Daniel Uzi Frydman

ATR Supports H.J. Res. 73 and S.J. Res. 19 Repealing CFPB’s Prepaid Card Rules

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Posted by Daniel Uzi Frydman on Monday, April 24th, 2017, 9:50 AM PERMALINK

Americans for Tax Reform (ATR) President Grover Norquist this week sent a letter to Congressional lawmakers urging support for Representative Roger Williams' H.J. Res. 73 and Senator David Perdue's S.J. Res. 19.

Both resolutions would use the Congressional Review Act to block the Consumer Financial Protection Bureau’s (CFPB) rules on prepaid debit cards, put forth at the end of 2016 and set to go into effect April of 2018. The CFPB’s prepaid card rule would deprive American financial consumers of access to banking services and perpetuate the regressive impacts of Dodd-Frank.

Below is the text of the letter to Congress, which can also be found here.

April 24, 2017

The Honorable Paul Ryan
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Majority Leader
U.S. Senate
Washington, DC 20510

Dear Speaker Ryan and Majority Leader McConnell:

On behalf of Americans for Tax Reform (ATR) I write to express ATR’s strong support for using the Congressional Review Act to repeal the Consumer Financial Protection Bureau’s (CFPB) rule on prepaid debit cards.

Issued in the fall of 2016 and set to go into effect April of 2018, the CFPB’s rule on prepaid debit cards would actually harm the same financial consumers the Bureau sought to protect in issuing the rule. Millions of American consumers use and rely on prepaid cards, yet if the CFPB’s rule is allowed to proceed those millions of consumers will be deprived of access to needed banking services.

As a result of the Dodd-Frank Act, many banks no longer offer free checking accounts or have alternatively either increased fees or required higher minimum balances for maintaining free checking accounts. This has had the effect of pushing many financial consumers out of the traditional banking system and led to millions of Americans becoming “unbanked.” The CFPB’s rule would only increase this regressive trend, impacting primarily low-income consumers.

A report from the Pew Charitable Trusts found that of an estimated 23 million consumers using prepaid cards, a quarter of those were low-income Americans, with a third having annual income below $15,000. Prepaid cards have increased in popularity in recent years, with the amount placed on prepaid cards growing from $1 billion in 2003 to a projected $112 billion for 2018.

This is due in part to the fact that for consumers that can no longer afford traditional banking services, prepaid cards are a more affordable option than traditional debit cards linked to checking accounts. The CFPB’s rule will in turn have a disparate impact on low-income financial consumers and as a result further increase the number of unbanked Americans.   

Thankfully, Representative Roger Williams and Senator David Perdue have introduced joint resolutions of disapproval of the CFPB’s rule under the Congressional Review Act. H.J. Res. 73 in the House and S.J. Res. 19 in the Senate would repeal the CFPB’s costly and regressive prepaid debit card rule.

I urge you and your colleagues in Congress to support both H.J. Res. 73 and S.J. Res. 19 and use the authority granted under the Congressional Review Act to protect American consumers and preserve choice in financial products by repealing the CFPB’s rule on prepaid debit cards.

Sincerely,

Grover G. Norquist
President
Americans for Tax Reform​

Photo Credit: Phil Roeder


Open Competition Laws Save Taxpayers Millions

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Posted by Daniel Uzi Frydman on Tuesday, April 4th, 2017, 10:22 AM PERMALINK

Infrastructure policy has received a plethora of attention from the media and the Trump administration this year, following campaign promises to pass a large infrastructure package. As the Trump administration and lawmakers on Capitol Hill look to implement such a package this year it is important to take into account pro free-market and pro taxpayer laws being used in the states that can inform discussions on the federal level, such as “open competition laws.”

Currently a number of local governments impose “closed competition laws” as it relates specifically to water infrastructure projects. Such arcane laws have clogged up competitive markets by allowing only pre-determined materials to be used in water infrastructure projects, thus preventing innovative new products from competing for certain government contracts.

Closed competition laws as such result in government selected winners and losers. Unfortunately, the winners are not the taxpayers, rather the specific industries that the government has gifted with monopolies on government-approved materials, leaving taxpayers with a loss.

