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DC's Healthcare Exchange Suffers Same Afflictions as Obamacare
Posted By: Samantha Jordan - 06/19/14

For Skip Moskey, and many D.C. residents, signing up for health insurance through DC’s new insurance marketplace has been like “climbing the great wall of China.” But instead of climbing up an ancient wall, DC residents are climbing through miles of red tape.

The Washington Post explained on Wednesday that processing problems on the new marketplace are causing delays to coverage up to three months. With myriad insurers including CareFirst and Kaiser Permanente reporting they have received information with flawed data, or failed to receive applications at all, it appears the problem is occurring at the DC Healthlink.

The DC Healthlink is a government-sponsored marketplace providing mandatory insurance coverage, one of 14 which states have set up after the unsuccessful launch of the national exchange. Yet, it seems the smaller exchange is running into many of the same glitches and processing problems the national exchange encountered last year. 

Healthlink is not only costing DC residents time, but also money. The Washington Post reported that those seeking coverage through DC’s marketplace could pay more than twice as much a month than with a previous plan. 

This extreme case was true for Skip Moskey who discovered the new policy would cost him $667 a month compared to $330 a month he was paying with CareFirst BlueCross BlueShield. 

When the cost of time and money is substantially larger than the alternative, it is difficult to imagine many would volunteer to attain coverage under the Healthlink. But instead of paying $337 more for the new policy, taxpayers will be paying $1.8 trillion.

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Income Tax Cuts in DC? Yes, They’re Real
Posted By: Lee Schalk - 06/19/14

Believe it or not, the District of Columbia is moving closer to passing a positive tax reform package that would slim the City’s fattened coffers by $67 million each year while cutting income taxes for the vast majority of DC residents. It would also lower the death tax. It’s not a perfect plan, but it’s far superior to what we’re accustomed to seeing in DC. The District’s government needs to be put on a diet, and this proposal would help.

By now, most DC residents have probably heard about the “fitness tax” scare that some local gyms have ginned up to squash support for the proposed reforms. This line of argument deserves closer scrutiny.  

Health clubs are currently excluded from the 5.75 percent DC sales tax, as are carpet and upholstery cleaning services, car washes, tanning studios, bottled water home delivery, bowling alleys, and billiard parlors. The sales tax would be expanded to each of these services. As the DC Fiscal Policy Institute explained, “The Council’s tax package doesn’t create a special tax on health clubs but instead includes them in the basic sales tax.”

Raising taxes on businesses and their customers – without lowering other taxes by a greater amount – would be a bad idea. That’s especially the case if a product or service is being targeted with high rates. Taxpayers and businesses should likewise beware of big-government tax collection schemes masquerading as “fairness” or “reform,” like the misguided Marketplace Fairness Act.

But that’s not quite what’s happening here. The net result of the tax package would be less for the DC Taxman overall. Sure, gym members might pay an extra four bucks a month to go to the gym, but on average, they would also save a cool $400 per year on their income tax tab. It’s a tradeoff similar to what we saw last year, when North Carolina enacted its historic, pro-growth tax reform plan, which featured income tax cuts made possible by expanding the sales tax base. Given the choice, I’d gladly pay a little more in sales taxes if it means the government took a smaller bite out of my paycheck, leaving me with more money in my pocket than I’d have under current tax laws. Nearly everyone I know living in the District feels the same. And in the end, a lower income tax bill leaves consumers with more to spend at local businesses anyway.

While the DC package wisely broadens the sales tax base and treats more goods and services equally, it moves in the wrong direction on vapor products. The plan would miscategorize e-cigarettes as “other tobacco products” (OTP), even though they contain no tobacco. It would then tax OTP products at the same rate as traditional analog cigarettes, which frustratingly means that vapor products, which are a safer alternative to smoking, will become much pricier. This could lead District “vapers” to stick with traditional cigarettes (which doesn’t bode well for public health).

While higher taxes on e-cigarettes would be disappointing if it remains in the final proposal, other elements in the overall package (the income tax cuts) would provide a nice boost for nearly all DC residents. Taxpayers in DC should carefully examine the claims about the gym tax  by heading over to the Tax Foundation’s blog, getting informed, and speaking up in favor of pro-growth reform done the right way.

