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Minimum Wage Hike Spells Trouble for Seattle Workers and Businesses
Posted By: Melodie Bowler - 06/12/14

Last week, members of the Seattle City Council voted unanimously to raise the minimum wage in The Emerald City to $15 per hour, from the already-highest-in-the-nation state rate of $9.32 per hour. The new rate will be phased in over a seven year period starting on April 1, 2015, based on the size of each business (smaller businesses will be on a longer phase-in time table). Additionally, businesses will be permitted to pay lower training wages to teenagers.

Unfortunately, the Seattle City Council ignored the fact that minimum wage hikes typically fail to raise overall wage levels and can reduce overall employment by making unskilled and young workers more expensive to hire. Furthermore, businesses are likely to pass on the cost of a minimum wage increase to their customers.

We can already see repercussions from a similar minimum wage increase in neighboring SeaTac, where the minimum wage soared to $15 on January 1, 2014, after squeaking by on the November ballot. One parking lot in SeaTac added a “living wage surcharge” of 99 cents per day to the price of parking to cover the increased cost of labor. The nearby Clarion Hotel closed its full-service restaurant abruptly, causing the loss of fifteen jobs. A hotel cleaning lady explained that her benefits were slashed, including 401K, health insurance, paid vacation, free food, and free parking.

Restaurateurs in Seattle have already begun to speak up. Jeremy Hardy, owner of Coastal Kitchen and Mioposto, suggested that the minimum wage increase is bad news for the Seattle economy, stating, “We are going to adjust using all of the tools at our disposal; pricing, reducing menu offerings, look at operating hours, reducing labor where we can and certainly not opening another business in our beloved Seattle.” Not only will entrepreneurs pause or perhaps not even consider opening new businesses in Seattle, but one restaurant owner believes customers will start spending less as well. Salaried workers unaffected by the wage increase will see local prices rise without increases in their own compensation. Angela Stowell, CFO and owner of Ethan Stowell restaurants, worries “that our guests will start spending less and going out less as they adjust to higher prices and their own wage compression.” To make matters worse, Brendan McGill, owner of Hitchcock and Hitchcock Deli, points out, “The public sentiment is shifting to ‘why tip? They already make $15 an hour.’ …I wouldn't expect service to improve around town.”

The intended purpose of the minimum wage increase is to improve the lives of low-wage, unskilled workers. Yet for some workers in SeaTac, we have already seen that the opposite is true. As Seattle’s wage hike begins next year, concerned taxpayers throughout the country will be watching closely. Hopefully, city and state officials considering a similar wage increase will take note and avoid making the same mistake.

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Relief for Veterans Waiting on VA? THUD! & More - On Capitol Hill, June 11
Posted By: Douglas Kellogg - 06/11/14

On Capitol Hill is back, because Congress is back, and not a week goes by where your tax dollars aren't on the line.

This week: An attempt to help vets waiting on the VA, a tax & spend student loan proposal from Sen. Elizabeth Warren, THUD, & more!

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Eric Cantor's Spending Agendas, IRS Adopts New TABOR - The Late Edition, June 11, 2014
Posted By: Jihun Han - 06/11/14

Today's Taxpayer News!

National Taxpayers Union offered some analysis of the IRS' recent adoption of a 10-point taxpayer bill of rights. Read here.

The biggest news of the day is Rep. Eric Cantor's primary election loss in Virginia. The 7-term House Member's agendas averaged just over $11 billion in savings per term, ranging from a high of $56.6 billion in spending during the 109th Congress to a low of $87 billion in savings in the 111th. Click for more.

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Olympic-Size Spending
Posted By: Samantha Jordan - 06/11/14

Residents of Washington D.C. could be seeing Olympic sized increases to their taxes. Amongst six cities including Boston, Dallas, Los Angeles, San Diego and San Francisco, Washington D.C. is under consideration to host the 2024 Olympic games. 

Wednesday morning’s Washington Post stated under the United States Olympic Committee’s (USOC) requirements, the chosen city would have to provide 45,000 hotel rooms, housing in the Olympic village to fit 16,500 athletes, work space for 15,000 journalists, an “extensive public-transport system,” a work force of 200,000 and should expect an operations budget of $3 billion.  However, Bob Sweeny, who is leading the DC 2024 Olympic Initiative, estimates the total costs at $4-6 Billion.

The Olympic Committee has become notorious for underestimating Olympic budgets. A study conducted by the University of Oxford examines cost overruns in the Olympic Games by studying both the summer and winter Olympics between 1960 and 2012. The project discovered that The Games overran their budget in every case without exception, averaging an overrun in nominal terms of 324 percent.

If you’ve done the math, by following the trend presented in the study the 2024 Olympic games could cost Washington D.C. between $12.96 and $19.44 Billion. But even this estimate seems suspiciously low when looking at the recent Sochi Olympics, which cost around $51 Billion.

Advocates of the DC 2024 Olympic Initiative explain their plan will eliminate cost by integrating existing facilities and locating the Olympic Stadium and village in a region that needs redevelopment as is. But with the rising cost of extravagant stadiums, this plan doesn’t seem reassuring.

