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Spotlight On Sequestration
Posted By: Michael Tasselmyer - 12/04/13

In addition to three new and notable bills we've recently scored, NTUF is dedicating a portion of this week's edition of The Taxpayer's Tab to an issue that could play a pivotal role in the ongoing budget discussions: sequestration.

The automatic, across-the-board cuts went into effect earlier this year, and have impacted a wide range of government agencies and programs. The budget committee that's been tasked with finding common ground between House and Senate budget proposals is already facing pushback from lawmakers who want the sequester repealed or replaced.

There have been several attempts in the 113th Congress to repeal the cuts that are scheduled to go into effect in 2014. For reference, a brief outline of those bills:

  • H.R. 505: Rep. Keith Ellison's (D-MI) Balancing Act would repeal the sequester cuts in their entirety and replace them with tax increases for corporations and individuals. It would also increase investment in infrastructure projects and job training, and restrict certain types of military spending.
  • H.R. 699: Rep. Chris Van Hollen (D-MD) introduced the Stop the Sequester Job Loss Now Act in February. In addition to repealing the 2013 cuts and modifying several provisions in the tax code, Rep. Van Hollen's bill sought to reduce 2014 budget cuts by $27.5 billion.
  • H.R. 849: Under Adam Smith's (D-WA) Sequestration Relief Act of 2013, sequester cuts would be repealed and partially offset by a reduction in discretionary spending caps.
  • H.R. 857: The Protect Troops at War Act, introduced by Rep. Paul Cook (R-CA), would eliminate 2013 and 2014 sequester cuts to the Department of Defense.
  • H.R. 900: Rep. John Conyers (D-MI) introduced the Cancel the Sequester Act of 2013, which, as the name implies, would outright repeal all scheduled sequester cuts.
  • H.R. 2060: Rep. Van Hollen also introduced this bill, which would repeal (rather than reduce) the 2014 sequester and lower discretionary defense spending limits.
  • S. 388: Senator Barbara Mikulski's (D-MD) American Family Economic Protection Act of 2013 would reduce 2014 sequestration cuts, adjust tax rates for wealthy individuals, and eliminate certain direct payments to agricultural producers.

Most of the legislation discussed above varies significantly in scope and specificity, which makes a blanket cost estimate for any attempt at 2014 sequester repeal difficult to formulate. However, NTUF arrived at a score using the $109.3 billion total 2014 sequester level and the Congressional Budget Office's estimate of how outlays would be affected in the case of a 2013 repeal. By analyzing CBO's projected yearly outlay effects as a percentage of that year's total authorizations, we estimated that if the 2014 sequester were repealed entirely, federal spending would increase by $105.6 billion over four years, or $26.4 billion annually. Note that our estimate is preliminary and subject to revision should new information become available.

Whether sequester cuts are maintained, repealed, reduced, or replaced by some combination of tax hikes and other spending reductions, the implications for taxpayers could be significant.

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The Late Edition: December 3, 2013
Posted By: Curtis Kalin - 12/03/13

Today’s Taxpayer News!

Security Fail: The Transportation Security Administration (TSA) spent $900 million during the past five years on behavior screening at airports. The GAO has now reported that the program has flagged 0.59% of passengers and of those, zero were arrested for terrorism. More at CNS News.

Drummer grants: The Department of Energy’s Inspector General is investigating the expenditure of $630,000 of stimulus funds for African drummers and a DC media firm with close ties to top DOE officials. The Free Beacon has more.

Federal IT flaws: The Obamacare website isn’t the first government website to have major IT malfunctions. Websites for the Departments of Defense, Homeland Security, the FBI, and IRS have all faced significant tech hurdles in launching sites. The Fiscal Times has a full list.

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Taxpayer Money for Anti-Taxpayer Propaganda
Posted By: Brandon Arnold - 12/03/13

Should the federal government waste your tax dollars on biased research?  You know the answer. And, recent work by a pair of free-market organizations shows Washington’s doing just that … again.

