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In a July 25th meeting of the Progressive Democrats of America Roundtable in Washington, D.C., Congressman Keith Ellison (D-MN) was discussing fiscal and budgetary shortfalls when he said:
"The bottom line is we're not broke, there's plenty of money, it's just the government doesn't have it."
Though Ellison doesn't appear to be concerned by the ever-increasing debt, many at the Congressional Budget Office (CBO) are, as they have repeatedly warned that unless current policies change, budgetary shortfalls will continue to climb over the next decade. "Such high and rising debt," they contend, "would have serious negative consequences," including:
Rep. Ellison has proposed a solution to ensure that the government does recapture some of that money it "doesn't have" at the moment. He introduced H.R. 1579, the Inclusive Prosperity Act of 2013, in order to institute a new tax on certain securities transactions. Ellison contends that this could raise upwards of $300 billion per year.
The Congressman's proposal is a form of transaction tax, which is one of the reform options that NTUF polled our members and associates on during our Milton Friedman Legacy Day event. It was not as popular with the taxpayers we spoke to as the FairTax and Flat Tax, two other options that tap into consumption instead of income.1 Comments | Post a Comment | Sign up for NTU Action Alerts
For this year’s Milton Friedman Legacy Day activity, NTU Foundation asked taxpayers across the country what federal tax system they want. At our in-person event in downtown Washington, DC and online at our special voting page, we had over 650 total votes on if the current system should be kept or replaced with a FairTax, Flat Tax, National Transaction Tax, or a Value-Added Tax.
If you are unfamiliar with these tax systems, we had some fancy posters made to show the basic points and contentions associated with each (you can click on each to see the full resolution):
Here are the results broken down by those who attended our physical event and those voting via our survey online:
Put another way, here's an infographic put together by our fantastic Creative Content Manager, Tim Howland:
What do these results mean? Probably a few things:
We need more information and more taxpayers in the network of voting and voicing their preferences. Stay tuned, we here at NTU Foundation are working on another survey to get a more clear idea on what people want out of their tax system.20 Comments | Post a Comment | Sign up for NTU Action Alerts
Keystone Pipeline Keeps Hitting White House Roadblocks
The public and many in Congress continue to support construction of the Keystone XL Pipeline despite President Obama’s unrealistically low job creation projections. The administration has impeded construction of the pipeline for five years while it has called for multiple environmental impact assessments. Each time a result falls in favor of TransCanada, the company requesting the construction permit, the administration asks for another report or for an additional application, effectively preventing construction.
First, the administration requested a study by the State Department, under the direction of Hillary Clinton, on the environmental impacts of the Pipeline. When the report detailed that no substantial impact would occur, the President rejected the permit and asked TransCanada to reapply. When they did so, Obama announced that he would delay the decision until after the 2012 election. Now, a year and a half later, although TransCanada has completed two legs of the pipeline, it has no more certainty as to whether it will be allowed to build the section which extends over the northern border of the United States.
On July 24th, in an interview with The New York Times, The President belittled the potential economic benefits of the Pipeline, contending that it will only create 2,000 jobs during construction and 50 to 100 permanent jobs. The Washington Post’s “Fact Checker” responded to the President’s statement by recalling the job estimates released by TransCanada and the State Department, his executive agency. They called into question his calculations and stated that the figure was more accurately anywhere from 5,000 to 6,000 jobs. Other projections put the job count at 20,000. While these numbers vary, there is consensus that it would create a substantial number of jobs in a still-struggling economy.
On a more fundamental level, the Administration is unnecessarily preventing a private company from materializing a project which would provide the United States access to 500,000 barrels of oil per day from a stable ally. Privately created jobs, however many, will benefit the economy. Regardless, a company should not have to prove that it would create a minimum number of jobs to qualify for the presidential approval.
At the same time, environmental concerns should be assuaged by the extremely rigorous safety guidelines and consideration of risk at every step in the process. In Canada a combination of monitoring and new technologies have helped to both reduce environmental impact and spur development.. Heading south via the Pipeline, The New York Times reports that a recent study by the National Academy of Sciences found that the tar sands derived oil, also called diluted bitumen, is “no riskier to transport than other types of crude oil.” And TransCanada has even agreed to comply with 57 additional construction conditions demanded by the U.S. government:
TransCanada maintains its commitment to build Keystone XL as safely and reliably as possible. To that end, the company will adopt and comply with 57 special conditions developed by the U.S. federal pipeline regulator PHMSA (Pipeline and Hazardous Materials Safety Administration) that provide an even greater confidence in the operation and monitoring of the pipeline, including: a higher number of remotely controlled shut-off valves, increased pipeline inspections and pipe that is buried deeper in the ground. The Final Environmental Impact Statement for the project issued in August 2011 concluded the incorporation of the 57 special conditions 'would result in a project that would have a degree of safety over any other typically constructed domestic oil pipeline system under current code.'
The House recently passed the Northern Route Approval Act to bypass the presidential approval process for the Pipeline. The Senate is proceeding with plans of its own to allow construction. It is time for a nation with access to great energy resources to allow the implementation of policy to progress. With no legitimate legal issues and no identified significant environmental impacts, people must ask,“Why does the President keep adding hoops for this project to jump through?”
