Blumenthal Amendment Destroys Trade-in Value and Consumer Choice

Share on Facebook
Tweet this Story
Pin this Image

Posted by Justin Sykes on Wednesday, July 22nd, 2015, 1:06 PM PERMALINK


This week the Senate will likely vote on an amendment being offered by Senator Richard Blumenthal (D-Conn.) that would make it illegal for dealers to sell a car with an open recall. While at first this sounds reasonable, the reality is this amendment would apply to any and all recalls, some as insignificant as a misprinted owner’s manual.

The consequences of Blumenthal’s amendment would be a blanket restriction leaving not just dealerships holding the bag but American consumers. In fact the most burdensome impact would be on millions of average Americans who suddenly find their cars with zero trade-in value. It would also prevent consumers from buying some models even though the recall is extremely trivial. 

The truth is while safety recalls receive the most attention, the majority are unrelated to safety. For example some KIA models were subject to recall because the tire pressure sticker was misprinted. General Motors also saw a recall of Camaros because “the air bag warning label on the sun visor may peel off.”

Although it is good for consumers to be well informed, enacting overzealous restrictions that blanket the automobile industry and consumer trade-ins is not an approach founded in logic.

For instance a more common sense approach would be to have dealers disclose open recalls at the point of the sale. This would allow consumers to decide whether something as trivial as a misprinted label is important enough to deter purchase. This is exactly how the free market is supposed to work.

Senator Blumenthal’s amendment assumes to little of consumers and market forces. The Senator’s amendment would limit consumer choice and destroy the trade-in value for millions of Americans. Lawmakers in Congress should take action and oppose this illogical and economically detrimental amendment. 

 

Photo credit: Thomas Hawk

Top Comments


Tune In to the Bipartisan Summit on Fair Justice


Posted by Jorge Marin on Wednesday, July 22nd, 2015, 9:00 AM PERMALINK


We all know the statistics. The United States is drowning in one of the world’s most extensive prison populations… and budgets. Americans for Tax Reform is committed to reducing the footprint of the government in people’s lives as much as possible; this is why we are joining our efforts with the Coalition for Public Safety, and the parties present here today.

In order to secure the crime reductions we have been able to achieve in recent years, and expand them, we are looking to apply the proven reforms which have been so successful at the state level. By encouraging better sentencing and more effective alternatives to incarceration, America can provide justice and fiscal sanity simultaneously.

More from Americans for Tax Reform

Top Comments


Dodd-Frank Hammers Small Banks

Share on Facebook
Tweet this Story
Pin this Image

Posted by Nathaniel Rome on Tuesday, July 21st, 2015, 4:48 PM PERMALINK


Small American banks have been hit with a brutal one-two punch over the past decade. First, it was the Financial Crisis. And five years ago today, the Government decided to kick small banks while they were down by passing Dodd-Frank.

Since Dodd-Frank, there has been only one new FDIC-insured bank. You read that correctly, only one new bank since 2010. Bank of Bird-In-Hand in Amish Country, with their horse-and-buggy drive-through, stands alone. In the three decades prior to Dodd-Frank, an average of more than one hundred banks opened annually. And even after past recessions, new banks have opened by the dozens. But since the recession and Dodd-Frank, new banks have been almost non-existent.


 

And it is not just a lack of new banks, it’s a decline of existing banks. Mergers and failures have erased thousands of independent banks. Since 2006, there has been a decline of 1,762 banks, one of the most precipitous declines in American history.

 

While Dodd-Frank was intended to target big institutions, it is becoming clear that small banks are being driven into insolvency as a result of heightened regulations and compliance costs.. A Harvard Kennedy School Report finds that community banks have seen their banking asset share decline by 12.4% percent while large banks (excluding the 5 biggest) have seen their asset share grow by 11.4%. 

According to the Mercatus Center, there are nearly 27,000 regulations associated with Dodd-Frank, more regulations than associated with all other laws passed during the Obama administration – combined. It is a basic fact of business that large institutions can better adapt to regulatory pressure than smaller ones. Small banks have stunted growth because all new resources must go into hiring compliance officers and potential new banks are daunted by the regulatory wall barring them from entering the market.

These developments should be viewed with grave concern. Not only do local banks provide more personalized services, but they also provide a critical life-line for small businesses seeking loans. Small banks – those with less than $1 billion in assets - account for only 8 percent of all banking assets, but make one-third of all small business loans. The decline of these banks will be a major blow to American innovators and entrepreneurs seeking investment.

