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The Case Against Doug Elmendorf at CBO

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Posted by ATR on Friday, November 21st, 2014, 12:22 PM PERMALINK


Americans for Tax Reform president Grover Norquist sent an open letter today to House and Senate GOP Leadership laying out seven reasons not to reappoint Doug Elmendorf as Director of the Congressional Budget Office:

Elmendorf’s CBO Got Grubered.  It was Doug Elmendorf who adopted the scoring models for Obamacare given to him by Obamacare architect Jonathan Gruber.  These inaccurate models were key to CBO’s assertion that Obamacare would be good for health insurance markets and reduce the deficit.  That would be the same Jonathan Gruber who said that lying to the American people was necessary to pass Obamacare because Americans are stupid.

Elmendorf’s CBO Pushes Failed Keynesian Economic Analysis.  As Dan Mitchell of the Cato Institute has pointed out, “the CBO – over and over again – produced reports based on Keynesian methodology to claim that Obama’s so-called stimulus was creating millions of jobs even as the unemployment rate was climbing….CBO also radically underestimated the job losses that would be caused by Obamacare…CBO has produced analysis asserting that higher taxes are good for the economy, even to the point of implying that growth is maximized when tax rates are 100 percent…When purporting to measure loopholes in the tax code, the CBO chose to use a left-wing benchmark that assumes there should be double taxation of income that is saved and invested…[and] on rare occasions when CBO has supportive analysis of tax cuts, the bureaucrats rely on bad methodology.”

Elmendorf’s CBO “Can’t” Score Obamacare.  On June 17, 2014, CBO Director Doug Elmendorf issued a blog post on CBO’s website where he explains that CBO cannot any longer estimate the budgetary impact of Obamacare: “Attempting to construct a counterfactual benchmark for the budget that excluded [Obamacare] would raise significant challenges and would go beyond CBO’s traditional role in the budget process.”  This was another way of saying that CBO had given up the Gruber-led façade that Obamacare would reduce the deficit, but was not willing to show their math in getting there.

Elmendorf chooses to not make CBO's analysis fully transparent.  CBO does not disclose—in detail, and for peer review—their scoring methodologies.  If they did, there would be a lot more pressure on them to incorporate macroeconomic analysis into their scores.  This was a conscious choice of Doug Elmendorf’s.

Elmendorf’s CBO Used Dynamic Scoring Only Once—to Help the Obama Administration. The whole history of the CBO is one of opposition to so-called “dynamic scoring,” which is nothing more than incorporating common sense assumptions about changes to the economy resulting from large fiscal policy shifts.  There is one notable exception—the 2013 Senate immigration bill.  There and only there, Elmendorf’s CBO used both halves of its brain and produced a dynamic score.  It just so happens that this immigration bill was a priority of the Obama administration, and producing a score here (as opposed to killing the death tax, or repealing Obamacare, or cutting the capital gains tax rate) would advance to the administration’s agenda.

Elmendorf is a liberal Democrat appointed by former Senator Kent Conrad (D-N.D.) under a Democrat Senate majority. It’s a longtime rule of the U.S. Congress that the majority party gets to pick their own staff.  That’s what Senate Democrats did when they appointed one of their own, Doug Elmendorf. It’s absurd to say that Democrats have that right, but that Republicans are not free to pick their own CBO Director when they are in the majority.

Elmendorf served on President Bill Clinton’s Council of Economic Advisors and in the Clinton Treasury Department.  He was a senior fellow at the liberal establishment Brookings Institution.  He even got a Ph.D. from Harvard under the dissertation guidance of former Clinton Treasury Secretary Larry Summers.  There is no doubt that he is a career Man of the Left.

The Bottom Line: Reappointing Doug Elmendorf Is an Endorsement of CBO’s Practices. The CBO under Doug Elmendorf adopted all the bad practices of his predecessors, acquired some new ones (for example, a disturbing discontinuity between Obamacare’s baseline score and CBO’s long term fiscal outlook), and has not implemented needed reforms to CBO.  Reappointing Elmendorf would be validating the status quo.

 

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Gerold R. Ford School of Public Policy, University of Michigan's photostream

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E-Rate Proposal Increases Spending, Ignores Problems

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Posted by Matthew Bruno on Wednesday, November 19th, 2014, 4:54 PM PERMALINK


Even though there is around $5 billion in unspent taxpayer money sitting in the E-Rate account right now, FCC Chairman Tom Wheeler seeks to increase the amount that is spent by the United States’ E-Rate program from $2.4 billion to $3.9 billion. That equates to a 1.5 billion dollar and 62% increase in the fund overall and 16 percent increase in phone customers’ monthly bills overall.

