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Blog Contributors

Brandon Arnold
Executive Vice President 

Dan Barrett
Research and Outreach Manager 

Melodie Bowler
Government Affairs Intern 

Demian Brady
Director of Research 

Christina DiSomma
Communications Intern 

Jihun Han
Communications Intern 

Timothy Howland
Creative Content Manager 

Samantha Jordan
Communications Intern 

Curtis Kalin
Communications Intern 

Ross Kaminsky
Blog Contributor 

David Keating
Blog Contributor 

Douglas Kellogg
Communications Manager 

Sharon Koss
Government Affairs Intern 

Michael Liguori
Government Affairs Intern 

Richard Lipman
Director of Development 

Joe Michalowski
Government Affairs Intern 

Diana Oprinescu
Communications Intern 

Austin Peters
Communications Intern 

Kristina Rasmussen
Blog Contributor 


Government Bytes

Big Government Tries Again to Tax Soda Like a Sin
Posted By: Melodie Bowler - 08/25/14

Once again, soda taxes have reached the November ballot in two California cities, Berkeley and San Francisco. Berkeley’s city leaders have chosen to place a 1-cent-per-ounce tax on the ballot; San Francisco’s measure attempts to levy a 2-cents-per-ounce tax. While called a “soda” tax, these measures would actually tax all beverages sweetened with sugar, including juices, iced teas, sports and energy drinks. For two liters of Coca-Cola, typically about $2.00 in a grocery store, Berkeley’s measure would raise the price by almost 70 cents; San Francisco’s would cost consumers an additional $1.35.

The opposition to taxing soda is remarkably robust since the issue aligns generally unaffiliated voting blocks: free-market, low-tax proponents and advocates for the impoverished. Soda taxes are regressive, burdening all individuals equally rather than proportionally based on income. Low-income families would be hit hardest by a soda tax because the additional cost of groceries would encompass a greater portion of their budgets.

These ballot measures may worry some soda drinkers, but supporters of the tax face an uphill battle. In 2012, the California cities of El Monte and Richmond tried to implement similar soda taxes of 1 cent per ounce through ballot measures. While voters in these cities overwhelmingly supported President Obama’s re-election, 76 percent of voters rejected the soda tax in El Monte and 67 percent rejected the tax in Richmond. The small town of Telluride, in the San Juan Mountains of Colorado, voted down another soda tax last November, with 68 percent against the measure. Many cities and even some states have attempted to implement soda taxes, but none have been successful.

Fortunately for soda drinkers, restrictions are pushed by a small crowd and overwhelmingly disliked by the electorate. In 2010, the Washington State Legislature passed a tax on soda (along with bottled water and candy), but voters responded by getting an initiative on the ballot and overturning the tax. Even the courts of New York stopped former Mayor Bloomberg’s attempt to limit the sale of large sodas to sixteen ounces. One soda-related measure did pass years ago in Ohio, but rather than creating a new tax, it amended the state constitution to prohibit any taxation of soda.

On November 4th, voters in Berkeley and San Francisco will decide whether drinking soda is a sin worth taxing. Each soda measure that will reach voters this fall will be featured on NTU’s upcoming Ballot Guide. Keep up with the fight against these measures and other attempts at nanny-state overreach on NTU.org.

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Latest Taxpayer's Tab: Presidential Library Donations
Posted By: Michael Tasselmyer - 08/24/14

Taxpayer's Tab Update

Presidential libraries are expensive propositions, and while the federal government foots most of the costs associated with archiving and maintaining the various papers, photos, and memorabilia on display within them, private foundations finance most of the construction and maintenance costs. However, private donors are allowed to give as much as they'd like to a president's library (even those who are still in office) and foundations that accept them do not usually have to identify those who donate large sums of money. This has lead to allegations of donors "buying" perks such as White House access and Presidential pardons, and a call for more transparent financial disclosures.

In this week's edition of The Taxpayer's Tab, NTUF featured Congressman John Duncan's (R-TN) and Senator Tom Carper's (D-DE) Presidential Library Donation Reform Act, which would require presidential library foundations to disclose the names of donors who give more than $200 in any financial quarter. H.R. 1133/S. 2640 would make those disclosures accessible and searchable online, an effort the Congressional Budget Office estimates would cost about $1 million per year.

Also featured this week:

  • Most Expensive: Congressman Larry Bucshon (R-IN) introduced the NIST Reauthorization Act, which would provide additional funding to the National Institute of Standards and Technology. H.R. 5035 would increase federal spending by about $260 million per year.
  • Least Expensive: Senator Tim Scott's (R-SC) Charity Care Expansion Act would create a new tax deduction for medical professionals to offset the costs they incur by providing free or reduced cost "charity care" to uninsured Americans. S. 2492 would also repeal the Preventive Health and Health Services Block Grant, which would reduce federal spending by $3 billion over five years.

