ATR and Digital Liberty Support Comcast/TWC Merger
On Monday, Americans for Tax Reform and Digital Liberty supported a coalition letter to the Senate Judiciary Committee in support of the Comcast and Time Warner Cable (“TWC”) merger, and more generally, allowing commercial enterprises to organize and operate freely in a market economy.
There is no evidence that the Comcast/TWC merger would create any actual or potential market failure. Indeed, customers stand to gain. Comcast offers its customers broadband internet speeds that are anywhere from two to ten times faster than TWC, and Comcast has gone on record stating it plans to upgrade TWC’s slower networks. Additionally, Comcast offers more streaming, high definition, on demand, and mobile video options than TWC. Combining the companies could bring significant improvements in these areas to TWC customers.
Some opponents of the merger worry that it will provide Comcast with a monopoly on Internet broadband service. However, their concerns are misplaced. Post-merger, Comcast would have a 20 percent market share, hardly a monopoly. The proposed Comcast/TWC transaction will not monopolize the industry or impair competition. Instead, it will provide current TWC customers with more options and better service.
To read the full letter, click here.
Obama's "16 Sweetest Reasons to Get Covered" Truly Putting the 'Madness' in March Madness
March Madness is around the corner, and Obamacare is just in time to put a damper on all the fun. That’s right, the White House is dumping loads of resources into a March Madness media campaign, teaming up with basketball stars like Lebron James. And just when we thought that the White House couldn’t be more tacky, they’ve created their own bracket called “The 16 Sweetest Reasons to Get Covered,” where people can vote for their favorite thing about Obamacare, illustrated with GIFs. Below are some of the bracket choices, and why they are actually a raw deal for American taxpayers.
Ah, another Obama policy aimed at “fairness.” But if Obama was really concerned with fairness, women would pay more for healthcare simply because women use more healthcare. Women tend to be smaller, and more prone to injuries. Women visit their doctor more frequently. They take advantage of preventative screenings more often than men. Maternity and newborn care alone costs on average over $32,000 per child! And to top it off, women live longer, and therefore consume more costly healthcare in their old age. So why shouldn’t they pay more?
Just because patients aren’t paying for their birth control doesn’t make it free. Pharmaceutical companies aren’t going to freely hand out contraceptives like Halloween candy. Someone is paying for it—and that someone is the taxpayers, either through taxpayer funded subsidies or higher premiums. Worse yet, it is expected that birth control costs will increase under the contraceptive mandate. Because birth control is provided at no cost to the patient, there is no incentive to choose the generic brand over the name brand. The forces of competition will no longer apply, putting upward inflationary pressure on the price of birth control. The contraceptive mandate just forks over more taxpayer money to drug companies.
Do you live a healthy lifestyle? Do you eat your vegetables and exercise? Do you make good choices like limiting your alcohol consumption and not smoking? Because of your healthy lifestyle, you are less at risk for heart disease, cancers, stroke, diabetes, and a slew of other highly preventable illnesses. So that means you should pay less for health insurance, right? Unfortunately under Obamacare, insurance companies can’t charge higher prices for individuals with preexisting conditions. That means that every health-conscious individual is being forced to subsidize other individuals that have made poor life choices. We’re rewarding bad health decisions, and punishing good health decisions. How backwards is that for a healthcare system?
Again, nothing is free. In the words of the rock band Rush, “you can’t get something for nothing.” Pharmaceutical companies aren’t going to hand out free drugs. Health insurance companies aren’t going to pay the doctors and hospitals for you out of the kindness of their corporate hearts. Obamacare, like all government welfare programs, is paid for or subsidized by the taxpayers. It’s important to remember that every dollar the government spends was taken from the people.
Alabama Misguidedly Pushes the Marketplace Fairness Act
State governments facing fiscal challenges are looking for an easy way out. Governor Robert Bentley (R-AL) and other Alabama lawmakers are pushing the Marketplace Fairness Act (MFA) as a quick fix. Alabama can start filling its coffers if it can force out-of-state businesses to collect and remit Alabama’s sales tax.
But what Alabama lawmakers don’t understand is that the MFA Internet sales tax will actually hurt Alabama’s web-based businesses. With e-commerce accounting for over $5 trillion dollars in nationwide sales each year, and 90% of sales taxes already collected, the Internet marketplaces shouldn’t be tampered with.
Current Alabama law states that when a resident makes an online purchase out-of-state, they must file a tax return by the next month and pay the Alabama use tax. But because the use tax is self-reported and complicated, most people don’t bother reporting their purchase. In fact, most people don’t even know they are required to report their out-of-state online purchases.
