ATR President Encourages Opposition to H.R. 1380, the NAT GAS Act
Click here to read the full letter.
Today, Americans for Tax Reform sent a letter to U.S. Representatives regarding H.R. 1380, the New Alternative Transportation to Give Americans Solutions Act, or NAT GAS Act. The letter encourages members to strongly oppose the legislation for its compilation of new rules, grants, and tax policies that only further skew the marketplace towards the energy sources favored by the federal government rather than consumers. An excerpt from ATR President Grover Norquist's letter:
Over the years, Congress and regulatory agencies have piled on rules and regulations in an attempt to nudge, or force, Americans to use lawmakers’ preferred energy sources. This compounding effect has skewed today’s energy market to the point where our most efficient energy sources are being phased out and replaced with unreliable, expensive alternatives.
Americans for Tax Reform believes that an energy market which most benefits consumers is one largely absent of government intervention. In order to achieve this goal, conservatives must begin peeling back the numerous duplicative regulations and laws that facilitate or impeded certain types of energy. Unfortunately, HR 1380 takes the opposite approach instead piling more rules, grants, and tax policies onto America’s already encumbered energy sector.
Congresspersons with a desire to cut taxes, a sentiment all Republicans should have, should not feel compelled to support HR 1380. There are any number of tax cuts which would reduce the government’s burden on Americans while not distorting our energy markets.
Show Notes: How Obama's Labor Department Gets Between You and Your Savings
In Episode 68 of The Grover Norquist show, Grover sits down with ATR’s Justin Sykes to discuss the Department of Labor’s (DOL) fiduciary rule, a rule that places the federal government between Americans and their retirement savings, and is a cornerstone of Obama’s regulatory regime.
Estimates show that the rule could disqualify up to 7 million IRA holders from investment advice and potentially reduce the number of IRAs opened annually by 300,000. Repealing this burdensome rule should be a priority of President-elect Trump.
Ohio Senate Must Act to Protect Citizens’ Property Rights in Civil Asset Forfeiture Bill
The state government of Ohio reinforced the power of law enforcement to seize money, cars, and other assets suspected of being connected in any way to a crime through civil asset forfeiture laws. Legislators realized this corruption, and the state’s House of Representatives passed a bill in May (with 72 to 25 votes in favor) to reform the practice in Ohio.
The Columbus Dispatch quoted Americans for Tax Reform President Grover Norquist when discussing the need for asset forfeiture reform:
“In criminal cases, the burden of proof rests with the prosecution to prove a defendant’s guilt. But in forfeiture cases, the property owner is put in a position in which he must prove that he obtained his property lawfully.”
H.B. 347 would limit state law enforcement’s coordination with the federal government unless the seizure is greater in value than $100,000. Doing this closes a loophole allowing local law enforcement to use federal standards when forfeiting assets. The legislation also requires a criminal conviction for the government to seize the property.
The bill would also end civil asset forfeiture for most cases were the property exceeds $25,000 in value.
In current Ohio law, officers can seize property from individuals without any criminal or formal charges. The legislature will use the bill proposed to protect Ohio property owners and reinstate due process for forfeited property.
According to the Institute for Justice, current Ohio forfeiture law has a low bar to forfeit, no conviction required, poor protections for innocent third party property owners, and close to 100% of proceeds from forfeitures streamlining back to law enforcement. IJ’s Policing for Profit report notes that forfeiture proceeds in the state averaged at $8,575,933 per year between 2010 and 2012, and it gives the state a D- for its current laws.
The legislation carries significant support from not only the legislature but Ohioans themselves. A poll from the U.S. Justice Action Network released in September 2015 showed that out of 500 registered Ohioans, 81% believed that asset forfeiture reform was essential for the state’s improvement.
Asset forfeiture is a bipartisan issue, and innocent property owners deserve to receive the due process protections guaranteed to them in the Bill of Rights. Americans for Tax Reform urges the Ohio Senate to stand with the state’s House of Representatives to reform civil asset forfeiture and protect its citizens’ rights.
