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This Week: A Redesigned Taxpayer's Tab
Posted By: Dan Barrett - 03/28/14

Taking suggestions from our base of dedicated subscribers and looking to the future, NTUF released a new and improved version of The Taxpayer’s Tab – NTU Foundation’s weekly BillTally newsletter. This update is the first major redesign in the Tab’s almost five-year history and we’re not just talking about rounded corners and a sleeker look. Now, readers will have multiple options to read and share Tab content in an easy and simple fashion.

Thanks to the generous donations of NTU Foundation supporters, our Creative Content Manager Tim Howland and the NTUF research staff present you with a responsive and sleek insight into the bills that Members of Congress are proposing, supporting, and hoping to pass into law. Subscribers can read the Tab, as they always have, as it appears in their inboxes and can now go to our website to share each of the Tab’s articles and to broadcast the message of fiscal transparency to their social networks.

We’ve also started a new “Bottom Line” section to summarize each bill so if you don’t want to read the entire Most Expensive Bill of the Week article, you can just scroll to the bottom and get the cliff notes. As before, NTUF will be updating taxpayers on our research and the issues of the day through our tweets, blog posts, cross-posts on TruthAboutBills.com, and cost estimate numbers on WashintonWatch.com.

Like what you see? Consider making a tax-deductible donation to NTU Foundation to help us educate more Americans on government spending, taxes, and regulations! The more that you help NTUF out is the less that you’ll give to the IRS next April.

Again, thank you for your support and we welcome feedback on our new Taxpayer’s Tab!

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Senate Advances Ukraine Aid Package - What's Really in the Bill May Surprise You!
Posted By: Nan Swift - 03/25/14

Yesterday, the Senate moved forward with S. 2124, the “Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014.” As the name suggests, S. 2124 is an aid package for embattled Ukraine that includes measures legislating loan guarantees, sanctions, security assistance.  But that’s not the whole story.

S. 2124 also contains some significant changes in the U.S. relationship with the International Monetary Fund (IMF). Under the misnomer “reform” the changes were first announced in 2010 by the IMF, but until now, Congress has declined to enact the modifications that the Obama Administration supports. The so-called reforms call for a doubling of our annual funding quota along with a major change in the rules for election of the IMF executive board.

Currently, the U.S. appoints our own representative to the executive board (the group tasked with day to day IMF decisions). Under the 2010 proposal, all members of executive board would be elected by the Board of Governors, which is comprised of representatives of each IMF member country, making it harder for the U.S. to protect our interests. Having a U.S. representative at the table is an important accountability tool for American taxpayers who provide the majority of IMF’s funds, $64.5 billion annually.

 The U.S. also contributes the lion’s share of funds to an IMF account called the New Arrangements to Borrow (NAB). So far, taxpayers have committed $106 billion (18.7 percent of total NAB) to what was supposed to be a temporary, emergency program. Under the proposed 2010 plan, that would be half-true. NAB is going away, but the high price tag is here to say - shifted back under our overall IMF quota and putting taxpayers on the hook for an additional $63 billion a year.  In addition, subsuming NAB funds into the general quota eliminates our veto on crucial IMF decisions

For taxpayers, the IMF reforms mean a lot more money for a lot less influence in how that money is spent. Any way you split it, that’s a terrible deal. Unfortunately, with the focus on Ukraine, the IMF changes aren’t getting the consideration they warrant.

Before agreeing to give billions more to the IMF, lawmakers should be mindful of some big picture concerns.  For instance, the IMF suffers from severe democratic deficiency, not unlike the U.N. and other global entities the U.S. is involved with. Without the ability to vote on IMF decisions, taxpayers and U.S. lawmakers alike have little influence on IMF decisions. Taxpayers should have a say if their funds are to be used to bail out sovereign states such as Greece and Ireland. As it stands, the hundreds of billions of dollars taxpayers have entrusted to the IMF over the years have funded Communist regimes, contributed to fiscal irresponsibility, and increased moral hazard.  By doling out credit at rock-bottom prices, the IMF provides little incentive for recipient countries to the reforms they need to avoid economic catastrophe.

Then there is our own national balance sheet with a debt to GDP ratio of 73 percent and on track to hit 100 percent in the next 25 years unless Congress takes action to address out of control entitlement spending and enacts pro-growth policies.  In light of our ongoing economic challenges and poor fiscal outlook, lawmakers should prioritize funding domestic needs.

Finally, it’s unnecessary to logroll IMF reform with Ukrainian aid. With an estimated $400 billion available, the IMF doesn’t need a new injection of taxpayer backed dollars to meet global needs and commitments. Our relationship with the IMF is one that deserves reexamination and the close scrutiny of stand-alone legislation debated on its own merit.