National Taxpayers Union’s own study, “Stadiums and Subsidies: Home Run for Wealthy Team Owners, Strike-out for Taxpayers,” explains megaprojects funded by the public, such as Olympic Stadium, are an inefficient investment of taxpayer dollars.  The study illustrates trends in taxpayer subsidies and rising construction costs, concluding taxpayer tabs and stadium construction costs have direct relationships. As the taxpayer tab increases, so does the total stadium construction cost.

Olympic games showcase cities, bring in tourists and supposedly promote general infrastructure development. But D.C. is already host to frequent political events attracting the public eye and tourists alike. Unless taxpayers voice their concerns to the USOC, D.C. could soon be home to the 2024 Olympics and the financial bane that comes with them.

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Welcome to NTU and Foundation’s Largest Intern Class Ever!
Posted By: Dan Barrett - 06/10/14

On Thursday, Team Taxpayer welcomed 12 interns to NTU and Foundation headquarters. With the addition of one more today, this is the largest group of students and young professionals that we have ever had in our program. Over the next few months they will learn how to fight for taxpayers across the country, the different ways we connect with taxpayer groups (at the local, state, and national levels), and how the two grassroots nonprofit organizations operate. Check out a short bio on each of them below. Interested in interning at NTU and Foundation in the future? Check out our programs.

2014 Summer Interns for NTU & NTUF

Government Affairs Interns:

  • Melodie Bowler recently graduated from the University of North Carolina at Chapel Hill with degrees in political science and philosophy. Previously, Melodie researched state tax issues for another organization.
  • Michael Liguori is also a student at the University of North Carolina at Chapel Hill. Aside from working on political campaigns, Michael is working towards an international studies degree.

Foundation Communications Interns:

  • Jihun Han is a student at Syracuse University in New York. He aims to graduate with a degree in broadcast and digital journalism. Jihun has also worked on campaigns in his home state of Oregon.
  • Samantha Jordan goes to George Mason University in Virginia, majoring in economics and Eurasian/Russian studies. Samantha is also on the university’s forensics team.

Foundation Research Interns:

  • Steve Adams is a student at Hampden-Sydney College in Virginia and is seeking a degree in government. He previously interned in the U.S. House of Representatives.
  • Paul Bartow hails from Wheaton College in Illinois. He is pursuing a degree in history while also serving as a research intern at the university’s archives.
  • Alex Eblen goes to Rhodes College in Tennessee. His areas of study include political science and international studies. Alex also has experience as a research intern at a property development company.
  • Catherine Fitzhugh studies political science at Grove City College in Pennsylvania. She is also a research fellow for the school’s Center for Vision & Values.
  • Kelly Hastings just graduated from Berry College in Georgia with a degree in economics. She has also served as an economic forecasting intern at the Tennessee Valley Authority.
  • Ian Johnson is an economics student at Brigham Young University in Utah. He is originally from Florida.
  • Gordon Miller studies at Troy University in Alabama. He is working towards a music education degree but has a demonstrated interest in economics as well.
  • John Ridley is a student at Vanderbilt University and studies political science, computer science, and management. He started his own web design company and will also be helping out with NTUF’s technology needs.
  • Daniel Simmons graduated from the University of Houston with his MBA. Previously, he was a personal banker and started his own pressure washing company.

As you can see, we’ve got a lot of talent and a lot of hands on deck to help shine a light on taxpayer issues this summer. NTU and Foundation staff will keep you updated on our internship programs and of the accomplishments of each intern as we work through the summer.

How can you help? Support our interns with a contribution to NTU or NTUF! Our interns need office supplies, transit stipends, and the occasional cup of coffee to help us track government spending. With your donation, they will have the tools they need to fight for you and your tax dollars.

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Health Care Fraud: A $272 Billion Malady
Posted By: Michael Tasselmyer - 06/09/14

Medicaid and Medicare disburse over $1 trillion in benefits per year, representing a massive portion of the $2.7 trillion that goes into healthcare-related spending in the U.S. each year. On top of that, the bureaucratic system that determines who receives those benefits (and how much) has grown increasingly complex over the years: next year, Medicare alone will have nearly 140,000 different codes doctors must choose from to describe their patients' injuries if they want to make a claim through that program. The massive amount of money in the system, combined with the complicated and often difficult-to-enforce regulatory checks in place, makes it a target for those looking to rip off taxpayers for their own monetary gain.

The estimated cost of healthcare fraud for taxpayers? $272 billion.

A recent article in The Economist makes note of some of the ways fraudsters can take advantage of the system, including overbilling for treatments and partnering with doctors and pharmacies to obtain, and then resell, prescription drugs for profit. Federal investigators report that incidences of healthcare fraud have increased by four times over the past five years. The problem takes significant resources to fight, but with fraud so rampant and lucrative, doing so can yield significant savings for taxpayers: the Department of Health and Human Services reported earlier this year that over the past three years, enforcement teams have recovered $8 for every $1 they spend to investigate fraud. Last year, the government recovered $4 billion, which is just a fraction of the total amount lost to fraud but represented a record-high success rate.