If Rosenworcel Renominated, Trump & Republicans Lose the FCC
The Trump Administration has an amazing opportunity to affect tech and telecom policy. His appointments to the Federal Communications Commission will make all the difference in what has been a bitterly divisive and aggressive left-wing term under Chairman Tom Wheeler.
That is if he gets to make any appointments.
Senate Democrat Leader Harry Reid and President Obama are making a last ditch effort to control the Internet. They are circulating a petition to lift the hold on Commissioner Jessica Rosenworcel and have her reconfirmed next week just before Congress recesses.
Under this scenario, Republicans are on the verge of destroying one of the largest sectors of the economy. For what?
The best Trump and the Republicans can hope for is a 2-2 split on the FCC period. Wheeler has made it clear that he will not follow the tradition of the outgoing administration's chairman stepping down. Wheeler plans to stay. At least an even split would prevent them from forcing through more anti-free market regulations, and teach Wheeler to compromise.
A 2-2 split slows down the new commission’s ability to make reforms and reexamine the highly controversial, overbearing, partisan rulings from the last few years.
A 3-2 Democrat controlled FCC means the commission will immediately start pushing through regulations that Wheeler yanked from the Commission's November meeting agenda -- items that Chairmen John Thune, Fred Upton, and Greg Walden all asked Wheeler to hold off on. Wheeler refused to listen to any congressional guidance, be it from Republicans or Democrats, before President-elect Trump’s election.
If Rosenworcel is reconfirmed it is not to solidify the reconfirmation of Commissioner Ajit Pai. He has a year left in his term. With her reconfirmation the FCC stays under Democrat control under the Trump administration. And the President-elect is robbed of his ability to nominate two new commissioners.
The current commission should not be rewarded for its bad behavior. Just today an article in the Hill by Larry Spiwak detailed some of Tom Wheeler's shamefully partisan moves :
- Attempting to force non-profits filing in commission proceedings to reveal their donor lists in clear violation of Supreme Court precedent;
- Improperly coordinating with the White House to encourage mass "clicktivism" as probative evidence to support the FCC's controversial decision to reclassify broadband internet access as a Title II common carrier telecommunications service while deliberately ignoring any serious economic analysis of the issue;
- Hiring people for senior leadership positions at the commission even though they filed as interested parties in dockets they were later tasked with supervising, thus creating a serious conflict of interest problem;
- Illegally attempting to hold a Twitter town hall with an outside party to discuss a yet-to-be-released commission item during the Sunshine Act "quiet period";
- Only making public the results of an internal peer review critical of the FCC's economic analysis in the Business Data Services proceeding on the very day comments were due, thus depriving interested parties of an opportunity for meaningful comment;
- Continuing to lie to the American people that cable and satellite companies allegedly charge consumers $231 a year in set-top box rental fees, even though that number was thoroughly and publicly debunked;
- Improperly expanding the FCC's important merger review authority to impose conditions and "voluntary commitments" to serve select political constituencies and priorities that by any reasonable account had no nexus to any specific merger-related harm;
- And as perhaps the most partisan act Wheeler grasping the hands of his fellow Democratic commissioners and raising them high over their heads in a victory salute to a standing ovation after the Open Internet Order vote. Such childish behavior simply confirmed what every telecommunications professional already knew: Wheeler had no intention of conducting a dispassionate analysis and viewing all parties equally before the law. (I shudder to think what would happen if several justices of the Supreme Court were to do the same after a controversial ideological vote.)
Senate Republicans should not be making last minute deals with Obama and Harry Reid. They should continue to hold the line so that President Trump can name the new appointees to the commission.
This among other things is just why Mitch McConnell needs to get out of the way and let a real Republican head the Senate. He is weak and unfocussed. He should be able to keep others of his party "lined up" when the Democrats try to pull this kind of oBUMa crap.
Just do away with the FCC entirely and start over. A new Congress and President should be able to do that.
