Alexander Hendrie

Hillary's Death Tax Hypocrisy

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Monday, September 26th, 2016, 3:02 PM PERMALINK


Hillary has organized her own finances in a way to shield her estate from death taxes. 

Hillary Clinton has adopted the proposal of socialist Bernie Sanders to increase the top Death Tax rate to 65 percent.

 

Clinton previously called for a hike to the top Death Tax rate, from 40 to 45 percent, as part of a more than $1,000,000,000,000 (one trillion) net tax increase on the American People over the next ten years. The true net tax hike figure is likely much higher because Clinton’s campaign has not released specific details for many proposals. To date, the campaign has proposed multiple capital gains tax hikes, an income tax increase, a business tax increase, a tax on stock trading, an "Exit Tax" and even a “fairness” tax.

Clinton’s tax plan offers no tax rate reduction for any individual or business.

And now, Hillary is proposing Death Tax brackets of 50 percent, 55 percent, and 65 percent.

As noted by the Wall Street Journal:

The left claims only the super-wealthy will pay high rates, but the Sanders plan that Mrs. Clinton is copying did not index exemption levels for inflation. One reason a bipartisan movement emerged to reform the death tax in the 1990s was because the then 55% rate engulfed ever more taxpayers over time. Mrs. Clinton would also end the “step-up in basis” on stock valuations for many filers, triggering big capital gains taxes for a much broader population.

She also knows most of her rich friends will set up foundations, as she and Bill Clinton have, to shelter most of their riches from the estate tax. As Americans have learned, these supposed charities can be terrific vehicles for employing political operatives while they wait for Chelsea to run for the Senate.

While Hillary continues to push for a steep Death Tax on the American people, when it comes to her own finances, it is a different story. Clinton’s newly released tax returns show she still uses tax avoidance strategies to shield her Death Tax liability.

According to a 2014 report by Bloomberg News, the Clintons created trusts in 2010 and shifted ownership of their New York home to it in 2011. In doing so, they will avoid paying hundreds of thousands of dollars in future death taxes.

As Bloomberg reports:

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

But Hillary Clinton’s official campaign website, in calling for a steep Death Tax hike, scolds:

She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are.

Oh! Let’s go back to the Bloomberg article:

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”

Interesting.

Clinton said that “the estate tax has been historically part of our very fundamental belief that we should have a meritocracy.”

The newly released Clinton tax return shows the continued use of an Article 4 Trust, as shown on Schedule E, page 2.


Hillary has a long history of opposing Death Tax relief:

- In 2001, Clinton voted no on H.R. 1836, “the Economic Growth and Tax Reconciliation Act,” which contained a series of tax cuts, one of which increased the Death Tax exemption level to $3.5 million.

- In 2005, Clinton voted no on H.R. 8, “the Death Tax Repeal Permanency Act of 2005,” which fully repealed the Death Tax.

- In 2006, Clinton voted no on H.R. 5970, “the Estate Tax and Extension of Tax Relief Act of 2006,” which increased the Death Tax exemption level to $5 million.

- In 2008, Clinton voted no on S.Amdt.4191, legislation to increase the Death Tax exemption level to $5 million.

To learn more about Hillary’s tax hike plan, visit ATR’s dedicated website,www.HighTaxHillary.com

Photo Credit: 
https://imgflip.com/memegenerator/63852085/Hillary-Clinton-Grim-Reaper

More from Americans for Tax Reform

Top Comments


Hillary Calls for 65% Death Tax

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Friday, September 23rd, 2016, 10:46 AM PERMALINK


Hillary Clinton has adopted the proposal of socialist Bernie Sanders to increase the top Death Tax rate to 65 percent.

Clinton previously called for a hike to the top Death Tax rate, from 40 to 45 percent, as part of a more than $1,000,000,000,000 (one trillion) net tax increase on the American People over the next ten years. The true net tax hike figure is likely much higher because Clinton’s campaign has not released specific details for many proposals. To date, the campaign has proposed multiple capital gains tax hikes, an income tax increase, a business tax increase, a tax on stock trading, an "Exit Tax" and even a “fairness” tax.