The damage does not end there. More than a third of Dodd-Franks regulations have yet to be finalized. This means more regulations, costs, and uncertainty for small banks. To stop the decline of community banking and a concentration of banking assets in fewer and fewer banks, Congress must not celebrate Dodd-Frank’s birthday and instead address the problems with the law.  

Photo Credit: 
Tony Webster, https://www.flickr.com/photos/diversey/

Top Comments


California Should Beat Back Asset Forfeiture

Share on Facebook
Tweet this Story
Pin this Image

Posted by Danil Zelenkov on Tuesday, July 21st, 2015, 3:04 PM PERMALINK


California is on the verge of fixing abusive civil asset forfeiture laws in the state. Yesterday, California Assembly Committee passed Senate Bill 443 unanimously (7-0) after passing the State Senate (38-1). The new bill has the potential to improve California’s civil asset forfeiture laws, which currently have a D in the Institute for Justice’s Scorecard, and a C+ in Freedomworks’s.

SB 443 will place much needed restrictions on law enforcement. Right now, law enforcement agencies need ‘clear and convincing evidence’ in order to seize property. The bill will alter that by requiring a criminal conviction for forfeiture to take place. The San Diego Union Tribune explains that the new law would impose “a steeper burden of proof so that agencies are less apt to view law-abiding citizens as cash cows”.

In addition, the bill provides forfeiture victims the right to a fair hearing to reclaim their lost property. If exonerated, victims will be entitled to attorneys’ fees and litigation costs compensation.

This legislation addresses the “equitable sharing program” that local law enforcement agencies can use to circumvent state laws. SB 443 will prevent federal-state collusion and will bar transfers of seized property to the federal government. This particular provision of the bill takes away the ‘profit incentive’ that current civil asset forfeiture laws provide for law enforcement agencies. State officials can still claim 80% of the proceeds when they hand them over to the federal government. In 2012 alone, federal, state and local law enforcement snatched approximately $4.2 billion in seized assets. The main opponent of SB 443, the California Association of Police Chiefs complained that the bill would “significantly reduce distribution amounts to local law enforcement.” It is clear that this police profiteering must be stopped.

Russ Caswell was one victim of the draconian civil asset forfeiture laws in the state. The Drug Enforcement Agency (DEA) in conjunction with local police seized his family-owned motel because of a handful of drug-related arrests of some motel guests. Although, Mr. Caswell had always cooperated with the authorities and was unaware of the illegal activity, local police still seized his hotel. Mr. Caswell was never convicted of a crime, but the $2 million property was too irresistible to be left alone.

Assemblyman David Hadley (R-Torrance) and Senator Holly Mitchell (D-Los Angeles) have taken on the crucial job of leading the charge for reforming civil asset forfeiture. The bill’s proponents feel that it is essential to uphold “a core American principle of justice that you can’t have your life, liberty or property taken away from you without due process of law.”

Americans for Tax Reform is urging California Gov. Jerry Brown to sign SB 443 into law and elevate California’s civil asset forfeiture laws on par with other states leading reforms such as New Mexico and Montana.

 

Photo Credit: 
WEBN-TV https://www.flickr.com/photos/politicalpulse/

More from Americans for Tax Reform

Top Comments


5 Years Later: Dodd-Frank Continues to Cripple Small Business, Kill American Jobs

Share on Facebook
Tweet this Story
Pin this Image

Posted by Dorothy Jetter on Tuesday, July 21st, 2015, 2:59 PM PERMALINK


In 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act established the Consumer Financial Protection Bureau which claims to "help consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives." In reality, Dodd-Frank and the resulting government interference have done more harm than good for American consumers by crippling small businesses and stunting job growth.  

Five years later, small businesses are struggling to comply with this complex legislation.  According to the Wall Street Journal, the United States is losing on average one community bank or credit union a day because of Dodd-Frank. American Action Forum released a study analyzing the overwhelming costs of the legislation; $24 billion in final rule costs and 61 million paperwork burden hours.

American consumers are seeing the consequences of these burdensome regulations.  For example, before Dodd Frank, 75% of banks offered free checking and in 2012, only 39% of banks continued to do so. Similarly, the minimum average balance necessary to qualify for free checking has doubled over the same time period.  Many attribute this to the bill's Durbin Amendment, which imposed price controls on the interchange fee (paid between banks for the acceptance of card based transactions) charged for debit cards.  

Additionally, a study by the International Center for Law and Economics found low income families are being hit the hardest.  The center estimates that from 2014-2017, $1 billion to $3 billion annually will be transferred from low-income households to large retailers and their shareholders as a result of the Durbin Amendment. 

