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Latest Taxpayer's Tab: The BillTally Top 10
Posted By: Michael Tasselmyer - 11/09/13

Tab Insert

In this week's edition of The Taxpayer's Tab, NTUF continues to offer analysis and insight into the latest BillTally report, which covers the legislative proposals introduced during the first six months of the 113th Congress. The data shows that savings proposals have been coming at a slower pace than in previous sessions, and if history is any indication, we aren't likely to see many more over the next year. The total spending agenda proposed so far this Congress? $1.28 trillion.

In this week's Tab, NTUF focused on the defense-related spending proposals we identified in each Chamber. The differences between the House and Senate with respect to these bills might surprise some taxpayers, and could play into the budget committee's approach to a long-term fiscal deal over the next few weeks. For more, check out the online edition of the Tab here.

And, to round out our coverage of the BillTally release, we've put together a list of the five most and least expensive proposals we saw over the first half of the year:

Spending Cut Bills:

  1. S. 547, the One Percent Spending Reduction Act of 2013. Introduced by Senator Mike Enzi (R-WY). Savings: $99.5 billion
  2. S. 173, the Simplified, Manageable, And Responsible Tax (SMART) Act. Introduced by Senator Richard Shelby (R-AL). Savings: $85.8 billion
  3. H.R. 45/H.R. 132/H.R. 1005/S. 177, the ObamaCare Repeal Act. Introduced by Rep. Michele Bachmann (R-MN)/Steve King (R-IA)/Tom Graves (R-GA)/Senator Ted Cruz (R-TX). Savings: $63.9 billion
  4. H.R. 779, the Access to Insurance for All Americans Act. Introduced by Rep. Darrell Issa (R-CA). Savings: $56.4 billion
  5. H.R. 57, a bill to make 15 percent across-the-board rescissions in non-defense, non-homeland-security, and non-veterans-affairs discretionary spending for each of the fiscal years 2013 and 2014. Introduced by Rep. Marsha Blackburn (R-TN). Savings: $53.9 billion

Spending Increase Bills:

  1. H.R. 676, the Expanded & Improved Medicare For All Act. Introduced by Rep. John Conyers (D-MI). Cost: $1.16 trillion
  2. H.R. 1200, the American Health Security Act of 2013. Introduced by Rep. Jim McDermott (D-WA). Cost: $824.5 billion
  3. S. 627, the Medical Innovation Prize Fund Act. Introduced by Senator Bernard Sanders (I-VT). Cost: $108.5 billion
  4. H.R. 870, the Humphrey-Hawkins 21st Century Full Employment and Training Act of 2013. Introduced by Rep. John Conyers (D-MI). Cost: $100.5 billion
  5. H.R. 1617, the Emergency Jobs to Restore the American Dream Act. Introduced by Rep. Jan Schakowsky (D-IL). Cost: $45.6 billion
For more information, check out the Tab online here, and be sure to sign up for future email updates.
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The Late Edition: November 7, 2013
Posted By: Curtis Kalin - 11/07/13

Today’s Taxpayer News!

Electric fail: An investigation by WZZM TV showed that pouring taxpayer money into electric cars has basically failed. The federal government has spent $5 billion on this work all while charging stations, originally intended to replace gas stations, sit empty.

An expensive day’s work: A key agency in the Washington, DC education department paid almost $90,000 to a Chicago based education firm for one day of work at a conference. The cost “included a half-hour keynote speech, three 45-minute parent workshops and hundreds of copies of parenting books.” The Washington Post has more details.

Historic waste: A new study shows the Veterans Administration (VA) has ignored several federal laws surrounding historic buildings. The VA often builds new facilities instead of fixing up older ones, which wastes taxpayer dollars. More on CNSNews.

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The Late Edition: November 6, 2013
Posted By: Curtis Kalin - 11/06/13

Today’s Taxpayer News!

Massive Marshal waste: NTU’s Pete Sepp is quoted in this WSBTV article exposing the U.S. Marshals Service for the agency’s waste on gifts ranging from Christmas ornaments to silk scarves to commemorative coins. In total the Inspector General found almost $800,000 worth of waste.

Medicare mismanagement: Medicare has paid out millions of dollars to the deceased, a new Inspector Generals report found. The report tallied $23 million of improper payments to deceased Americans and those illegally living in the country. More information at Healthcare Payer News.

Call waiting: Vermont state officials found that the state wasted $272,000 on cell phones that went unused by state officials in 2012.  Of the 11 million minutes purchased by the state, 5 million were not used. More details at VNews.