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Obama’s Euro-Trip Air Force One Flights Cost over $6.6 Million
Posted By: Michael Tasselmyer - 03/24/14

The most internationally well-traveled President, through five years, is also flying the most expensive-to-operate Air Force One to date. (For analysis of Presidential travel over the first five years, click HERE.)

As reported in the Washington Examiner last month, new records obtained via a Freedom of Information Act request show that it cost about $228,288 per flight hour to operate Air Force One in FY 2013. That figure represents a 27 percent increase from the previously confirmed $179,750 cost that NTUF used in our last study of Presidential Travel.

Taken on its own, the $48,535 jump may not sound all that significant. However, when trips are many thousands of miles and span several time zones and continents, the difference can quickly add up.

For example, the President’s current European trip will likely involve about 29 hours of total travel time, assuming a cruising speed of 575 mph between Washington, Amsterdam, Brussels, Rome, and Riyadh, and then back to D.C. Using the previous estimate, the total cost of flying Air Force One between those international cities would be about $5,212,750. Using the new data, the cost comes out to $6,620,352.

While these figures are approximations, and do not account for the additional (and likely greater) expenses of transporting the President’s Secret Service and diplomatic entourage, backup aircraft, land vehicles, and advance security teams, it goes to show that higher Air Force One operational costs substantially change the budgetary magnitude of these trips.
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President Obama is Most Internationally Traveled President through 5 Years
Posted By: Michael Tasselmyer - 03/24/14

The President is overseas once again, this time for a rapid-fire trip to Europe and the Middle East, with plans to visit five countries in five days: the Netherlands, Belgium, Vatican City, Italy, and Saudi Arabia. Ahead of the trip, we here at National Taxpayers Union Foundation (NTUF) are taking a moment to update our ongoing Presidential travel research to give taxpayers an idea of how often the President is going abroad using taxpayer dollars, and how that compares to past Chief Executive travels. (For more on the cost of the President's current European trip, click HERE.)

When we released our last major update of Presidential travel in June of 2013, Barack Obama was scheduled to make at least two international trips in the final six months of the year. Now that the calendar has turned and his trips are officially in the books, the final count stands at:
  • Days abroad: 24
  • Countries visited: 13
  • Trips taken: 6
Over the last half of the year, the President made two trips, though only one of those was scheduled at the time of our last report.

In September, Mr. Obama spent three days abroad as he visited Russia and Sweden to meet with those countries' respective leaders.
He was originally scheduled to spend 8 days in October visiting Malaysia, the Philippines, Indonesia, and Brunei as part of the 2013 Asia-Pacific Economic Cooperation (APEC) conference. However, those plans were cancelled when the federal government shut down during debates. An impromptu December trip to South Africa to pay respects to the late Nelson Mandela wrapped up the Prsident's international travels for the year.

The table below shows how President Obama's fifth year stacks up against those of other Presidents' in terms of total trips, days spent abroad, countries visited, and the average length of those trips.

travel2

The data also show that President Obama has taken more trips and spent more time abroad after five years in office than any other modern president. The table below shows the cumulative totals through 2013.

5yr

At least one travel trend from the President’s first term seems to be carrying over into his second: while he is taking slightly higher number of total trips abroad than his two most recent predecessors, those trips have been shorter, on average. Our report last summer showed that over the course of his first term, President Obama spent about 3.8 days abroad per trip, fewer than any modern president since Johnson. That pattern seems to have carried over into his fifth year in office, where he spent fewer days abroad per trip than George W. Bush, Bill Clinton, Ronald Reagan, Richard Nixon before him.
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Deroy Murdock Talks Clear and Present Debt Danger, GOP Failures on Spending
Posted By: Douglas Kellogg - 03/21/14

"Speaking of Taxpayers" has a special guest this week! Fox News Contributor & syndicated columnist Deroy Murdock joins the podcast to talk about his latest piece in National Review on the importance of shifting the debt debate to the present, and not pretending it is a problem that we can wait to handle in the future. Pete & Doug update you on the latest news from around the country, & we have an update on a Taxpayer's Tab redesign. Plus, the Outrage of the Week!

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Governor Scott Walker to Sign Half-a-Billion Dollar Tax Cut Package
Posted By: Lee Schalk - 03/20/14

Just two months after outlining his plan to further slash taxes in Wisconsin, Governor Scott Walker is poised to sign his tax cut into law, which would reduce the cost of government by more than $500 million in the Badger State.