Although the E-Rate program has increased Internet access to schools and libraries, E-Rate needs to be revamped and streamlined instead of wastefully expanded.

American Action Forum’s Will Rinehart discusses the true ramifications of an expansion of E-Rate. This expansion increases spending nearly 123 percent from 2008 levels. Rinehart analyzes how the “contribution rate” or tax rate that consumers pay to support this program has grown dramatically in recent years. With this proposed expansion, we would see a contribution rate of 19.3 percent, more than double the rate of 9.5 percent we saw in the first quarter of 2009.

Five main problems with the current E-Rate system include:  the massive amount of paperwork, the need for outsourcing to consultants, misplaced funding priorities, excessive delays for funding, and poor incentives that favor those who know how to play the system rather than those who genuinely need help.

Instead of increasing funding through raised taxes, E-Rate needs to be pored over with a fine tooth comb in order to understand how to make the current program run more efficiently. Simply throwing more money at the problem is a lazy, temporary solution. Disciplined reform is the only way to effectively make E-Rate a capable and successful program. 

Commissioner Ajit Pai has previously made comments in support of reforming the E-Rate program instead of simply expanding it. In his words, “Instead of a student-centered E-Rate program, we now have one too heavily focused on bureaucracy.”

In July of 2013, Commissioner Pai proposed a simple, four-step, student-centered fix that would not adversely affect taxpayers. The first step would be to revise the distribution of E-Rate funds so that a certain amount would be given to a school per student, with that amount contingent on poverty levels and rural locations. So, these funds would follow students throughout school. Next, spending would be focused on the areas that need it most—connecting individual classrooms to the Internet, rather than focusing on voice services. Third, the E-Rate application process would be simplified down to a one-form initial application and, later on, another one-form report. Finally, greater disclosure of how funds are spent, and an accompanying website that allows anyone to access this information would increase transparency and accountability.

In their statements Monday, November 17, 2014, Commissioner Pai and Commissioner Mike O'Rielly reiterated that the FCC is making the same mistakes it made during its E-Rate proposals last year. Essentially, the Commissioners argue that E-Rate needs to be reformed instead of expanded.  Although mistakes were made last July, the FCC needs to right this wrong and take steps to overhaul the program.

Increasing funding will only encourage continued inefficiency. E-Rate needs to see wholescale reform instead of spending increases that will only encourage further misuse of funds.

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Study: 57% of NHL Free Agents Went to Teams with Lower Taxes


Posted by ATR on Monday, November 17th, 2014, 9:39 AM PERMALINK


WASHINGTON, D.C. -- A new study jointly-released by the Canadian Taxpayers Federation (CTF) and Americans for Tax Reform (ATR) reveals that of the 123 Unrestricted Free Agents who changed teams during the 2014 offseason, 57 percent of went to teams with lower taxes.

The study, titled Home Ice Tax Disadvantage looks at NHL team salary spending, personal income tax rates in the relevant province or state, and the “true cap,” which takes into consideration these rates. The purpose of the report is to show the impact that taxes – personal income taxes in particular – have on labor mobility. While the numbers are more extreme for NHL players, the concept is the same for millions of North American families.

“Injuries can damage your favorite sports team. So can high taxes in your state or province,” said Grover Norquist, president of Americans for Tax Reform.

Key findings include:

Of the 123 Unrestricted Free Agents who changed teams during the 2014 offseason, 57 percent went to teams with lower taxes. In total, those 78 players will pay $7,951,784 less in taxes next year.

From a tax standpoint, U.S. states are becoming less competitive compared to Canadian provinces: Six of the seven Canadian teams went up in the rankings between 2012 and 2014. Interestingly, Alberta’s combined federal and provincial taxes are now lower than the states that have no state income taxes. Of the 23 American teams, 21 of them fell in the rankings of best places to play between 2012 and 2014. Florida, Tampa Bay, Dallas, and Nashville fell from the top spot in 2012 to third best locations in 2014 to play from an income tax standpoint.

In dollar terms, the Los Angeles Kings players paid the highest total of $27.8 million to the federal government and $8.5 million to the state.

