook for any mistakes the software makes, after the cost of implementing it into their existing systems.

The significance of this part of the MFA equation cannot be understated. Has there ever been a time Congress has so succinctly prescribed a particular tool to business to deal with a law? The occasions are quite rare. If passed into law, will their advice and words of comfort mean anything for the first small business to be visited by California auditors? Would these words survive litigation?

3) Overblown Attacks on Origin Sourcing. As one might expect, pro-Internet Sales Tax panelists targeted “origin sourcing”, which would apply our current “physical presence” sales tax standards to online sales.

Where MFA would effectively have you be the property of your home state no matter where you shopped, “origin sourcing” represents the familiar situation of paying sales taxes wherever you buy something.

During the hearing Mr. Kranz in particular described “origin sourcing” as turning our tax system on its head. How using a current actual or de facto standard in many states for traditional retail could be described as turning anything on its head is not clear. Most importantly however, “origin sourcing” is the only current solution that actually represents “fairness.” It would place brick-and-mortar and online sellers under the same rules whereas MFA would only put online sellers at the mercy of out-of-state auditors.

We also heard points brought up from an Art Laffer study that made great leaps in logic by assuming states would take all their new revenue from MFA and attribute it toward tax cuts. NTU Executive Vice President Pete Sepp took these points apart previously in a piece on

Another common theme centered on the revenue states could rake in with such a scheme – but as noted in NTU’s testimony, these assumptions are based upon a highly-flawed methodology developed by the University of Tennessee that overstates the likely amount of revenue at stake.

While few conclusions could be drawn from the hearing, what is clear is that while experts and Committee members continue to labor under serious misapprehensions as to how the MFA will affect businesses and taxpayers alike, it is prudent for the Committee to not to rush to an MFA mark-up but to continue exploring solutions to what is a complex problem. Representative Collins (R-GA) put it best when he cautioned that implementing a framework for internet sales tax might be “closing one Pandora’s box and opening another.”

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What Budget Florida’s 13th District Elected
Posted By: Dan Barrett - 03/12/14

Yesterday, voters in the 13th Congressional District of Florida elected Republican David Jolly to finish out the late Congressman Bill Young’s (R-FL) term. A former counsel to the late Congressman, Jolly sought to continue some of the goals of Rep. Young as well as to elevate other fiscal issues to the national stage.

Now that taxpayers know who will be representing them in Washington, DC, the question remains what policies Congressman-elect Jolly will pursue. Though Jolly was outspoken about his opposition to the Affordable Care Act, many wonder what else will be on his agenda until another election is held in the district this November. To help educate voters before yesterday and to answer lingering questions today, NTU Foundation compiled all of the direct quotes and campaign literature put out by David Jolly (and the two other frontrunners) to show taxpayers exactly what kind of a federal budget he would support and what questions remain for the newest member of the House of Representatives. Check out the full Florida special election report.

What numbers we have: David Jolly had three specific policies that were clear enough to be scored. NTUF matched his proposals with in-house or third party data and, similar to our BillTally project, accounted only for changes in budgetary spending (or outlays). If these three were enacted, the government would spend a net $60 billion less per year.

  • Repeal the Patient Protection and Affordable Care Act: -$63.9 billion (savings)
  • Secure the Border: $3.68 billion
  • Prevent National Flood Insurance Premium Hike: $180 million

Jolly’s unknown spending policies: We have been analyzing campaign agendas for years but campaigns continue to not provide Americans with the information they need to understand how those seeking office would affect their tax dollars and their government. Though they were too broad to be quantified, NTUF found seven platform items that could affect the federal budget. The difficulty of scoring these policies is not new.

  • Index the Minimum Wage
  • Block Medicaid Expansion Without Federal Guarantee
  • Purchase Insurance Across State Lines
  • Ensure the Military is Properly Equipped
  • Fight for Local and Regional Military Installations
  • Strengthen America’s Foreign Policy
  • Protect Veterans Programs and Funding

Where savings could be: Depending how items would be scored by the Congressional Budget Office, one policy might save the government money. Jolly spoke of blocking the expansion of Medicaid -- an Affordable Care Act provision -- which might save money if Florida’s share of funds would be dedicated to deficit reduction.

Spending still prevalent: Six proposals in Jolly’s platform would either reallocate existing federal spending or increase expenditures by potentially billions of dollars. Without clarification, it is impossible to determine (for example) how keeping local and regional military bases open would affect other defense spending programs, potentially costing taxpayers more in the long run. It is hoped that as time goes on and Rep. Jolly organizes his staffs in Washington and Florida, he will clarify his positions on the above proposals and provide the intended or projected costs.

On net: Though it is not likely that a single Representative will affect federal spending on a mass scale, it is certain that David Jolly will vote on important fiscal issues. Those votes might point the government in a fiscally-sustainable direction or continue America’s deficits. Votes might include reforming the complex tax code, reauthorizing federal highway spending, and/or the many small bills that add up to big changes. The important takeaway from Florida’s latest special election is that candidates need to communicate their complete platforms to taxpayers and, once in office, to live by those promises. NTUF will be analyzing and scoring David Jolly’s legislation, just as we do so with every introduced bill in Congress.

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"Speaking of Taxpayers" from CPAC 2014, Part 1 (with link to Part 2!)
Posted By: Douglas Kellogg - 03/10/14

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We're back from the bustling floor of CPAC! A special, extended edition of "Speaking of Taxpayers" has all the action as we discuss the conference & chat with a number of great guests. In part one of this two-part podcast, Pete & Doug talk about the Obama budget with TPA's Michi Iljazi; and budget busting pensions, Medicaid expansion, and expensive gimmicks with Corey Eucalitto & Joe Lupino-Esposito of State Budget Solutions...Click for Part 2!

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House Restarts Debate over Satellite TV Bill
Posted By: Brandon Arnold - 03/10/14

On Wednesday, March 12, the House Energy & Commerce Committee’s Subcommittee on Communications and Technology will hold a hearing on the reauthorization of the Satellite Television Extension and Localism Act, or STELA as it is commonly known. First passed in 1992, this legal framework was originally intended to foster competition in the pay-TV marketplace.

The current law expires at the end of 2014 and this week’s hearing has the potential to launch Congress into a contentious battle over several complex issues. Lawmakers could, for instance, pursue aggressive regulatory reforms along the lines of the Next Generation Television Marketplace Act (H.R. 3720). Back in 2012 my former NTU colleague Andrew Moylan described how the legislation would “eliminate retransmission consent and compulsory license provisions, thereby placing negotiations between television content and service providers on a more level and clearly delineated playing field.”

However, rather than implementing a major regulatory overhaul, it appears Congress will probably take a less volatile route. According to the Committee’s draft legislation, which was released late last week, , the House will likely pass a relatively “clean” STELA reauthorization bill. The Committee’s draft recommends a few changes to current law, such as allowing cable and satellite companies to negotiate rates with individual broadcasters instead of being required to conduct joint negotiations. However, the proposal avoids more controversial issues, like ending the requirement that cable companies must include network broadcasts on their basic programming tier. Taking a safer route would make legislative passage easier, but it could very well mean that debate over additional market-driven,  consumer-oriented policies will have to wait until another opportunity arises. Given the current political environment, that may even mean the next Congress.


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