Just defund the FCC and pass retroactive legislation nullifying abhorant FCC rulings.The courts have no say in what congress funds.
Mnuchin: Dodd-Frank Reform “Number One Priority”
It was announced Wednesday that President-elect Donald Trump has tapped Steven Mnunchin, formally with Goldman Sachs, to the lead the Treasury. Following the announcement, Mnuchin wasted no time laying out his general priorities for financial services reforms in 2017, which included reforming the Dodd-Frank Act and the Volcker Rule in particular, easing the burden on regional banks, and potentially returning Fannie Mae and Freddie Mac to private control.
Appearing on CNBC’s “Squawk Box” Wednesday, Mnunchin expressed intentions to target the costly and burdensome Dodd-Frank Act, stating:
“The number one problem with Dodd-Frank is it’s way to complicated and it cuts back lending, so we want to strip back parts of Dodd-Frank that prevent banks from lending and that will be the number one priority on the regulatory side.”
Since enactment over six years ago, the Dodd-Frank Act has unleashed a slew of costly and burdensome regulations that have forced many community banks out of the market, chilled small business lending, and general reduced American financial competitiveness, among other problems.
Mnuchin will be in good company for prioritizing Dodd-Frank reform next year, as President-elect Trump has already vowed to “dismantle Dodd-Frank” and freeze or scrap other financial regulations such as the Department of Labor’s Fiduciary Rule.
President Trump and Mnuchin will have their work cut out for them somewhat, as House Financial Services Committee Chairman Jeb Hensarling has laid out a financial reform blueprint with the Financial CHOICE Act he introduced this year.
Hernsarling’s CHOICE Act looks to repeal burdensome regulations such as the Volcker Rule and Durbin Amendment, and rein in out of control regulators such as the Consumer Financial Protection Bureau and Financial Stability Oversight Council, in addition to a number of other reforms.
Photo credit: Woodley Wonder Works
CFPB Should Stop Work on Costly Arbitration Rule
Earlier this year the Consumer Financial Protection Bureau (CFPB) proposed a new rule that would harm both consumers and businesses. This rule would ban the commonly used arbitration clauses in consumer finance contracts.
A report published by the Competitive Enterprise Institute (CEI) examined the rule and how by banning these clauses the CFPB is effectively forcing consumers to forgo the quick and relatively cheap option of arbitration and instead pursue the long and more cumbersome process of filing class action lawsuits. Such lawsuits only benefit high-priced lawyers at the expense of both consumers and businesses.
CFPB Director Richard Corday describes arbitration clauses as “contract gotcha that effectively denies groups of consumers the right to seek justice”. However, this statement could not be further from the truth.
According to the CFPB’s own study, arbitration often results in better outcomes for consumers. Class action lawsuits on the other hand are only approved by the courts 20 percent of the time. Those lucky enough to be part of the 20 percent of approved cases must wait an average of 3 years in order to see any kind of settlement while those involved in arbitration wait an average of 6.9 months.
That CFPB’s study also found based on a survey of over the 400 class actions against financial firms, the average payout to class members was less than $2.00 a person, much lower than typical payouts under the arbitration process.
The arbitration rule is currently slated to be finished in 2017, but lawmakers are concerned the CFPB could look to push through the rule this year to circumvent President Trump blocking finalization. Such a “midnight regulation” from the CFPB would be ill advised and the Bureau should instead freeze its rulemaking on this issue and others until the new administration takes office.
Simply put, the arbitration rule is another example of the agency’s attempt to overregulate the financial services industry at the expense of consumers and businesses. In the 6 years that the agency has existed it has issued nearly 50 rules that have cost Americans and businesses billions of dollars in additional costs. Fortunately, next year consumers will have both a Congress and executive branch dedicated to protecting their interests and enforcing oversight of the CFPB.
Photo Credit: Brian Turner
Pro-Growth Reform Should Rollback or Remove Distortive Excise Taxes
A major goal of tax reform is eliminating or minimizing the extent to which the code picks winners and losers, with the end goal of a code that treats all economic decisions neutrally. This means removing any distortions in the tax code so that capital can form in the most productive way possible, resulting in more jobs, increased wages, and higher growth than may otherwise occur.
