Congress Must Take a Stand Against Crony Capitalism by Ending the Ex-Im Bank

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Posted by Alexander Hendrie on Thursday, May 28th, 2015, 9:30 AM PERMALINK


Members of Congress love to tout their support for the free market and their opposition to crony capitalism.  So when the Export-Import bank expires on June 30, Congress has the opportunity to prove it really means what it says by putting an end to this poster child of corporate welfare.

Ex-Im provides loans and financing to assist US companies to export their goods and services. It does so by financing the foreign companies purchasing of US products. In theory, this helps companies compete overseas when they would otherwise be unable to. In reality, the bank finances commerce between wealthy well-connected foreign and US companies to the tune of billions of dollars.

By far the biggest beneficiary of Ex-Im largesse is Boeing, which benefits from 40 percent of all loans the bank has given out. There is no reason Boeing needs this assistance. Just last year the company reported record high revenues.

A report from the Wall Street Journal found that Boeing has worked closely with Congress whenever the bank has come up for reauthorization, and helped craft terms for loans that it directly benefits from. The Aerospace giant has become so involved in this process that there was “an extraordinary level of coordination between public officials and corporate executives.” It is no wonder that Ex-Im is sometimes referred to as “Boeing’s Bank.”

In fact, the Sunlight Foundation found that 19 of the top 20 recipients of Ex-Im largesse lobbied congress to extend the bank. In the process, these companies have shaped the bank to provide highly favorable loans. Not only do US firms not need this welfare, foreign recipients are completely undeserving of these handouts. Foreign firms that have received Ex-Im loans include Russian oligarchs that supply arms to Syria and Iran, State owned airlines, and a Mexican energy conglomerate.

Supporters of Ex-Im claim that the bank helps small businesses. But in reality, small businesses do not have the resources and connections to compete for Ex-Im subsidies and so less than 1 percent of 1 percent of small business benefit from subsidies distributed by the bank.

If that were not bad enough, the bank has come under scrutiny because of for numerous cases of fraud and corruption that have been uncovered by the Inspector General and Government Accountability Office (GAO). In the past six years alone, there have been 85 criminal indictments, 48 criminal judgments, and a quarter billion in fines, restitution, and forfeiture from investigations into Ex-Im. The Heritage Foundation has noted that job numbers touted by bank officials as part of Ex-Im’s necessity have been subject to unabashed criticism from the GAO.

Not only are Ex-Im’s loans unnecessary, they are also costly. According to the Congressional Budget Office, reauthorizing the bank will cost taxpayers $2 billion over the next decade. Taxpayers can no longer afford to finance this crony capitalism, especially in today’s environment of tight budgets.

Urge your Congressman to oppose reauthorization of the Export-Import Bank by calling 202-224-3121 

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Maryland Has Been Wrongly Double-Taxing Residents Who Pay Income Tax to Other States

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Posted by Grace Palo on Wednesday, May 27th, 2015, 4:53 PM PERMALINK


Last Monday, the Supreme Court struck down Maryland’s practice of double-taxing residents who pay income taxes in other states. 
 
The Court ruled 5-4 that the tax law is unconstitutional due to the fact that it does not provide a full tax credit to residents for income tax paid outside of the state. The ruling will affect about 55,000 taxpayers.  
 
Maryland’s income tax law had been withholding a credit on the county segment of the state income tax, which could be as high as 3.2 percent, lead to residents with out-of-state income to experience double taxation. The Justices ruled that this violated the commerce clause of the Constitution due to its potential to discourage individuals from doing business across state lines.
 
"Maryland's tax scheme is inherently discriminatory and operates as a tariff," the court wrote in its summary, "which is fatal because tariffs are 'the paradigmatic example of a law discriminating against interstate commerce.' "
 
Income from other states is usually taxed both where the money is made and where taxpayers live, in most states, but in order to guard against double taxation, states usually give residents a full credit for income taxes paid on out-of-state earnings. 
 
Maryland’s residents have been able to deduct income taxes paid to other states from their Maryland income tax, but the deduction could not be applied to a “piggyback” tax that is collected by the state for counties and the city of Baltimore.
 
Those who tried to claim the credit on their county income tax returns between 2006 and 2014 are likely to be eligible for refunds, which officials estimate at about $200 million with interest. The refunds will be provided from the state’s income tax reserve fund. 
 