The Calgary Flames and Edmonton Oilers tied for the lowest jurisdictional tax rate at 38.5 percent with the Florida, Texas, and Tennessee teams close behind at 40.5 percent.

Players for the Montreal Canadiens paid the highest tax taxes with a tax rate of 53.9 percent.

Having a no trade clause gives the power to avoid being sent to high tax jurisdictions. Jason Spezza’s tax savings by moving from Ottawa to Dallas are $394,732.

Players without a no-trade clause face a pay cut when traded to a high-tax jurisdiction. PA Parenteau will have to pay $349,535 more in taxes after moving from Colorado to Montreal.

Benoit Pouliot will save the most taxes moving from the New York Rangers to the Edmonton Oilers. If he had signed the same deal in New York he would have had to pay $575,752 more in taxes.

“The numbers don’t lie; NHL players take a financial hit to play in certain jurisdictions,” said paper author and CTF National Research Director Jeff Bowes. “Obviously, there are other factors at play besides taxes, but the fact remains that disparities in tax rates leave some teams at a major disadvantage.”

“NHL players are just one example of highly skilled workers who have a choice of where to work” added CTF Federal Director Aaron Wudrick. “The same principles apply far beyond professional athletes, but also for doctors, engineers and CEOs of major companies. If high tax rates make it more difficult to attract free-agents in the NHL, it’s not a stretch to believe it’s also be hard to attract other highly skilled workers. Governments need to keep that in mind when they’re considering the impact of tax rates on attracting top talent.”

The CTF and ATR study on the taxes of NHL players can be found HERE.

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Important Challenges for the Lone Star State to Tackle in 2015

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Posted by Damien Salamacha on Friday, November 14th, 2014, 10:56 AM PERMALINK


Many say that as Texas goes, so goes the nation, and there is some data to back that up, at least from an economic standpoint. Were it not for Texas, national job growth in recent years would not look so hot. As Vance Ginn, Economist at the Texas Public Policy Foundation’s Center for Fiscal Policy pointed out in Investors Business Daily, “excluding the 1.1 million jobs added in Texas since the last recession started in December 2007, the rest of the U.S. employs about 350,000 fewer people than its pre-recession level.”

With an important 2015 biennial session of the Texas legislature fast approaching, Americans for Tax reform sent a letter to members of the Texas legislature this week urging them to take important steps to protect Texas taxpayers and further spur economic growth. The letter ATR sent to Texas legislators is as follows:

Dear Returning and New Members of the Texas Legislature,

As you prepare to return to the state capitol for the 2015 legislative session, on behalf of Americans for Tax Reform and our membership across the Lone Star State, I urge you to keep taxpayers in mind as you consider all the pieces of legislation that will come across your desk. There are two main things that you can do to protect Texas taxpayers and stoke economic growth: 1) rein in the unsustainable trajectory of state spending, which can be accomplished by instituting a true and unbustable state spending cap; and 2) eliminate the state’s business tax, otherwise known as the margin tax, one of the biggest blemishes on what is an otherwise relatively competitive tax code.

As was noted in Forbes earlier this year, even relatively-well governed states like Texas face significant fiscal challenges. In a Texas Public Policy Foundation report titled “The Real Texas Budget,” TPPF researchers found an incomplete comparison in state spending data published by the Legislative Budget Board, the state’s official keeper of budget information. According to the report’s findings, the Texas budget – when adjusting for moving patient income to higher education-related facilities off-budget and the projected underfunded Medicaid amount – actually increased by nine percent in the current 2014-2015 biennium from the previous, as opposed to the more modest five percent increase advertised by the state’s official scorekeeper.

Another TPPF report titled “The Conservative Texas Budget,” outlines a series of policy recommendations and reforms to rectify Texas’s overspending problem that, while not as bad as that of some states, is still a major problem. One of those reforms, the institution of clear and achievable spending limits, is the best step that lawmakers could take to protect Texas taxpayers.

I also write today to urge you to rid Texas of the margin tax during the 2015 legislative session. Legislation was recently filed by Sen. Craig Estes that would do just that. The Lone Star State has been a model for other states on numerous matters of governance, and for good reason, but the margin tax is the one major blight on the state’s otherwise stellar business tax climate and now is the perfect time to unlock the state’s full economic potential by repealing this misguided tax.