See for instance this article by Michelle Minton of the Competitive Enterprise Institute. She notes that National Institutes of Health have issued a five-year grant totaling over $3 million to an organization to examine the effect of the recent privatization of alcohol sales in Washington State. While at first blush, this might seem like a legitimate examination of an important subject, Michelle uncovers the truth:

The organization that received the grant and its scientists have a long history of producing anti-alcohol-biased research. Dr. William Kerr, the lead on the project, has written and spoken many times in the past about his firm stance against the privatization of alcohol sales which he believes directly results in increased drinking and costs to the state. He received funding from the National Alcohol Beverage Control Association, an organization with the sole purpose of defending control state systems, to produce a study warning states of the dangers of privatization. In all likelihood, the conclusion of this forthcoming study will communicate a similar attitude.

 This is particularly troubling given that several other states, most notably Pennsylvania, are examining changes to their alcohol laws. Such efforts to expand consumer choice and create jobs could very well be blocked by flawed, taxpayer-funded “research.” That would mean taxpayers would be shortchanged both by the inappropriate expenditure of funds to pay for the grant, but even more significantly by stymieing pro-consumer changes to outdated laws.

Perhaps just as troubling is a study funded by the Small Business Administration (SBA) to tout an Internet sales tax bill, which has garnered much attention on Capitol Hill this year. Big retailers have spent millions of dollars on lobbying and PR efforts in support of the so-called “Marketplace Fairness Act;” however, as Andrew Moylan of the R Street Institute points out:

In service of the PR campaign for President Obama’s and Senator Dick Durbin’s favorite Internet sales tax law, the SBA decided to fork over $80,000 of taxpayer money to…(drumroll please)…the very people who have been writing studies in favor of the Marketplace Fairness Act (MFA)!

Here again, the use of taxpayer dollars is offensive in its own right, but even worse is the fact that public funds are being used to promote blatantly anti-taxpayer legislation. My colleagues, Pete Sepp and Doug Kellogg accurately dubbed the SBA study the “Outrage of the Week” in a recent podcast.  The federal government should stop funding biased research. Doing so would represent a small step toward deficit reduction and a  much bigger one toward fairer, more responsible governance.

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NTUF Interns Meet with Congressman Justin Amash!
Posted By: Dan Barrett - 12/03/13

Today, NTU Foundation interns had the distinct honor of meeting with Congressman Justin Amash, who represents Michigan's Third District. The Foundation's Associate Policy Analyst Tara Riggs and Communications Associate Curtis Kalin learned about the development of the Congressman's Liberty Caucus, how Congress might go about reforming the nation's entitlement programs, and the changing directions of the American electorate. This rare opportunity to speak to one of the most prominent movers in the liberty movement was the highlight of our interns' time working with NTUF researchers and staff to gain valued experience and policy knowledge.

The interns thank Justin Amash for his time and insights!

A special thank you goes to Hayley Alexander for making this meeting possible.

Intereseted in doing research, communications, or development work at NTU's education organization? Check out the details and help us keep a tab on Congress!

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The Late Edition: December 2, 2013
Posted By: Curtis Kalin - 12/02/13

Today’s Taxpayer News!

A bug’s light: The National Science Foundation awarded more than $82,000 of taxpayer money to study the self defense methods of “bioluminescent millipedes”. More enlightening details at CNS News.

Missed it by that much: The city of Bremerton, WA will need to spend more than $15,000 to fix a handicap access ramp that was built four inches short of the state requirement. KOMO News has more.

Joy rides: The New York state corrections department improperly gave state car permits to 80 staff members for daily commuting, a new Inspector General report shows. Proof the vehicles were being used for a legitimate state purpose was “scant”. The full story from AP.

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Cyber Monday’s Worst Deal
Posted By: Brandon Arnold - 12/02/13

Today is “Cyber Monday” and millions of Americans are purchasing holiday gifts online. This would have been the perfect day for the U.S. Supreme Court to give consumers a reason for seasonal cheer. Unfortunately, it seems the Justices are not in the holiday spirit. The Court announced today that it would not hear an important case dealing with the taxation of Internet purchases. This means that New York and a handful of other states can continue to tax retail transactions by utilizing a constitutionally dubious law.

