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Transportation and InfrastructureTax Hikes Go Back to the Future Today, the Senate Finance Committee is marking up their transportation bill with an eye toward adding billions in tax increases to cover the overspending in the bill. More spending, more tax hikes to pay for it. Stop me if you've heard this before. But there are two proposals in particular that gave me a little bit of policy deja vu. First, the so-called "Chairman's mark" includes a $3 billion retroactive tax increase targeting the "carrying forward" of credits claimed back in 2009. You might remember 2009 as the year before the year before this year. The halcyon days when we passed a "stimulus" bill that was going to help our economy boom by 2012. The optimistic times when we could totally afford a trillion-dollar government-run health care program and our debt was "only" $10-11 trillion (as opposed to $15 trillion and counting today). Some on the Senate Finance Committee apparently would like to relitigate tax policy from that wonderful era in American history and enact a retroactive tax hike. Now, it should be noted that the two credits they're targeting (the alternative fuel mixture credit and the cellulosic biofuel producer credit) are not ideal tax policies by any stretch of the imagination. Particularly the alternative fuel credit, given that it's "refundable" and thus acts like government spending rather than simple tax reduction. A smart tax code wouldn't include either of these policies but would levy low, consistent taxes across the board for all types of fuels and producers. But enacting retroactive tax increases is a much more egregious violation of principles of sound tax policy than either of those dumb credits. The second effort, a proposed amendment to the Chairman's mark from Senator Robert Menendez (D-NJ), would target the oil and gas industry for punitive tax treatment by eliminating provisions like the Section 199 manufacturer's deduction or the "dual capacity" credit for them alone. If we've written it once, we've written it a hundred times: singling out oil and gas companies for higher taxes is bad tax policy and it's bad energy policy. Thankfully, the Congress has thus far largely agreed with us as the dozens of attempts in recent years to impose Menendez-like tax increases have all failed at one point in the process or another. The Senate Finance Committee will be taking up these issues this afternoon and we hope they focus their efforts on reducing wasteful spending and not on retroactive tax hikes or tired attempts to punish an unloved industry. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
FAA Conference Report: Positive Steps, Missed Opportunities Later today the Senate will vote on the Conference Report on the Federal Aviation Administration (FAA) Reauthorization Act. Although the bill takes many positive steps forward, it ultimately missed several opportunities for savings and reforms that fiscal conservatives had sought. Since 2007 the FAA has been lurching from short-term extension to short-term extension (23 in all), which has become a serious logistical impediment for the aviation sector’s attempt to modernize and grow. The Conference Report would reauthorize FAA operations and programs for four years, thus creating a more stable funding path for the agency and predictability for the aviation sector. Moreover, it does so without worsening the already onerous tax burden on air travel. Given that consumers can often face a higher effective tax rate on their airline tickets than they do on their 1040 tax returns, it’s too bad Congress couldn’t go one step further and actually provide relief from this heavy tax load. The bill makes incremental (and in some cases solid) progress on a number of other issues. Although funding for the wasteful Essential Air Service has not been eliminated, the modest eligibility restrictions in the legislation could provide a starting point for deeper reforms. Language was also included to increase airports’ ability to hire private security screeners in place of Transportation Security Administration (TSA) workers. Furthermore, the package would make improvements to a National Mediation Board rule so as to better balance labor organizations’ attempts to unionize a workplace with the rights of workers to not participate in union activity. Despite this progress, the Conference Report’s elevated authorization levels remain a major concern. NTU has previously expressed its support for the House-passed FAA Reauthorization Bill, which would have funded the FAA at 2008 levels. By contrast the Conference Report would extend FAA funding at inflated 2011 levels – a $3.8 billion increase. At a time when taxpayers are expecting government agencies to do more with less, the Conference Report could have been more aggressive at restraining expenditures and reinforcing a private sector-driven model that allows our aviation industry to more effectively innovate and evolve. Bottom line: even as lawmakers line up to vote for this compromise legislation, Congress could have done – and in the near future will need to do – more to ensure aviation policy is on a fiscally and economically desirable flight path. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Thing About Expediency and an Infrastructure Bank
In yesterday’s speech before a joint session of Congress, President Obama called for new spending to help get the economy going again and to get Americans back to work. Putting aside the debate on how to truly fix the economy and how much of the fixing ought to be legislated by government, let’s take a look at one of the items the President offered as part of his overall solution: a national infrastructure bank. As he said: "And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the economy." Such a bank is no new concept. Besides inclusion in the President’s proposed FY 2011 budget, four pieces of legislation have been introduced in the 111th and 112th Congresses to establish government borrowing entities for transportation, water, and energy projects. While a bill introduced by Congresswoman Rosa DeLauro (CT-3) would create a wholly-owned government bank is worth noting, the President specifically mentioned a “Massachusetts Democrat”-supported bill, likely the BUILD Act, sponsored by Senator John Kerry (MA). BUILD would authorize $10 billion in new borrowing authority for infrastructure ventures, with a $2 billion real cost to taxpayers in start up expenses and loan guarantees. BUILD was highlighted in the July 26th edition of the Taxpayer’s Tab. According to information provided by the White House, the bank under the President’s proposal would cost $10 billion over an undefined period of time. One would hope everyone will have a better idea of the timetable once the bill is released to the public. However, it appears, the President’s new infrastructure bank proposed would require a greater infusion of federal dollars than the plans supported by any member of Congress, be it Democrat or Republican-controlled. More to the President’s point, he touted the immediate need for the provisions he outlined in his