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Latest Taxpayer's Tab: EITC Expansion, Travel Limits
Happy Memorial Day Weekend from the staff at National Taxpayers Union Foundation!
In this weeks' edition of The Taxpayer's Tab, NTUF took an in-depth look at three bills we recently scored as part of our ongoing BillTally project.
The Tab is available online with more information on each of these bills.4 Comments | Post a Comment | Sign up for NTU Action Alerts
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A quick update from Pete & Doug as another Article V resolution passes; David Williams of Taxpayers Protection Alliance joins the podcast for a must-hear discussion on the problems with LEED green building standards and his efforts to get to the bottom of government's cozy relationship w/ the Green Building Council. Plus, the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Thanks to the natural gas boom, the United States is on the brink of becoming a net energy exporter. But as NTU has often pointed out, the next step depends on what public officials do, or fail to do.
A new video produced by the organization Act on LNG is the latest to underscore the pivotal point we’ve reached. Whether the United States will expand on this competitive advantage, and in doing so sustain the gains made in recent years, hinges on whether the Department of Energy will license the export facilities necessary to ship natural gas beyond the U.S. border in its liquefied from (LNG). To date, only seven permits have been approved. More than 20 are still pending review, some for years.
Recognizing the urgency of the situation and spurred by recent global market developments, Congress has stepped up with legislation to pressure DOE and help surmount the outdated export obstacles. NTU has long supported efforts to lift trade restrictions and more recently backed a solid plan in the House to make it happen.
Much of the development that paved the way to the position America enjoys now happened in spite of federal policy, not because of it. If the President truly supports an all-of-the-above energy portfolio, he should direct the Department of Energy to expedite approval of outstanding LNG permits. Congress should move forward with legislative solutions as well. Natural gas has put the United States on a promising path to energy prosperity – it is Washington’s responsibility now to make sure we don’t reach a dead end.0 Comments | Post a Comment | Sign up for NTU Action Alerts
On Capitol Hill, May 20: NDAA Hits the House, Harry Reid Foils Tax Extenders
NTU Federal Affairs Manager has the news from the Hill as Congress considers the Water Resources Development Act, NDAA; and Harry Reid sparks the Senate GOP to bail on last week's tax extender package - all of which put your tax dollars on the line! Don't forget to subscribe to NTU's YouTube channel!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Keeping Economy Free from Internet Sales Tax Mandate Is About Your Rights
There’s yet another volley out from the pro-Internet sales tax mandate crowd, this one from the supposedly conservative side of the aisle – “supposedly” because changing the law to chase revenue just doesn’t seem like a “conservative principle.”
It is not just the additional tax complexity imposed on interstate transactions that makes MFA bad policy, but the destruction of traditional taxpayer protections that would extend government taxing power to a degree we have never seen before.
That’s just the beginning of why this article should lead to many questions from online business, taxpayers, and anyone concerned with fiscal freedoms.
The first line kicks off the questioning with the statement, “The federal government has a policy that directly puts Main Street brick-and-mortar retailers at a competitive disadvantage.”
If you want to call the U.S. Constitution, state sovereignty, and Supreme Court precedent, “a federal policy,” we’ll tolerate that phrasing for now – but for taxpayers and businesses these “federal policies” are needed protection against reckless, budget-busting, revenue-hungry state and local governments that have no interest in shrinking themselves if there’s any tax dollar out there they can devour.
How does the article argue for states’ rights while supporting a policy that would tear down the vital boundary that protects a state’s citizens from being subject to another state’s government when they have no physical presence in that state?
Stated more plainly: Would a business owner in South Carolina feel their state’s sovereignty is particularly strong when New York tax officials show up to audit him because someone from Brooklyn ordered something from his store?
Should we also allow a state government like Illinois to go after the gift shop in Montana where a Chicago resident bought a t-shirt on vacation?
How is it “fair” to make states with the most expansive and invasive tax laws more powerful by letting them interfere with out of state entities that interacted with their citizens?
What is “conservative” about scrapping long-standing taxpayer and business protections, unleashing tax collectors from reckless big states, and thus killing businesses in one of the few bright spots in our economy?
The article then goes on to contend that “you cannot honestly argue for returning control from Washington to the states and then say ‘but not in this case.’” Actually there are many “cases” in which our Constitution’s commerce clause provides safeguards against states’ excesses. (Anyone interested in limiting government probably wants all the abusive powers the federal government has been exercising to go away, not be transferred to another government.)
Congress has recognized this imperative in the past, through laws that forbid higher state taxes on air carriers than on other businesses, limit the applicability of stock transfer taxes, among a host of examples.
Is the author actually arguing to repeal all these protections and raise Americans’ tax burdens?