For more on these bills and the latest NTUF research, check out The Tab online.

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Gone Fishing - Speaking of Taxpayers, August 22
Posted By: Douglas Kellogg - 08/22/14

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NTU Federal Affairs Manager Nan Swift explains how a dispute over who inspects catfish could get so complicated (hint: government) and cost so much. Then, NTU State Affairs Manager Lee Schalk lends a much needed state update as election season nears and taxes are on the ballot. Plus, the Outrage of the Week is a big one!

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Export-Import Bank: A Bad Deal for Taxpayers
Posted By: Melodie Bowler - 08/19/14

If you haven’t heard about the Export-Import Bank, here’s a quick rundown of the basics:

  • Commonly called Ex-Im, the bank was established by executive order of President Franklin D. Roosevelt on February 2, 1934.
  • Ex-Im provides loans and loan guarantees to U.S. companies attempting to export and to foreign companies wanting to import U.S. goods.
  • If Congress does not reauthorize Ex-Im by the end of September, it will cease providing loans or loan guarantees. It would continue to service current loans.

While budget-neutral in theory and often on paper, this notion is perpetuated only through faulty accounting and misleading statistics. Let’s debunk some of the rumors running wild on Capitol Hill.

Myth

Fact

90 percent of Ex-Im loans go to small businesses.

Based on the number of loans, almost 90 percent did benefit small businesses in 2013 (according to the bank’s very inclusive definition of “small”). Based on the number of dollars loaned, the large majority of taxpayer-backed financing went to behemoth businesses. In fact, Congress requires 20 percent of the total dollar value of Ex-Im transactions to go to small businesses, but the bank has repeatedly failed to meet that number.

Ex-Im financing is necessary for American businesses to compete in the global market.

In 2013, Ex-Im financed only 1.6 percent of U.S. exports.

Ex-Im is a “self-sustaining agency” that returns profits to the Treasury.

Ex-Im uses faulty accounting procedures rather than fair value accounting to create an illusion of profits. The Congressional Budget Office estimates that Ex-Im costs taxpayers $200 million each year.

If we take a closer look at Ex-Im’s transactions, the bank’s financing becomes even more questionable. In many cases, large corporations benefitting from Ex-Im financing could have received loans from the private sector. In other instances, the Ex-Im-backed ventures were so risky that private lenders would not fund them. In either scenario, U.S. taxpayers should not be responsible for providing low-interest loans that are unnecessary or unlikely to be paid.

To demonstrate the true horror of what Ex-Im does with our money, the House Financial Services Committee created a blog series titled “Egregious Ex-Im Bank Deal of the Day.” Each weekday, the staff publishes another awful deal that Ex-Im decided was worthy of taxpayer funding. Remember Solyndra, the failed manufacturer of solar panels? After receiving $535 million from the stimulus package, Ex-Im officials decided the now-bankrupt company could use additional help, in the form of a $10.3 million loan guarantee for a foreign supermarket chain to buy Solyndra’s products. In a recent deal, the Australian Roy Hill Iron Ore project received a $694 million loan from Ex-Im after the private market refused to offer financing. Not only are Americans funding this without their consent to bear the risk, but the project will compete with U.S. mines, jeopardizing domestic jobs. Possibly the most egregious deal yet has been $4.975 billion in direct loans to assist building Sadara Chemical Company, a project of Saudi Aramco, the state-owned oil company of Saudi Arabia. If the Saudi Arabian government needs American exports for its pet project, they can likely finance those purchases without help from U.S. taxpayers.

If that weren’t enough reason to let Ex-Im’s authorization lapse, in addition, the bank’s transactions are fraught with bribery and cronyism. Abengoa International, a Spanish green-energy company, managed to receive about $150 million in total loans from Ex-Im, to no one’s surprise, since former governor of New Mexico Bill Richardson sat on the board for both the company and the bank. Four other Ex-Im officials are currently undergoing investigations of bribery and favoritism. While Ex-Im is financing growth for our foreign competitors, including Russia and Brazil, the U.S. continues to experience economic and employment hardships at home. Rather than risking taxpayers’ dollars for the benefit of other countries, it is time to let the Export-Import Bank expire.

