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Indiana Can Challenge Obamacare Tax Credit Rule; Canadians Suing Over FATCA Law
Posted By: Jihun Han - 08/13/14

Today's Taxpayer News! 

A U.S. district judge ruled that Indiana can challenge an Obamacare tax credit rule. Indiana claims that enrolling for Obamacare through the federal exchange and gets tax credits is illegal. Read here for more!

Canadians are suing over the Foreign Account Tax Compliance Act (FATCA) for many reasons, including that it contradicts the constitutional principle “that Canada will not forfeit its sovereignty to a foreign state.”

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Canadians Sue Over FATCA
Posted By: Samantha Jordan - 08/13/14

In a recent blog, The National Taxpayers Union Foundation speculated over potential snags in the United State’s close friendship with Canada over the overreach of the Foreign Account Tax Compliance Act. It appears after just one month since it’s enactment, US-Canadian ties are already being strained.

Since implementation on July 1, 2014, FATCA has cost Canada’s five biggest banks a combined $750 million in Canadian dollars ($687 million in US dollars) just in initial compliance expenses. American-Canadian dual citizens are already fed up. 

The Wall Street Journal explains US expatriates are taking legal action against the Canadian government for its role implementing FATCA. The lawsuit challenges that the Canada-US intergovernmental agreement violates provisions in the 1982 Canadian Charter of Rights and Freedoms which guarantees “life, liberty, and security of person; security against unreasonable search and seizure; and equal protection of law without discrimination.”

Additionally, the plaintiffs suggest that FATCA “goes against the principle ‘that Canada will not forfeit its sovereignty to a foreign state.” By forcing Canadian banks to share account information with the IRS via Canadian tax authorities, many would argue FATCA goes against the Canadian principle “that Canada will not forfeit its sovereignty to a foreign state.”

Given that a record, 1,577 US taxpayers gave up their passports or green cards in the first half of 2014, the US needs to ask if FATCA is worth risking our closest ally.

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Dispatches from the Internet Sales Tax Road Show
Posted By: Melodie Bowler - 08/12/14

The Marketplace Fairness Act (MFA) “is the single biggest threat to taxpayers that is capable of passing this Congress,” stated NTU President Pete Sepp in a recent “Speaking of Taxpayers” podcast. The MFA would allow state governments to collect sales taxes from every online retailer that sells to consumers in their states, regardless of the state in which the retailer is located. The burden of this legislation would fall on businesses, having to file tax returns for every jurisdiction to which they send products. For more details on the MFA, check out NTU’s Internet Sales Tax Myths and Facts.

In order to inform voters about the consequences of this legislation passing, NTU has joined with the R Street Institute to tour the country on the Internet Sales Tax Road Show.

Below, Andrew Moylan of R Street and Pete talk to an audience in Columbus, Ohio about opposition to the MFA. Ohio voters overwhelmingly reject the idea of other state governments taxing Ohio’s online retailers, 56 percent to 31.

pete andrew 1

Ohio business owners were greatly concerned about the difficulties of complying with the MFA. An independent study found the cost to businesses of collecting taxes annually for nearly 10,000 existing jurisdictions can range from $57,500 to $260,000. The initial setup, integration, and implementation of the necessary software can cost an additional $80,000 to $290,000.

After the presentation, Pete discussed the hazards of passing the MFA with a local Columbus reporter from WBNS. Many state governments believe the MFA would provide a legal means to pad their coffers by allowing them to collect sales taxes on the online purchases of their constituents. However, with 46 states grabbing at online merchants’ revenues, many small businesses could end up closing shop, unable to afford the cost of compliance.

Look out for NTU and R Street in your state! For additional information and to keep up with the Road Show, head to or for more in the effort to stop MFA.

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National Employee Freedom Week Helps Educate Union Members on their Rights
Posted By: Samantha Jordan - 08/11/14

82.87 percent of Americans say union workers should be able to opt out without force or penalty. Many union members don’t know they already have that right. 

National Employee Freedom Week (NEFW) is working to change just that. NEFW is a nationwide campaign to let employees know they have the freedom to opt-out of their union. Through a coalition of 77 groups in 44 states, NEFW aims to “empower workers by informing them of their choices, sharing alternatives that may better serve their needs and provided them the resources needed to make the choice that’s best for them.”

Among these options, NEFW emphasizes that employees in “Right-To-Work States” have the option to leave their union entirely. The National Right to Work Legal Defense Foundation, Inc. explains nearly half of the US—24 states —protect employees from being required to join unions. Even those living in “Non-Right-To-Work States,” have options within their union. Employees in these states can either become an agency fee payer that only pays for the non-political parts of union membership or become a religious/conscientious objector who does not fund the union whatsoever.