Clinton’s tax plan offers no tax rate reduction for any individual or business.

And now, Hillary is proposing Death Tax brackets of 50 percent, 55 percent, and 65 percent.

As noted by the Wall Street Journal:

The left claims only the super-wealthy will pay high rates, but the Sanders plan that Mrs. Clinton is copying did not index exemption levels for inflation. One reason a bipartisan movement emerged to reform the death tax in the 1990s was because the then 55% rate engulfed ever more taxpayers over time. Mrs. Clinton would also end the “step-up in basis” on stock valuations for many filers, triggering big capital gains taxes for a much broader population.

She also knows most of her rich friends will set up foundations, as she and Bill Clinton have, to shelter most of their riches from the estate tax. As Americans have learned, these supposed charities can be terrific vehicles for employing political operatives while they wait for Chelsea to run for the Senate.

While Hillary continues to push for a steep Death Tax on the American people, when it comes to her own finances, it is a different story. Clinton’s newly released tax returns show she still uses tax avoidance strategies to shield her Death Tax liability.

According to a 2014 report by Bloomberg News, the Clintons created trusts in 2010 and shifted ownership of their New York home to it in 2011. In doing so, they will avoid paying hundreds of thousands of dollars in future death taxes.

As Bloomberg reports:

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

But Hillary Clinton’s official campaign website, in calling for a steep Death Tax hike, scolds:

She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are.

Oh! Let’s go back to the Bloomberg article:

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”

Interesting.

Clinton said that “the estate tax has been historically part of our very fundamental belief that we should have a meritocracy.”

The newly released Clinton tax return shows the continued use of an Article 4 Trust, as shown on Schedule E, page 2.


Hillary has a long history of opposing Death Tax relief:

- In 2001, Clinton voted no on H.R. 1836, “the Economic Growth and Tax Reconciliation Act,” which contained a series of tax cuts, one of which increased the Death Tax exemption level to $3.5 million.

- In 2005, Clinton voted no on H.R. 8, “the Death Tax Repeal Permanency Act of 2005,” which fully repealed the Death Tax.

- In 2006, Clinton voted no on H.R. 5970, “the Estate Tax and Extension of Tax Relief Act of 2006,” which increased the Death Tax exemption level to $5 million.

- In 2008, Clinton voted no on S.Amdt.4191, legislation to increase the Death Tax exemption level to $5 million.

To learn more about Hillary’s tax hike plan, visit ATR’s dedicated website, www.HighTaxHillary.com

Photo Credit: 
https://imgflip.com/memegenerator/63852085/Hillary-Clinton-Grim-Reaper

More from Americans for Tax Reform

Top Comments

Roger Reid

Rich Democrats pay the same tax as rich Republicans. The difference is rich Democrats lie about what they are doing and pass tax laws that don't directly apply to them and eventually trickle down to the middle class. A family farm or small business, for instance, can be worth millions on paper but be very cash poor. Inheritors are on the hook for the death tax based on value.


Hillary Calls for Another Capital Gains Tax Increase

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Friday, September 23rd, 2016, 9:42 AM PERMALINK


Hillary Clinton this week called for another increase in the capital gains tax. Clinton proposed limiting the use of “like-kind exchanges,” a provision allowing investors to pay taxes on certain types of capital gains only when they cash out — not if they choose to reinvest earnings into another asset.

The capital gains tax hits income that has already been subjected to income taxes and has been reinvested to help create jobs, grow wages, and increase economic growth. This income should not be taxed and studies have shown that even supposedly modest increases would have strong adverse economic effects.

For instance, repeal of like-kind exchanges would cost the U.S. economy as much as $13.1 billion in lost GDP in the long term, according to a study by Ernst and Young.

The left always derides the capital gains tax as a “loophole” by big government that ought to be repealed. Going after provisions such as like-kind exchanges is another step toward the long term goal of taxing all capital gains as ordinary income.

