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Court Strikes Down Net Neutrality, Leaves Door Open for Internet Regulation
Posted By: Brandon Arnold - 01/15/14

Yesterday’s ruling by the U.S. Court of Appeals for the DC Circuit in Verizon v. FCC offers encouragement, though not complete reassurance, that the legislative branch’s authority over a sweeping telecommunications policy has been reaffirmed. On one hand, the Court wisely struck down “net neutrality” rules that the FCC adopted in 2010 without the consent of Congress, saying that the “agency overreached in barring broadband providers from slowing or blocking selected Web traffic.”

These rules sought to regulate Internet service providers to prevent the discriminatory delivery of broadband. My colleague, Pete Sepp, weighed in on the FCC’s rulemaking process in 2010 when he called network neutrality “a hostile government takeover of the Internet, and with it bureaucratic micromanagement.” Preventing the FCC from excessively regulating in this area is a win for limited government.

Still, the Court’s ruling wasn’t all good news. It also opened the door for FCC regulation of the Internet by asserting that it has jurisdiction over broadband access, though Congress has never granted it such. Plus, the FCC may consider an appeal to the U.S. Supreme Court. All of this means taxpayers will have to remain vigilant to ensure that the Internet remains a vibrant medium for commerce and information sharing. 

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Speaking of Taxpayers: Wes Berry on Internet Sales Tax Threat to Small Business
Posted By: Douglas Kellogg - 01/15/14

The owner of Wesley Berry Flowers calls in to talk about the Marketplace Fairness Act and the problems with an Internet Sales Tax; hosts Pete & Doug preview some of the upcoming issues taxpayers will face in 2014 - plus the Outrage of the Week!

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Video: House Ways and Means Committee’s Tax Reform Goals
Posted By: Dan Barrett - 01/15/14

Today, the committee in charge of the Tax Code released a video on how the system doesn’t work and how they plan to fix it. The Republican-led body presents three solutions:

  1. Make the Tax Code simpler and fairer: “By getting rid of all the junk in the income Tax Code, we could shrink it by 25 percent”
  2. Make the Tax Code more efficient: “By getting rid of special interest handouts and lower tax rates across the board”
  3. Make the Tax Code more accountable to taxpayers: “Whenever a tax loophole gets closed, let’s make sure that money goes back to the people who are paying the taxes in the first place and not to pay for more Washington spending”

Though these are lofty goals for Congress, it's clear from recent legislation like the 2012 American Taxpayer Relief Act that making a meaningful impact on our Tax Code will require extensive reform. Almost everyone agrees that the system is “too complex, too confusing, and too costly” and that is precisely why having a plan makes sense. Still, identifying the problem is just the first step towards fixing it. U.S. businesses -- big and small -- deserve, a fair, effective, and efficient Tax Code and Washington is in the prime position to fix it.

Here’s hoping that Congress can come together to relieve all taxpayers of the dread and stress of the current Tax Code (a system that has been changed “4,400 times over ten years” by both parties).

For more information on how complex our tax system is, check out NTU’s 2013 Tax Complexity study, which will be updated later this year. NTU Foundation also surveyed folks which tax system the U.S. should change to during our annual Milton Friedman Legacy Day event.

How would you change the Tax Code? Streamline the current system? Completely replace it? Leave a comment down below!

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Latest Taxpayer's Tab: Congress Already Reworking Budget Deal
Posted By: Michael Tasselmyer - 01/11/14

Tab Insert

Less than one month after its passage, Congress is already revisiting some of the key agreements it reached in the Ryan-Murray budget deal. In this week's Taxpayer's Tab, NTUF compiled all of the bills that would make changes to two major benefits programs: emergency unemployment insurance, and pay for military retirees.

During the December budget negotiations, Congress failed to reach an agreement on how (or whether) to extend emergency unemployment insurance benefits, which were offered to provide relief for long-term unemployed Americans who had exhausted other forms of payments. One of the obstacles lawmakers continue to face is how those benefits would be paid for if they were to continue. A number of proposals have called for a short term extension without any offsets to the cost; others, including an amendment offered by Senator Harry Reid (D-NV), would extend the program for a longer term in exchange for offsets spread out over the next ten (or more) years. A 3-month extension is estimated to cost about $6.56 billion, according to the Congressional Budget Office.