Alternative professional organizations provide additional options such as insurance and opportunities for professional development at a fraction of the cost of a union membership. For example, organizations such as the Association of American Educators offer insurance benefits for just $16.50 a month and cover $2 million in liability insurance.

Of 454 union members surveyed, NEFW found 136 wanted to leave their union. By increasing awareness through their August 10—16, 2014 campaign, NEFW can help union members to understand their options and weigh the opportunity cost of paying thousands of dollars in dues or freeing themselves from the unions. 

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What Did Failed ACA Exchanges Cost Taxpayers?
Posted By: Michael Tasselmyer - 08/10/14

Taxpayer's Tab Update

Technical difficulties during the rollout of, the online insurance plan exchange authorized by the Affordable Care Act (ACA) and administered by the federal government, received plenty of scrutiny both in the media and on Capitol Hill. However, four states' independently-run exchanges -- in Maryland, Oregon, Massachusetts, and Nevada -- were also plagued by glitches and security concerns; so many, in fact, that all four have decided to either scrap their sites and start over, or opt into the federally-administered system. According to new information from the House Energy and Commerce Committee, taxpayers fronted $746 million worth of grants to get those failed exchanges up and running.

In this week's edition of The Taxpayer's Tab, NTUF featured legislation introduced by Congressman Tom Reed (R-NY) and Senator John Barrasso (R-WY) that would require those states to return the money to the federal government. The State Exchange Accountability Act would result in about $75 million per year being returned to the Treasury.

Also featured in this week's Tab:

  • Most Expensive: Senator Richard Blumenthal (D-CT) introduced the Stop Subsidizing Childhood Obesity Act. S. 2342 builds on legislation originally sponsored by former Representative Dennis Kucinich and would repeal current tax breaks offered to promotional activity within the food industry. Any revenue gained from doing so would be redirected to the U.S. Department of Agriculture's Fresh Fruits and Vegetables Program to provide students with more nutritional school lunches. The bill would cost $500 million in the first year.
  • Wildcard: Congressmen Dave Cicilline (D-RI) and Scott Rigell (R-VA) introduced H.R. 5095, which would require Members of the House of Representatives to undergo ethics training similar to that which is required of current House staffers and all Senate Members and staff. It likely wouldn't require any additional funding.
  • Friedman Legacy Day Poll: NTUF asked our members which method of tax reform they'd like to see in Washington, and we have the results of the poll in this week's Tab.

Check out the latest edition online.

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Profiles in Liberty: Looking to the Future
Posted By: Dan Barrett - 08/08/14

With all their tax, communications, and research training, what will our NTU and NTUF interns be doing this fall? We asked them, and here’s what they said!

Government Affairs Interns:

  • Melodie Bowler will be staying in the area and searching for a job in policy research.
  • Michael Liguori is transferring to the University of North Carolina, Chapel Hill, where he will continue to work towards an International Relations degree and minors in Economics and Arabic.

Foundation Communications Interns:

  • Jihun Han is returning to Syracuse University to complete his junior year. He is looking forward to continuing his program in radio broadcasting.
  • Sam Jordan will be returning to George Mason University in the fall. She plans to use her improved communication skills on the University’s competitive speech team.

Foundation Research Interns:

  • Steve Adams will be headed back to Hampden-Sydney College to complete his senior year.  He was elected to represent his classmates as a student senator, and will be working to complete his thesis on capital punishment.
  • Paul Bartow has just started a job at the American Enterprise Institute as an American History Research Assistant. He is excited to apply the research and communication skills he honed at NTUF in his new position.
  • Alex Eblen has a fall internship with Representative Blaine Luetkemeyer from Missouri.
  • Catherine Fitzhugh will be returning to Grove City College to complete her senior semester. While there, she will continue her role as a Student Research Fellow at the Center for Vision and Values at Grove City College.
  • Kelly Hastings will be moving back to Tennessee and conducting an extensive job search. She completed her degree in Economics this past spring.
  • Ian Johnson will be spending some time with his family and then returning to Brigham Young University in January.
  • Gordon Miller hopes to advance free-market principles by obtaining a job at an educational organization or a think tank in the Washington, D.C. area.
  • JR Ridley will be headed back to Vanderbilt University where he will continue his work with the Medical School IT Department.
  • Daniel Simmons will return to Texas with his family. He is the owner of a power washing company, and will be completing the capstone class of his MBA program.

The Profiles in Liberty series will have one more instalment this summer. Stay tuned to Government Bytes to see what our interns have to say about their internship experience this summer.