It’s understandable how politicians from any party see a revenue grab, especially one that comes at the expense of people who cannot vote for you (taxation without representation), as enticing.
But how can educated groups or citizens honestly fall for MFA, which would empower state and local taxing authorities to force out-of-state businesses to collect – and carry the burden for collecting – sales taxes.
Especially since those governments can already collect use tax from taxpayers who live within their borders!
They also reap major revenues right now from big-box outfits that integrate their physical stores with online shopping options. And there’s a third source of money: taxes on Internet sales made between a customer and a business located in the same state (which can easily happen in big states like Texas and California).
That’s right, we’re being fed a sob story as if these poor states have been stripped of all means. But, they can collect anything due to them already…
They just prefer to harass people who can’t vote for them and place the cost of compliance on someone else, while conveniently not having to disturb their voters with an invasive tax collection process.
Ultimately this is a losing game – with over 9,000 taxing jurisdictions involved, businesses (and by extension their customers) across the country will suffer, including those in the hometowns of politicians who support the MFA scheme.
But perhaps the politicians and opportunistic big businesses looking to implement an Internet Sales Tax Mandate will start to get the picture as voters show they share these questions and concerns.
An NTU/R Street poll conducted by Mercury found 57 percent of respondents were against an MFA-type scheme – strong majorities were opposed across every demographic group but one.
A Georgia primary candidate can testify to that as he took a hit recently for claiming to be against tax hikes, while supporting MFA.
Perhaps that’s because more “brick and mortar” stores than ever are now also online sellers – making up 38 percent of total online sales – and they aren’t letting singular self-interest trump taxpayer rights.
Now one final question: How does one who favors ‘limited government’ back a policy that would do so much to un-limit government?0 Comments | Post a Comment | Sign up for NTU Action Alerts
When It Comes to Foreign Investment, Sales Pitch Should be to Congress
Marketplace reports that President Obama is meeting with business executives today to pitch investment in the U.S.:
Last year, foreign investment in the U.S. was roughly $193 billion -- down from its peak of $310 billion in 2008.
Dartmouth’s Matthew Slaughter says the U.S. attracts investments from foreign companies by telling executives that the U.S. is "the most innovative, open, largest economy on the planet.”
But Slaughter says many foreign company leaders respond by saying growth in the U.S. has slowed compared to developing countries like China, not to mention an aging infrastructure, complicated immigration system and high corporate taxes.
Slaughter does a good job summing up the problem, however, in the past six years our infrastructure hasn’t aged a great deal and the immigration system hasn’t grown significantly more complicated. While those things don’t help, what is hurting the most is our high corporate tax rate. For the past two years running, the U.S. has had the highest corporate tax rate among industrialized economies and the effects are clearly taking a toll. This problem continues to worsen as more and more countries cut their rate each year.
As NTU has noted again, and again, and again, the best way to declare the U.S. open for business is to lower the corporate tax rate and pursue other reforms, such as rolling back burdensome regulations, making our business climate competitive once again. Before President Obama sits down with global investors, he should first sit down with the legislators on Capitol Hill who need to act before the U.S. falls further behind.
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The latest statistics show that tourism accounted for nearly 2.8 percent of total U.S. GDP in 2013, and the industry as a whole supports 5.7 million jobs. The latest edition of the Taxpayer's Tab features a bill from U.S. Congressman Gus Bilirakis (R-FL) and Senator Amy Klobuchar (D-MN) which would reauthorize Brand USA, the public-private organization that promotes U.S. tourism to international audiences, through 2020. The Travel Promotion, Enhancement, and Modernization Act has been sponsored by 66 Representatives and 25 Senators.
Also featured in the newest issue:
The latest edition of the Tab is available online.0 Comments | Post a Comment | Sign up for NTU Action Alerts
In the Battle for Tax Extenders, "It's Complicated"
Just a few days ago, GOP Members of the Senate voted to block the EXPIRE Act, offered as a substitute amendment to H.R. 3474, over Senate Majority Leader Harry Reid’s (D-NV) repeated refusal to consider amendments to the legislation. The same problem shut down debate of the Portman-Shaheen energy efficiency legislation last week.
Even before Reid once again hijacked the Senate’s normal order, the EXPIRE Act’s future was anything but certain. The bill comprised a two-year extension of 55 tax credits, deductions, and other tax policies, most of which recently expired at the end of 2013. These tax provisions, often referred to as “extenders,” are a complex issue to discuss. Not surprisingly, those within the conservative movement have a variety of perspectives on this matter, centering on the true nature of a tax credit, what constitutes a “good” or “bad” tax extender, and whether or not the bill’s broad-based, pro-growth provisions outweigh its less beneficial elements .