One broad way of achieving this is ensuring that businesses are taxed as equitably as possible by eliminating business credits in exchange for lowering rates within an across the board tax cut.
A different, more targeted way to achieve this goal is through the repeal of certain taxes, such as excise taxes. When it comes to alcohol excise taxes, this problem is especially noteworthy as the code currently taxes beer, wine, and spirits at different, arbitrary rates:
- Beer is subject to an $18 excise tax per barrel, with a reduced rate for the first 60,000 barrels produced by smaller brewers.
- Wine is subject to excise taxes between $1.07 and $3.40 per gallon, with a phased out credit for small wineries.
- Spirits are taxed at $13.50 per proof gallon, but with no reduced rate for smaller distillers.
This makes no sense, and is exactly the type of distortion that tax reform should aim to fix.
One possible path forward to undoing this inconsistent taxation is by passing the Craft Beverage Modernization and Tax Reform Act (S. 1562/H.R 2903), legislation sponsored by Senator Ron Wyden (D-Ore.) and Senator Roy Blunt (R-MO), and Congressman Erik Paulsen (R-MN) and Congressman Ron Kind (D-Wis.). The legislation is supported by a majority of both chambers -- 287 Congressmen and 52 Senators from both parties -- so there is clear consensus on the ideal path forward.
This legislation moves closer toward the goal of tax equity by ensuring the code treats beer, wine, and spirits in similar ways. In addition, it also equalizes the tax treatment of producers large and small.
By lowering rates, the Craft Beverage Modernization and Tax Reform Act achieves another key goal of tax reform – encouraging growth, jobs, and higher wages, through a more efficient system. It’s a basic principle that if you want more of something, you tax it less. Less income being diverted to federal and state governments means more resources left that can be invested by businesses in economically productive activity.
Excise taxes by their nature are counterproductive, because they have two competing goals. Lawmakers often justify these taxes as a way to clamp down on negative behavior, but the more successful they are at this goal, the less revenue they produce. In addition, they pick winners and losers by taxing a selective, narrow base, which distorts production and economic choices.
Tax reform that lowers rates and removes distortions is decades overdue. Removing credits, deductions, and discriminatory taxes – like alcohol excise taxes – must be a key component of pro-growth reform that increases wages, creates more jobs, and boosts economic growth.
The proposed bill would reduce the excise tax on domestic spirits producers by 80% for the first 100,000 proof gallons/year. The US and EU complained to the WTO about Colombia’s tax rates on booze. In defending against the complaint, Columbia could at least say that the different tax rates are based on the alcohol content, and not on national origin. The US does not even have that argument to justify the uneven playing field of taxing imports at five times the rate of domestic spirits producers.
ATR Statement on EPA’s Newly Released Fuel Economy Standards
Washington – ATR President Grover Norquist issued the following statement this week in response to the EPA’s unprecedented push to finalize strict new fuel-economy standards for 2022-2025:
“The EPA’s push this week to finalize burdensome and costly new fuel-economy standards is clearly an affront to the incoming Trump administration. The EPA’s actions disregard the appropriate and in-depth analysis needed to ensure that the new standards take into account fuel efficiency, affordability, and the impact on the economy.
“The overly strict standards proposed by the EPA will only make cars and trucks increasingly more expensive and unaffordable for American consumers. As a result, American families and workers will be forced to look to less efficient and less safe used cars and trucks.
“Such stringent and premature standards are unrealistic, and effectively put the government in between consumer choice and American mobility.”
Trump has his team looking at those regulations which are unduly oppressive and will be immediately withdrawn.
This one will probably be among the first to go.
ATR Statement on H.R. 34, the 21st Century Cures/Mental Health Reform Package
Congress will this week consider H.R. 34, “the 21st Century Cures Act.” This fiscally responsible legislation promotes medical innovation by streamlining the discovery, development, and delivery of medicines. It also reforms the nation’s failing mental health system to ensure millions of Americans receive the care they need. Members of Congress should have no hesitation supporting and voting “Yes” on this important legislation.