The margin tax reduces the job-creating capacity of Texas businesses and does so in an incredibly onerous way at that. As the Texas chapter of the National Federation of Independent Businesses put it, the margin tax is "crippling the small and mid-sized businesses” throughout the state. In addition to the harm it does to employers, economists of all political stripes agree that it is one of the worst ways to raise revenue. Professor John Mikesell, an expert in public finance at Indiana University, has described the margin tax as a "badly designed business profits tax...combin[ing] all the problems of minimum income taxation in general—excess compliance and administrative cost, penalization of the unsuccessful business, undesirable incentive impacts, doubtful equity basis—with those of taxation according to gross receipts."

The tax is so complex – it applies variably to different industries and types of businesses – that the costs to comply with this levy for some employers are actually greater than their tax liability. One of the more egregious aspects of the margin tax is that it applies to companies without regard as to whether a profit was generated, meaning that businesses that lost money can still end up having a margin tax liability.

Other states are eager to compete with Texas for jobs and the state stands to fall behind if the margin tax is not repealed. In fact, a number of states have passed tax reform in recent years that seeks to make them more competitive with Texas, and over a dozen are set to pursue such tax reform in 2015. It’s important for Texas lawmakers to not rest on their laurels. In order to stay ahead of states that wish to entice employers away from Texas, it would behoove legislators to repeal, or begin phasing out, the margin tax in 2015. It’s time to eliminate this unnecessary impediment to private sector growth and job creation. It’s also time to right the unsustainable trajectory of state spending, which can be accomplished with a robust spending cap, like the one proposed by TPPF.

Americans for Tax Reform will continue to follow these issues closely throughout session and will be educating your constituents as to how you vote on these important matters. If you have any questions, please contact Patrick Gleason, ATR’s director of state affairs, at (202) 785-0266 or pgleason@atr.org.

 

Onward,

Grover Norquist

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ATR's Patrick Gleason Details Future for Tax Reform (and more...)

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Posted by Zoe Crain on Thursday, November 13th, 2014, 4:30 PM PERMALINK


Patrick Gleason, director of state affairs at Americans for Tax Reform, wrote an op-ed for Forbes highlighting the influence of tax-based policy in the midterm election results.

The Tillis and Brownback victories send a clear message to state lawmakers across the country. Rate reducing tax reform isn’t just good policy, it’s good politics. Over a dozen states are set to pursue such tax reform in 2015, and the fact that Thom Tillis is heading to the U.S. Senate and Gov. Sam Brownback has another four years in office makes it much more likely that a tax cutting wave will sweep the states in 2015.

Mike Godfrey of Tax-News.com wrote a piece regarding the proposed internet sales tax, which Speaker Boehner has publicly opposed.

Americans for Tax Reform (ATR) welcome Boehner’s stand against the Bill, and its president Grover Norquist warned that “too many politicians in state capitals and Washington have looked at the internet only as a way to raise taxes. They want to tax internet access; they want to tax internet sales. Boehner has drawn a line in the sand saying the American people come first and politicians need to keep their hands off the internet.

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Grover Norquist Applauds Speaker Boehner's Fight Against Internet Sales Tax (and more...)

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Posted by Zoe Crain on Wednesday, November 12th, 2014, 3:44 PM PERMALINK


The Hill’s Bernie Becker wrote about Americans for Tax Reform president Grover Norquist’s reaction to Speaker Boehner’s announcement that he would fight against online sales tax proposals.

“Obama says yes to taxing the Internet, Reid says yes to taxing the Internet,” Norquist, the founder of Americans for Tax Reform, said in a statement. “Speaker Boehner just said ‘hell no’ to taxing the Internet. Boehner wins. The American consumer wins.”

Connor Wolf of the Daily Caller wrote an article regarding a United Auto Workers union establishing itself at a Volkswagen plant whose employees have voted against unionization.

However, some see this as circumventing the workers’ wishes. Matt Patterson, executive director at the Center for Worker Freedom, said in a statement, “The commitment of the company to allow this outside organization, which has decimated auto jobs in Detroit and left entire companies and cities bankrupt, is a betrayal of the VW workers who gave a loud and clear ‘No!’ to the UAW, by a vote of 712 to 626.”

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ATR Praises Boehner for Internet Tax Stance

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Posted by Alexander Hendrie on Tuesday, November 11th, 2014, 1:07 PM PERMALINK


As reported by Roll Call on Monday night, when asked about the so-called ‘marketplace fairness act’ House Speaker John Boehner’s spokesman said:

The speaker has made clear in the past he has significant concerns about the bill, and it won’t move forward this year,” said spokesman Kevin Smith. “The Judiciary Committee continues to examine the measure and the broader issue. In the meantime, the House and Senate should work together to extend the moratorium on internet taxation without further delay.