Comptroller of the Treasury of Maryland v. Wynne’s ruling will potentially cost states with similar tax laws, including New York, Indiana, and Pennsylvania, millions of dollars. 
 
Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito Jr Anthony M. Kennedy, Stephen G. Breyer and Sonia Soto¬mayor all voted against Maryland, while Justices Ruth Bader Ginsburg, Antonin Scalia, Elena Kagan and Clarence Thomas dissented
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New Report Finds Obamacare Overhead to Cost $273 Billion

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Posted by Alexander Hendrie on Wednesday, May 27th, 2015, 2:43 PM PERMALINK


Obamacare will be responsible for $273.6 billion in new administrative costs between now and 2022 according to a new report released by Health Affairs Blog. As the researchers note, this means Obamacare overhead accounts for an average of $1,375 per newly insured person per year.

The report notes that overhead of government programs accounts for $101.4 billion while private insurance overhead accounts for the remaining $172.2 billion.

According to co-author Steffie Woolhander, the exorbitant amounts of money spent on administrative overhead in Obamacare undermines the stated goal of the law to provide affordable coverage to uninsured Americans. In fact, 22 percent of federal spending on Obamacare is being consumed by bureaucracy.

This is not the first time Obamacare has left the American people on the hook for billions of dollars in unneccesary costs.

Since 2011, $5.4 billion in taxpayer money has gone to the states to set up healthcare exchanges. This money was given away with zero oversight and no strings attached and so it should not be surprising to hear that numerous states have wasted billions in taxpayer money on unworkable Obamacare websites.

While exchanges for Hawaii, Massachusetts, Maryland, Vermont, New Mexico, and Nevada have all been spectacular failures, the poster child for Obamacare waste is undoubtedly Oregon, which spent $305 million on its exchange only to later return to the federally run Healthcare.gov at an additional cost of $41 million. Since then, former Oregon Governor Kitzhaber has come under investigation over accusations he scrapped the exchange in order to help his 2014 reelection campaign, rather than making decisions based on the workability of the website.    

Already, Obamacare has cost taxpayers billions of dollars. With this latest news of out-of-control administrative costs, Congress must do more to ensure stronger oversight and accountability over the law.

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Why Intellectual Property Trumps the Currency Fight

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Posted by Nate D'Amico on Wednesday, May 27th, 2015, 12:48 PM PERMALINK


Last Thursday, the Senate voted 62 to 38 to advance the Trade Promotion Authority (TPA) bill.  This is a vital piece of legislation to aid President Obama and Congress’s ongoing push to complete negotiation of the Trans-Pacific Partnership (TPP) trade agreement.  This is a multi-lateral trade deal with eleven foreign nations, among them Australia, Japan, and Singapore that began negotiations in 2005.  This bill is significant because it will allow us to establish and expand intellectual property protections with countries who currently have weak or non-existent intellectual property laws or fail to prevent theft of U.S. intellectual property.

The bill, however, and the entire trade agreement may fall apart due to maneuvering concerning currency manipulation. A small group of mostly Democrats, especially Elizabeth Warren (D-MASS), are pushing for amendments that will include enforcing punitive trade mechanisms upon countries who are found to be manipulating their currency to gain unfair advantage.  This has been a hot topic on the international stage in recent years, especially concerning trade with China (who is not a member of the Trans-Pacific Partnership) and Japan, which some suspect is trying to devalue the yen.  However, there is widespread belief that the other parties in the TPP will not consent to any enforcement measures.  The White House has even threatened a veto of TPA if the amendments are included in the final version of the bill.

Why would the White House go so far as to threaten to kill a bill that has had strong bipartisan support?  Everyone agrees that currency manipulation is an issue that needs to be addressed to protect America’s strength in foreign trade.  But at the cost of torpedoing a major trade agreement almost a decade in the making, it’s simply not worth making our stand here.  The most significant part of TPP is that it will bring strong intellectual property protections for American companies to nearly a dozen new countries.  The benefits to the American economy will be enormous, likely to the tune of trillions of dollars and millions of jobs.