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Senators Seeking Tax Hike for Highway Trust Fund; NJ Senate Dems Want Tax Hike on Rich but Christie Says No - Late Edition, June 19
Posted By: Jihun Han - 06/19/14

Today's Taxpayer News!

Sens. Bob Corker (R- Tennessee) and Chris Murphy (D- Connecticut) are proposing a hike in the federal gas tax to fund the highway trust fund (fund runs out this summer). To help offset the tax hike, the Senators want Congress to pass the expired tax extenders. Business Insider has the latest!

Senate Democrats in New Jersey are proposing tax hikes for the wealthy in order to balance the budget. However, Governor Chris Christie has reiterated that he will not raise taxes. Reuters  has more! 

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In New Jersey, 76ers Come First, Taxpayers Second
Posted By: Melodie Bowler - 06/18/14

Various ideas are cropping up in the New Jersey legislature to close the looming $2.7 billion budget gap for fiscal year 2015, and Governor Christie has had to cut pension payments to pay for this year’s $800 million shortfall. Despite these fiscal woes, the state has approved an $82 million gift (paid in yearly $8.2 million installments) for the Philadelphia 76ers basketball team to build a training facility in Camden. While legislators debate raising income taxes on millionaires and an e-cigarette tax, Governor Chris Christie lauded the 76ers decision, which he believes will bring “additional revenue and other things and business for the city of Camden.” The New Jersey Economic Development Authority voted unanimously in favor of the grant, given their authority by the Economic Opportunity Act of 2013.

Local politicians believe the construction of the training facility will boost the economy in Camden, where unemployment continues to soar above national rates at 16 percent. For $82 million, the 76ers facility will bring only about 250 jobs to Camden, 200 of which are already filled by players and current members of their staff, according to reports. Still, Governor Christie and Camden’s own representatives believe that the facility will revitalize the area, bringing in new businesses to meet the demands of people visiting and working in the facility. Camden Mayor Dana L. Redd asserts, “The ancillary services that are going to be needed provide a great opportunity for small businesses, to reap rewards. There's going to be a spill-over effect."

Based on the area’s current attractions, however, a spill-over effect seems unlikely. The 76ers’ training facility will be built at the Camden waterfront, a long-time local attraction. At the waterfront currently sits the Adventure Aquarium and Susquehanna Bank Center, along with the Battleship New Jersey and the Camden Children’s Garden. Despite the jobs these brought to Camden when they were first built, the existing attractions have done little to improve economic growth in the area. The state currently predicts the deal will bring in $76.6 million in benefits over 35 years. In the end, New Jersey will give the Sixers an $8.2 million per year tax cut, only to see approximately $2.19 million per year in net benefits. Next time, before catering to a multi-million dollar franchise, perhaps Governor Christie should give his own heavily-taxed constituents a break.

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Death Tax Repeal Coming?; Congress Reacts to IRS Lost Email Claims – Late Edition, June 18
Posted By: Jihun Han - 06/18/14

Today's Taxpayer News!

The U.S. House of Representatives is one step closer to repealing the death tax altogether. Forbes has the latest on it! At the same time reports are swirling that the Clintons are maneuvering to avoid the tax (which they support). 

The IRS' claims that it has lost numerous emails related to its controversial actions toward conservative groups have members of Congress reacting harshly: Read here.

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House GOP Leadership Vote: NTU Ratings Shed Light on Costly Differences
Posted By: Brandon Arnold - 06/18/14

Tomorrow, House Republicans will vote to elect a new Majority Leader and, in all likelihood, a new Majority Whip. Last week, National Taxpayers Union (NTU) posted the NTU Rates Congress scores of the various candidates for these two important leadership positions. Since that time, the Majority Leader race has winnowed down to two men - pitting current Majority Whip Kevin McCarthy (R-CA) against Rep. Raul Labrador (R-ID).