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Today’s Taxpayer News!
President Obama appeared on the “Tonight Show” with Jay Leno on Tuesday, marking his tenth appearance on a talk show since becoming president. Unfortunately, as the Washington Times and NTU’s Pete Sepp pointed out, all that entertainment can be expensive for taxpayers.
Officials in Unity, Pennsylvania, are voting tonight on a plan to offer seniors a full rebate on their property taxes. NTU’s Pete Sepp applauded the measure as a step in the right direction, although an across-the-board reduction is generally better for taxpayers.0 Comments | Post a Comment | Sign up for NTU Action Alerts
In a time of increased federal government intervention, school choice has been a silver lining for small government supporters. The idea that parents should be empowered to choose the school their children attend and that market mechanisms can be utilized to fix the declining American school system has gained popularity with both politicians and the public. Surprisingly, many forget who the intellectual father of the school choice movement is none other than the esteemed economist Milton Friedman.
Friedman's discussion of school choice started over 50 years ago in an essay "The Role of Government in Education." The piece outlined two main arguments for school vouchers that are still the basis of the voucher system today. First, he argued that schools based on choice would lead to competing among local institutions. The better a school's results, the more students the school would have elect to attend, and the more money they would receive through either government payments or vouchers. Secondly, Friedman argued that voucher programs are a more moral system because it did not limit children's choice of educational institutions to one designated by their home address.
From 1955 on, Milton Friedman became one of the lead champions of school choice. However, the idea faced heavy resistance from teacher unions and politicians on both sides of the isle. Nonetheless, in typical Friedman style, he pushed on with his efforts. Over time, he succeeded in sidestepping special interests and politicians by finding avenues to speak directly with citizens about the issue. For example, Milton dedicated a full episode to the topic during his very popular PBS Free to Choose Series that aired in 1980.
The concept of school choice continues to fight for acceptance. Initially a preferred method of liberal activists to help impoverished urban minorities escape poverty, the idea was later adopted by the Republican Party when Ronald Reagan made it the focus of his education plank in the 1980 Presidential Election. After Reagan's electoral success, it took another decade before Friedman saw his ideas become reality in the city of Milwaukee, Wisconsin when a voucher program was adopted for some students in its school district in 1990.
While Milton would prefer to see every child already enjoying the option of choice, the movement has made significant progress since it was first conceived. There is no doubt that the father of school choice would be proud to see Wisconsin, Ohio, Florida, Georgia, and even the District of Columbia adopt some variation of a voucher system. He would surely smile his iconic smile at the innovation school choice supporters have utilized to create charter schools and tuition tax credits in various states across the country.
With Friedman Legacy Week over, many of us reflect upon the economic genius of the man who shaped so much of the world as we see it but let us not forget his devotion to promoting school choice.3 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
Earlier this week, a dispute between CBS and Time Warner Cable resulted in a channel blackout for millions of cable subscribers in Chicago, New York, and Los Angeles. As NTU’s Brandon Arnold points out, the confusing web of telecommunications laws regulations makes it far more likely that such a dispute will end in a stalemate.
The Wall St. Journal offers this in-depth look at what tax reform could mean for the average American taxpayer - and whether it’s likely such reform could become law.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Latest Network Blackout Proves Congress Has Work To Do
CBS and Time Warner Cable are embroiled in a fight over retransmission fees that has left millions of cable subscribers in major metropolitan areas like New York, Los Angeles, Chicago and Dallas without access to the popular network. While this may seem like a typical conflict between two large corporations, it is more complicated than one might think. Because the federal government has created a complex system of laws and regulations dictating the rules of the game, the playing field is strewn with obstacles that increase the likelihood that providers of content and service will end up in a stalemate. NTU has weighed in previously on the need for Congress to update and simplify communications laws. Conflicts like this current one likely won’t be made less onerous for the parties involved by overbearing government. Consumers would benefit from a more thoughtful policy approach that respects the private sector’s capacity to build prosperous markets for video content and service and minimizes the role of the federal government.1 Comments | Post a Comment | Sign up for NTU Action Alerts
One of the best parts about this year's Milton Friedman Legacy Day was reading all of the comments that taxpayers left on our special online voting page. Along with asking folks to vote on which fundamental tax reform they want, NTU Foundation provided a space for respondents to talk about why Milton Friedman's teachings are still vital and what specifics he brought to the world that they liked. Here are a few:
"The videos he created to teach even the most complex issues of economics and the economy in ways that everybody could understand." –JJ, Ohio
"... His contention that free enterprise will allocate resources better than any central planners. One's self interest is not an evil thing, but the natural motivator of man." –Roger B, Michigan
"His glasses." – Daniel M, Texas
"His PBS series Free to Choose changed the way I think about economics and freedom." – Robert S, Indiana
"Friedman pushed for school choice and vouchers so that you can send your children to the best school and the school of your choice rather than the public school you are assigned. The money goes with the child and not to the school. Giving parents the choice to select the best schools for their children would improve education and provide competition among schools. Educational freedom is a win-win for everyone." –Mary A, Florida
"His emphasis on free-enterprise: 'The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that's why it's so essential to preserving individual freedom.' Milton Friedman" –Ted B, Washington
"Mr. Friedman was a deep thinker, whose thinking produced positive, logical, meaningful results." –Charles R, Oklahoma
"[His] open discussions on variants of taxing systems has opened the eyes of millions of previously uninformed people. So many have only believed that what we currently have is all there is in the world when it is relatively new in our Country's history. We CAN change an unfair system into a workable & sustainable modern system that ensures ALL have some vested interest in our future as a Country." –Jeff M, Florida
"Wherever practical, people should be free to choose for themselves." –John R, California
Thanks to everyone who send us their votes and thoughts on Friedman! The winners of the $50 iTunes gift cards will be announced shortly.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Today’s Taxpayer News!