Small business institutions, and the jobs that go along with them, have also been shrinking in the era of Dodd-Frank. Congressman Jeb Hensarling (R-Texas) compared Dodd-Frank to "Obamacare for our economy."  Hensarling reasons, "Dodd-Frank has left us with fewer choices, higher costs and less freedom."  Small business institutions simply cannot afford to comply with these rules. Community banks and credit unions are increasingly forced to close as a result of ever worsening regulations and compliance costs.

In a recent study, the Harvard Kennedy School of Government suggests lawmakers work to identify, "what regulatory conflicts are unnecessarily harming community banks, to ensure better coordination and to reduce unintended consequences stemming from conflicting regulatory objectives.”  The same study concluded that Dodd-Frank accelerated the decline of America’s community banks.

In 2010, as an alternative to Dodd-Frank, House Republicans introduced the Consumer Protection and Regulatory Enhancement Act Rather than sweeping government overhaul, this legislation sought to reform the financial regulatory system through market-based solutions and without taxpayer funded bailouts.  After enduring five years of oppressive Dodd-Frank policies, the time has come to revisit these proposed alternatives.  ​

Photo Credit: 
Nancy Pelosi https://www.flickr.com/photos/speakerpelosi/

More from Americans for Tax Reform

Top Comments


New Report Confirms Federal Government Failed to Monitor Billions in Obamacare Funds

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Tuesday, July 21st, 2015, 1:00 PM PERMALINK


The federal government failed to track billions of dollars in grants given to states to create Obamacare exchanges according to a report by Reason Magazine’s Peter Suderman.  As a result, neither the federal government nor the states are able to say how much of the $2.78 billion in Medicaid matching funds were improperly used to construct state exchanges. In addition, the report finds these states have yet to complete an alarmingly high list of functions associated their exchange websites.

These findings appear in a July 2015 draft report compiled by the nonpartisan Government Accountability Office (GAO) and obtained by Reason.

As Suderman notes, the Centers for Medicare and Medicaid Services (CMS) did not require states to track funding to exchange marketplaces with any specificity. As a result “ [CMS] is not in a position to account for all federal funds that went toward the establishment and support of marketplace IT systems.” Instead, CMS requires states to categorize funding in five vague categories: IT contracts, IT consultants, IT personnel, IT equipment, and IT supplies. 

Despite this freedom and over $5.4 billion in grants from the federal government, state exchanges encountered numerous complications in setting up. In fact, as the report notes, only one state based exchange has completed “development of hub services functions such as verifying an individual’s identity and citizenship, and retrieving tax information for evaluating taxpayer eligibility for insurance affordability program.”

Even worse, several state exchanges have already failed, and many face financial difficulties now that grant money is all but exhausted and states are required to finance without federal assistance.

In Hawaii, the exchange received $205 million in grant money, but was unable to become financially sustainable upon launch due to a lack of potential enrollees. Most embarrassingly, the exchange enrolled zero individuals during a special enrollment period.

As bad as Hawaii was, Oregon’s exchange is undoubtedly the poster child for government waste. The state received $305 million in federal funding but had failed to complete a workable exchange months after launch date.

The disaster prompted then-Gov. Kitzhaber to place a trusted campaign consultant, known as the “Princess of Darkness” in charge of the exchange, despite her having no IT or healthcare background. When the exchange was dismantled, it was officially because it was unworkable and unsalvageable. However, reports emerging since suggest that the princess dismantle the exchange solely based on assisting the governor’s reelection campaign.

It remains unclear how much of the millions in funds can be recovered from these failed exchanges, or whether the federal government has any contingency plan should more states return to the federal system. But given the revelations that millions more could have been improperly spent on constructing exchanges and key functionality remains unfinished, it is clear that stronger controls are needed immediately. 

Photo Credit: 
Pictures of Money

More from Americans for Tax Reform

Top Comments

stephen gilliss

1) Horrific abuse of taxpayer dollars and 2) Seemingly criminal behavior by politicians to avoid accountability. Except for purposes of national security, all government transactions should be 100% transparent.


Taxpayers Demand Obamacare Money Sent to Failed State Websites Be Returned

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Tuesday, July 21st, 2015, 8:00 AM PERMALINK


When Hawaii’s Obamacare exchange began experiencing financial difficulties earlier this year, the federal government stepped in and froze what remained of the $205 million in grant money given to Hawaii Health Connector. But in Oregon, none of the $305 million federal funds has been recovered since the exchange was abolished. This discrepancy raises questions on just how and when the Department of Health and Human Services (HHS) conducts oversight over the grants it has given to states. Given what happened in Oregon, when does the federal government ask states for the money back?