Here’s how they stack up on NTU’s scorecard:

Candidate

2012 Score

2012 Grade

2012 Rank

Lifetime Average Score*

McCarthy

72%

B-

144

79%

Labrador

90%

A

5

90%

*Lifetime average score is the arithmetic mean of each year’s score. Please note that grading criteria changes from year to year.

Many media outlets are reporting that McCarthy is a heavy favorite. If he does indeed win, it would open up the position of Majority Whip. Running for that post are Republican Study Committee Chairman Steve Scalise (R-LA), Rep. Pete Roskam (R-IL), who is currently the chief deputy whip, and Rep. Marlin Stutzman (R-IN). 

Here are their ratings on NTU’s scorecard:

Candidate

2012 Score

2012 Grade

2012 Rank

Lifetime Average Score*

Scalise

82%

B+

57

84%

Roskam

69%

C+

170

78%

Stutzman

86%

A

24

87%

*Lifetime average score is the arithmetic mean of each year’s score. Please note that grading criteria changes from year to year.

For more information on NTU’s rankings, please click here.

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Profiles in Liberty: Gordon Miller
Posted By: Dan Barrett - 06/17/14

NTUF’s Research Interns are focusing their energies on the BillTally project, which scores EVERY bill introduced in Congress for changes in federal spending. Through our Profiles in Liberty series, we’re presenting each of our summer interns and focusing on the work they’re doing. This week’s edition features Gordon Miller!

NTUF Research Intern Gordon Miller

Gordon hails from Atmore, Alabama. This past spring he graduated from Troy University in Alabama, where he obtained a degree in Music Education and a minor in Leadership Studies. While at Troy, Gordon spent most of his time honing his musical talents (culminating in a semester spent as a student teacher in Troy City Schools), but a holistic approach to education lead him to pursue his interest in both public policy and economics. He helped start a chapter of Students for Liberty at Troy during his time there. 

What has been your favorite part of living and working in the DC area?

GM: The political business of this city is something that I'm not yet used to, and for me, it's quite exciting. The wealth of opportunities present here invigorates and inspires me, as there are so many things in which I could become involved.

What are your career goals?

GM: Establish myself within the public policy and educational arenas. Working for NTUF provides me with the opportunity to expose myself to some of the work required in related jobs and helps me connect with individuals that will help to ensure my future success. 

What do you do for fun?

GM: Outside of the office, I enjoy reading, watching TV, playing video games, exploring the area as much as I can, and spending time with my family and friends. I also go to as many social events as I can, both for the fun and the opportunity to network with various individuals. 

How did you become interested in politics?

GM: Politics has been an interest of mine for several years, but I did not become heavily involved until a couple of years ago when I was approached by a friend who asked me if I would help to start a chapter of Students for Liberty. After assisting with that, I immersed myself in various educational campaigns, conferences, activist events, and group discussions.

What are some of your life achievements which you are particularly proud of?

GM: Over the last 5 years, I have had the opportunity to travel to the British Isles and Germany. While there, I met several influential individuals, overcame various personal challenges, and broadened my horizons. In addition, I feel like I left my mark at Troy University with both my participation in the Sound of the South Marching Band and my contributions towards establishing Students for Liberty on campus.

What does a typical day at NTUF look like for you?

GM: I have really enjoyed working for NTUF. The atmosphere is fantastic and the staff members are awesome. They are very concerned with helping us interns get off to the best start in the DC area. A typical day for me starts out with a cup of coffee, and then I dive into BillTally research, where I analyze bills to figure out how they might affect federal spending (whether that means an increase in expenditures or budgetary savings). 

What has been the most interesting bill you have researched at NTUF?

GM: A nuclear disarmament bill. It is a rather controversial bill, but it was incredibly fascinating to research, partly due to the level of controversy surrounding it. In addition, it provided me with insight into how difficult it can be to obtain figures on a bill that is so heavily connected to the Department of Defense.

What advice do you have for future interns?

Do as much as you possibly can for as many people as you possibly can. This mentality and spirit of humility will benefit everyone involved.

Stay tuned to see an interview with Daniel Simmons, coming out later this week! Be sure to check out the previous interview with Communications Intern Sam Jordan.