The package, which awaits Walker’s signature after passing the Wisconsin Assembly and Senate, contains the following taxpayer-friendly provisions:

  • Income tax reforms
    • Reduces the rate for lowest income tax bracket (applying to income up to $10,910) from 4.4 to 4 percent, saving taxpayers $46 per year, on average
    • Tweaks withholding rates so that a working class family of four is able to keep an extra $58 per month
    • Lowers income taxes for factory and farm owners
  • Property tax reforms
    • Lowers property taxes by $406 million, saving an average homeowner $101 per year

Thanks to Walker and the taxpayer advocates in the Wisconsin State Legislature, these tax cuts equate to hundreds of extra dollars each year for Wisconsinites who agree that lightening the tax burden is the best way to fuel economic growth, yet, like most Americans, are struggling in the current economic climate.

With Walker’s signature on this half-a-billion dollar tax cut package imminent, the governor has fired up the grassroots, both at home and throughout the country and proven once again that he is a taxpayers’ friend.

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Latest Taxpayer's Tab: Overtime Pay Reform
Posted By: Michael Tasselmyer - 03/16/14

Tab Insert

As in the private sector, certain government employees can receive additional pay if their work leads to "administratively uncontrollable overtime" hours (AUO). The problem? Many agencies abuse the allowance, to the tune of $8.7 million according to recent reports. The issue was addressed on Capitol Hill recently in the form of H.R. 3463/S. 1691, as featured in this week's edition of The Taxpayer's Tab.

Congressman Jason Chaffetz (R-UT) and Senator Jon Tester (D-MT) introduced the Border Patrol Agent Pay Reform Act of 2013 in order to curb some of the overtime pay abuses that were recently brought to light. Investigations revealed millions of dollars in overtime pay had been wrongfully awarded to employees within the Department of Homeland Security, particularly the Customs and Border Patrol (CBP) agents stationed at the agency's headquarters. The bill would reduce spending by $125 million per year ($625 million over five years) by reworking the current CBP pay scale.

Also featured in this week's Tab:

  • Most Friended: Congressman Lou Barletta (R-PA) and Senator Mark Warner (D-VA) introduced H.R. 3979/S. 1798 to make sure that volunteer firefighters and medical personnel won't be counted as full-time equivalents under the Affordable Care Act's employer mandate. The Protecting Volunteer Firefighters and Emergency Responders Act had 106 cosponsors as of this publication.
  • Wildcard: Wyoming's Representative-at-large Cynthia Lummis (R) and Senator John Barrasso (R-WY) introduced the River Paddling Protection Act to allow managers more freedom in deciding where to allow boating, kayaking and canoeing in Yellowstone and Grand Teton national parks. The administrative requirements in H.R. 3492/S. 2018 would require about $1 million per year in additional spending.
  • Budgetary Discrepancies? The White House's economic projections in the FY 2015 budget differ markedly form those released by the Congressional Budget Office last month. NTUF put together an infographic to demonstrate what that means for taxpayers.

For more, check out the latest edition of The Taxpayer's Tab.

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"Speaking of Taxpayers" from CPAC 2014, Part 2
Posted By: Douglas Kellogg - 03/14/14

Subscribe to NTU's podcast via iTunes!

It's part 2 of our special CPAC podcast! We talk online freedom, Internet Sales Tax/Marketplace Fairness Act, and growing the relevance of fiscal issues with a younger crowd; with a great lineup: Seton Motley of Less Government, Michael Ostrolenk of the Liberty Coalition, and Casey Given with Students for Liberty!

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Obama Administration Backs Away from Costly Proposed Rule Change
Posted By: Brandon Arnold - 03/14/14

Taxpayers dodged a multi-billion-dollar bullet this week when the Centers for Medicare and Medicaid Services (CMS) indicated that it no longer intends to implement a costly package of changes to Medicare Part D.

The decision by CMS came just hours before the House of Representatives planned to vote on H.R. 4160, the Keep the Promise to Seniors Act, sponsored by Congresswoman Renee Ellmers (R-NC). This bill, which NTU enthusiastically supported, would have blocked the proposed rule.

I blogged about the issue last week and noted the strong opposition that was mounting against the rule changes:

[A] bipartisan group of 20 Senators led by Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) recently expressed very strong objections to the proposed rule in a letter to CMS Director Marilyn Tavenner.

Though NTU has had our fair share of concerns about Medicare’s prescription drug program, we were very pleased to see CMS reverse course on a plan that would have cost taxpayers an additional $1.6 billion per year, according to the Milliman actuarial firm. However, as I noted in my earlier post, taxpayers must remain vigilant, as this was “yet another example of the Obama Administration’s over-utilization of the rulemaking process.”