Today, many state exchanges are struggling to pay the upkeep costs associated with their exchanges and in the future may move to the federally run healthcare.gov. This begs the question – how prepared is HHS for the very real possibility of another state abandoning their exchange? What criteria will a state be held to when deciding if they can move to the federal exchange? How much of the funds will be the federal government recoup? Based on the differing outcomes of the failed Hawaii and Oregon exchanges it would appear HHS is making things up as they go along.

According to a report by the Honolulu Star-Advertiser, Hawaii Health Connector had spent over $130 million of the $205 million in grants it had been given. The remaining $70 million was seized by HHS at the start of the year when problems began emerging within the exchange.

Hawaii Health Connector had hoped to pay for ongoing costs through a two percent fee on premiums. This turned out to be woefully inadequate and they then asked the state legislature to provide millions in bailout funds. When Hawaii’s legislature refused, the exchange had no choice but to shut down.

As this was playing out, HHS was restricting Hawaii Health Connector’s access to any federal funds remaining given it was expected that Hawaii would begin transition to healthcare.gov, a process it began last month.

This stands in stark contrast to the Oregon debacle, where $305 million in federal funds was spent building a failed exchange. When the exchange began to run smoothly months later, it appears that then-Governor Kitzhaber’s political consultants pulled the plug to assist the Governor’s reelection campaign.

In the months and years leading up to the launch deadline, there were repeated warnings from Oregon’s quality control contractor that the exchange was on the wrong path. In fact, according to a report by KATU.com, nearly every major problem that plagued Cover Oregon was foretold. But despite these warnings, grant money continued to flow freely.

With problem after problem emerging with state exchanges, taxpayers could find themselves billions of dollars in the red because of mismanagement. In this scenario what kind of contingency plan does HHS have?

 

Photo Credit: 
American Life League

More from Americans for Tax Reform

Top Comments


Simpson-Bowles Would Have Failed to Fix Budget Problems

Share on Facebook
Tweet this Story
Pin this Image

Posted by Alexander Hendrie on Monday, July 20th, 2015, 3:00 PM PERMALINK


CBO budget numbers confirm that the Simpson-Bowles budget proposed by some members of Congress would not have reined in the nation’s spending problem as its supporters claimed. The proposal that was adopted in its place, the Budget Control Act (BCA) succeeded in reducing spending at far greater levels than Simpson-Bowles would have.

President Obama commissioned the “National Commission on Fiscal Responsibility and Reform” led by co-chairs Alan Simpson and Erskine Bowles. In late 2010, the commission released its budget blueprint, often described as the Simpson-Bowles budget.

Ultimately, the proposal was ignored by Congress because it was a $3.3 trillion tax increase, and did not adequately address the nation’s spending problem. Instead, the Republican controlled Congress chose to pass the BCA, which implemented annual spending caps to limit the growth of spending. This was enforced by across the board sequesters on federal spending and helped direct the federal budget towards a pathway of responsible spending.

The Simpson-Bowles Budget proposed reducing federal debt and spending by raising taxes. At the time, the commission’s own forecast predicted a $1 trillion tax increase over 10 years, but in hindsight the plan would have raised taxes $3.264 trillion over 10 years. Under Simpson Bowles, taxes would currently be 19.3 percentage of GDP and a projected 20.6 percentage of GDP by 2020. But under current law, taxes have been kept at a far lower 17.7 percent of GDP and will reach just 18.1 percent of GDP – 2.5 percent lower than Simpson-Bowles, or $435 billion less in taxes.


Simpson-Bowles proposed a trade-off: tax increases for spending cuts. But based on CBO statistics, the BCA-imposed spending restraint has done everything Simpson-Bowles promised and more, all without radically increasing taxes on American families. According to CBO, spending as a percentage of GDP currently sits at 20.4 percent, far lower than the 21.6 percent that Simpson-Bowles touted.


Even though Simpson-Bowles would have been an abject failure, some politicians continue to support the framework. Senator Lindsey Graham (R-S.C.), a candidate for President of the United States recently called on Congress to pass the budget plan during an interview on CNN’s “State of the Union.”

In reality, the high taxes that Simpson-Bowles called for were never needed and would have raised the tax burden on American families and businesses to near-record high levels. 