This deal will do far more for us now than currency manipulation penalties will.  The other signatories to the trade agreement also have a significant interest in the passage of the current TPA.  This is not because suspected currency manipulation will be allowed to continue, but because this will further open foreign markets to U.S. companies.  Those already in the Pacific will have mechanics to increase the scale of their operations, while countless new companies, secured by the TPP’s intellectual property protections, will make first forays into the region.  This deal will give members like Malaysia and Peru unprecedented access to the American market. The benefits to our own and the global economy are clear.  The choice Congress faces in finalizing this bill is between forcing measures that will either cause TPA to be vetoed or bring the Trans-Pacific Partnership to a grinding halt if the President does sign it, or going forward with TPA as it now stands and seeing to fruition a trade deal that will bring trillions into the U.S. economy and into the pockets of American companies and workers.  Does that really sound like a tough choice to make?

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IRS’s Ability to Protect Taxpayer Information in Question Following Cyberattack

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Posted by Alexander Hendrie on Tuesday, May 26th, 2015, 6:51 PM PERMALINK


The IRS today announced that hackers have breached their system and stolen the personal information of over 100,000 taxpayers by accessing old returns. The breach should again raise questions about the ability of the agency to safely protect confidential taxpayer information especially given the increased responsibility the agency is being given in administering Obamacare.

According to the agency, hackers have used personal information of taxpayers to file fraudulent tax returns by exploiting a specific application known as “Get Transcript.” The final amount stolen has yet to be determined although Commissioner Koskinen hoped it would not reach $50 million.

In a statement, Senate Finance Chairman Orrin Hatch (R-Utah) said it is unacceptable that the IRS remains so vulnerable, and the agency has been “repeatedly warned” that it needed to do more to protect taxpayers.

At the same time, the Treasury Inspector General for Tax Administration (TIGTA) has repeatedly raised concerns about the agency’s ability to protect taxpayer information. A TIGTA report issued earlier this month found that the agency had failed to fire employees that “willfully violate tax law”, while a report issued in February found that the agency had rehired employees that had engaged in unauthorized access of taxpayer information.

Just last week, it was revealed that the agency had failed to test its system for administering Obamacare until a week before tax filing season began. Given its repeated failings, it should be alarming that the agency will now be handling the personal healthcare information of Americans.

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Florida Legislature Adjourns Without Action on Gov. Scott’s Tax Cuts

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Posted by Brad Hart on Tuesday, May 26th, 2015, 9:57 AM PERMALINK


Earlier this month the Florida legislature adjourned without passing a budget. This happened as a result of the state Senate’s demands that Florida expand Medicaid under Obamacare in exchange for a tax reduction package passed by the House. The House didn’t bite and sine die came and went. A special session to resolve their differences convenes on June 1.

In the last 20 years, Florida has been the leader of the nation in bringing in new families, businesses and retirees to the state. Yes, Florida is a beautiful state with amazing weather, but in recent years, it has been Gov. Rick Scott’s wide range of tax cuts that have made the Sunshine State even more appealing. His tax cuts have been both pro-family and pro-business. This provided relief to a wide range of residents.

 In Gov. Scott’s first term, the legislature passed 2 billion dollars in tax cuts. They aren’t resting on those laurels, however.  Florida has one of the nation’s highest communication-services taxes (CST) on cellphones, satellite TV and nonresidential landline phone services. In launching “Cut My Taxes Week,” this year he announced a proposal to reduce the states CST by a rate of 3.6%. This modest reduction will result in about 470 million dollars in annual savings for Florida taxpayers, who are increasingly relying on new technologies that have driven up the cost of these services.

 Before adjourning, the Florida House passed a “No Tax is Safe” plan that included the CST cut but the Senate failed to act on this tax reduction package before they adjourned.

Many in the state Senate have demanded a dramatic expansion of Medicaid instead of spending restraint and tax relief. This new spending program would expand in an unsustainable manner Obamacare’s Medicaid in Florida to a new group of middle class and in many cases childless adults.

This would reverse a trend that Florida has set in recent years. Thanks to Republican health care reforms, Florida has seen an enormous amount of Medicaid savings. Tax payers have saved 118 million annually since a launch of a private program in 2006 and over 1 billion in savings just last year when the program expanded statewide. This program raised the quality of coverage for low income Floridians by transitioning current Medicaid recipients in to a managed-care private program. This is just one of the reasons why Florida is leading the way in 21st century health-care reform.