Taxpayer relief and improved infrastructure have proven achievable at the state and local level through the process of repealing and reforming existing closed competition laws, and replacing them with open competition laws. At its core, open competition laws allow for basic free market principles to flourish. Open competition laws could be used to breath new life into not just water infrastructure projects but could have wider application for infrastructure projects in general by enabling the use of less costly, and often times more effective infrastructure materials.

The positive effects open competition laws have had at the local level should give state and federal lawmakers new perspective when discussing infrastructure projects. Comparing the experience of various cities in Arkansas, North Carolina, and Michigan offers evidence as to the benefits open competition laws can have for taxpayers and government coffers.

In Arkansas the city of Fayetteville, where open competition laws are in place, saves taxpayers an average of $278,625 per mile on the cost of water infrastructure piping when compared to Hot Springs Arkansas which has closed competition laws. Fayetteville is not a lone example of open competition laws benefiting taxpayers.

Charlotte, North Carolina’s largest city, follows open competition laws for water infrastructure projects, whereas Raleigh, North Carolina’s second largest city adheres to closed competition laws. Just as Fayetteville enjoys the fruits of open competition, Charlotte saves taxpayers an average of $155,902 per mile of pipe when compared to Raleigh.

Finally, in Michigan, the cities of Monroe and Livonia join Fayetteville and Charlotte as cities that follow open competition laws, saving the cities of Monroe and Livonia an average of $114,154 per mile of pipe. Port Huron and Grand Rapids have closed competition laws and thus suffer from exponentially higher water infrastructure costs.

Successful adoptions of open competition laws by municipalities have spurred interest by states, with both Arkansas and South Carolina proposing bills that would implement open competition for the entire state. Other states such as Ohio and Michigan have also begun investigating the benefits of open competition.

This new wave of free market reforms not only save millions in taxpayers dollars on water infrastructure projects but also can be used to inform larger state and most importantly federal infrastructure discussions this year.

If open competition laws were implemented on the national level, the National Taxpayers Union estimates that would save taxpayers over $371 billion. This is significant as the American Water Works Association estimates that more than $1.3 trillion is needed for water infrastructure improvements in the coming decades.

With abundant savings that could be achieved at the state level, such open competition policies could have an extreme benefit at the federal level and not just with regard to water infrastructure projects. With a planned federal infrastructure package being negotiated this year, free-market pro-taxpayer policies such as open competition laws should inform lawmaker’s discussions.

Photo Credit: Lindsey G

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Maryland Fracking Ban Deprives State of Economic Growth and Savings

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Posted by Daniel Uzi Frydman on Monday, April 3rd, 2017, 2:40 PM PERMALINK

On March 27, 2017, the Maryland Senate passed legislation aimed at permanently banning the energy recovery method of hydraulic fracturing, commonly referred to as “fracking”, in all of Maryland. This is bad news for Maryland families and businesses as a statewide ban on hydraulic fracturing could deprive the state of future jobs, government revenue, and affordable energy that would result from energy production.

Currently there are no fracking operations in Maryland, so the state depends on natural gas safely produced in neighboring states. This is a victory for competing states as out of state businesses are supplying the demand for affordable energy in Maryland, but an economic missed opportunity for Maryland.

Research supports this missed opportunity as a 2012 study found natural gas drilling in Maryland could add over 1,800 jobs annually in the state as well as give a $85 million increase to labor income. Additionally, the study revealed that in-state natural gas expansion creates the potential for an economic boost of over $316 million to the Maryland economy.

Since 2006, there has been an 18 percent rise in the use of natural gas in Maryland, as the price of natural gas for consumers has fallen 26 percent. This has lead to hundreds in annual savings for Maryland households and businesses on energy costs. It is also the case that since 2006 Maryland’s energy-related emissions dropped by almost 40 percent as a result of increased natural gas use.

The combined savings from increased natural gas usage and potential increase in economic activity from allowing new energy production in the state are hard to ignore.