This U.S. News and World Report piece, penned by NTU’s Pete Sepp, offers some insight into economic “game-changers” (policies that could grow jobs and increase innovation) for the energy sector.
The 113th Congress is making history in a perhaps inauspicious way: if current trends continue, this legislative session could have the lowest record of productivity in history.
Senators Max Baucus (D-MT) and Dave Camp (R-Mich) are still on the road promoting tax reform.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Today the Environmental Protection Agency (EPA) released its final rule for 2013 renewable fuel percentage standards. That’s an awkward way of saying that under the Renewable Fuel Standard (RFS), enacted in 2007, the EPA sets annual amounts for how many gallons of biofuel refiners are required to blend with our gasoline. While the law sets out ever-increasing amounts each year, the EPA does have discretionary authority to reduce these levels. Different levels are set for various kinds of biofuels including corn ethanol, cellulosic, and biomass.
The ruling today underscored two things:
Despite the drop in one form of biofuel, the overall mandate is still far higher than consumers and affected businesses would like to see. By not lowering the overall mandate in tandem with the cellulosic reduction, refiners will have to either blend even higher amounts of imported sugarcane ethanol or more expensive biodiesel into the fuel supply, or purchase increasingly pricey biofuel credits called Renewable Identification Numbers or RINs to fill the gap.
The fact that the EPA didn’t see fit to rein in the RFS mandate, even though it is within its power to do so, means that the threat of the dreaded “blend wall” is closer than ever. When first instituted, the RFS mandated that obligated parties blend ever increasing volumes of biofuels into gasoline and diesel. The RFS also assumed that fuel demand would continue to grow over the coming decades.
Since 2007, however, a number of things have thrown a wrench into that plan. The economy has tanked, purchasing power has dropped, and fuel efficiency has increased – just to name a few variables. The bottom line is that Americans are consuming less gasoline than anticipated. The latest numbers indicate a practically flat line in gasoline consumption from last year to this, yet the EPA is insisting we somehow burn through about 1.3 BILLION more gallons of ethanol than the year prior. The divide between growing volumetric mandates and shrinking gasoline demand will continue to grow in the coming years, forcing the onset of the blend wall, or the practical limit on the amount of ethanol that can be safely used in current vehicles and infrastructure.
The blend wall is one reason why some have been pushing for E15 – gasoline with a 15 percent ethanol content, not 10 - in order to make room in the gasoline supply for more and more government-mandated ethanol. This is a terrible idea for a number of reasons. The higher ethanol content is bad for older cars and small engines. Gas pumps aren’t designed to dispense it. Ethanol costs consumers more to go the same distance as gasoline. And it means diverting even more of already tight corn supply from the food chain to the gas tank.
While today’s ruling didn’t bring any relief to consumers, the EPA did acknowledge:
EPA does not currently foresee a scenario in which the market could consume enough ethanol sold in blends greater than E10, and/or produce sufficient volumes of non-ethanol biofuels to meet the volumes of total renewable fuel and advanced biofuel as required by statute for 2014.
Therefore, EPA anticipates that in the 2014 proposed rule we will propose adjustments to the 2014 volume requirements, including the advanced biofuel and total renewable fuel categories
The fact that the EPA is beginning to understand the problem that people have been predicting for years is cold comfort for the consumers, livestock producers, and many others who have been decrying the damaging effects of the RFS for years.
Taxpayers can’t wait for the EPA to “propose adjustments.” Today’s ruling, so out of touch with the market realities of the RFS, is one more indicator that the RFS is broken. Instead of hoping the bureaucrats at the EPA do the right thing, we need to urge our legislators to move forward with real reforms like S. 1195 in the Senate and H.R. 1462 in the House – both are robust bipartisan plans that would level the playing field and inject some much-needed commonsense to an out-of-control mandate.
In the long run, the EPA’s repeated energy fumbles only underscore the need for Washington to stop picking winners and losers and get out of the energy market. Until then, as the biofuel mandate keeps going up, perhaps we should just be happy the EPA has not set a minimum gas consumption standard … yet.1 Comments | Post a Comment | Sign up for NTU Action Alerts