Interested in learning about the other interns working for the Foundation this summer? Want to help the NTUF interns? Check out this post.

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

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NYC Mayor Finding Skeptics in the Business Sector; DC Debates New Budget Proposal that Sparked “Yoga Tax” Talk- The Late Edition, June 16 2014
Posted By: Jihun Han - 06/16/14

Today's Taxpayer News!

Despite New York City Mayor Bill de Blasio’s recent tax proposal, some businesses are still concerned about the Mayor’s overall agenda that includes an effort to increase the minimum wage. The Wall Street Journal has more!

The Washington D.C. Council is proposing a new budget that would expand the sales tax to a number of things including gym memberships. Some are soundly against the proposal, although the so-called “yoga” tax is just one aspect of a package that would cut the city’s income tax rates. Proponents believe this income tax will be more than enough to offset the added sales tax.

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Blurred Lines: Official and Political Travel
Posted By: Michael Tasselmyer - 06/16/14

President Obama was in California this past weekend to speak at UC Irvine's commencement ceremony, and while he was in the Golden State, he made time to stop by a fundraising event in Laguna Beach as well. We know that the cost to fly Air Force One from D.C. to Los Angeles is about $2.3 million, but what we don't know is how much of the bill taxpayers will have to cover.

Online publication Zocalo Public Square features a post I contributed concerning that topic. While travel for official and unofficial purposes has long been a perk of holding office, Presidents have a uniquely influential impact when it comes to political fundraising -- and taxpayers deserve to have more information about what those trips could cost them.

Under the current rules, the cost to fly the President to official functions is covered by the U.S. government; groups hosting "unofficial" political events must reimburse the government for the President's transit. However, it can be difficult to determine how much of the trip's total cost taxpayers are responsible for, especially when the White House schedules both official and unofficial events during the same trip. As mentioned in the piece:

"...the rules are so vague that not even researchers who study them full-time can describe them. In a 2012 report, the Congressional Research Service stated that it's 'unclear how the White House designates travel that is not directly related to a governmental or political function.' ... This makes it easy for schedulers to add a sprinkling of 'official' business to any trip, and it opens the door for any party to game the system. Ultimately, this is to the detriment of every American's bank account as well as an electoral process that's becoming increasingly expensive and time-consuming."

Check out the full post on Zocalo Public Square.

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Latest Taxpayer's Tab: Refinancing Student Loans
Posted By: Michael Tasselmyer - 06/15/14

Taxpayer's Tab Update

Last week, the Senate considered a proposal from Senator Elizabeth Warren (D-MA) -- backed by the Obama Administration -- that would have given the government authority to refinance student loans at lower fixed rates, including some loans issued by private lenders. The Congressional Budget Office estimated that had the Bank on Students Emergency Loan Refinancing Act been passed, it would have allowed the government to assume $60 billion in new private loans, and refinance an additional $460 billion of existing federal direct student loans, at a net cost of about $16.9 billion per year. The legislation also included a new $72 billion tax on those earning over $1 million per year in order to finance the provisions.

The actual cost of that program could have panned out very differently in reality though, mainly because of government accounting methods that make some loan programs appear drastically cheaper than they would be according to other methodologies. How much of a difference can that accounting make? Find out in the latest issue of The Taxpayer's Tab.

Also featured this week:

  • Healthcare Fraud: NTUF examined the growing complexity of the U.S. healthcare system, which makes it susceptible to fraud. Bogus payments are estimated to cost taxpayers as much as $272 billion.
  • Most Friended: Senator Kay Hagan (D-NC) introduced the Bipartisan Sportsmen's Act of 2014, which is an omnibus bill that includes several titles to reauthorize and extend various hunting, fishing, and conservation programs.
  • Wildcard: Congressman Raul Ruiz's (D-CA) Renewable Jobs Act would authorize $10 million per year to fund a pilot program dedicated to providing on-the-job training for positions in the renewable energy industry.

For more on these issues and the research NTUF is compiling on them, check out the latest edition of The Taxpayer's Tab.

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