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Taxpayers Already Fighting November Ballot Measures
Posted By: Lee Schalk - 08/18/14

As we head towards fall, debates regarding state and local November ballot measures are heating up. In many places, groups of citizen activists are organizing to push back against the threat of greater spending and higher taxes. In Georgia, the Cobb County Taxpayers Association (CTA) is one such group, speaking out against a Special Purpose Local Option Sales Tax (SPLOST) measure that is a shoe-in for the infamous “negative” rating in the 2014 edition of NTU’s Ballot Guide.

If passed, the measure would renew a one percent sales tax hike for six years. If thwarted, Cobb County taxpayers would see their sales tax rate drop to 5 percent, which would be the lowest rate in the region. As CTA points out, many counties in the Atlanta area have a rate of 7 percent, meaning that this SPLOST proposal’s defeat would greatly benefit Cobb County residents and businesses by helping to attract more retail activity.

If you’re a concerned taxpayer living in the area, you may want to keep tabs on CTA’s activities. They held an organizational meeting this past Saturday in Marietta and will continue to work to defeat the tax measure. More info can be found HERE. Additionally, be sure to keep an eye on NTU.org as we continue to weigh in on state and local ballot measures. In particular, stay tuned for the release of our annual Ballot Guide, which will be available in the fall.

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Administration Stonewalling Government Watchdogs
Posted By: Nan Swift - 08/18/14

The offices of Inspector General were created under the “Inspector General Act of 1978” to serve as internal watchdogs within federal agencies by conducting audits and investigations into programs, providing policy recommendations to “promote economy, efficiency, and effectiveness,” preventing fraud, and communicating administrative problems to Congress.  Since their inception, the Inspectors General (IG) have served an invaluable role for taxpayers by rooting out waste and increasing transparency. However, the important work of the IGs is being hindered by the Obama Administration according to a letter sent earlier this month from IGs across the federal government to members of the House Oversight and Government Reform Committee and the Senate Homeland Security and Government Affairs Committee.  NPR reports:

Forty-seven IGs signed a letter this month highlighting problems with access to federal records — problems they say slow their investigations and threaten their independence.

"If the IG community cannot rally around getting access to data, access to information, what can they rally around?" asks Brian Miller, who served as inspector general at the General Services Administration for nine years. "You know, this is, this is vital."

Miller says by failing to hand over documents and access to electronic databases, bureaucrats can deprive IGs of the fuel they need to do their work.

Taxpayers have real reason to be concerned at the news IGs aren’t receiving the support and access to information they need from the “most transparent administration in history.” Over the years, the important work of the IGs has been the source of critical information. Here’s just a small sample of what IGs have uncovered:

Just from the handful of cases above, it’s clear the IGs fulfill an essential role in ensuring tax dollars aren’t misused and federal programs are properly administrated. Best of all, unlike so many other government endeavors, taxpayers can be sure they are making a good investment when it comes to these vital people. A 2011 Government Accountability Office (GAO) report found that the savings IGs generated through their audits and investigations “represented an $18 return on every dollar invested in IGs.”

Of course, if IGs are finding it harder to do their jobs and obtain the information necessary to conduct thorough analyses, taxpayers will see less and less of that investment recouped and more and more waste across all agencies. Taxpayers will have to hope that Congress and the Administration can find a way to ensure our IGs can continue to be an effective tool that raises the bar for bureaucracy.

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Latest Taxpayer's Tab: Publicly Funded Art
Posted By: Michael Tasselmyer - 08/17/14

Taxpayer's Tab Update

Did you know that in 2002, taxpayers funded a $10,000 grant that went to support the Arctic Chamber Orchestra's tour through rural Alaska? The government agency that administered the funding is the National Endowment for the Arts, which was established in 1965 and received about $146 million in appropriations last year.

Congress has tried to defund the NEA before, and this week's edition of The Taxpayer's Tab features the latest version of such legislation, introduced by Representative Matt Salmon (R-AZ). H.R. 5090 was introduced as part of the Congressman's "Shrinking Our Spending" (SOS) initiative, and would prohibit any future funding of the NEA.

Also featured this week:

  • Most Expensive: Congressman Matt Cartwright (D-PA) and Congresswoman Rosa DeLauro (D-CT) introduced the VARIETY Act, which would refund 30 cents of every SNAP dollar used to purchase fresh fruits and vegetables in order to encourage healthier eating habits. H.R. 4904 would cost about $824 million per year.
  • Wildcard: Senator Chris Coons' Manufacturing Universities Act would offer additional federal funding to American colleges and universities that develop engineering programs with a special focus on manufacturing applications. S. 2719 would cost about $125 million per year.
  • Farewell, interns: NTUF had the pleasure of hosting 11 interns this summer, all of whom helped us research legislation and write about our findings. Find out more about them and our internship program!