The case, filed by Overstock.com and Amazon, was a challenge to a New York State law that allows the state government to tax transactions even if the retailer does not have a physical presence in New York. National Taxpayers Union and the Tax Foundation filed an amicus brief in September encouraging the Supreme Court to hear the case and overturn the law because it undermines the important physical nexus standard established by the Quill v. North Dakota case of 1992. This standard protects individuals and businesses from money-grubbing out-of-state tax collectors. With today’s decision by the Supreme Court, we should expect more states to pass similar laws to tax and harass consumers and businesses in other states.

For more information on the Internet sales tax, click here.

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Giving Thanks
Posted By: Dan Barrett - 11/28/13

Happy Thanksgiving from the National Taxpayers Union Foundation!

NTU Foundation would like to thank you for your support and for spreading the word about our research. Thanks to your comments and shares online, letters to newspapers, and tax-deductable contributions, we can continue to analyze the latest proposals in Congress and shed light on what your elected officials would like to do with your hard-earned tax dollars.

NTUF researchers are VERY grateful for our members' support. We've been able to accomplish a lot this year thanks to your help:

  • Bringing Taxpayers Together: Our event in July helped celebrate the life and work of economist Milton Friedman, and offered a forum to discuss the key elements necessary for meaningful tax reform.
  • Tracking Spending Agendas: By showing what new spending was proposed in Congress, NTUF's BillTally program provides legislators, the news media, and, of course, taxpayers, with the tools and knowledge to hold Congress accountable.
  • Keeping Taxpayers Up-To-Date: NTUF is constantly getting the word out on the real facts and figures behind the bills making their way through Congress right now. Our recent study identified over $1.2 trillion in new spending that would occur if each non-duplicate bill were enacted into law. Our weekly newsletter, The Taxpayer's Tab, and other outreach efforts keep taxpayers and Congressional offices informed of the latest proposals and independent cost estimates.

Now, we need your help again. How can you help? By making a tax-deductible donation here. NTUF is able to produce timely research for policymakers and taxpayers with the help and support of Americans -- like you -- who wish to stay informed of their government's spending. We don't take government money or handouts. We rely on private citizens to help us find better ways to run the government and new ways to bring complex economic concepts down to earth.

What will your donation support? We conduct a lot of research that requires the best minds in the fields of economics, political analysis, and public policy. Here are just some of our ongoing efforts and who is on the case:

    Michael-TasselmyerPolicy Analyst Michael Tasselmyer needs your support to expand his research of how much it costs taxpayers when President Obama travels abroad. So far, he has studied what it takes to fly the President abroad as well as how often Presidents travel. However, there is still a lot to learn when it comes to finding how much his travel really costs taxpayers. Michael would use your contribution to track down the real total costs of presidential travel.

    Dan Barrett

    Research & Outreach Manager Dan Barrett recently authored a study of what spending Cory Booker plans to support as New Jersey's newest Senator. He needs your support so he will be able to examine the next election cycle and show Americans what their candidates will do with their tax dollars and our federal budget. Dan would use your contribution to track elections as they come up and deliver more line-by-line studies of more candidates.

    demian-bradyDirector of Research Demian Brady is the only researcher in Washington D.C. who has read nearly every single bill in Congress. Brady compiles all of the research done by the Foundation into the BillTally system, which gives Americans the only comprehensive look at what your Representative and Senators want to spend. He needs your help to update the BillTally database and to better integrate our findings into our website.

    As you can see, your help will go a long way towards helping us produce some of the best research and commentary on the most pressing fiscal issues facing our nation. With your $100, $50, or even $25 tax-deductable contribution, NTUF will continue to get you what you need to know when it comes to government spending.

    THANK YOU for supporting NTU Foundation. Our best research is brought to you by your gift and your encouragement.

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    Ex-Im Bank is to Crony Capitalism what Michelangelo is to Fine Art
    Posted By: Douglas Kellogg - 11/26/13

    There’s “crony capitalism” without the Ex-Im Bank, but does any government-related entity truly match their maniacal genius?