These differences of opinion were evident earlier last week with Club for Growth and Heritage Action holding one view and Americans for Tax Reform (ATR) another. That these venerable free-market institutions – who agree on many other issues – should come to such different conclusions is a good illustration of just how much remains to be sorted out among people of good will.
The Club for Growth and Heritage Action’s vote alerts focused on the fact that the EXPIRE Act is packed with tax provisions that benefit only a narrow part of the economy, distort markets, and prop up otherwise unprofitable industries, such as the notorious Wind Production Tax credit. Heritage explained:
The Senate’s tax extenders — and indeed the entire process surrounding the extension of expiring tax provisions — is one of the most egregious examples of Washington using its powers to prop up well connected interests.
For example, the Senate package includes over a dozen targeted tax provisions aimed at energy production, most of which are geared toward so-called green energy. According to the Heritage Foundation, Congress designed many of the provisions to “artificially tilt the energy market in the direction of certain renewable sources or reward certain taxpayers for behaving how the government would like them to.” Others are “narrowly tailored so only certain industries can benefit, which is unfair.”
In light of preferential tax policies directed toward likes of NASCAR and horse racing, it’s easy to see why taxpayers should be outraged at such an obvious manipulation of the tax code on behalf of favored industries. At the same time, as ATR’s supportive vote alert argued:
Some tax provisions should not return – the wind production tax credit springs to mind, but there are a number of others. However, these are more than balanced out by extremely important tax relief provisions which must not be lost from the code.
The vote alert went to great lengths to differentiate between good and bad provisions, highlighting the fact that “many conservatives have been deeply confused on this distinction,” before finally warning that “the mandate for the Senate is clear: do no harm.”
The Tax Foundation did not take a position on the EXPIRE Act, but it added further nuances to the debate as it carefully laid out the case for good and bad tax extenders in this article:
Often, Congress keeps all of the extenders – which includes a whole slew of tax breaks for individuals and businesses – but they shouldn’t. Many of the 55 expired provisions are economically distortive, encouraging some economic activities over others. In fact, there are only a small few that should be kept in order to make the tax code more neutral by mitigating the tax code’s biases against savings and investment.
And here the Tax Foundation delineated the “cost” of each provision, bringing to light to another major complicating factor in the tax extenders fight. While some repeatedly reference the “cost” of a particular tax credit, others argued that these provisions are effectively already on the books and thus, did not reduce anticipated tax revenue. Due to the perceived “cost” of the tax credits, the EXPIRE Act also contained other revenue raisers to “offset” the extenders. The Heritage Foundation did a good job of explaining the problem:
… the Congressional Budget Office incorrectly scores an extension of previously-enacted tax cuts as if they were wholly new tax cuts. Under budgeting rules it follows, this means Congress must cut spending or raise other taxes to avoid “adding” to the deficit.
But reviving once again a repeatedly-extended tax policy is not a tax cut. These policies have been in place for years, some — such as the Research and Experimentation (R&E) Credit — for three decades. If they expire, taxes will rise on those taxpayers who use them. Extending them merely prevents a tax increase, so there is no need to offset their “cost.”
While it will be hard to ever completely reconcile these very thoughtful perspectives, what all free market advocates can agree on is the need for fundamental, comprehensive tax reform, in particular a lower corporate tax rate.
Despite earnest attempts to jump-start such a discussion, that day is still a long way off. However, in the meantime, the House has taken a good approach toward the extenders problem by bringing the provisions up in a piecemeal fashion that will allow them to pass or fail based on their specific merits. Such was the case earlier this month with a bill to make permanent the research and development tax credit that NTU supported here. This also avoids the log-rolling of the Senate’s EXPIRE Act package while keeping some of the more voracious special interests at bay.
The best prospect for taxpayers to emerge from this extenders fight with a win is to urge the House to stay the course and when it comes up again, encourage your Senators to insist on good amendments to the EXPIRE Act that would remove some of its narrowly tailored and economically dubious tax provisions with an eye toward across-the-board rate reductions. Still, one thing is for certain: without real reforms to make good policies permanent, we’ll be haggling over the minutiae of tax extenders again soon.0 Comments | Post a Comment | Sign up for NTU Action Alerts
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NTU Federal Affairs Manager Nan Swift stops by to talk about efforts to stop the inappropriate use of OCO (Overseas Contingency Operations) which avoids proper budgeting and "Tax Extenders." Also, FCC moves forward on net neutrality, MFA draws heat in Georgia, and the Outrage of the Week has Congress flying high on your dime.0 Comments | Post a Comment | Sign up for NTU Action Alerts
(VIDEO) Sequester-pocalypse Fear Mongering vs. Reality
Congratulations! If you're watching this video, you're one of the 312 million Americans who narrowly survived the "Sequester-pocalypse"!