Fiscally Responsible: The 21st Century Cures package contains no tax increases, and all new spending is fully offset over the ten year window with corresponding spending cuts, as noted in an analysis by the Congressional Budget Office.
In all, H.R. 34 provides $6.3 billion in funding over the next ten years, including $4.8 billion to the NIH, $1 billion to combat opioid abuse, and $500 million to the FDA. Unlike the version of Cures passed last year, spending in the updated version is not mandatory, so Congress will retain necessary oversight over all spending.
More than half of the legislation’s spending is offset by rescinding funds from Obamacare’s unaccountable Prevention and Public Health Slush fund, a fund that has been used to push the Obama administration’s partisan agenda with non-existent congressional oversight. Other offsets include several changes to Medicare and Medicaid that will help promote the sustainability of these programs in the decades to come.
Promotes Medical Innovation: H.R. 34 devotes significant resources to streamlining the long process of medical innovation by reforming the discovery, development, and delivery of medicines and treatments.
Reforms include reducing regulatory red tape, breaking down barriers that restrict data sharing, speeding up clinical trials while increasing patient input, promoting new technologies, and expediting the review of potentially breakthrough devices.
While the resources needed to develop new cures are costly and time consuming, the potential savings to the broader healthcare system are significant. Updating the regulatory system governing the development of new medicines and treatments will ensure the U.S. remains a world leader in treatment, that the lives of millions will improve, and that costs will be minimized.
Reforms Failing Mental Health System: All too often, the U.S. mental health system fails to provide proper treatment to the millions that need it. The federal government spends roughly $130 billion on mental health each year, often with underwhelming and ineffective results. While there are 112 federal programs dedicated to addressing mental health, there is little, if any coordination. The Substance Abuse and Mental Health Services Administration (SAMSHA) has even been dubbed the “worse government agency”.
While there is need for change, the solution cannot be spending billions in a system is plagued by inefficiency and waste. Instead, H.R. 34 contains many important reforms that update the mental health system without spending any new money.
Specifically, the legislation reforms SAMSHA, creates more oversight and connectivity over the many programs and agencies involved in mental health and priorities evidence-based care that empowers caregivers, supports innovation, and advances early prevention programs.
In addition, the legislation creates more support for the mental health workforce, for on-campus mental health education, and for addressing substance use.
There is clear support for reforming our mental health system in this direction. Similar legislation, “the Helping Families in Mental Health Crisis Act” (H.R. 2646), sponsored by Congressman Tim Murphy (R-Pa.) passed the House of Representatives by an overwhelming vote of 422-2 earlier this year. Lawmakers should have no hesitation again supporting these important reforms.
Top 5 Financial Regulations Trump Should Repeal
Throughout his campaign Donald Trump pledged to repeal and “dismantle” burdensome financial regulations such as the Department of Labor’s (DOL) “fiduciary rule” and regulations enacted under the Dodd-Frank Act. Now that President-elect Trump has clinched the Whitehouse and has the backing of a Republican House and Senate, he now has the ability to act on his campaign pledge.
Looking ahead to 2017, there are five financial reforms that Trump can undertake to relieve the burdensome and costly regulatory impact left over from the Obama administration.
- Repeal the DOL’s Fiduciary Rule. Trump should look to repeal the DOL’s costly fiduciary rule before it takes effect April 2017. The massive rule spans over 1000 pages and reduces the ability of financial advisors to give advice to IRA and 401(k) holders. Estimates show the fiduciary rule could disqualify up to 7 million IRA holders from investment advice, and reduce the number of IRAs opened annually by up to 400,000.
- Repeal the Durbin Amendment. The Durbin Amendment, passed as part of the Dodd-Frank Act, requires the Federal Reserve to fix the price of fees charged to retailers for debit card processing. Prior to Dodd-Frank, issuers of debit cards received a fee from the merchant to offset the cost of running the debit card system. This has increased the cost of accepting debit cards for many small businesses, which in turn pass those costs onto consumers.