Hillary has already called for several capital gains tax increases. First, she would create the most byzantine capital gains tax with six brackets for those whose total taxable income puts them in the 39.6 percent bracket. This proposal is supposed to fix the problem of short-term investment, even though investors make decisions based on value, not length of time. Her campaign has not said how much this will increase taxes.

Clinton has also proposed raising taxes on “carried interest” capital gains earned by investment partnerships. Carried interest capital gains are indistinguishable from any other type of capital gain because individuals that derive income from carried interest pay the same capital gains taxes rates as everyone else, as they should. It is not a loophole in any way.

In all, Hillary has proposed at least $1 trillion in new taxes based on the campaign’s own figures. The true Clinton net tax hike figure is likely much higher because her campaign has failed to release specific details for many of her proposals.

She has called for an income tax increase, a business tax increase, a death tax increase, a tax on stock trading, an "Exit Tax" and even a “fairness” tax. In addition, she has refused to rule out a carbon tax and a top advisor has suggested there is no need to lower the corporate rate, even though the U.S. has the highest rate in the developed world.

Photo Credit: 
http://bit.ly/2cWyqSy

More from Americans for Tax Reform

Top Comments

West_Coast

F uck Hillary.


Obama Administration Pushing Unilateral Death Tax Increase

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Friday, September 23rd, 2016, 9:00 AM PERMALINK


In his final months of office, President Obama is set to unilaterally increase the scope of the Death Tax. Rather than make this tax more burdensome and confusing, the administration should work with Congress to repeal the unpopular tax.

Earlier this month, the Treasury Department announced a new rule affecting section 2704 of the tax code. The rule limits the use of two valuation discounts that families can take when assessing their Death Tax liability – a lack of control discount and a lack of marketability discount.

A lack of control discount can be claimed when a family holds a minority ownership stake in an asset, resulting in the asset holding less value on the open market.  A lack of marketability discount applies when an asset held by the family cannot easily be liquidated because of market barriers.

The proposed Treasury rules make it much more difficult for families to claim these two provisions. As a result, the rule would increase the Death Tax for many families.

The rule has drawn opposition from lawmakers, led by Congressman Warren Davidson (R-Ohio) who recently introduced the “Protect Family Farms and Businesses Act.” This legislation, which would block the unilateral stealth Death Tax increase is a good, conservative bill and should be supported and co-sponsored by all Members of Congress. 

The rule has also drawn opposition from a broad coalition of 119 business and free market groups including ATR that yesterday sent a letter to Treasury Secretary Jacob Lew in opposition to the proposed rule.

At a basic level, Americans know that the Death Tax is not fair. It is a tax you pay on savings you have already paid taxes on at least once, and potentially more than once. Those who are hit hardest generally are first and second generation small business owners, because the truly wealthy can avoid the tax through an army of accountants, attorneys, and charitable planners.  

The Death Tax is also bad for jobs and the economy. According to the Tax Foundation, repealing the Death Tax would create 159,000 jobs and significantly increase wages, GDP, and capital investment.

The intense opposition to the Death Tax is unquestionable. In poll after, the Death Tax has consistently been opposed by nearly 70 percent of adults, registered voters, and likely voters. The House of Representatives even voted to repeal the Death Tax last year with a bipartisan vote of 240-179.

Rather than listen to the will of the people and support Death Tax repeal, the Obama Administration wants to make the Death Tax more complex and burdensome on American families.

 

Photo Credit: 
https://www.flickr.com/photos/preya/

More from Americans for Tax Reform

Top Comments


Bill Clinton Says Cut the Corporate Rate, Hillary Says No

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Wednesday, September 21st, 2016, 4:28 PM PERMALINK


Former President Bill Clinton today called for reducing the U.S. corporate income tax rate to a globally competitive rate. Clinton is wise to do to so because America has the highest tax rates for businesses in the developed world. Lowering business taxes to a globally competitive rate will allow our businesses to compete against foreign competitors and put a stop to corporate inversions and foreign acquisitions of American assets.