Thanks to Catherine Fitzhugh for developing the Profiles in Liberty series and interviewing our interns.

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Rep. Jeb Hensarling on Ex-Im Bank - Speaking of Taxpayers, August 8
Posted By: Douglas Kellogg - 08/08/14

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House Financial Services Committee Chairman Jeb Hensarling (R-TX) joins the show to explain what's going on with Ex-Im on the Hill - and why it's so important we put an end to the "Bank of Boeing." Plus, Pete & Doug talk "inversions", FATCA, and good news on the BBA front... And, as always, the Outrage of the Week!

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Ken Blackwell on Milton Friedman
Posted By: Dan Barrett - 08/07/14

Last week, Ken Blackwell, member of the board of directors for the National Taxpayers Union and director of the Coalition for Mortgage Security, wrote an article for Forbes praising Milton Friedman for his contribution to the understanding of free markets and advancement of individual rights in honor of the late economist’s 102nd birthday. In addition to outlining Friedman’s ideas regarding the role of government in civil society, Blackwell commends him for accurately predicting the growth of government and anti-market sentiments that has occurred in recent years.

Friedman believed that government responsibility should be limited to military defense, the enforcement of contracts between individuals, and the protection of citizens from crimes against themselves or their property. He further argued that government intervention in the economy ultimately leads to, “inefficiency, lack of motivation, and loss of freedom.” In his 1994 reintroduction to Friedrich Hayek’s The Road to Serfdom, Friedman suggested that “the battle for freedom” is one that “must be won over and over again.” Blackwell’s analysis of Friedman’s introduction to Hayek’s pivotal work sheds light on the dangers Americans face today as our government continues to expand, assault for-profit institutions, intervene in the healthcare market, and disregard private property rights.    

Thanks to Kelly Hastings for writing this post.

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Obama Administration Opaque On Releasing Obamacare Info; Growing Number of U.S. Citizenship Renunciations Spurred by Taxes? – Late Edition, August 7
Posted By: Jihun Han - 08/07/14

The Obama Administration has stopped releasing Obamacare sign-up information since the month of May. They are reportedly nervous about releasing premium rates before the midterm elections. Daily Caller has the latest!

The Treasury Department released its quarterly list of Americans renouncing their citizenship. 2013 was a record high for U.S. expatriates and the trend still seems to be going up. According to Forbes, one of the reasons is because of the complex tax code and the requirement to file taxes even if you don’t work in the U.S.

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Corporate Inversions Continue
Posted By: Melodie Bowler - 08/07/14

This is a follow-up to the earlier blog post, Corporate Inversion: Fleeing from the Terrifying Tax Code.

The fervor for inversion is not slowing down, especially now that Congress is in recess until September. With two bills left behind, H.R. 4679 in the House and S. 2360 in the Senate, Congress could address the issue during their short September session or in the subsequent lame duck session. While President Barack Obama and Treasury Secretary Jacob Lew condemn businesses as “unpatriotic” for trying to relocate, few policymakers attempt or even suggest specific comprehensive reforms to the tax code, despite admissions that the rate is the real problem. Instead, both bills retroactively change the IRS requirements for inversion to trap businesses in the U.S.

The high corporate tax rate reduces competitiveness for U.S. companies, causing many to analyze the costs and benefits of moving their headquarters abroad. Under the current law, some not-yet-incorporated, fledgling businesses will also decide that the U.S. is not an ideal country in which to open shop. The U.S. corporate income tax rate sits at 35 percent, considerably higher than the European Union average rate of 21.34 percent or the OECD average of 24.11 percent. Operating with at least a 10 percentage point tax advantage leaves foreign competitors with significantly more income for future investments, higher wages, or lower prices, with which U.S. companies struggle to compete.

With their additional expendable revenue, foreign corporations are increasingly viewing U.S. companies as valuable investments. They can buy U.S. competitors to take advantage of American resources and infrastructure, yet maintain their headquarters abroad. As a recent Wall Street Journal article reported, foreign businesses use their additional cash after paying taxes to outbid their U.S. counterparts trying to buy U.S.-based businesses. The article specifically cites a situation in which Emerson, a manufacturing and technology company based in St. Louis, attempted to acquire American Power Conversion (APC) in Rhode Island. Despite an offer of over $5 billion, France-based Schneider Electric outbid Emerson by about $1 billion, turning once-American APC into a French company.

Without true tax code reforms, Congress will continue to see erosion of its tax base. Congress’s misguided attempts to stop inversions could actually expedite the erosion by preventing new companies from incorporating in the U.S. President Obama has threatened unilateral action to stop inversions, but only comprehensive tax reform will rectify the problem that Congress has created with the complicated tax code.

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