- Repeal the Volcker Rule. Passed as part of the Dodd-Frank Act, the Volcker Rule, named for former Federal Reserve Chairman Paul Volcker, limits the type of trading activities that banks can engage in, specifically proprietary trading (trading for ones own accounts). Volcker has since acknowledged however proprietary trading did not lead to the financial crisis, calling the justification behind the rule into question. As a result, U.S. financial institutions have become less competitive globally, the cost of raising capital for small businesses has increased, and market liquidity has been reduced.
- Stop or repeal the Arbitration Rule. The CFPB is currently racing to finalize the proposed Arbitration Rule before President Trump takes office in January. The proposed rule would ban arbitration clauses in consumer finance contracts such as those used by lenders and credit card companies. The rule would be a boon for trial attorneys and a burden for consumers. The CFPB’s own study found arbitration clauses result in better outcomes for consumers, with awards being given in a matter of months, while class-action awards take years and have average payouts of less than $2 per person.
- Reform the CFPB. The Consumer Financial Protection Bureau (CFPB) is the fastest rulemaking body in the federal government. Of the nearly 50 rules the CFPB has imposed, 26 of them have directly resulted in $2.8 billion in costs and 16.9 million hours of increased paperwork. Two primary CFPB reforms Trump can focus on are subjecting the bureau to Congressional oversight and shifting CFPB leadership from one unaccountable bureaucrat to a 5-member board.
Photo Credit: Gage Skidmore
IRS Employees Putting Taxpayer Info At Risk with Un-encrypted Emails
IRS employees sent numerous emails with unencrypted taxpayer data, in violation of the agencies email policies, according to a report by the Treasury Inspector General for Tax Administration (TIGTA). As the report notes, almost half of IRS employees sampled failed to abide by the agency’s email policies. Based on these findings TIGTA estimates that the information of more than 28 million taxpayers could be vulnerable.
Under IRs procedure, employees can only send emails containing taxpayer data if it is properly encrypted. As the report notes:
“IRS employees should never include taxpayer PII/tax return information in electronic mail (e-mail) messages or attachments unless an IRS-approved encryption technology is used.”
However, this was not the case. In a random sample of 80 employees, TIGTA found that 49 percent of employees, failed to follow IRS guidelines. As the report notes:
“39 (49 percent) employees sent a total of 326 unencrypted e-mails containing 8,031 different taxpayers’ PII/tax return information internally to other IRS employees or externally to non-IRS e-mail accounts.”
As the report notes, this poses a serious risk that taxpayer information will be improperly disclosed. The information sent in these emails included personally identifiable information and tax return information. Of most concern, TIGTA identified 51 emails that were sent to non-IRS e-mail accounts and an additional 20 that were sent to personal e-mail accounts.
TIGTA determined that this issue could affect more than 28 millions of taxpayers. According to the report:
“Based on our sample results, we estimate that 11, 416 SB/SE Division employees sent 95,396 unencrypted e-mails with taxpayer PII/tax return information for 2.4 million taxpayers during the four-week period of our sample. If this four-week period is typical, we estimate that more than 1.1 million unencrypted e-mails with taxpayer PII/tax return information of 28.2 million taxpayers could be sent annually.”
This is not the first time the IRS has left taxpayers in danger. In September, TIGTA released a report on the failure of the IRS to ensure the proper return of laptops that contained sensitive taxpayer information by contractors. TIGTA estimated that the IRS had failed to properly document the return of 84.2 percent, or more than 1,000 computers due to be returned by contract employees.
Additionally, last year there was a data breach that left hundreds of thousands of taxpayers’ information exposed after being warned by watchdog groups. Following the hack, TIGTA revealed that the IRS failed to implement 44 recommendations that would improve the IRS’s ability to protect taxpayer information from hackers. Of these 44, ten recommendations were over three years old.