Underreporting of online purchases has led lawmakers to back the MFA, which requires out-of-state businesses to collect the use tax on Alabama’s behalf. It’s seen as a solution to revenue shortages. The MFA would require Alabama’s online businesses to collect and submit sales taxes for every tax jurisdiction that they ship goods to. Likewise, other states’ online businesses would be required to collect and remit Alabama’s sales tax, which is unlikely to bolster Alabama’s revenues. Ninety prevent of sales taxes are already remitted by the major businesses, and states are expected to pay for the small business software to collect. Therefore it is likely this new collection mechanism will cost more than it brings in.
Worse still, the MFA would allow states to exercise the unprecedented power to tax outside of their state boundaries. It could bolster state revenue, but it doesn’t come without costs—costs that severely outweigh the possible revenue. Online businesses will be burdened with collecting and remitting taxes for every tax jurisdiction they do business with (which could be over 9,000!). The compliance costs alone could put small companies out of business.
Online retailers would then be subject to audits from all tax jurisdictions they ship goods to, which creates a serious representation problem. Company owners, employees and shoppers will be regulated by other states without any political recourse.
And that’s not the only way shoppers lose under the MFA. Under Pennsylvania’s online sales tax, customers have been charged tax when none was owed. Further complicating online sales taxes with the MFA will just exacerbate the confusion and costs of sales tax compliance and expose online shoppers to tax errors.
Forcing online businesses, a crucial part of our economy, to undertake excessive compliance costs that could force them out of business is not a real solution. Big, online retailers with teams of corporate lawyers may be able to survive the MFA storm, but small business will undoubtedly suffer.
The MFA would open a huge can of worms for Alabama; it’s a misguided policy aimed at nothing more than bolstering Alabama’s bank account at the expense of small business. If Alabama wants to bolster revenue, it needs to keep the tax system fair, competitive and simple to encourage innovation and growth—not encroach on state sovereignty and put online retailers out of business.
CBO: Obama Minimum Wage Hike Could Kill 1 Million Jobs
In the President’s weekly address, he again pushed for a minimum-wage hike to $10.10 per hour, claiming that it “would lift millions of Americans out of poverty.” He’s even gone as far as to say that “there’s no solid evidence that a higher minimum wage costs jobs.”
But on Tuesday, the Congressional Budget Office (CBO) published a report which sharply discredits President Obama’s wishful thinking. The CBO found that an increase in minimum-wage to $10.10 per hour would result in a net loss of 500,000 jobs, and potentially as many as 1 million jobs. This begs the question: “Mr. President, how does losing your job help lift you out of poverty?”
The full CBO report can be found here.
ATR Urges Wisconsin Legislators to Vote "Yes" on Taxpayer Relief
On Tuesday, Americans for Tax Reform sent a letter to Wisconsin’s Legislators urging them to vote for Assembly Bill 1, legislation that would return $400 million in surplus revenues to the taxpayers through tax relief. Wisconsin’s bottom income tax bracket would be reduced by 9 percent and property taxes would be effectively reduced by 5 percent, while still ensuring “Rainy Day Fund” savings in case emergency revenues are needed in the future.
An excerpt from the letter:
The passage of Assembly Bill 1 would continue to set Wisconsin apart from her neighbors like Illinois and Minnesota that have seen taxpayers flee a draconian state tax regime; each state now scrambling to hastily enact tax relief to the politically favored to stop the bleeding. Simply put, Assembly Bill 1 would continue to keep Wisconsin on the right track as a national example of an increasingly economically competitive state.
Click here to read the full letter.
From Digital Liberty: Protect Copyright to Protect Innovation
Core copyright industries contribute over one trillion dollars to the U.S. GDP and provide some 5.4 million jobs. Human ingenuity is driving this growth, experimentation, competition and innovation, all of which flourish under the protections of copyright. But unfounded assertions that copyright stifles innovation is threatening the entrepreneurial spirit. Without the certainty and flexibility that copyright law provides, entrepreneurs will be wary of taking risks, fearful that their investments will never pay off.
Some who seek to minimize copyright protections advocate for applying the first sale doctrine to purely digital content. The first sale doctrine allows individuals to sell their physical copies of books, CDs, etc. that contain copyrighted material. It is important to keep in mind, however, that when consumers buy digital products like CDs and DVDs, they are buying a license to use the copyrighted material under certain restrictions; they are not buying the copyrighted material itself. If the first sale doctrine was applied to purely digital content, like song downloads, it would allow for infinite copies to be made without compensating their creators. Incentives to create new and diverse content would rapidly shrink, harming the creators and consumers alike.