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Ballot Measures 2013: Taxpayers Thwart Worst, But Many Bad Measures Still Pass
Posted By: Lee Schalk - 11/06/13

Despite what may have appeared to be a sleepy off-year election, a host of ballot measures compiled by National Taxpayers Union (featured in The Wall Street Journal) with national implications appeared on November 5 state and local ballots across the country, and the results might surprise you. At the end of the day, there were both silver linings and disappointments for taxpayers across the country.

The Good

  • In Colorado, the $1 billion income tax hike went down in flames. Despite the $10 million spent in support of Amendment 66, Coloradans were in no mood for income tax increases, which are often a major hindrance to economic growth. The amendment secured only 34 percent of the vote in the increasingly blue Centennial State.
  • Telluride, Colorado taxpayers overwhelmingly rejected a penny-per-ounce soda tax, 68-32 percent. Two similarly regressive measures were defeated in Richmond and El Monte, California last November.
  • Texas voters approved five pro-taxpayer amendments: three that grant property tax relief, one that shrinks government by eliminating the ineffective State Medical Education Board, and one that provides consumer flexibility on homestead purchases by allowing reverse mortgages.
  • Washingtonians took down Initiative 522 (55 to 45 percent), which could have significantly disrupted commerce by requiring the labeling of genetically modified food.
  • Hialeah, Florida voters approved a pension reform referendum question. Future elected officials will no longer receive exorbitant pensions after leaving office, and future changes to the Hialeah pension fund must now be approved by taxpayers.
  • Proposition 5 was approved in Kaysville, Utah, restricting revenue of the city Power Department and Power Fund to be used only for that Department. If revenues exceed operating costs for the Power Department, those extra collections will now be returned to the customers. This will provide transparency by barring the local government from spending those proceeds on items unrelated to the power company.

The Bad

  • New Jersey voters passed a minimum wage increase that raises the hourly rate by 14 percent, from $7.25 to $8.25. SeaTac, Washington voters also approved a local minimum wage hike to $15 per hour. These measures, which sailed through with overpowering support, could actually reduce overall employment by making unskilled and young workers more expensive to hire. Additionally, businesses are likely to pass on the cost of the wage increase to consumers.
  • Texans said “yes” to Amendment 6 by an astounding margin, 73 to 27 percent. The Lone Star State’s Rainy Day Fund can now be tapped to pay for local water projects.
  • A handful of California towns and cities (Corte Madera, Larkspur, San Anselmo, San Rafael, and Scotts Valley) voted to raise sales taxes.

The Ugly

  • Maine voters, whose state already claims the 12th-highest per capita debt in the nation, approved five ballot questions to increase state debt by a total of $149.5 million.
  • Proposal 1 passed easily in New York (57 to 43 percent), permitting localities to exceed debt limits when constructing or reconstructing sewage facilities. Evidently, fiscal responsibility remains a foreign concept to many in the Empire State, which ranks number one in local-level, per capita debt among the fifty states.
  • An attempt to strengthen the initiative and referendum process, Initiative 517 was beaten badly in Washington, 60 to 40 percent. The initiative sought to extend signature collection time, ensure that measures with sufficient signatures appear on the ballot, and set penalties for harassing petition organizers.
  • Modest pension reform was rejected in Cincinnati, as 78 percent of voters shot down Issue 4. Last week, NTU board member and former mayor of Cincinnati Ken Blackwell warned that Cincinnati must face the pension crisis that sealed Detroit’s fate.

Last but not least, the results of Colorado’s marijuana tax hike measures could be considered good, bad, or ugly, depending on your point of view. While Coloradans rejected the Amendment 66 income tax hike, they approved the Proposition AA marijuana taxes 65 to 35 percent. Locally, voters in Eagle, Red Cliff, Littleton, Boulder, and Denver also passed new taxes on marijuana. All of these measures increase taxes on a product recently deemed legal under state law.

Keep an eye on for additional analysis and commentary on 2013 ballot measures.

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Congress Wants to Buy Healthcare & Jobs
Posted By: Michael Tasselmyer - 11/05/13

Last week's release of the latest BillTally research offers taxpayers an in-depth look at the legislation that's been proposed on Capitol Hill so far this Congressional session, and the data doesn't offer much consolation for those who'd like to see less federal spending. NTUF found that the 86 unique, non-overlapping bills scored between both the House and the Senate would increase the budget by about $1.28 trillion per year: in other words, for every dollar Congress proposed to cut, they sought to spend an additional $3.83.

So where does the bulk of those new spending proposals come from? Largely in the form of legislation that would attempt to reform healthcare and stimulate job creation. The American economic recovery is still considered by most economists to be on relatively shaky ground, and many experts have warned of the detrimental impacts that rising healthcare costs could bring. Lawmakers in Washington have seemingly been paying attention to these signs and continue to introduce legislation designed to confront the issues.