As reported by CNBC, Clinton called for the rate to be lowered to be closer to the average of the developed world:

"I was the president who urged it to be raised to 35 percent, but when I did it, it was precisely in the middle of OECD countries. It isn't anymore."

In contrast, Hillary Clinton has suggested there is no need to lower the corporate rate. Advisor Neera Tanden recently suggested that Hillary would oppose any effort to lower the corporate income tax rate because “the U.S. has been doing pretty well when it comes to competitiveness."

This position puts the campaign far outside the mainstream of both Democrats and Republicans including President Barack Obama and Speaker Paul Ryan who have called for lowering the 35 percent federal income tax rate to a more globally competitive rate. Democrats have called for a lower rate as part of a net tax increase, while Republicans cut taxes for all families and businesses.

“Bill Clinton has staked out the obvious commonsense position that we can’t compete with a 35 percent rate,” said Grover Norquist, president of Americans for Tax Reform. “Most Democrats want a rate cut as but only as part of a large net tax increase. Hillary not only wants a massive tax increase, she is opposed to a rate cut. She is wildly to the left on this issue.”

Rather than reduce the extremely high, uncompetitive corporate tax rate, Hillary has proposed an “exit tax.”  The term “exit tax” is used by the campaign itself. Her campaign document describing this proposal says it will impose an $80 billion tax increase.

The Clinton campaign has called for at least $1 trillion in higher taxes including a $275 billion tax hike through unspecified “business tax reform.” Her campaign has failed to release specific details on these proposals so the true Clinton net tax hike figure is likely much higher than $1 trillion

Clinton’s refusal to acknowledge and address America’s high business tax rates will ensure that America’s competitiveness problem remains unresolved.


Chart by Strategas Research Partners using Tax Foundation and OECD data

As shown in the chart aboveAmerica’s corporate income tax rate is close to 15 percent higher than the average in the developed world. The tax rate has barely changed since tax reform was passed 30 years ago in 1986.  At the time, we lowered our rate to 39 percent – below the developed average of 44 percent. Since then, other countries have cut their rates aggressively.

31 of the 34 OECD countries have reduced their corporate rates since 2000. Only the U.S. and Chile have higher corporate tax rates than they did in 2000. Our high rate makes it difficult, if not impossible for our businesses to compete with competitors that have much lower rates Canada (26.3 percent), the United Kingdom (20 percent), and Ireland (12.5 percent).

This inaction has resulted in close to 50 American businesses leaving the country through an inversion in the past decade, according to data compiled by Democrats on the Ways and Means Committee. America has also lost an additional $179 billion worth of assets through acquisitions by foreign competitors, according to a report by Ernst and Young.

Clearly there is a need to reduce business taxes, both to reduce the burden on American businesses and to allow them to compete with foreign competitors. Bill Clinton clearly understands this issue, but Hillary Clinton’s plan would only make the tax code more complex and burdensome for American businesses.

Photo Credit: 
http://bit.ly/2d9KjCg

More from Americans for Tax Reform

Top Comments


Koskinen's IRS May Still Be Targeting Conservative Groups

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Tuesday, September 20th, 2016, 2:11 PM PERMALINK


IRS Commissioner John Koskinen will appear before the House Judiciary Committee to defend himself against impeachment charges following his role in the Lois Lerner targeting scandal.

 
 

Koskinen was appointed to lead the IRS after promising to bring transparency and openness to the embattled agency. He has failed.

Serious internal control flaws mean the IRS may still be unfairly selecting Americans for an audit “based on an organization’s religious, educational, political, or other views,” according to a pair of reports released by the Government Accountability Office (GAO) last year.

 

As GAO notes, certain deficiencies increase the risk of unfair audit selection based on a taxpayer's First Amendment rights. As the report finds:

“The control deficiencies increase the risk of selecting organizations for audit in an unfair manner—for example, based on an organization’s religious, educational, political, or other views.”

