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Today’s Taxpayer News!
Fox23 (from Tulsa, OK) has reported that several 4th Circuit federal judges convened an expensive conference at the luxurious Greenbrier resort this past weekend. As NTU’s Pete Sepp put it, “All kinds of posh amenities, everything a federal judge would want to be pampered with are available there.”
Sen. Max Baucus and Rep. Dave Camp are heading off across the country on a “tax reform tour.” The tour kicks off in Minneapolis on July 8, with other dates to be announced soon. What do you think the prospects are for this effort leading to a tax overhaul?0 Comments | Post a Comment | Sign up for NTU Action Alerts
INFOGRAPHIC: NTUF's Presidential Travel Abroad Study
With all of the attention NTUF is getting with our recent paper, Up in the Air: A Study of Presidential Travel and Its Uncertain Costs, we thought that taxpayers would appreciate a boiled-down version of the findings.
A special thanks to our Creative Content Manager, Tim Howland.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes!
In a packed podcast, Mackinac Center's Vincent Vernuccio joins Pete & Doug to talk about union employee rights and National Employee Freedom Week. Plus, NTUF's Michael Tasselmyer talks about the new Presidential Travel Study - and the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
If you have been following the news out of Washington, DC over the last week or two, one thing really stands out: legislators had until today, July 1st, to reach an agreement on extending federal subsidized student loan interest rates or see them double to 6.8 percent. That deadline has come and gone (Congress left town for an early start to the Fourth of July holiday) but what does that actually mean? NTUF analysts have already written about how student loans are funded by the federal government or what the different types of loans there are. Below I’ve listed some myths that I kept hearing repeated by politicians, advocates, and everyday Americans.
Myth: The interest rate increase was a surprise.
Not True. If you recall, last year, Americans faced the same scenario (with much the same rhetoric of impending doom for life as we know it). President Obama and Members of Congress enacted a short stopgap measure before ultimately passing legislation to continue the funding for the lower rates until today. Everyone involved knew this day would come and had (or rather, continue to have) time to address the situation, though solutions can take different forms.
Myth: Doubling the interest rate will mean double the repayments.
Absolutely Not True. I have unfortunately heard this mostly come from alarmist Members of Congress. According to many sources, including the Brookings Institution and the Congressional Budget Office (CBO), an increase of interest rates for subsidized loans will mean a higher per month payment requirement once those students graduate. How much? The Joint Economic Committee reported that college students will have to pay an average $2,600 more over the course of the life of the loan. Spanning over years, that could be $20 or $50 but CBO found that it averaged out to be a $38 increase per month (assuming the loan is repaid over ten years). Though I would not welcome such an increase in repayment costs, it is a marginal change nonetheless.
Myth: Extending the lower interest rate is no cost to taxpayers.
No & It Gets Worse. CBO scored a basic two-year extension of just the subsidized student loan interest rates as an $8.3 billion cost spread out over four years. Currently, the income from interest and loan repayments is projected to net the government $6 billion in FY 2013 BUT the spending will soon outweigh the income. As explained in The Taxpayer’s Tab, administrators borrow money by issuing U.S. Treasury securities and use the new money as loan capital and subsidies. This system works as long as loan interest is higher than securities interest. However, by 2018, the interest on new debt will be quite close to set interest rates (and when you account for administrative costs ($15 billion over ten years, you’re no longer in the black). Simply put, if the government keeps borrowing at this rate, student loans will quickly become a liability for taxpayers, who would be footing the bill for a bailout if it comes to that.
Myth: There is nothing anyone can do now.
All Is Not Lost. With the deadline passing only today, legislators could come back from their break and pass legislation that could do a number of things for student loans, including:
There are resources on the web for students to consider their options, like this one by Brookings. However, students need to understand the market conditions they live in and how their borrowing affects the economy. I encourage all students to do their best to get scholarships and get the grades they need to better their initial standing in higher institutions. But if going to college is too expensive, other options exist that are just as viable. Tech and certificate programs, community college, and simply working now to go to school later are considerations highlighted by not only CBO but parents who are likely expected to shoulder some of the cost of their child getting a higher education. They also need to understand the financial committment of possibly failing in their academic venture. Don't believe me? A third of student loan borrowers never earned a degree.
Here's to hoping that students are more skeptical when hearing these myths, especially when their financial futures are on the line.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today's Taxpayer News!
The Baton Rouge Advocate ran a special report on the increasing difficulties (and costs) of fixing the city’s aging sewer system, which are funded in part by rapidly increasing fees. NTU’s Lee Schalk offers a fiscally-sound opinion on the issue.
Former Rep. Jesse Jackson is apparently still receiving federal pension benefits, despite awaiting sentencing after being convicted of misappropriating campaign funds. According to Pete Sepp, Jackson’s potential annual pension is worth about $45,000.
ICYMI: NTUF put together a handy infographic on Presidential travel habits (and costs)!0 Comments | Post a Comment | Sign up for NTU Action Alerts
This past week, a diverse group of organizations (including NTU) banded together to ensure employees are properly educated regarding employment freedom. The results have been outstanding, and the word has spread broadly! Check out some of the op-eds and articles that have covered NEFW:
The Washington Free Beacon: “Opting Out:National Employee Freedom Week Survey Shows Union Households Would Leave Labor Organizations.”
Fox News: “Happy Employee Freedom Week, America.”
The Washington Times: “Respecting Employee Freedom.”
The Colorado Springs Gazette: Celebrate freedom from unions during National Employee Freedom Week
Forbes on America’s teachers’ unions.
The Pittsburgh Tribune-Review: “Knowing Rights Empowers Workers.”