Demanding an expansion of Obamacare’s Medicaid at the cost of hard working taxpayers doesn’t make sense. If implemented Florida would reverse a positive trend in health care savings and taxpayer relief by bending the cost curve upward for years to come. All of this has occurred at the same time the federal Center for Medicare & Medicaid Services has demanded Medicaid expansion in Florida.  To cave to the masked demands of the Obama Administration by expanding Medicaid would not benefit taxpayers or current recipients of Medicaid

Decades of research suggest, that states with lower tax burdens grow faster. The Florida House and Gov. Scott’s modest 2015 tax cuts recognize this reality. When the Florida legislature reconvenes next month, the Senate should abandon demands for expansion of Medicaid in exchange for much needed tax relief by reducing the CST tax. 

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ATR Supports Creation of Obamacare Inspector General

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Posted by Alexander Hendrie on Thursday, May 21st, 2015, 4:14 PM PERMALINK


Americans for Tax Reform supports H.R. 2400, the “Special Inspector General for Monitoring the Affordable Care” (SIGMA) Act, introduced by Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-Ill). This legislation will help ensure stronger oversight over Obamacare and hold unelected bureaucrats accountable to the American people.

The SIGMA act creates a special inspector general to oversee and monitor Obamacare. While Obamacare’s many complex regulations and mandates span across numerous government agencies, no one inspector general has jurisdiction over these agencies.

H.R. 2400 would fix this problem by creating an inspector general that could knock on doors across the government, from the Department of Health and Human Services (HHS), to the Treasury Department, the Social Security Administration, the Pentagon, the Department of Homeland Security, the Veterans' Administration, the Department of Labor, and even the Peace Corps.  This would shine a much needed spotlight on the unaccountable actions of the Administration and provide Congress and taxpayers with reports on a regular basis.

The creation of an inspector general office for Obamacare follows in the footsteps of other recent predecessors for Iraq reconstruction, Afghanistan reconstruction, and the TARP bailout.  These inspectors general have recovered billions of dollars in savings for taxpayers, and resulted in prosecutions of hundreds of bad actors.

Already, Obamacare has cost taxpayers billions upon billions of wasted dollars. Since 2011, HHS gave almost $5.4 billion in grant money to states for the attempted construction of Obamacare exchange websites. This money was handed out with little oversight and no strings attached.

Unsurprisingly, several states wasted each and every dollar they received.

Oregon shut down its website and moved to the federal exchange earlier this year. Despite being given $305 million in grant money, the website failed to enroll anyone weeks after the November 2013 deadline and was forced to send out paper applications to individuals hoping to enroll. After failing to create a useable website, Oregon moved back to the federally run Healthcare.gov at the cost of $41 million. As a result, the actions of Oregon officials has become the subject of multiple federal investigations that remain ongoing.

In addition, Hawaii recently announced it plans to migrate to the federal exchange after failing to receive a $28 million bailout. The website failed to become financially viable because of lower than expected enrollment figures. In fact, the website enrolled just 8,592 individuals in year one despite spending $205 million constructing its exchange. This means it spent $23,899 per enrollee.

These two states are not on their own. Massachusetts, Maryland, Vermont, New Mexico, and Nevada have all been astonishing failures that have cost taxpayers millions of dollars.

If an Obamacare inspector general had existed in the past, perhaps taxpayers would have been spared from billions of dollars in waste, and unelected bureaucrats would be held accountable for their inappropriate conduct. ATR urges all members of Congress to support and vote for this important legislation.

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IRS Failed to Test Obamacare Changes Until Week Before Filing Season

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Posted by Alexander Hendrie on Thursday, May 21st, 2015, 2:44 PM PERMALINK


The IRS failed to test its Obamacare processing system until a week before filing season began, according to a report released today by the Treasury Inspector General for Tax Administration (TIGTA).

"The administration learned nothing from the failed rollout of Obamacare’s website and then repeated the lack of preparation with the IRS and forced that failure onto every American on tax filing season,” said Grover Norquist, president of Americans for Tax Reform.

The agency relies on what is called a Final Integration Test (FIT) to test its ability to deal with potential tax filing complications. However, according to the TIGTA report, the IRS failed to develop and test key systems to integrate Obamacare into the FIT program. As the report notes:

“key systems and programs were not sufficiently developed and tested before delivery to the FIT environment.”