GAO audited Wage & Investment (W&I) and Small Business/Self-employed (SB/SE) divisions in response to a request from House Ways & Means Committee members led by Chairman Kevin Brady (R-Texas) and Oversight Subcommittee Chairman Peter Roskam (R-Ill.).

These requests were made in response to IRS targeting conservative groups. This targeting resulted in just one conservative non-profit being granted tax exempt status over a three year period.

As Chairman Brady and Roskam note, selection flaws mean the IRS is failing to apply tax law in a fair and equitable manner. The Ways & Means Committee summarized the findings of each report, as found below:

GAO Report on Small Business/Self Employed Unit

  • GAO found that the IRS does not have strong internal controls and did not have consistent procedures for documenting audit selection decisions, which increases the risk of unfair audit selection.
  • GAO concluded that “the lack of strong control procedures increases the risk that the audit program’s mission of fair and equitable application of the tax laws will not be achieved.”


GAO Report on Wage & Investment Unit

  • Similar to the other business units, GAO found that the Wage & Investment unit did not always document how cases were selected for audit.
  • GAO found that the IRS did not provide support for changes in selection processes and procedures.
  • GAO also found that the IRS does not conduct continuous reviews of its audit selections, and instead only reviews it once a year.
  • GAO concluded that internal controls should be strengthened to “provide greater assurance that W&I is fulfilling its mission to select tax returns with fairness and integrity.”
Photo Credit: 
https://www.flickr.com/photos/teegardin/

Top Comments


Koskinen's IRS Failed to Search Five of Six Locations for Lois Lerner Emails

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Monday, September 19th, 2016, 5:04 PM PERMALINK


IRS Commissioner John Koskinen will appear before the House Judiciary Committee to defend himself against impeachment charges following his role in the Lois Lerner targeting scandal.

Koskinen was appointed to lead the IRS after promising to bring transparency and openness to the embattled agency. He has failed.

The IRS failed to search five of six possible sources of electronic media for Lois Lerner’s emails, according to documentation released by the House Oversight Committee in July 2015.

Over the course of investigations into the Lois Lerner targeting scandal, Commissioner John Koskinen repeatedly assured Congress that he would provide all of Lois Lerner’s emails. But based on testimony from the Treasury Inspector General for Tax Administration (TIGTA), this did not occur. The agency’s ineptness -- or corruption -- resulted in 24,000 Lerner emails being lost when they were “accidently” destroyed. 

According to TIGTA official Timothy Camus, the IRS had six possible sources to search for Lois Lerner’s emails:

“The hard drive would have been a source, Blackberry source, backup tapes a source, the backup tapes for the server drives and then finally the loaner lap tops.”

When asked how many of these sources the IRS searched, Camus was unable to say for certain whether the IRS had searched for any. While Camus did acknowledge that agency employees initially checked her hard drive, it appears that more could have been done to recover data from this source. Instead, all data was deemed unrecoverable after a brief search:

“We’re not aware that they searched any one in particular. They did – it appears they did look into initially whether or not the hard drive had been destroyed, but they didn’t go much further than that.”

The agency’s refusal to conduct due diligence in its search for Lerner’s emails meant that 1,000 emails were not found until TIGTA searched backup tapes. When asked why the IRS did not give these emails to Congress, Camus said it was because the agency never looked for them in the first place:

“To the best we can determine through the investigation, they just simply didn’t look for those emails.”

Commissioner Koskinen stated that the IRS took “extraordinary efforts” to recover any emails, but this is clearly not the case. Years after the investigations into the Lois Lerner targeting scandal began, the agency’s unprecedented obstruction has meant Americans are no closer to the truth.

Photo Credit: 
Becky McCray, https://www.flickr.com/photos/bjmccray/

Top Comments

Jim Irish

The solution to the gross malfeasance of the IRS is not to reform the federal agency but to dismantle it brick by brick and then adopt a Fair Tax.

chiefpontiac

There is no such thing as a lost email. These systems are redundant just in case there is a system crash. And, as a last resort there are digital backup tapes that are used to store information. Also, whichever company was used as a spam filter, they have copies of everyone's emails as well...So this lame idea that emails can be lost is an insult to everyone's intelligence, even the low information Democrat Party voter...

jim mayer

So let's see, TruePundit reports "Documents appear to implicate State Dept. in cover-up on Clinton emails" Get that? An entire Government Agency committing crime to shield one of their own.