Consequently, the legislation proposed would deter any in-state incentives to start hydraulic fracturing operations in the future, which if allowed could likely reduce the price of natural gas for all Maryland consumers even further. In essence, this legislation prevents the possible creation of new energy production jobs in Maryland, while completely disregarding the rising demand for natural gas in the state.

Rising demand in Maryland creates a tempting opportunity for Maryland businesses to sprout up and provide resulting benefits to Maryland residents and businesses through affordable and reliable energy. Unfortunately, potential economic growth and the resulting benefits could be permanently destroyed if the Governor signs off on this misguided legislation.

Embracing the potential future benefits of safe hydraulic fracturing in Maryland would benefit state consumers and businesses. Thus, the only way to preserve the potential for growing energy jobs in Maryland and keep the cost of natural gas on the decline for consumers and businesses is to stop this misguided legislation.

Photo Credit: Thad Zajdowicz

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ATR Supports Rep. McHenry’s "Supporting America’s Innovators Act” of 2017 (H.R. 1219)

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Posted by Daniel Uzi Frydman on Wednesday, March 22nd, 2017, 12:10 PM PERMALINK

Americans for Tax Reform this week released a letter to Congressional lawmakers urging support for Representative Patrick McHenry’s (R-N.C.) “Supporting America's Innovators Act of 2017”, H.R.1219.

H.R.1219 amends a specific exemption under the Investment Company Act of 1940 by increasing the investor limitation from 100 to 250 people for qualifying venture capital funds. The bill would benefit small businesses and startups by incentivizing venture capitalists to grow their investments in rural-state entrepreneurs. Local economies that host these small business and startups would benefit from H.R.1219 too, as the increased financial fluidity in their cities would only stimulate economic growth for all.

With bipartisan support in the House Financial Services Committee, H.R.1219 passed through the committee with a 54 to 2 vote. H.R. 1219's Senate companion legislation, S. 444, also passed the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and is now awaiting a full Senate vote.

Below is the text of the letter, which can also be found here.

March 22, 2017

Dear Members of Congress:

I write to express support for H.R. 1219, the Supporting America’s Innovators Act of 2017. Introduced by Representative Patrick McHenry, H.R. 1219 would increase access to capital for America’s small businesses thus improving entrepreneur’s ability to grow their business and compete. I urge all members of Congress to support this important legislation.

In recent years it has been increasingly challenging for many small businesses to access the necessary financial capital to fund their operations. H.R. 1219 would allow certain entrepreneurs to receive funds from a larger number of investors in order to better fund new start up efforts or to expand their business operations. 

Currently, the Investment Company Act of 1940 limits the number of investors allowed in a “qualified venture capital fund” to 100 in order for the fund to be exempt from registration with the Securities and Exchange Commission (SEC). H.R. 1219 would amend the 100-invester cap currently in the Act to allow for up to 250 investors.

Legislation similar to H.R. 1219 passed the House in 2016 with a bipartisan vote of 388-9. H.R. 1219 passed out of the House Financial Services Committee on March 9 of this year with a vote of 54-2. Both votes evidence strong support in Congress. A companion bill has also been introduced in the Senate under the same title.

I urge all members of Congress to support H.R. 1219. Doing so will help to increase access to capital that is vital to America’s entrepreneurs and small businesses.   

Sincerely,                                

Grover G. Norquist                                                    
President                                                                    
Americans for Tax Reform

Photo Credit: Brookings Institution


Top Five Reasons Connecticut Should Oppose a Carbon Tax

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Posted by Daniel Uzi Frydman on Friday, March 17th, 2017, 9:19 AM PERMALINK

Americans for Tax Reform (ATR) this week released a letter to the Connecticut General Assembly urging legislators to oppose House Bill 7247, an “Act Establishing a Carbon Price for Fossil Fuels Sold in Connecticut.” Connecticut consumers and businesses already face the eighth worst overall state tax burden in the country. The Connecticut carbon tax proposed in HB 7247 would only make matters worse by levying a $15 per ton carbon tax on the state, which would increase $5 annually.