Today, Americans for Tax Reform president Grover Norquist issued the following statement in praise of Boehner:

Too many politicians in state capitols and Washington have looked at the internet only as a way to raise taxes. They want to tax Internet access, they want to tax Internet sales. Boehner has drawn a line in the sand saying the American people come first and politicians need to keep their hands off the Internet. This gives encouragement to American taxpayers and consumers that we will win this fight.  Obama says yes to taxing the Internet, Reid says yes to taxing the Internet.  Speaker Boehner just said 'hell no' to taxing the Internet. Boehner wins. The American consumer wins.

In addition, Katie McAuliffe, Federal Affairs manager for Americans for Tax Reform and Executive Director of Digital Liberty, said: 

Passing a short term extension of the Internet tax moratorium that still allows states to implement Internet access taxes is not a ‘deal’ Americans should accept. It is far better to let the moratorium expire and reinstitute in the next Congress than to accept a bill that exposes Americans to 45 different state departments of revenue and 50 states regulatory burdens.

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Son Mi Kim

Boehner is doing the right thing here. He is to be praised. Committee review is the only way to clean it up MFA. Scratch below the surface and see how bad it is for American business and interstate commerce as a whole. eMainStreet.org explains: https://www.youtube.com/watch?...

ITFA is extremely popular and should be made permanent.

KOTFrank

Wow something done right by a politician. And again anotyhret reason Obama stinks and is truly not for the people (including his PEPFAR), but is for other politicians and then big business.


Administration Announces Obamacare Enrollment Numbers to Drop

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Posted by Alexander Hendrie on Tuesday, November 11th, 2014, 10:15 AM PERMALINK


Yet again the Obama administration has had to concede that the Affordable Care Act is not as popular amongst taxpayers as they have previously claimed.

In another fatal blow to the law, Health and Human Services Secretary Sylvia Matthews Burwell admitted that almost 30 percent less people will be covered by the exchanges than has been previously forecast, with as few as 9 million to have insurance by the end of 2015.

The latest forecast has also predicted that almost 20 percent of those who got coverage last year will not renew plans for 2015.

Although the low number can be partially explained by canceled plans, it is also a result of typical big government incompetence. HHS was forced to drop 112,000 immigrants who were unable to prove their eligibility.

The new forecast is far lower than the estimate of 13 million people covered that was provided by the Congressional Budget Office. HHS officials stated that they believe the CBO report was far too optimistic. 

It really shouldn’t be surprising that taxpayers are abandoning the failed exchanges. The controversial law has attracted negative press ever since the botched website rollout last year.  Even a year later it seems that administration officials haven’t figured out how to run a website. According to confidential reports, various contingency plans have been made to ensure that the frail healthcare.gov will function properly.

 

 

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Norquist Statement on Obama FCC Power Grab


Posted by ATR on Monday, November 10th, 2014, 2:51 PM PERMALINK


Americans for Tax Reform president Grover Norquist issued the following statement:

“It tells us everything that Obama launched this naked power grab to control the Internet mere days after the election. If he believed that this would be popular or good policy he could have done this six years ago, or five years, or fours years ago. He could have introduced legislation to actually rewrite the law that he’s now trying to change by his own personal fiat. Taxpayers and consumers will fight hard to stop this damaging power grab.”

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Grover Norquist Comments on Priorities for Republican-Controlled Congress

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Posted by Zoe Crain on Monday, November 10th, 2014, 1:36 PM PERMALINK


Rebecca Shabad of the Hill wrote an article speculating about the first priorities for a Republican-controlled Congress.

Grover Norquist, president of Americans for Tax Reform, said the Republican Congress should first quickly appoint a new director of the Congressional Budget Office (CBO) and get in place new leadership at the Joint Tax Committee, which is made up of the Senate Finance Committee chairman and the chairman of the House Ways and Means panel. CBO and that panel would be responsible for estimating the costs of tax reform legislation.

Passing tax reform through reconciliation, Norquist noted, would only allow the measure to last 10 years, short of the permanent fix Republicans say is necessary. 

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Wigglesworth

Comprehensive amnesty is dead no thanks to Grover and his corrupt paymasters.


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