Here they report IRS is guilty of corruption to protect one of their former power abusers.

At DOJ, Loretta Lynch kisses the ring in Phoenix and promises the one who hired her that she would protect the Queen at any cost.

At FBI, James Comey's formerly esteemed reputation has finished circling the toilet bowl drain as he finds himself now trying to explain why he refused to pursue criminality so egregious, with a cache of damning evidence so overwhelming one might need to back a semi up to the courthouse steps to unload all of it.

Health Human Services Secretary Kathleen Sebelius is being paid for the rest of her life for creating a disaster... You know I could go on for hours.
This country is so depressed right now and they don't know why. The cognitive dissonance, the inability to recognize the unmistakable source of the problem.... is us, the voting public.

We are becoming a Godless people electing Godless people. The coming storm won't be a random act, we are bringing the rain down upon our own heads. Unfortunately, the rain will fall upon the righteous as well as the unrighteous.


Obama Debt-Equity Rules Will Reduce Investment and American Competitivenes

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Wednesday, September 14th, 2016, 10:00 AM PERMALINK


Soon to be finalized Debt-Equity regulations promulgated under Section 385 of the tax code will restrict the ability of American businesses to compete overseas and make routine investment and financing decisions. For decades, businesses have structured themselves around existing rules that differentiated the tax and legal treatment of debt and equity.  

Now, these new regulations will empower the IRS – an agency that has become increasingly dysfunctional and politicized over the past eight years – with the authority to enforce confusing and complex new rules on American businesses. Despite the objections of Democrats, Republicans, and former Treasury officials, President Obama is set to unilaterally rush through these new rules in the twilight of his presidency, with little thought to how they will affect businesses.

As examined in a report by PricewaterhouseCoopers, Section 385 regulations will impact internal business transactions related to both inbound (foreign business operating in the U.S.) and outbound (U.S. businesses operating overseas) transactions.

The new rules will give the IRS extensive power over common transactions used by businesses to transfer assets across subsidiaries, including transactions used to financing the construction of a new factory in the U.S. by shifting cash across subsidiaries through a loan, or any routine transferring of cash across subsidiaries for finance purposes. Under the proposed rules, IRS bureaucrats have near unlimited authority to reclassify transactions as they see fit. 

As noted by PwC, Section 385 regulations will increase the costs of transactions in a way that is comparable to hiking the corporate income tax rate. In turn, this will result in less money invested in the economy, slow the already stagnant U.S. economic growth, and further encumber the creation of new jobs.

Already, American businesses are struggling to compete with the rest of the world because of our out-of-date, overly complex tax code. As shown in the chart below, America’s corporate income tax rate is close to 15 percent higher than the average in the developed world. The tax rate has barely changed since tax reform was passed 30 years ago in 1986.  At the time, we lowered our rate to 39 percent – below the developed average of 44 percent. Since then, other countries have cut their rates aggressively, yet U.S. lawmakers have failed to do the same for our code.


Chart by Strategas Research Partners using Tax Foundation and OECD data

Our failure to lower our corporate rate to a competitive level and to modernize the system of international taxation has resulted in close to 50 American businesses leaving the country through an inversion in the past decade, according to data compiled by Democrats on the Ways and Means Committee. America has also lost an additional $179 billion worth of assets through acquisitions by foreign competitors, according to a report by Ernst and Young.

While there is a clear need for pro-growth tax reform, the proposed regulations will take the tax code in the other direction. The regulations will increase compliance costs and the cost of capital, making new investment more difficult and make harder for American businesses to compete with foreign competitors. 