Additionally, some seek to eliminate the application of statutory damages in cases dealing with individual file-sharers and secondary liability for large-scale online infringement. They cite a few cases where plaintiffs were given large awards, and claim that it will chill innovation. But the reality is that in those cases the defendants were guilty of massive copyright infringement. Juries have the discretion to award the plaintiff a range of damages according to the particulars of the case, which can be as low as a few hundred dollars. Property rights are only valuable if holders can enforce them.
The online explosion of legitimate sources of content as well as services, apps and devices that deliver the content debunk the fallacy that copyright law stifles innovation. The government must continue to enforce intellectual property rights to assure innovators and distributors that thieves won’t benefit from their work.
Good News for Obama: He's Still More Popular Than Obamacare
President Obama’s approval rating stands at 37 percent, marking a new low for his presidency. But he’s still maintaining a narrow lead over the ACA’s approval rating, a pathetically dismal 31 percent. Although Republicans have been outspokenly against Obamacare since the beginning, Democrats are starting to join the chorus of opposition with 58 percent disapproving of the healthcare law.
This puts Harry Reid in a peculiar position. He’s juggling White House expectations that he defend the law, while still trying to protect vulnerable Senate Democrats in conservative states. Incumbent Democrats in Louisiana, Alaska, and North Carolina, among others facing re-election in 2014, are trying to distance themselves from Obamacare. Mary Landrieu (D-LA) is trying to tackle the issue of cancelled health insurance policies, 80,000 of which are from her home state. But Reid has all but ignored her plan and doesn’t seem to have any intentions of bringing it to the floor for a vote. He needs to maintain loyalty to the president, who has promised an “administrative fix” to combat the 5 million cancelled policies nationwide, although he has yet to say what that is.
Despite Obama’s promise, thirty-nine skeptical House Democrats still voted for the Upton bill (H.R. 3350) that would allow individuals to keep their current health insurance, even if it doesn’t meet the new Obamacare requirements. If the Upton bill becomes law, it would allow young, healthy and middle-class individuals another option besides the exchanges. The exchanges would then be burdened with too many poor and sick individuals, increasing the risk of collapse. That is ultimately why Reid won’t allow the Landrieu and Upton bills to progress. He’s playing gatekeeper to safeguard Obama from having to veto such popular legislation.
Although the president’s approval continues to plunge right alongside Obamacare, he doesn’t have to face re-election. Nor does he care much about his vulnerable Senate allies. The Affordable Care Act is Obama’s signature piece of legislation, and he isn’t going to jeopardize it at the cost of a few Senators.
Landrieu: If you like your plan, we'll mandate that you can keep your plan
Last week, Sen. Mary Landrieu (D-LA) introduced the “Keeping the Affordable Care Act Promise Act” that acknowledges Obamacare’s responsibility for the nearly 5 million cancelled policies and the millions more to come. The goofy name aside, it aims to edit the “grandfather clause” to force insurance companies to offer coverages that have since been made illegal. Democrats are beginning to grasp the severity of how many people are being negatively affected by Obamacare, and they are scrambling to do damage control before the midterm elections. Unfortunately, they’re trying to fix the problem with more mandates rather than reducing regulation. â€¨
Currently, it is nearly impossible for plans to maintain their grandfathered status, namely because it’s up to “regulatory guidance” (bureaucrats) to determine which plans qualify. Additionally, most changes to a healthcare plan, no matter how minuscule, will result in loss of grandfathered status. And even completely unchanged plans will still have to comply with the Obamacare mandates like covering children until they’re 26, or elimination of preexisting condition exclusions.
The “grandfather clause” was written so strictly with the intention of plans losing their grandfathered status, in effect forcing people to buy new coverage that is compliant with Obamacare’s regulations. These new plans are much more costly, not only because they cover a bunch of junk that you may not want or need, but for the purpose of subsidizing everyone else. Everybody has to “pay their fair share.” That’s the only way Obamacare can work.
Like all members of Congress, Landrieu has been flooded with constituent phone calls and letters demanding to know why their plans were cancelled. It is estimated that 80,000 Louisiana residents will lose their health insurance because their plans don’t meet Obamacare’s overly burdensome requirements. Facing a tough reelection in a red state, Landrieu is pushing to halt the cancellation letters plaguing Louisiana.
Ironically, in 2010 Republicans brought forth a resolution to block the strict language of the grandfather clause, but Landrieu and her Democratic colleagues voted it down. This resolution would have maintained current plans’ grandfathered status, allowing individuals who liked their plan to keep it. Now Landrieu is feeling the heat for her vote, and she’s trying to make good on broken promises before she faces re-election next November.
