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Taxpayers Tab


Taxpayer's Tab Issue #1

January 10, 2013

 

 

 

Vol. 4 Issue 1 January 10, 2013

And They’re Off!

Since the 113th Congress officially convened eight days ago, the National Taxpayers Union Foundation (NTUF) has been wrapping up our research on the now-concluded 112th Congress as well as diving into the new legislation that Members are already offering. Although the Senate has largely been occupied with procedural measures and no legislation has been introduced yet, nearly 200 bills have been drafted so far in the House.

As always, NTUF pledges to continue to provide taxpayers with the most up-to-date research and educational materials on the legislation that could impact the size and role of the federal government, and ultimately the wallets of millions of Americans.

For new subscribers, The Taxpayer's Tab provides an update of the latest research from NTUF's BillTally project. BillTally tracks the net cost of nearly all bills introduced in Congress. Each issue highlights the week's most and least expensive bills, those with the most cosponsors, and a few bills that we think you will find interesting.

If you like what you see, feel free to share the Tab with friends, family, and your elected officials. Together, we can help taxpayers understand complex government programs and the policies being developed in Congress. Please also consider supporting the Foundation with a tax-deductible contribution to help us keep up the research and bring you vital information.

Most Expensive Bill of the Week

The Bill: H.R. 152, the Disaster Relief Appropriations Act, 2013

Annualized Cost: $10.0 billion ($50.1 billion over five years)

On the first day of the 113th Congress, Congressman Hal Rogers (R-KY) sponsored the Disaster Relief Appropriations Act. The bill would authorize new spending to assist families and individuals affected by Hurricane Sandy, which hit the east coast in late October of last year. Some federal entities would be required to spend funds to provide direct benefits to displaced Americans. For example, the Department of Housing and Urban Development would be authorized to spend up to $3.9 billion for long-term recovery and restoration of infrastructure and housing. Other agencies would be given tax dollars to recover or refurbish their own facilities in light of the hurricane. Some $14.6 million would be allocated for the Federal Aviation Administration for repair and other "consequences."

H.R. 152 would direct seven departments to spend money through 18 individual agencies or entities to fund recovery efforts along the east coast. According to the text, the bill would appropriate "out of any money in the Treasury not otherwise appropriated" $60.4 billion over the next ten years. The Congressional Budget Office (CBO) estimates this would result in outlays totaling $50.1 billion over the next five years. The remaining amounts would be spent over the succeeding five years.

The legislation includes no offsets for the new spending.

To learn more or discuss this bill visit WashingtonWatch.com.


The Least Expensive Bill of the Week

The Bill: H.R. 45, a bill to repeal the Patient Protection and Affordable Care Act and health care-related provisions in the Health Care and Education Reconciliation Act of 2010

Annualized Savings: $63.9 billion ($319.5 billion over five years)

One of the largest savings proposals sponsored in the last Congress was to repeal the Patient Protection and Affordable Care Act (ACA), or "Obamacare." This proposal has now been re-introduced in the new Congress in the form of H.R. 45. The health care overhaul bill was introduced in 2009 and signed into law in 2010 after much debate. Most recently, the ACA's individual mandate -- a requirement for all Americans to purchase insurance or face a fine -- was upheld by the Supreme Court.

Sponsored by Congresswoman Michele Bachmann (R-MN), H.R. 45 would repeal all of the ACA as well as the health-care related portions of the Heath Care and Education Reconciliation Act. The Reconciliation Act was used to ease the passage of the ACA through the Senate.

After legislators began introducing measures to repeal the ACA and the Reconciliation bill, CBO reported that such action would result in a massive increase of the federal deficit and, ultimately, the national debt. This was due to the repeal of the ACA's $1 trillion tax burden.

However, NTUF's Director of Research Demian Brady analyzed the net spending impact and found that repeal of the health care law would result in a multi-billion dollar savings to taxpayers. Using CBO and budget data, Brady concluded that the repeal of ACA and the Reconciliation Act would result in a $319.5 billion spending cut. More details can be viewed in his Issue Brief here.

To learn more or discuss this bill visit WashingtonWatch.com.


Most Friended

The Bill: H.R. 25, the Fair Tax Act of 2013

Annualized Savings: $17.5 billion ($87.6 billion over five years)*

Number of Cosponsors: 53 House Members

Legislators on both sides of the aisle and taxpayers across the political spectrum see tax reform as a key issue in 2013. Politicians from Speaker John Boehner (R-OH) to President Obama have pledged to address the complexity and fairness concerns regarding the current tax system.