Photo Credit: 
https://www.flickr.com/photos/preya/

More from Americans for Tax Reform

Top Comments


Feds Neglect Obamacare Oversight

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Tuesday, September 13th, 2016, 2:18 PM PERMALINK


The Obama Administration has failed to conduct oversight over the $5.5 billion taxpayer funded Obamacare state based exchanges according to a report by House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Oversight Subcommittee Chairman Tim Murphy (R-Pa.). The Centers for Medicare and Medicaid Services (CMS) has imposed zero consequences on state exchanges that have closed and has failed to say they will in the future.

Instead, CMS appears to be encouraging state exchanges to close and join the federal system without consequence. The federal government is even turning a blind eye to exchanges using taxpayer dollars in violation of federal law and is allowing failed exchanges to keep millions in user fees intended to fund the federal exchange.

Starting in 2010, the federal government awarded $5.5 billion to states to plan and construct state based Obamacare exchanges. In total, 17 states decided to proceed with construction and they received more than $4.5 billion of this total. Since then, exchanges have encountered numerous challenges including lower than expected enrollment, higher costs, and failed IT systems.

Despite this, the federal government has failed to conduct virtually any oversight over failed or failing state exchanges, a list that includes exchange Oregon, Hawaii, Vermont, Minnesota, Hawaii, Maryland, Massachusetts, Nevada, and New Mexico.

Failed to Conduct Oversight Over State Exchanges

As the report notes, CMS is responsible for conducting oversight over state exchanges. However, the federal government has failed to ensure state exchanges published operational costs as required by law, failed to enforce laws prohibiting improper use of federal funds, and has failed to implement recommendations from government watchdogs.

To date, the federal government has recovered just $1.6 million in federal funds. $1 million of this comes from construction costs that CMS failed to detect for more than one year.

Failed to Ensure State Exchanges are Self-Sustaining

Under federal law, Obamacare state exchanges were required to be self-sustaining after December 2014. The $4.5 billion in federal taxpayer dollars could only be used for “establishment” expenses, not operational costs (maintenance, rent, personnel costs etc.). Section 1311 of Obamacare is clear in this regard:

“In establishing an Exchange under this section, the State shall ensure that such Exchange is self-sustaining beginning on January 1, 2015, including allowing the Exchange to charge assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operations.”

In violation of this law, every state exchange is still using federal funds 20 months later. As the report notes:

“As of September 2016, every SBE still relies upon federal establishment grant funds—20 months after SBEs were to be self-sustaining by law.”

Allowing Failed Exchanges to Keep User Fees

States utilizing the federally run Healthcare.gov for their Obamacare exchanges are typically levied a 3.5 percent fee for operational costs. Instead of charging failed state exchanges this same fee to use the federal system CMS has allowed the four failed state exchanges – Oregon, Hawaii, New Mexico & Nevada – to use Healthcare.gov for free and keep user fees they have collected. In 2015, Oregon collected $10.5 million in fees, which the state is free to keep. 

Failed to Prevent Cover Oregon Debacle

As noted in a recent report released by House Oversight Committee Chairman Jason Chaffetz (R-Utah), the federal government failed to conduct any oversight over the failed $305 million taxpayer funded Cover Oregon Obamacare exchange. This absence of federal oversight occurred even as the state’s independent quality assurance manager, Maximus, flagged the state exchange as “high risk.”

In the months and years ahead of the October 1, 2013 launch date, CMS officials were glowing in their praise of Cover Oregon, even awarding the state additional funds. Concurrently, Maximus was raising red flags about the progress of the project. 

In hindsight, Maximus was right -- the Cover Oregon exchange was in poor health as was proven when it failed to work by its scheduled launch date – or for months after this deadline.

At the time, Oregon officials believed they were close to a working product by April 2014 after months of hard work. However, political advisors for then-Governor John Kitzhaber wanted the problem to go away ahead of his November reelection. As that report found, these advisors quietly manipulated the project so it would fail, and the state would be forced to join the federal Obamacare system.

Misled Congressional Investigators on Recovery of Wasted Taxpayer Dollars

Earlier this year, congressional investigators released a report debunking Slavitt’s claim that his agency had recovered $200 million in wasted Obamacare state exchange funds. Slavitt made this claim while under oath during a December 8, 2015 hearing.