Republicans introduced a similar bill in the House, allowing health insurance providers to continue offering coverage that was in effect as of January 1, 2013 for another year. But unlike Landrieu’s version, it has no mandates. Instead of forcing insurance companies to provide old plans, the Republican bill just removes ACA impediments so insurance companies can reinstate the plans they were forced to cancel. The House bill has a better chance of passing the Democrat-controlled Senate. It affords individuals more time to re-purchase their old insurance before the penalty hits without dismantling the law, something Democrats would never stomach. Although the bill isn’t a permanent solution, it’s a good start and will open the door to more comprehensive reform.
More from Americans for Tax Reform
French Soccer Being Taxed To Death. Is American Football Next?
France’s 75 percent income tax proposal is back— and this time with a vengeance. Interestingly, the group most loudly opposed aren’t the denizens of the French Riviera (although they certainly oppose the tax as well), but professional soccer. French soccer clubs have united to protest the mammoth tax, so far refusing to play about twenty games in a round of league matches. “This is a historic decision, made unanimously and with determination, to save soccer,” the French Football Association released in a statement.
French President Hollande campaigned on a 75 percent income tax for individuals making over 1 million euros, riling up the socialist base that ultimately delivered him the presidency. Hollande stayed true to his campaign promises and the 75 percent tax passed. Fortunately, the constitutional court rejected the tax in that it was applied to individuals instead of households. It was a win on a technicality, but a win nonetheless.
Hollande has since tweaked the levy. In its most current form, the 75 percent tax would still apply to salaries over 1 million euros, but it would be paid for by the employer. In this form, experts fear it would be upheld by the courts.
Soccer clubs and fans fear that the tax will prevent them from recruiting top players. But what’s even more threatening to French soccer is that many great—but financially fragile—clubs could be forced to shut down entirely. “There is already a deficit in our sector and now they impose a new tax,” said the president of the players union in France. “Football has a role in society that will be affected as a consequence of these new measures.”
Polls show that over 70 percent of the French think their taxes are ‘excessive’ and 80 percent think Hollande’s tax policies are ‘misguided’ and ‘inefficient’. Hollande’s economic policy is undeniably discouraging the entrepreneurial spirit by punishing success, detrimental to wealth creation and job growth. Soccer may be screaming the loudest, but a 75 percent tax on the wealthy hurts everyone.
Overtaxing the wealthy is not a quintessentially French phenomenon. Wealthy Americans are punished by our progressive tax system as well. Some of our favorite sports teams’ MVPs shell out over half of their incomes to the government. If our tax burden continues to shift to the wealthy as it has in France, American sports will follow suit in their decline.
More from Americans for Tax Reform
Obamacare Rate Shock is Real: What HHS Doesn't Want You to Know
With just days to go before the Obamacare exchanges open, the Department of Health and Human Services finally addressed the question of health insurance premiums under the Affordable Care Act. HHS triumphantly declared that premium costs will be 16 percent less than projected, a victory for Americans everywhere!
Well, not exactly. If you follow a trail of footnotes, you will find that HHS is comparing their own findings to an old CBO projection for 2016 premiums. HHS is not saying that premiums will be 16 percent lower under the exchanges than they are now—although it certainly sounds like they are. They’re saying that HHS’s current premium estimation is 16 percent less than what the CBO projected premiums hypothetically could be in 2016. Who cares? Not only is the HHS report misleading, but it makes no mention of how much premiums will change between now and when the exchanges open.
Premium data information is only fully reported for 13 states and the District of Columbia, all of which set up their own exchanges. In these blue states, only 5 are expected to have premium decreases. Some of these overregulated states already imposed guaranteed issue and community rating before Obamacare, which drove healthy people out of the market and increased premiums. But once the individual mandate goes into effect, healthy people in these states will be forced back into the insurance market as subsidizers, reducing overall premium costs. Even with these subsidized decreases, the thirteen states and D.C. are still expected to see an average 24 percent increase in premiums.
And even worse, based on new data released by the HHS, average individual-market premiums nationwide are expected to increase up to 99 percent for men and 62 percent for women. Men, who typically use less healthcare services than women and therefore paid lower rates, will now be paying the same rates as their female counterparts under Obamacare, accounting for the disproportionate rate spikes. Critics say that the higher premiums will be offset by Obamacare’s subsidies. But only lower income individuals qualify for subsidies, and many times they’re not even enough to cover the increase in premium.
“For millions of Americans these new options will finally make health insurance work within their budgets,” HHS Secretary Sebelius said. What she is ignoring is that millions of other Americans will be footing the bill, being forced to pay higher premiums and higher taxes to fund the subsidies that they will never themselves receive.