A carbon tax is likely to hinder economic competitiveness in the Constitution State by inflating the cost of energy, in turn negatively impacting businesses, jobs, and the price of consumer goods, thus increasing costs across the board for Connecticutians.

A study by the National Association of Manufacturers, based on a $20 per ton tax rate, explores where the brunt of this misguided legislation will be felt if the tax is implemented. If HB 7247 becomes law, Connecticutians will experience employment loss, increased prices at the pump, and elevated energy bills. Just one year after implementation, with a rate of $20 per ton, Connecticutians can expect the following:

1. Increased Prices at the Pump. In 2016 Connecticut’s gas tax was the 6th highest in the nation, and the proposed carbon tax would only drive that rate higher. In addition to the federal gas tax of 18.4 cents per gallon and the Connecticut state gas tax of 37.51 cents per gallon, HB 7247 would add an additional 20 cents per gallon, totaling up to a 75.9 cents tax per gallon for topping off the tank.

2. Raised Electricity Costs. The cost of natural gas is projected to increase by more than 40 percent in the state, driving up energy costs for residents and businesses. Homeowners would suffer as HB 7247 would cause significant increases to household electricity rates. Such an increase in energy prices would also jolt through the economy raising the costs of consumer goods, an impact that would fall hardest on the state’s low-income residents.

3. Eliminated Employment Opportunities. A $20 per ton carbon tax could deal a blow to employment in Connecticut, with a potential loss of worker income equivalent of up to 9,000 jobs after just the first year, rising above “18,000 jobs by 2023.” 

4. Economic Sectors Would Spiral South in 2023. Connecticut economic sectors such as services, energy-intensive manufacturing, and non-energy-intensive manufacturing face an aggregate loss in economic output that could reach a projected 3.2 percent by 2023.

5. Crippled Economic Competitiveness. Connecticut currently ranks as the 43rd worst state on the bipartisan Tax Foundation’s 2017 State Business Tax Climate Index. Implementing HB 7247 in Connecticut would only slow down an already burdened intrastate tax climate. Bordering states would gain more of a competitive edge over Connecticut if HB 7247 were to become law, which would only hinder the state’s competitiveness, and deter business investments in Connecticut further.

If passed, Connecticut’s residents and businesses will see employment loss, economic sectors deteriorate, electricity bills jolt up, and prices at the pump pile up. Lawmakers should oppose House Bill 7247 and protect the residents and businesses in the great state of Connecticut.

Photo Credit: Ilirjan Rrumbullaku

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Top Five Reasons Rhode Island Should Oppose Carbon Tax

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Posted by Daniel Uzi Frydman on Thursday, March 9th, 2017, 10:25 AM PERMALINK

Americans for Tax Reform (ATR) recently released a letter to the Rhode Island General Assembly urging legislators to oppose the "Energize Rhode Island: Clean Energy Investment and Carbon Pricing Act" of 2017 (SB 365). Rhode Island consumers and businesses already face the eighth highest overall state tax burden in the country. The Rhode Island carbon tax proposed in SB 365 would only make matters worse by levying a $15 per ton carbon tax on the state, which would increase $5 annually.

A carbon tax is likely to hinder economic competitiveness in the Ocean State by inflating the cost of energy, in turn negatively impacting businesses, jobs, and the price of consumer goods, thus increasing costs across the board for Rhode Islanders.

A study by the National Association of Manufacturers, based on a $20 per ton tax rate, reveals where the brunt of this misguided legislation will be felt if the tax is implemented. If this bill becomes law, Rhode Islanders will experience employment loss, elevated energy bills, and increased prices at the pump. Just one year after implementation, with a rate of $20 per ton, Rhode Islanders can expect the following:

Increased Prices at the Pump. In 2016 Rhode Island’s gas tax was the 9th highest in the nation, and the proposed carbon tax would only drive the rate higher. In addition to the federal gas tax of 18.4 cents per gallon and the Rhode Island state gas tax of 34 cents per gallon, SB 365 would add an additional 15 cents per gallon, totaling up to a 67.4 cents tax per gallon for topping off the tank.