    As reported this week, and well summarized by David Williams of Taxpayers Protection Alliance (TPA) in Townhall, the Ex-Im Bank has created a twisted masterpiece in giving preliminary approval to a $694 million loan deal with Roy Hill, a mining company owned by the richest person in Australia Gina Rinehart.

    The deal will allow Roy Hill to buy equipment from Caterpillar. While Caterpillar is U.S.-based, this arrangement subverts free market competition, hurting other American manufacturers.

    Read the full story from Townhall; and check out last week’s “Speaking of Taxpayers” podcast, which featured TPA’s David Williams discussing the Ex-Im Bank.

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    Federal Student Loan Profits Rival Apple, Exxon Mobil
    Posted By: Michael Tasselmyer - 11/26/13

    It probably wouldn't come as a shock to most to learn that Exxon Mobil and Apple were two of the most profitable companies in the U.S. last year. With profits of $44.9 billion and $41.7 billion, respectively, the oil and electronics giants raked in quite a bit of revenue. But you may be surprised by which government program reported profits nearly as high: federal student loans.

    USA Today reports that the U.S. government made $41.3 billion in student loan profits during the last fiscal year. That's down from the previous year's total, but the report comes just as student loan debt eclipses the $1 trillion mark.

    In fact, Americans owe more in student loans than they do in credit card debt, as posted in the latest quarterly report from the New York Federal Reserve. And, according to the Congressional Budget Office, the popularity of these loans are unlikely to decrease: the non-partisan budget agency projects net loan volume (the total dollar amount offered in loans), net number of loans, and average loan amount to continue to increase every year for the next ten years.

    The following two graphs (courtesy of zerohedge.com) strikingly illustrate the changing nature of credit card and student loan debt. Even as Americans' credit card balances shrink, student loan volume remains high:

    creditcarddebt

    studentloansgrowth

    As Americans take out less in credit card debt and more in student loans, the percentage of those loans that ultimately wind up as "delinquent" continues to grow, as well:

    studentloanbalance

    These trends have many economists and policy experts worried about the increasingly negative effect student loan debt is having on the U.S. economy's ongoing recovery. Said Federal Reserve Chairman Ben Bernanke recently: "[Student loan debt] is affecting, for example, the ability of many young people to buy a first home, affecting other purchasing decisions they might make, affecting obviously their overall financial condition... To the extent that there's a lot of student debt held by people who are not working, it's obviously yet another drag on recovery."

    In July, Congress passed legislation that would tie student loan interest rates to financial markets, locking those rates in for the duration of the loan and capping the maximum applicable rate at various levels depending on the type of loan and level of study they will pay for. CBO estimated that would increase federal outlays by about $25 billion over the next five years.

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    Tax Hikes Will Dim Black Friday for Some States’ Shoppers
    Posted By: Douglas Kellogg - 11/26/13

    It’s almost Turkey time, and right after Thanksgiving many Americans will kick off the holiday shopping season with “Black Friday”; and, if not this week, soon enough even the biggest shopping procrastinators will have to scrounge up something for Mom and Dad.

    For many of those generous gift-buyers the state will be taking home a more significant portion of their expenses this holiday season thanks to sales and gas tax hikes.

    Three states just couldn’t manage to find a way to cut spending, and instead raised sales taxes; and ten states and the District of Columbia hiked up their gas tax rates.

    California took home the crown for highest statewide sales tax rate as they rocketed their rate to 7.5 percent. More surprisingly Arkansas (up to 6.5 percent) and Virginia (up to 5.3 percent) also saw increases.

    For most people shopping means driving, or having something shipped that makes somebody else drive. So the second state-level tax that will have some unpleasant surprises for citizens (and Amazon) is the gas tax.

    Adding to this bane of commuters, shoppers, and taxpayers, were California (new state motto: “Bring Money”), Wyoming, Nebraska, Michigan, Indiana, Kentucky, Massachusetts, Connecticut, Maryland, and the District of Columbia.

    For residents of these states Black Friday will seem a little bit darker this year. Is your state playing the Grinch this holiday season?

    Source: Tax Foundation:

    http://taxfoundation.org/blog/map-state-gasoline-tax-rates

    http://taxfoundation.org/article/state-and-local-sales-tax-rates-midyear-2013

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