NTUF Director of Research Demian Brady broke down the new spending proposals by issue area, and health- and economy-related legislation played a major factor in affecting the overall spending trends for the first six months of the 113th Congress.

In the House:

 Category  Number of Proposals  Total Annualized Cost (millions)  Average Annualized Cost (millions)
 Health  45 $1,184,328 $26,318 
 Commerce/Economy/Housing  40 $143,808 $3,595

And in the Senate:

Category Number of Proposals Total Annualized Cost (millions)   Average Annualized Cost (millions)
Health 35 $115,377 $3,296 
Commerce/Economy/Housing 14 $16,792 $1,199 

By far the largest health-related spending bill in the House was a plan to implement a single-payer system. That proposal would amount to $1.16 trillion in new spending. Other multi-billion dollar bills related to healthcare to emerge from that Chamber include:

  • $3 billion in research aid for the National Institutes of Health (H.R. 1301);
  • Repealing a cut to $1.6 billion worth of payments to certain hospitals under the Affordable Care Act (H.R. 1920); and
  • A bill to extend the Federal Employees Health Benefit Program to non-federal workers (H.R. 779), at a cost of $7.5 billion.

The massive cost of healthcare-related proposals is in line with previous years. There was no single-payer bill introduced in the Senate during the first six months of the year, but even without such legislation, health-related spending bills in the Senate were still over four times as costly as the next most expensive issue area (education, at $27.3 billion per year).

Economic stimulus bills were more common in the House (40 bills) than in the Senate (14 bills). Of course, the Senate also proposed much less spending across all policy areas: its total net agenda would reduce federal spending by $46.8 billion, and Senators proposed fewer $100 billion or larger spending bills than their colleagues in the House. And even without single-payer healthcare legislation, the House's net spending agenda would still increase federal outlays by $37.5 billion. It is still very possible that the Senate's net agenda will increase significantly with the introduction of more "big-ticket" healthcare and stimulus proposals as seen in the House.

Read the full BillTally report online here.

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The Late Edition: November 4, 2013
Posted By: Curtis Kalin - 11/04/13

Today’s Taxpayer News!

Costly skies: The state of Illinois spends more than $4 million a year flying state officials from Chicago to Springfield. An investigation by Fox 32 Chicago found that almost half of all flights have four or less passengers aboard, wasting the estimated $3,000 per flight cost.

Welfare waste: Beneficiaries of Tennessee’s welfare program have used state issued Electronic Benefit Transfer cards on outlandish expenses, state records show. Funds were used on liquor, cafes, electronics, and even theatre tickets in Memphis.  Read more at WMCTV.

Unspent funds: The Department of Labor’s Navajo Nation educational program has grossly mismanaged taxpayer funds even as thousands wait for job training. A federal investigation showed that the program failed to spend $13.4 million while only serving 62 percent of its expected participants. More details at the Washington Times.

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The Myth of the 12.6 Percent Effective Corporate Tax Rate
Posted By: Curtis Kalin - 11/04/13

A May 2013 report by the Government Accountability Office (GAO) claimed that U.S. corporations paid an effective tax rate of just 12.6 percent - a startling revelation considering the U.S. now has the highest statutory corporate tax rate in the world at 35 percent. As a wary taxpayer might expect however, there is more to the story…

The GAO study was used by many to bolster the notion that tax loopholes and offshore “tricks” allowed American businesses to duck a great deal of their tax burden. The party for those seizing on this opportunity was short-lived, however, as a more complete analysis performed by international tax expert Andrew B. Lyon (with Pricewaterhouse Coopers ) showed real and significant problems with GAO’s analysis.

Lyon’s study, published in the academic journal Tax Notes last month, exposed glaring omissions that skewed GAO’s baseline finding. Most evident was GAO’s use of just the year 2010 in their analysis.  In making their judgment, they selected a narrow window of time that that just happened to coincide with loss write-offs resulting from several years of the Great Recession. Lyon took a more comprehensive approach, breaking down the corporate rate from 2004-2010.  His finding was that long-term, “The effective tax rate based on worldwide current tax payments for all U.S. corporations exceeded 35 percent for the 2004-2010 period.”

What’s more, Lyon’s more comprehensive methodology found that even during the limited period GAO examined, effective corporate income tax rates well exceeded the 12.6 percent reported by GAO, largely because the agency failed to account for taxes paid to foreign governments on certain income dividends received by American companies.

An effective tax rate of 35 percent ranks highest among industrialized nations and has America lagging behind in terms of tax competitiveness. With unemployment in particular remaining a challenge for the U.S., it is important for policymakers to clearly understand the damage a punitive corporate income tax rate causes our economy. Taxpayers should not be fooled into a false choice using false facts. How the GAO could issue such a flawed study is another question…

Andrew Lyon’s very in-depth study is highly recommended for those looking to dive deeper into this discussion, read it HERE.