Elevated Electricity Costs. The cost of natural gas is projected to increase by 40 percent in the state, driving up energy costs for residents and businesses. Homeowners would suffer as Senate Bill 365 would create significant increases in household electricity rates, with an average increase of around 22 percent. Such an increase energy prices would also ripple through the economy raising the costs of consumer goods, an impact that would fall hardest on the state’s low-income residents.

Evaporated Employment Opportunities. A $20 per ton carbon tax “would deal a blow to employment in Rhode Island, with a loss of worker income equivalent of between 2,000 to 5,000” jobs after the first year rising above “5,000 jobs by 2023.”  

Economic Sectors Would Spiral South in 2023. Economic sectors like services, energy-intensive manufacturing, and non-energy-intensive manufacturing face an aggregate loss in economic output that could reach a projected 2.6 percent by 2023.

Reduced Economic Competitiveness. Rhode Island currently ranks 44th worst on the bipartisan Tax Foundation’s 2017 State Business Tax Climate Index. Implementing SB 365 in Rhode Island would only slow down an already burdened tax climate. Bordering states would gain even more of a competitive edge over Rhode Island if SB 365 became law, which would only hinder the state’s competitiveness and deter business investment in Rhode Island further.

If passed, residents and businesses that call Rhode Island home will see employment loss, economic sectors deteriorate, electricity bills jolt up, and prices at the pump pile up. Lawmakers should oppose Senate Bill 365 and protect the residents and businesses in the great state of Rhode Island.

Photo Credit: CMFGU

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CFPB Officials Making More than the Vice President?

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Posted by Daniel Uzi Frydman on Friday, February 17th, 2017, 3:14 PM PERMALINK

Created as part of the 2010 Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) is possibly the biggest and most financially infuriating failed experiment to come out of Dodd-Frank. While the CFPB claims to be a voice for the “little guy” the Bureau’s exorbitant salary’s and spending practices highlight just how out of touch CFPB officials are with those on Main Street America.

 

As a result of power granted under Dodd-Frank and the Obama administration’s push to regulate every nook and cranny of American’s lives and the economy, the CFPB has evolved into one of the most extreme examples of unaccountable bureaucracy’s to date.  The CFPB Director is not only immune from standard removal processes by the president, but lacks any Congressional oversight because the CFPB is not subject to the appropriations process, as they receive their funding straight from the Federal Reserve, leaving the taxpayers and their elected representatives in the dust.

 

Recently released public data shows that the lack of Congressional oversight and other factors have amounted to exorbitant salaries at the CFPB, among other wreck less spending issues.  A troubling amount of CFPB employees are being paid more than members of the Senate, the Cabinet, and even the Vice President of the United States.

 

CFPB employees are enjoying some of the most fluffed salaries in all of D.C., especially when one considers they are a group of unelected bureaucrats supposedly working with the interests of the common American at heart.

 

Currently, 39 CFPB employees earn more than Vice President Mike Pence’s annual salary of $230,000. Additionally, 201 CFPB employees make more than Senate majority and minority leaders Mitch McConnell and Charles Schumer, who earn $193,000 annually. It does not stop there, 54 CFPB employees earn more than Paul Ryan’s $223,000 annual earnings. Finally, another 170 CFPB employees earn more than the Attorney General, the Director of National Intelligence, and the Secretaries of Defense and State.

 

It’s all to ironic that the agency that is supposed to be looking out for the little guy is actually padding the pockets of their own employees with exorbitant salaries that rival those of some of Washington’s most powerful leaders.

 

The cherry on top of the paradox that is the CFPB is the Bureau has been plagued in the past for overspending such as headlines last year highlighting the cost of the Bureau’s $150,000,000 lair, situated across of the White House. With a purchase price of $150,000,000, it would be fair to assume that this building would come with everything a government agency would need right? Not for the CFPB, in fact, the CFPB ordered up a grand $216,000,000 renovation for the building.