Another point of contention arose regarding retirement benefit calculations for military veterans under the age of 62. Currently, those personnel are offered benefits at a reduced rate. Congress is now debating whether those reductions should exist at all, or whether certain servicemembers -- namely, those retired due to disability -- should be exempt.

For a detailed list of the bills NTUF compiled, check out the latest Tab online here.

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Does House Oversight Hearing on Wasteful Spending Mean Hope for Taxpayers?
Posted By: Douglas Kellogg - 01/09/14

NTU Vice President Brandon Arnold offered testimony to the House Committee on Oversight & Government Reform today, making recommendations for saving taxpayer dollars and improving efficiency in government – including submitting NTU and U.S. PIRG’s bipartisan savings report, “Toward Common Ground.”

barnoldThe hearing also included U.S. PIRG’s Jamie Woo, Tom Schatz from Citizens Against Government Waste (CAGW), Chris Edwards of the Cato Institute, as well as Senators Tom Coburn (R-OK) and Tom Carper (D-DE), Ranking Member and Chairman of the Senate’s Homeland Security and Government Affairs Committee, who spoke first.

The bipartisan tone may offer some encouragement for taxpayers, who just endured a budget deal that scrapped spending caps over the next two years. All the panelists, and the Representatives who asked questions, offered pro-active proposals for dealing with wasteful federal spending. Perhaps it's just the renewing effect of a new year, but the enthusiasm and energy being focused on finally addressing the most indefensible expenditures of taxpayer money was encouraging.

Arnold urged the committee to draw from NTU and U.S. PIRG’s $523 billion in recommendations (which have a passed a bipartisan test already to simply make the report), citing examples of savings opportunities like the $1.2 billion Essential Air Service, which funds scarcely used airports, and $1.8 billion in potential savings from stopping improper Medicare payments to chiropractic services.

Arnold echoed a theme heard throughout the hearing saying, “Just one of these 65 recommendations has been enacted into law… there remains much work to be done.”

That attitude that the lack of progress in dealing with government waste was unacceptable was universal.Reps. Carolyn Maloney (D-NY) and Elijah Cummings (D-MD) asked both panels how progress can be made toward getting something done on this front.

Beginning with “low-hanging fruit,” and working to get legislation to the floor, were popular responses echoed by many as they acknowledged the challenges ahead, and failures of recent Congress’ to keep wasteful spending contained.

Committee Chairman Darrell Issa pledged to his Senate counterparts to put any legislation addressing reforms they agreed upon in the Senate Oversight Committee to a vote in the House Oversight Committee.

Arnold concluded, “Although cutting waste can limit some red ink, such efforts alone cannot solve our serious long-term debt and deficit problems. However, they can demonstrate to Americans Congress’s desire to act as a good steward of their hard-earned tax dollars.”

Whether the positive, cohesive, tone will translate into more than one of those NTU and U.S. PIRG proposals being passed by this time next year, time will tell.

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New Year's Resolution: Fiscal Sanity.
Posted By: Dan Barrett - 12/30/13

This is your last chance! Tomorrow is the last day of the year, and it's your last chance to make a donation to NTUF and receive a 2013 tax deduction. I appreciate all of the support you've given us over the course of the year. Please make an end-of-year gift right now!

Your end-of-year gift to NTUF is fully tax-deductible.

NTUF has been producing groundbreaking research since our founding in 1977. We have a long history of excellence in highlighting government excess and helping equip taxpayers with the information they need to protect themselves. Through NTUF's research, analysis, and commentary, we are empowering Americans to actively engage in the fiscal policy debate and hold public officials accountable for their decisions.

Your support is critical. So please, help us spread NTUF's message to lawmakers, the media, and voters by making a tax-deductible gift today.

To donate via credit card or Paypal, you can visit our secure online donation page. Thank you for your help!

Remember, to receive a 2013 tax deduction, you must make your contribution to NTUF before midnight tomorrow. Please don’t wait. Support NTUF today!

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New Year's Resolution: Deficit Reduction?
Posted By: Michael Tasselmyer - 12/28/13

As the year comes to a close, undoubtedly we begin to reflect on the ups and downs of the previous year. But lawmakers in Congress may be looking back a little further than that after reading the Congressional Budget Office's (CBO) latest report on the federal debt and deficit.