Photo Credit: 
Simon Cunningham, https://www.flickr.com/photos/lendingmemo/

More from Americans for Tax Reform

Top Comments


ATR Urges Congress to let the Solar Investment Tax Credit (ITC) Expire

Share on Facebook
Tweet this Story
Pin this Image

Posted by Justin Sykes on Monday, July 20th, 2015, 2:43 PM PERMALINK


Americans for Tax Reform today sent a letter to members of Congress urging them to allow the Investment Tax Credit (ITC) for solar energy to expire. 

Originally enacted in 2006, this 30 percent commercial and residential credit was intended to facilitate a fledgling solar industry. Yet in recent years solar has sufficiently matured and the time has come for  these taxpayer backed handouts to end.  

Congress now has a great opportunity to clean up America's tax code and begin peeling back government policies that unfairly pick winners and losers - simply by taking no action. Below is the full text of the letter: 

Dear Senators:

 On behalf of Americans for Tax Reform (ATR), and millions of taxpayers nationwide, I urge you to allow the Investment Tax Credit (ITC) for solar energy to expire. 

The ITC was never intended to be permanent but has received repeated extensions over the years. Congress is under no obligation to continue to extend temporary tax policy; simply because the ITC is law in 2015 does not justify the tax credit’s existence indefinitely. 

ATR supports allowing the ITC to expire and also urges lawmakers to oppose the inclusion of “Commence Construction” language that some are advocating for, which is a thinly veiled attempt for a backdoor extension of the credit. Allowing the ITC to continue disadvantages energy consumers by skewing America’s energy market, unfairly picking winners and losers and distorting our tax code. 

Originally introduced in 2006, the 30 percent credit for commercial and residential solar was intended to facilitate a fledging industry. Since then, the solar industry has sufficiently matured and its power generation is even mandated in a number of states.

Relying so heavily on the ITC, the solar industry has put Congress in the awkward and ill-suited position of deciding whether Americans will consume more or less solar energy. America’s energy markets are enormously complex systems, which function most efficiently without government’s distortive policies.

Burdened with political considerations, the federal government is ill-equipped to determine what source of energy Americans should use. With the federal ITC set to expire at the end of 2016, Congress has a great opportunity to cleanup America’s tax code and begin peeling back government’s distortive policies – simply by taking no action.

Sincerely,                                

Grover G. Norquist                                                    

 

 

Photo Credit: Brookhaven National Laboratory 

Top Comments

jimjenal

Hmmm... this would have more credibility if it called for eliminating *all* tax credits related to energy - but it doesn't. I smell an agenda here...

Cayo

Yeah, isn't this a tax increase?

PoliteLiberal

You've got to be kidding me. Only the solar energy investment credit?! What a phony.
First the legislative shenanigans in Kansas and Louisiana and now this?! How is this guy still relevant?!


Momentum is Building for Reform: Speaker Boehner Steps Up

Share on Facebook
Tweet this Story
Pin this Image

Posted by Jorge Marin on Friday, July 17th, 2015, 3:45 PM PERMALINK


Speaker of the House John Boehner (R-Ohio) made a strong statement in favor of criminal justice reform. On July 16, the Speaker made clear that America has too many people incarcerated. People who do not necessarily belong there.

National leaders are becoming more vocal about the need to improve the justice system across the nation. Although the United States has one of the most extensive prison systems in the world, two thirds of released prisoners can expect to go back to jail. Speaker Boehner is right to call attention to our wasteful criminal system.

We are at a point where counting the number of federal crimes is close to impossible. Thanks to everything from draconian crimes to draconian sentencing our prison population has reached unacceptable levels. Moreover, the people who go through the system are more likely to return to prison that not. According to the speaker,

“We’ve got a lot of people in prison, frankly, that really… don't need to be there. It's expensive. The housed prisoners, sometimes… are in there under what I'll call flimsy reasons.”

The SAFE Justice Act, which Speaker Boehner supported in his remarks, tackles the most pressing problems facing our courts and prisons. By focusing mandatory minimums for certain offenses on the most dangerous criminals, SAFE Justice targets police resources on the most pressing offenders. The bill also reduces federal over-criminalization, and increases the use of mens rea-in order to make sure that an individual was aware of whether his or her actions are criminal.

These measures will make our streets safer, and our budgets smaller.

Americans for Tax Reform is committed to seeing a smaller, more effective government in all its forms. Leaders in Congress should apply the principles in the SAFE Justice Act to reign in the excesses of our criminal Justice system. Speaker Boehner took an important step today.

 

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

More from Americans for Tax Reform

Top Comments


×