 

The CFPB website claims, “We arm people with the information, steps, and tools that they need to make smart financial decisions.” Funny, when according to CFPB, their office renovations were to include a public plaza featuring “sunken gardens, cascading waterfalls on reflective carnelian granite, a ‘living wall,’ timber lounges, sculptural seating, a reflecting fountain, a covered ‘porch’ canopy with wisteria and a bronze kiosk,” costing the taxpayers $285.32 per square foot.

 

Rep. Sean Duffy (R-WI), former Chairman of the House Financial Services Oversight Subcommittee, criticized the CFPB last year on this issue saying, “DC may be the only place on Earth where it is considered ‘reasonable’ for a federal bureaucracy to spend over $200,000,000 to renovate a building it doesn’t own — a full $50,000,000 more than the building is worth.”

 

The exorbitant salaries, the expensive downtown building, the $216,000,000 renovation, and the “public plaza” are just a few symptoms of an out of control agency that is not subject to congressional oversight or appropriations. The 115th Congress should look to reign in the CFPB by placing the Bureau under the Congressional appropriations process.

Photo Credit: Ted Eytan

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Congress Should Dump the U.S. Sugar Program this Valentines Day.

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Posted by Daniel Uzi Frydman on Tuesday, February 14th, 2017, 1:30 PM PERMALINK

This Valentine’s Day, consumers will spend an average of $136.57 on gifts and sweets for that special someone. For these millions of love struck candy consumers, a few extra dollars in their pockets would make it an even sweeter time of year. Yet the heartbreaking truth is that the cost of purchasing that box of chocolates or candy hearts this year is artificially high thanks to the not so sweet U.S. Sugar Program.

The U.S. Sugar Program is a relic of the Great Depression, and since its inception in 1934 the program has mutated into a crony capitalistic monster, with U.S. taxpayers, consumers, and manufacturers footing the bill for this costly and backwards program.

The Sugar Program is the antithesis of free-market policy as it provides a plethora of sweetheart deals to a small handful of big sugar producers, including generous taxpayer backed subsidies, price floors, and import quotas. As a result of these sweetheart deals for Big Sugar, taxpayer costs have gone up, jobs have been destroyed, and American consumers have received only heartburn from increased prices.

Survival of the Sugar Program is a result of the sweet subsidized life support taxpayers serve up every year. According to the Congressional Budget Office (CBO) the U.S. Sugar Program will cost taxpayers more than $138 million over the next 10 years in addition to the billions in annual hidden taxes American consumers pay at the grocery store.

In addition to taxpayer costs, such protectionist policies have created artificially high domestic sugar prices for consumers. In August of 2015, U.S. sugar prices were ¢33.13 per pound, more than double the world price of ¢15.57. It is estimated American families pay an average of $125, or a total of $2 billion, in higher grocery prices and taxes annually because of the program. While artificially high prices and restricted competition bode well for producers, domestic manufacturers alternatively have been discarded like an empty candy wrapper.

Domestic sugar-using manufacturers competing globally, but purchasing domestic sugar at a rate roughly twice that of the global price, are dealt a severe disadvantage and have had to either cuts jobs or move their business abroad. The U.S. Department of Commerce estimates that for every one sugar-growing job saved by the Sugar Program, approximately three manufacturing jobs are lost. Over a 13-year period, domestic sugar-using industries have seen a 17 percent decline in employment, amounting to an annual loss of nearly 10,000 jobs in the U.S. food industry.

When it comes to winners in this sticky situation, it is not American consumers but a handful of domestic sugar producers,- unless you also count international competitors. Where the American consumer and manufacturer have suffered, less than 4,500 producers have prospered. To put it simply, the U.S. Sugar Program is forcing American consumers and taxpayers to pay artificially higher prices for sugar and sugar related products in order to subsidize and protect a small number of sugar producers from free-market competition.   

It has been almost a century since the great depression, and it is high time Congress reforms this rotten relic. As the 115th Congress begins discussions over the coming 2018 Farm Bill, lawmakers should look to trim the unnecessary fat that is the U.S. Sugar Program. Doing so will not only protect the 600,000 U.S. jobs in food industries that use sugar, but will reduce the harm to taxpayers and give consumers a much needed break on Valentine’s Day for years to come.

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