American Jobs Act, saying “right now” seven times in the address. Yet the establishment of a new bureaucracy to exclusively funnel public and private dollars into projects creating and improving roads and dams is no easy task. There are several steps to follow. Once the government is authorized to create the bank (no small feat in the current political environment), personnel would have to be hired and offices set up, rules would be drafted, and money would have to be allocated and transferred to dedicated accounts. THEN planning and loan applications would have to be submitted and approved or denied with appropriate time tables of conducting further administrative actions, contracting of construction and design companies, and buying of building and support materials and machinery. Rather than “right now,” “near future” would be more accurate timetable under the best of circumstances. It would be foolhardy for Americans -- employed or otherwise -- to assume infrastructure jobs would be immediately available. Massive construction projects take years to plan, let alone implement, start, and finish. The jobs that would come would be turned out just as slowly. As Obama joked about the first “stimulus,” “shovel-ready was not as shovel-ready as we expected.” 1 Comments | Post a Comment | Sign up for NTU Action Alerts
Eliminate the Gas Tax? TaxGirl asks the following question at Forbes: "Should the federal gas tax be reduced or eliminated in order to jump start the economy?" Would it help? Would it make a difference at all? Would our infrastructure implode without the funding? Share your thoughts with us and with TaxGirl. 1 Comments | Post a Comment | Sign up for NTU Action Alerts
Ethanol Less Popular Than on Tuesday On Tuesday, the Senate voted against considering an amendment by Oklahoma Senator Tom Coburn that would have eliminated the 45-cent-a-gallon blender tax credit. That was then, this is now. Today, the Senate has approved an amendment sponsored by California Senator Diane Feinstein that would end the tax credit and lift the tariff that limits the importation of foreign ethanol, according to The Hill. Ethanol is an artificial industry that has lasted for decades thanks to its supporters inside the Beltway. For today, at least, the opponents of King Corn have won. Tomorrow, as they say, is another day. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Ethanol Still Popular on Capitol Hill An editorial in today's Wall Street Journal highlights a report from the UN that expresses concerns about foodstocks being converted to ethanol and Senator Tom Coburn's efforts to end ethanol subsidies. According to CNN, that effort failed this afternoon. So, despite opposition at the UN, ethanol remains popular inside the Beltway. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
Coming This Summer: New DC Bus Tax Folks traveling these days are faced with higher gas prices, more airport security fees, and static rail schedules, but new bus companies like Bolt and Mega Bus have utilized new technologies and business models to drive down the cost and hassle of getting around. If I wanted to take a mental health day from researching our federal budget (taxing as it is bloated), I could have paid a measly $20 for a round trip to New York City from Washington DC. Aside from the long gone Skybus airline, you can’t get any better than that. The companies get by with rock bottom prices because they don’t have investments in bus depots, heavy union contracts, or out of touch leadership. They pick you up from a designated location -- a parking lot or street curb -- and get you where you’re going in a reasonable amount of time. My trip to NYC would take four hours in morning traffic. However, the deals might be coming to an end. The DC government plans to impose a public space rental fee of $80,000 (or more) per year on these companies. This is a city government that already taxes its citizens and businesses similar to the nation’s biggest tax-hogs: Tied with California in the Tax Foundation’s Tax Freedom Day and with Washington State in the Americans for Tax Reform’s Cost of Government Day. In as little as a month, consumers will take another blow to their purchasing power because of government taxing and regulation. This is likely not the end of the story. The nearby states of Virginia and Maryland have an opportunity to become new stop points for the bus companies. Whether they would impose a similar tax or leave the companies to serve their customers remains to be seen. 0 Comments | Post a Comment | Sign up for NTU Action Alerts
VA Beach Taxpayers to Discuss Light Rail Mark your calendars. Virginia Beach and Hampton Roads taxpayers will have a chance to hear renowned transportation expert Wendell Cox discuss light rail on May 12th. The event, sponsored by the Virginia Beach Taxpayer Alliance, will be held in the Princess Anne High School Auditorium in Virginia Beach. It is free and open to the public. Doors open at 6:30 pm. The program begins at 7 pm. Contact Robert Dean, VBTA Communications Director, at robertkdean at cox dot net with questions. 13 Comments | Post a Comment | Sign up for NTU Action Alerts
More Social Security Payouts & Maple Syrup Bill Covered in Latest Taxpayer’s Tab
As the federal government narrowly escaped a shutdown and the President delivers a speech on his long-term fiscal plans, NTU Foundation has been scoring the bills introduced by your elected officials. Some bills would greatly increase the spending of tax dollars while others would scale back spending and reduce the budget. It is our intention to present both kinds of bills to inform taxpayers. The most expensive bill scored in the past week would increase payments to Americans who turned 65 between 1979 and 1988. Because of earlier reforms to the Social Security entitlement program, this age group, called “Notch Babies,” apparently received up to 55 percent less in payments than those entering the system, before and after. The measure would allow seniors either to accept a lump payment of $5,000 over four years or to accept a modified benefit payment plan over ten years. Check out the history and the costs of the Notch Fairness Act in Issue 12 of the Taxpayer’s Tab. Bills covered in the latest Taxpayer’s Tab includes:
Join NTUF on Twitter! We broadcast our latest work and highlight the spending agendas of the legislators representing you in Washington DC. Not a Twitterer? Sign up for the Tab so you get the most out of our research. Like what you see? Support NTUF and ride the wave of transparency. 1 Comments | Post a Comment | Sign up for NTU Action Alerts
Tune into NTU's State of the Union Coverage tonight Tonight at 9 p.m. EST, the National Taxpayers Union's crack government affairs and policy analysis teams will provide special online coverage of the President’s State of the Union Address, and we want you to be there and be a part of the discussion. We will be breaking down the President's proposals and what they will mean for taxpayers. Details on how you can join the conversation are below.
We look forward to seeing you online tonight at 9 p.m. EST!
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