The Hill: “Some States Can’t Celebrate National Employee Freedom Week.”0 Comments | Post a Comment | Sign up for NTU Action Alerts
In a recent blog post, the Arlington County Taxpayers Association (ACTA) highlights a finding from the Treasury Department that in 2011, the IRS sent over $46 million in fraudulent tax returns to 23,994 recipients registered at a single Atlanta address.
A report from the Treasury Inspector General for Tax Administration also listed other instances of mass amounts of fradulent returns being sent to single addresses in Atlanta, including "11,284 refunds worth a combined $2,164,976 to... a second Atlanta address; 3,608 worth $2,691,448 to a third; and 2,386 worth $1,232,943 to a fourth," according to CNSNews.
The news comes in the wake of accusations that the tax-collecting agency may have unfairly targeted certain groups based on political factors. The errors apparently stemmed from innappropriate assignment of Individual Taxpayer Identification Numbers (ITIN) to questionable applications. According to the law, only those eligible to receive Social Security Numbers can receive an ITIN. Poor oversight and a lack of internal controls at the IRS lead to improper assignment of ITINs; in these cases, the errors were particularly costly.
For more, check out the ACTA's original post here.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Too Big Not to Fail: Public Pensions and the Cost of Government
As National Employee Freedom Week continues, it’s worth taking a look at the organizations that accounted for 7.5 million union memberships last year: public sector employee unions.
Despite recent declines, public-sector unions still have a membership rate of more than 35% (more than five times the rate for private-sector unions). Those high membership rates aren’t a coincidence. State and local public employees with a union membership received on average $14 more per hour in wages and benefits than non-union members.
The gap is especially exaggerated when it comes to “defined-benefit” contribution retirement plans. These plans tend to become very expensive, because there is no truly accurate way to predict how long workers will live and how their incomes will rise before retirement. As wages rise and workers begin to live longer after retirement, these plans become more and more expensive, and can produce disastrous budget shortfalls. Naturally, all that extra cost has to go somewhere, and the burden lands almost always directly on the taxpayers.
According to the 2012 State Debt Report put together by the non-partisan State Budget Solutions, more than half of total state debt in 2010 (the most recent set of published data) consisted solely of unfunded pension liabilities, to the tune of $2.8 trillion. In some states, the percentage is even higher. California’s pension liability far outstrips its outstanding state debt, at more than three times the size. Illinois’ problem is even more exaggerated: the state has $32 billion in outstanding debt, but its pension liability comprises a staggering $192 billion. Large cities can face a similar problem, albeit on a smaller scale. The Beacon Hill Institute estimates that in FY2013, Los Angeles will spend 32 cents of every total payroll dollar on public-worker pensions. Unfortunately, only 9 cents of every payroll dollar will be contributed to the program by employees - leaving the city on the hook for a considerable chunk of change.
It is true that states have many fiscal challenges beyond those caused by public employee unions. Yet, it is overwhelmingly clear that public-sector unions are driving up costs for government at all levels (and thus, taxpayers).
In Los Angeles, for instance, every percentage point increase in public-union membership creates $78 more in debt per capita. It should be left to the individual to decide whether union membership is right for them, and to the membership base to decide if the unions should exist at all. States, though, are soon going to have to make a decision about whether a fully-unionized employee pool is affordable.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
NTU released an updated study today tracking President Obama’s adventures as one of America’s most-traveled presidents. Key findings include being the second-most traveled president in a single term and traveling the most in the first year of presidency.
Twelve fiscal groups, including NTU, have signed on to a letter opposing H.R. 1959, The Domestic Alternative Fuels Act of 2013, which would allow ethanol made from natural gas to be included in federally-required blending targets.
America’s Future Foundation hosted a panel at the Cato Institute on the Marketplace Fairness Act, in which NTU’s Brandon Arnold took part. The panel determined that because of the exaggerated effect of the tax on the younger generation, young people must lead the way in defeating the tax.0 Comments | Post a Comment | Sign up for NTU Action Alerts
New Study: If Trends Continue, Obama Will be Abroad for 190 Days as President
Michael Tasselmyer, NTU Foundation's Policy Analyst, authored a paper on the international travels of President Obama. Though the President spends fewer average days abroad per trip, he is still on pace to travel more overall than six of the last eight Presidents. He could be away for as many as 190 days on international trips, if his travel trends continue. To put this in context, if the President ends up traveling abroad for those 190 days, he will have spent just under nine percent of his tenure visiting other countries (FYI, he will be in office a total 2,191 days). That not only means that he will be spending more time away from the White House but the government will be spending new levels of tax dollars on security, personnel, and logistics associated with those trips.
One key fact Tasselmyer points out is the unknown total cost of each or all of the President's trips, which reach the tens of millions of public dollars. Just as Presidents Clinton and Bush, Obama has many hundreds of traveling companions and multiple aircraft to guarantee his security and travel but taxpayers are not purview to the top-line costs. Tasselmyer said:
"NTUF does not dispute the widely-held belief that a vital component of the President's duties is to represent our nation in foreign countries. [This study] is provided in the interest of fostering rational public discussions over the transparency as well as the costs and benefits of such activity."
Below is a travel breakdown of each year that President Obama has been in office:
The study also includes an updated per-flight-hour cost for Air Force One, which slightly decreased from NTUF's 2010 study because of changes in fuel costs. Check out the report and stay tuned to NTUF's Twitter feed for other key findings (as well as reactions from taxpayers, lawmakers, and the Administration).1 Comments | Post a Comment | Sign up for NTU Action Alerts