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Five Quirky Taxes to Watch Out for on Tuesday's Ballot
Posted By: Curtis Kalin - 11/04/13

It’s almost Election Day and voters in several states and many more localities will head to the polls to decide the fate of numerous fiscal ballot measures. Some of these proposals stand out more than others. Below we’ve listed the top five strange (and what many would consider punitive) tax issues on the ballot in 2013 that our research has identified:

  1. Airplane tax: The state of Washington is holding an advisory vote (#4) to approve the state legislature’s imposition of a new tax on companies frequently operating planes in the state. The tax would feature tiered fees based on the aircraft’s weight.
  2. Marijuana tax: Colorado was one of the states in America to legalize recreational use of marijuana in 2012. Not far behind this legalization came ballot initiatives to tax it. If passed, Colorado’s Proposition AA would impose a 15 percent excise tax on all recreational marijuana purchases in the state, as well as a 10 percent sales tax.  Voters in the cities of Boulder and Denver are considering measures that give their cities authority to impose additional sales and excise taxes on marijuana as well.
  3. Soda tax: Also in Colorado the town of Telluride is considering a one-cent per ounce tax on sweetened beverages. The revenue generated would go to children’s physical education programs in schools. Remember this is ‘per ounce’, making it a not-insignificant burden.
  4. Hotel tax: The California city of Selma is considering doubling the occupancy tax on hotels, inns, and other lodging from six to twelve percent. The tax in Measure K applies to all lodging for stays less than 30 days.
  5. Oil well tax: Still in California, the voters of Santa Fe Springs will vote to more than double the tax on barrels of oil drilled.  Measure S would take the tax from 20 cents a barrel to a maximum of 52 cents.

Also of note for local taxpayers: In California 87 school districts will vote on 45 local bond/tax measures totaling $22 billion. This far exceeds what any other state in America has on the ballot. Additionally, Arizona voters will be deciding on 11 local ballot measures that would implement $209 million for education bonds and $311 million in non-education related bonds (public safety, parks, roads, etc.)

There are many more state and local measures of note. Other entries – strange or not – from sharp-eyed taxpayers across the country are welcome!

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What Tricks & Treats Face Taxpayers this Election Day? And BillTally’s New Report - Speaking of Taxpayers, Nov. 1
Posted By: Douglas Kellogg - 11/01/13

Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes!

State Affairs Manager Lee Schalk talks NTU's 2013 Ballot Guide, even in an off-year election billions are on the line; and NTUF's Demian Brady talks about Congress' spending trends in their first 6 months. Plus, the Outrage of the Week! 

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Do Spending Cuts Lose Favor Over Time?
Posted By: Michael Tasselmyer - 11/01/13

Yesterday, NTUF released a special BillTally report examining the first six months of the first session in the 113th Congress. The report comes as lawmakers begin to debate several long-term budget issues, not the least of which is the fact that under the terms of the compromise that ended the recent government shutdown, federal funding will again run dry by early February unless Congress takes further action.

The 113th Congress has, at least to this point, shown a reluctance to address U.S. budgetary dilemmas by cutting spending. Through the first six months of 2013, Congress has introduced 554 bills to increase spending, as opposed to just 114 that would reduce outlays –- a nearly five to one ratio. For context, that ratio in the previous Congress was 3.9 and 4.6 to one in the House and Senate, respectively. Across both Chambers, the 113th Congress has introduced a net spending agenda of $1.28 trillion: about $1.74 trillion in increases and $453 billion in savings.

Perhaps more concerning for taxpayers who are wary of mounting debt and deficits is that if previous legislative trends are any indication, it's unlikely that Congress will introduce savings proposals any more quickly over the rest of the session.

In the 112th Congress, NTUF identified 221 House savings proposals over the course of the two year term. 52 percent of that total had been introduced by the end of the first 6 months, and over 74 percent were considered by the end of the first year. In other words, only about a quarter of any major savings proposals were introduced over the entire final year of that Congressional session.

The 112th Senate followed a similar trend: by the end of the first six months of the two year term, about 56 percent of all savings bills had been introduced. Just over 81 percent of the Senate’s savings legislation had been submitted by the end of the first year.

Through July of this year, the current Congress introduced 81 savings bills in the House and 33 in the Senate. The House had already submitted 72 percent of its savings bills by the end of March, and the Senate had reached 70 percent of its total in that same time.

Although it's impossible to predict how the current Congress might act going forward, history shows that legislative proposals to cut spending tend to be considered earlier rather than later. If that holds true for the 113th Congress, the window for significant savings legislation to be considered may be closing as the year comes to an end.

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