Instead, the process for integration was so chaotic that eight different builds were received, which meant the agency was only able to complete tests at the last minute. As the report notes:

“…the current procedures resulted in the FIT program receiving eight builds of the ACA 5.0 systems with the final build received by the FIT program less than one week before the start of the 2015 Filing Season.”

At the same time, the e-filing system was delivered to FIT with significant errors which increased the risk of processing errors during the filling season. As the report notes:

“Not completing the planned FIT execution on schedule prior to the 2015 Filing Season increases the risk of filing season processing errors that would have been identified and corrected during the FIT.”

In its recommendations TIGTA said that the IRS must ensure timely delivery of systems to the FIT environment. Failure to do so threatens taxpayers’ ability to file returns, receive refunds, and obtain adequate customer service.

 

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Grassley to IRS: Why Weren’t Law-Breaking Employees Terminated

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Posted by Alexander Hendrie on Wednesday, May 20th, 2015, 4:57 PM PERMALINK


Senator Chuck Grassley (R-Iowa) yesterday wrote to the IRS asking the agency to explain why it has not terminated employees that have willfully violated tax law.

The letter is in response to a Treasury Inspector General for Tax Administration (TIGTA) report that found the agency was not properly disciplining employees.

The Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to terminate employees that have committed acts of misconduct including willful violations of tax law. In reality, only 25 percent of employees that had willfully violated tax law were terminated by the agency and more than 60 percent of employees were disciplined in a way that did not involve termination.

As Grassley notes in his letter, RRA 98 gave the IRS some discretion on personnel flexibility but outlined clear instances for employee termination including “willful violation of tax law.” As the letter states:

“These changes created a clear and direct path to termination for employees who commit ten specific offenses, two of which are the willful tax violations at issue here.”

Grassley notes that the IRS’s improper use of this discretion is problematic given the serious nature of the offense. As the letter states:

“Willful violation of tax law is a serious offense and the presumption is an employee guilty of the offense shall be terminated.”

Worse still, the TIGTA report found that many of the IRS employees soon received “promotions, performance awards, and permanent pay increases” after their noncompliance cases were closed. 

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M. N.

Because they would sing like canaries and repercussions might actually be forced from the citizens who are tired of corruption in the government.

Libertarian Board

Because then they would rat out the ones who weren't caught. The IRS is simply corrupt. Giving any group, agency or government that much power is just asking for trouble. We should be more careful about never giving power that can be abused to anyone.


Hawaii Obamacare Enrolls ZERO People During Special Enrollment Period

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Posted by Alexander Hendrie on Wednesday, May 20th, 2015, 2:12 PM PERMALINK


The numbers are in: Hawaii’s Obamacare Exchange enrolled a grand total of ZERO — yes, zero people during its special enrollment period.

The Obama administration had implemented the special enrollment period from March 15 - April 30 to assist individuals who were unaware they would face a tax penalty for not having “qualifying” health insurance. In all, less than 250,000 individuals decided to enroll nationwide meaning that millions of Americans would rather pay the tax than enroll in Obamacare. 

While Hawaii enrolled zero individuals and is the worst performing state, it is not alone. Vermont signed up only 97 households, while Rhode Island enrolled just 25 households.

Hawaii’s dismal performance should not be surprising. The website cost taxpayers $205 million but could only enroll 8,592 individuals in year one. Cost to taxpayers per enroll: $23,899.

The state legislature recently rejected a $28 million bailout for the website meaning that a contingency plan to dismantle the exchange and migrate to the federal exchange will be implemented immediately. Unfortunately, taxpayers are not off the hook yet as it is expected that moving to the federally run healthcare.gov will cost $30 million.

Hawaii is not the first website to implode. Oregon’s $305 million exchange was officially abolished earlier this year at an additional cost and of $41 million. The exchange is currently under investigation by numerous federal organizations for how it wasted so much money.

In all, states received $5.4 billion from the federal government for state-based Obamacare exchanges with no strings attached and zero oversight over spending decisions.

With so much money being wasted, the American people deserve an explanation.

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porcer34

The numbers for Hawaii's special enrollment period are better than I expected.

vb_guy

there must be a way to blame this on global warming ....

Ben Dover

Sounds like racism to me...Maybe they should riot...too soon?


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