You can read the latest issue of The Tab online.

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Linda Remeschatis, Owner of WisconsinMade - Speaking of Taxpayers, August 14
Posted By: Douglas Kellogg - 08/15/14

Pete & Doug have a great discussion on the potential havoc of an Internet tax scheme like Marketplace Fairness Act with small business owner Linda Remeschatis of WisconsinMade. A final pair of interns stop by to lend insight into NTUF's work - plus, the Outrage of the Week! 

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Phone Scam Claims More Than $5 Million From Taxpayers; President Obama’s Corporate Donors Involved in “Inversion” Deals - Late Edition, August 14
Posted By: Jihun Han - 08/14/14

Today's Taxpayer News! 

Fake IRS callers have called people demanding thousands of dollars in alleged unpaid taxes. A reported $5 million have been stolen from taxpayers in this scam based on 1,100 people. Read the IRS response here!

President Obama will not return money to his corporate donors that have practiced “inversions” which the President dubbed the practice as “unpatriotic”; via Bloomberg!

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Disability Insurance: The Alarming Underbelly of the Social Security Crisis
Posted By: Melodie Bowler - 08/13/14

On Monday, July 28th, the Social Security Administration released its annual trustees report, officially titled “The 2014 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.”

Old-Age and Survivors Insurance (OASI) is commonly known as Social Security and is received by retirees or their immediate family after death. Disability insurance (DI) is also under the purview of Social Security but is received when someone is unable to work due to physical or mental disability.

In response to the release, the Committee for a Responsible Federal Budget held a panel discussion the following day, titled “Decoding the 2014 Social Security Trustees Report.”

Starting the discussion were Congressmen Tom Cole (R-OK) and John Delaney (D-MD).

At the end of May, they introduced H.R. 4786, the Social Security Commission Act of 2014. H.R. 4786 would create a 13-person Commission on Long Term Social Security Solvency. The commission would be chaired by a presidential appointee; the House and Senate each would choose six members, including two non-elected experts. For the commission to report its recommendations, it would need approval of at least nine participants, ensuring a bipartisan consensus. The Congressmen were enthusiastic about the prospect of creating this commission, but since its introduction, the bill has not moved. Everyone in the discussion agreed that progress will not continue until after the November elections.

Once the Congressmen left, the panelists began their examination of the report’s findings.

The combined Old-Age and Survivors Insurance and Federal Disability Insurance (OASDI) trust funds will be depleted in 2033. This prediction has not changed from last year’s report. Once depleted, 77 percent of total Social Security benefits will still be disbursed as revenue is continually deposited into the funds from payroll taxes.

Viewed separately, the OASI trust fund will run dry in 2034. The DI trust fund will empty in 2016 and will continue to pay just 81 percent of benefits. With disability insurance running very low very soon, the discussion steered toward solutions.

Unlike much of the federal government, the OASDI trust funds cannot borrow from outside sources to replace depleted revenue. One suggested solution is to borrow instead from the OASI fund to replenish the DI fund. This would be a short-term fix, and the almost insolvent DI fund would not be able to repay the loan to the OASI fund.

Another similar solution is to reallocate revenue from OASI to DI. Rather than a simple transfer from one fund into the other, politicians could change the portion of the social security payroll tax that benefits the two funds. Right now, the social security tax is 6.2 percent of income, with 5.3 percent funding OASI and the remaining 0.9 percent going to DI. Raising DI’s portion of the tax and lowering OASI’s portion would extend the solvency of the DI trust fund, but it would shorten the solvency timeline for the OASI trust fund.

Most of the panelists insisted that a truly long-term solution would include tax increases, benefit cuts, or both, which they did not describe in detail.

Many politicians and organizations have recognized the crisis facing Disability Insurance, but few have presented comprehensive plans to solve the problem. Last August, the Cato Institute published a policy analysis titled “The Rising Cost of Social Security Disability Insurance” to address exactly this issue.

Rather than raising taxes or putting the OASI trust fund in jeopardy, Cato recommends cutting costs drastically to save the DI trust fund. The analysis examines several ways to lower costs; the two paramount changes would be reducing benefits and enforcing stricter eligibility requirements. Regular reexamination of recipients would also result in significant savings. In the early 1980s when the Social Security Administration decided to reexamine DI beneficiaries, they found that 40 percent did not qualify to receive benefits. Cato recommends other small changes, but with these three together, Congress should be able to save Social Security Disability Insurance for those who really need help.

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