Congressional investigators could not verify this figure, and over a ten-week period, CMS staff were contacted seven times with requests for information verifying Slavitt’s $200 million claim. Many of these inquiries were ignored, and when documentation was finally received CMS could only account for the return of $21.5 million in “de-obligated” funds, money that was leftover from expired grants.

Contrary to Slavitt's assurances, it appears that federal efforts to recover funds has been non-existent.

Photo Credit: 
Daniel Rehn

More from Americans for Tax Reform

Top Comments


NAFTA is a Free Trade Success Story


Posted by Alexander Hendrie on Tuesday, September 13th, 2016, 2:00 PM PERMALINK


According to both major presidential candidates, the North American Free Trade Agreement (NAFTA) has caused economic destruction resulting in lost U.S. jobs and growth over the past two decades. Both Hillary Clinton and Donald Trump have even suggested that it should be revisited to ensure America gets a better deal. The truth is, NAFTA has been a positive economic force and it should serve as proof to pass more free trade agreements.

Free trade agreements are fundamentally about reducing barriers that impede international commerce. Typically, this involves two or more countries removing discriminatory tariffs, trade quotas, and other regulations on a reciprocal basis.

This is beneficial for two reasons. First, fewer barriers on American exports means less money taken by foreign governments out of the pockets of workers and business owners seeking to trade overseas. Second, fewer barriers on imports into the U.S. results in more competition and access to a greater range of products at lower prices for consumers across the country. In all, more than 1 in 5 American jobs are tied to trade, and these workers earn 16 percent more than jobs in industries not tied to trade.

NAFTA is no exception. The trade agreement has supported more than six million high paying jobs, has increased income for workers, and has contributed to increasing economic efficiency in North America. In the two decades since NAFTA went into effect, trade with Canada and Mexico increased by almost 350 percent to $1.2 trillion, while manufacturing exports have increased 258 percent.

Despite these facts, critics of NAFTA allege that the agreement opened the door to outsourcing. Not true, according to a study by the Heritage Foundation. Since NAFTA went into effect, manufacturing has become 42 percent more productive and workers have earned 21 percent more. Of jobs that have been lost to foreign competitors, most have gone to Asia, so cannot be attributed to NAFTA. American workers productivity has increased by more than 80 percent in the past 25 years, and workers earn $15,000 more than the average U.S. worker.

It is also untrue to characterize NAFTA-induced investment in foreign countries as a loss for American workers. As a study by the Peterson Institute for International Economics found, every 100 U.S. manufacturing jobs created in Mexico supported 250 American jobs. In all, nearly two million jobs across the U.S. depend on trade with Mexico. 

Rather than withdrawing from trade, presidential candidates should ensure the U.S. does not fall behind in the global economy.  There are currently over 400 free trade agreements in the world, yet the U.S. is part of just 14 and is the top trading partner with just over 20 countriesOne of our biggest competitors in the developed world – the European Union – has agreements with over 50 countries and is the top trading partner with 80 countries. 

Our inaction will only empower other competitors like China, which has 11 agreements with 18 countries, to catch up with the U.S. and set the rules of global commerce. China is negotiating its own agreement with countries in South East Asia,  so they have a prime opportunity to set the economic rules of the region if the U.S.-led Trans-Pacific Partnership stalls.

NAFTA has clearly been beneficial to the U.S. economy. Similarly, there should not be any doubt of the need for the U.S. to pursue more free trade agreements. Doing so will benefit workers, businesses, wages, and jobs.

 

Photo Credit: 
https://www.flickr.com/photos/basileflickr/

More from Americans for Tax Reform

Top Comments

kidcat24

Yeah, left wing on a right wing website.

BackwardsBoy

This article is nothing but far-left-wing globalist propaganda. NAFTA is responsible for destroying the careers of millions of hard working Americans and should never have been signed into law by Bill Clinton.


Pages

hidden
×