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Internet Sales Tax Supporters’ Fantasies Cannot Quell Concerns as Alternatives Take Center Stage
Posted By: Douglas Kellogg - 03/13/14

Yesterday’s House Judiciary Committee hearing about alternatives to the Marketplace Fairness Act’s (MFA’s) brand of Internet sales tax mandate offered several options that Congress could focus on, the best of which would be “origin sourcing” – yet, the most imperative statements remain the prudent warnings about the risks posed by MFA, and the need for the House to avoid this legislation first and foremost. 

Indeed, the hearing was more of a referendum on MFA than anything, and for good reason since MFA represents such a dangerous departure from traditional taxpayer protections and interstate competition. National Taxpayers Union (NTU) submitted comments to the Committee arguing against MFA and providing observations on other policy avenues, and late last year commissioned a poll with the R Street Institute finding at minimum 57 percent of respondents opposed MFA (the level of opposition rose when they were presented with “pros and cons” of the proposal).

Those testifying in favor of MFA, or nominally a Streamlined Sales and Use Tax Agreement (SSUTA), joined some of the lawmakers on the Committee in making many misguided points. The most oft-repeated of them warrant a response:

1)  “Leveling the Playing Field.” We heard multiple times that “leveling the playing field” or protecting brick and mortar establishments was the major motivation behind an MFA-type policy.

Yet, the number of brick and mortar stores that do not also sell their wares online is smaller than ever; as of 2010 they represented 38 percent of online sales. Online sales and storefront sales have both similarities and differences in their business models, so “leveling the playing field” in the way MFA does could carelessly plow under job creation and other activity that benefits the economy – and, indirectly, benefits government coffers.

Nonetheless, it is possible for sellers to participate in both kinds of retailing. Government cannot turn back the technological tide, and it cannot be valid to simply note change as a reason for panicked action.

2) The Massive Compliance Burden for Small Business. There still was no answer to the compliance burden question. Despite repeated attempts at creative explanations by several panelists -- Mr. Kranz, Mr. Crosby, and Mr. Moschella -- the main response to the threat of being subject to the rules (and audits) of nearly 10,000 taxing jurisdictions seemed to be “software.”

A 2006 PricewaterhouseCoopers study demonstrated that small businesses with sales between $1 million and $10 million still face enormous costs that would threaten profitability, causing significant harm to interstate commerce and the economy during an especially fragile time.

Even more striking, a coalition of “e-tailers” wrote lawmakers warning that MFA could cost the signatories some 220,000 jobs.

Mr. Crosby expressed faith that Congress could craft a bill combined with software that would alleviate any problems. But, unless Congress somehow took on legal liability for any failure of this software, businesses will be on the hook for any mistakes the software makes, after the cost of implementing it into their existing systems.

The significance of this part of the MFA equation cannot be understated. Has there ever been a time Congress has so succinctly prescribed a particular tool to business to deal with a law? The occasions are quite rare. If passed into law, will their advice and words of comfort mean anything for the first small business to be visited by California auditors? Would these words survive litigation?

3) Overblown Attacks on Origin Sourcing. As one might expect, pro-Internet Sales Tax panelists targeted “origin sourcing”, which would apply our current “physical presence” sales tax standards to online sales.

Where MFA would effectively have you be the property of your home state no matter where you shopped, “origin sourcing” represents the familiar situation of paying sales taxes wherever you buy something.

During the hearing Mr. Kranz in particular described “origin sourcing” as turning our tax system on its head. How using a current actual or de facto standard in many states for traditional retail could be described as turning anything on its head is not clear. Most importantly however, “origin sourcing” is the only current solution that actually represents “fairness.” It would place brick-and-mortar and online sellers under the same rules whereas MFA would only put online sellers at the mercy of out-of-state auditors.

We also heard points brought up from an Art Laffer study that made great leaps in logic by assuming states would take all their new revenue from MFA and attribute it toward tax cuts. NTU Executive Vice President Pete Sepp took these points apart previously in a piece on ntu.org.

Another common theme centered on the revenue states could rake in with such a scheme – but as noted in NTU’s testimony, these assumptions are based upon a highly-flawed methodology developed by the University of Tennessee that overstates the likely amount of revenue at stake.

While few conclusions could be drawn from the hearing, what is clear is that while experts and Committee members continue to labor under serious misapprehensions as to how the MFA will affect businesses and taxpayers alike, it is prudent for the Committee to not to rush to an MFA mark-up but to continue exploring solutions to what is a complex problem. Representative Collins (R-GA) put it best when he cautioned that implementing a framework for internet sales tax might be “closing one Pandora’s box and opening another.”

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