Still, the high cost of health care fraud illustrates the dangers that overly-complicated entitlement programs can pose to taxpayers -- they are easy targets for thieves looking to take advantage of a system that offers millions of transactions to hide behind every day.

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Late Edition, June 9: What Obamacare Tax is it this Time? One Whistleblower’s Tribulations
Posted By: Douglas Kellogg - 06/09/14

Today's Taxpayer News!

How are business owners prepping for Obamacare’s new 3.8% investment tax? The Wall Street Journal examines why ducking it won’t be easy.

Tax reform is stirring in New Mexico. Legislators are examining the gross receipts tax many feel is broken. But will the end result increase the tax burden?

Exposing wasteful spending is a big risk for federal employees. Read here to find out what happened to this particular whistleblower!


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Latest Taxpayer's Tab: IRS Targets Old Debt
Posted By: Michael Tasselmyer - 06/08/14

Taxpayer's Tab Update

What if you received a notice from the IRS stating that your tax refund had been revoked because your parents owed the government money decades ago? That's exactly what's happening to some Americans thanks to a provision included in the 2008 Farm Bill. NTUF's Research and Outreach Manager Dan Barrett wrote about this troubling trend on the Government Bytes blog last week, and outlined an alternative the IRS should consider if it needs to collect more revenue: pursue the $3.3 billion in back taxes owed by government employees themselves.

NTUF also featured 3 recently-scored bills in this week's edition of The Taxpayer's Tab:

  • Most Expensive: Congressman Steve Daines (R-MT) introduced the Authorized Rural Water Projects Completion Act, which would create a dedicated fund to finance water infrastructure projects in rural areas that have been authorized by Congress for years, but remain unfinished. It would result in $73 million per year in new spending towards those projects.
  • Most Friended: Congressman Chris Smith (R-NJ) has proposed the Combating Autism Reauthorization Act of 2014. It extends various autism research programs through 2019 at current funding levels, but also provides an additional $29 million per year for oversight and strategic management.
  • Wildcard: The Healthy Kids Outdoors Act of 2014, introduced by Senator Mark Udall (D-CO) and Congressman Ron Kind (D-WI), authorizes $5 million over the next three years to help state and local governemnts promote outdoor activity among youth.

For more on these bill's and Dan's blog post, check out the latest edition of The Taxpayer's Tab online.

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Operation “Choke Point” is About as Good as it Sounds - Speaking of Taxpayers, June 6
Posted By: Douglas Kellogg - 06/07/14

NTU Vice President Brandon Arnold stops in to discuss the DoJ's potentially extra-legal efforts to hamper businesses the Obama administration does not like. Pete has an update on the World Taxpayers' Conference, plus the news, NTUF's Michael Tasselmyer highlights a bill to get kids outdoors (with your money); and the Outrage of the Week!

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The Curious Case of Whistleblower Kevin Downing
Posted By: Samantha Jordan - 06/06/14

Exposing wasteful spending is costly work and Kevin Downing, a former economist and data collector at the Department of Labor, is paying the price. In 1999 Mr. Downing raised a red flag over a project to re-organize the New York City Bureau of Labor Statistics office, including an expensive and superfluous complex in Mountainside New Jersey. Upon reporting what appeared to him as an obvious example of pork-barrel spending, Mr. Downing was immediately terminated from his position and his whistleblowing was made public knowledge on the Internet, resulting in damage to his career prospects.  Employers continue to regularly cancel interviews.

On behalf of Mr. Downing, Representative Bill Pascrell, Jr. of the 8th District in New Jersey wrote a letter to the Department of Labor in hopes of highlighting his plight and protecting him from reprisals.  Congressman Pascrell wrote:

“There is evidence to indicate that Mr. Downing’s termination was inappropriate because it was in retaliation for his communication with Congressional staff regarding what he believed to be waste and abuse resent in the Bureau of Labor Statistics.”

Incredibly, Pascrell’s efforts were initially ignored and eventually dismissed by the Department of Labor entirely. Allegedly, the Labor Department managers used Kevin as an example to warn union officials and employees of inevitable retaliation against future whistleblowers.

Given the circumstances, Mr. Downing’s job termination would at least raise some legitimate questions. Many in Congress would seem to agree as they recently passed the Whistleblower Protection Enhancement Act (WPEA) to attempt to protect federal employees in situations similar to Downing’s. Nonetheless, it was not passed in time to affect his specific case.

After over six years of costly legal battles, it was confirmed Kevin’s termination was a direct result of whistleblowing but the Federal Circuit Court of Appeals rejected his case because Kevin “did not disclose non-frivolous information.”

For Kevin Downing, the personal and financial consequences of exposing wasteful governmental spending have been devastating.

On the bright side, his case has brought more attention to the whistleblower issue. A Petition to re-instate Downing with all promotions, pay and benefits as well as payment of his legal expenses has been initiated on for concerned taxpayers (including, of course, readers of this blog) who wish to express their solidarity.

If upstanding federal employees who risk their professional reputations to bring light to malfeasance are driven out of their positions without fair hearing or recourse, taxpayers stand to lose an important watchdog against waste – but worse, the growing mistrust in government would likely spread even further.

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