Last week, the non-partisan budget agency released an update to its November report, "Choices for Deficit Reduction." The report offers some sober analysis of the country's mounting debts and deficits, which are at historically high levels. The graphic below puts things into some perspective:

cbo options dec 2013

As CBO shows, not only are total outlays higher than they've been over the previous three decades, they are on pace to grow even more, and the revenues they're funded by are coming in relatively slowly. That particular trend illustrates the fact that for all the talk of a recovery, the U.S. economy still has a long way to go before things return to pre-recession levels of prosperity. As CBO explains:

"Making the task of deficit reduction more complicated is the economy's slow recovery from the severe recession. By CBO's estimate, the economy is now about 5 million jobs short of where it would be if the unemployment rate was down to its sustainable level and participation in the labor force was back up to its trend. The shortage of jobs has occurred mostly because demand for goods and services has been weak relative to the productive capacity of the economy."

But historical trends mean very little if we can't draw some conclusion for policy and outcomes going forward. CBO paints a rather harsh picture of where the current path of spending and borrowing at such high levels may lead:

"Because federal debt is already unusually high relative to GDP, further increases in that debt could be especially harmful. ... Higher debt would lead to larger interest payments; making those payments would eventually require some combination of lower noninterest spending and higher taxes. In addition, increases in debt tend to reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn reduces people's future income relative to what it would otherwise be. Also, when debt rises, lawmakers are less able to use tax and spending policies to respond to unexpected challenges, such as economic downturns or international crises. Rising debt could itself precipitate a fiscal crisis by undermining investors' confidence in the government's ability to manage the budget."

At the end of the day, deficit reduction matters a great deal, and is ultimately a matter of either reducing spending, increasing taxes significantly, or both. Lawmakers will have to make a decision about which direction to pursue when they return to Washington for 2014.

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Per-Mile Fees Would Drive Up Transportation Costs
Posted By: Michael Tasselmyer - 12/26/13

In a recent edition of The Taxpayer's Tab, we here at National Taxpayers Union Foundation highlighted a bill offered by Congressman Tom Graves (R-GA) and Senator Mike Lee (R-UT) that would phase out federal control of certain roads and other infrastructure in order to transfer that authority to the states. The Transportation Empowerment Act was introduced in the wake of warnings from the Congressional Budget Office that the Highway Trust Fund, which finances the construction and maintenance of most of those transportation projects, is in poor fiscal condition.

Among the recommendations for keeping the Fund solvent? A nearly 83 percent increase in the federal gas tax, up to 33.3 cents from its current level of 18 cents.

That particular suggestion came from the office of Congressman Earl Blumenauer (D-OR), who also recently introduced H.R. 3638, the Road Usage Fee Pilot Program Act of 2013. Rep. Blumenauer’s bill would authorize $35 million to study how a mileage-based fee program might be implemented in place of the gas tax.

The Congressman has called for similar studies before. In January, NTUF highlighted legislation that Blumenauer introduced in the 112th Congress that would have authorized nearly $155 million for review of the same scenario.

A per-mile fee would likely be instituted in one of three ways:

  • A GPS-based system would use satellite technology to track the total mileage a registered vehicle travels during a pre-determined period of time. That information would then be sent to a central database, where bills would then be processed and sent to drivers.
  • A "pay-at-the-pump" system would also rely on wireless tracking systems to log drivers' travels, but the fee would instead be charged at gas stations across the country whenever drivers decide to fill up.
  • A prepaid system would require drivers to buy "mileage licenses," authorizing their use of public roads for a certain period of time or total mileage before requiring renewal.

Aside from the obvious privacy concerns and challenges of implementation and administration (especially from a financial and logistical standpoint), these proposals all have one thing in common: they would increase the cost of driving significantly.

The Government Accountability Office recently modeled the effect of a (seemingly modest) 0.9 to 2.2 cent per mile tax on the typical American driver. They found that the average driver would pay between $108 and $248 per year under that system, compared to the $96 they pay now – an increase of at least 12.5 percent.

Current funding for federal transportation infrastructure, under the MAP-21 Act, expires at the end of 2014.

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