How big a problem is America's progressive income tax regime? The Tax Code is now over 73,000 pages long, filled with special rules and exemptions for most industries and special interests. Americans are also now spending 6.38 billion hours to remain compliant under the complex tax system, according to a study by the National Taxpayers Union. The amount of time and resources spent on tax compliance is roughly equivalent to that spent running the top four Fortune 500 companies (Wall-Mart, McDonald's, Target, and Kroger grocery stores) combined each year.

As one possible solution to the ails of the current Tax Code, Congressman Rob Woodall (R-GA) sponsored the Fair Tax Act. Designed to be revenue neutral, the Act would entirely replace the income-based system with a consumption-based system. H.R. 25 would repeal all income-based federal taxes, including income, withholding, dividend, capital gains, and estate taxes, in favor of a 23 percent sales tax on all new goods and services. The revenues would be taken at the point of sale and businesses would send money onto a new collection agency, also established in the bill. The Internal Revenue Service (IRS) would be abolished.

The new tax would be included in items categorized as necessities by the Department of Treasury, such as bread and milk; however, the bill would authorize payments, known as a "prebate," to households to compensate them for the taxes they pay on these items.

Based on budget information, NTUF found that enacting the Fair Tax Act would result in a net $87.6 billion savings on the federal budget in the first five years. Approximately $77.2 billion would be saved by eliminating refundable tax credits, which are special tax credits that result in budgetary outlays because they are designed to target individuals with little or no income tax liability. An additional $12.1 billion would be saved by completely deauthorizing the IRS in 2016.

H.R. 25 would also result in some new government spending. A new federal agency would be established to administer the prebates. NTUF assumes the cost would be similar to the current Department of the Treasury Tax and Trade Bureau, which was recently funded at $102 million.

Since it is unclear how taxpayers would receive their "prebate," NTUF calculated the cost of mailing each household a check each month, totaling $241 million per year. This represents the maximum cost for distributing the prebates. Debit cards or a direct deposit system could be implemented as potential lower-cost alternatives, but estimates are currently unavailable.

All 53 cosponsors of H.R. 25 are members of the Republican Party.

* This estimate will be updated with more current figures after the FY 2014 Budget becomes available in the spring.

To learn more or discuss this bill visit WashingtonWatch.com.


   

NTUF Op-Ed: "Now it's Time to Address the Real Problem: Spending"

NTUF's Director of Research Demian Brady co-authored an article with NTU's Vice President of Government Affairs Brandon Arnold on how the 113th Congress does not need to start from scratch in spending reduction proposals. Returning and freshmen Members of Congress need only look to the 112th Congress' savings bills. If federal legislators too just some of the targeted savings plans, taxpayers would see a $433 billion reduction in the deficit this year.

Check out Demian and Brandon's article posted on Townhall.com!


NTUF's Recent Blog Posts

The Foundation's staff have been busy on NTU's Government Bytes blog detailing how proposed spending could affect taxpayers.

"Fiscal Cliff" Vote Reveals Party Divide

The Fiscal Career of the New South Carolina Senator


 We Want You!

NTUF is looking for spring and summer associate policy analysts to participate in our internship program. Associates assist with BillTally research and other policy projects. Academic credit is possible. Email questions to ntuf@ntu.org. To apply visit our internship page. Join us and help keep a tab on Congress!


 Support NTUF

The National Taxpayers Union Foundation is able to produce timely reports and analysis for policymakers and taxpayers with the help and support of foundations, small businesses, and Americans -- like you -- who wish to stay informed of their government's spending.

With donations from Tab subscribers and members, NTUF will be able to continue to inform taxpayers about entitlement reform, the federal budget, and proposed legislation.

Please consider making a tax-deductable contribution to NTUF.


Missed an Issue?

Issue 31 - Dec 21
NTUF Scores Thousands of Bills

Issue 30 - Dec 13
Congressional Health Care for Seniors Act

Issue 29 - Dec 7
Net Legislative Spending Cuts

Issue 28 - Nov 28
STEM Jobs Act

Issue 27 - Nov 12
The 2013 Senate



About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

NTUF is a 501(c)(3) research and education organization. Donations are deductible for personal income tax purposes. Please make a donation today to help further NTUF's mission of research and education!

This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve.

 

 



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