These Taxes Will Leave a Bad Taste in Your Mouth

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Posted by Caroline Anderegg on Wednesday, August 19th, 2015, 5:10 PM PERMALINK


At the turn of the twentieth century the tax code was only 400 pages long—about the length of the third Harry Potter book. However, since then it has grown to be 187 times longer to a monstrous 74,608 pages. The majority of that growth has occurred in the last 30 years, and if it continues at this rate the tax code will exceed 100,000 pages by 2050. This not only illustrates the mounting weight of the federal tax burden, but the subsequent increase in control the nanny state IRS has over the economic behavior of all Americans.

On top of the complex and overreaching federal tax code, each state has its own unique set of tax laws. Many of these nuances force business owners to raise prices on confused, unhappy consumers.

Take the New York “bagel tax,” for example. The Empire State is known for its delicious bagels, but if bakery goers want it sliced, toasted or with toppings it will cost a little extra. Thanks to the fine print in New York’s tax code, those are the differences between a bakery item and a restaurant item. Only the latter is subject to the state’s 4 percent sales tax, as well as local taxes that can add up to almost 9 percent in some areas.

In a recent post, Stateline highlighted many of these unusual state taxes that perplex taxpayers across the country. Illinois offers a prime case of the discriminatory nature of these hair-splitting taxes. According to the Streamlined State and Use Tax Agreement that attempts to standardize sales taxes nationwide, the difference between candy and cookies or cakes is whether or not the product contains flour. So when Illinois raised the state candy tax from 1 percent to 6.25 percent in 2009, Kit-Kats, Milky Ways, and other flour-containing candy bars were exempt from the exorbitant candy tax hike while other products sold in the same aisle were not.

Beer-drinkers in Kansas encounter puzzling obstacles similar to those of candy-eaters in Illinois. The Sunflower State allows beer containing alcohol content of 3.2 percent or less to be sold in grocery stores. This beer, however, is subject to the state’s 6.5 percent sales tax as well as local tax, which averages a total of 8.4 percent combined tax. Regular beer with higher alcohol content, on the other hand, is exclusively sold in liquor stores and not subject to the same sales tax. An 8 percent liquor enforcement tax is imposed instead, which is on average a lower tax than that levied on these low alcohol content beers.

“There are many strange quirks in the tax system,” said Kansas Department of Revenue spokeswoman Jeannine Koranda in reference to this strange contradiction.

These “quirks” are actually costly burdens on taxpayers that represent a larger problem plaguing the current tax system. Pedantic complications in both the federal and state tax codes have become so numerous that the laws are now used to steer consumption and limit choice. Be it bagels, candy or beer, anomalies in the tax code not only impose undue regulation but make compliance difficult for taxpayers and business owners. 

Photo Credit: 
Mikael Wiman, https://www.flickr.com/photos/wimi_karlstad/

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Lois Lerner Rages Against 'Evil and Dishonest' Republicans, Will Networks Report?

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Posted by Geoffrey Dickens on Wednesday, August 19th, 2015, 1:53 PM PERMALINK


Editor's Note: This article was originally posted on NewsBusters and was republished here with permission.

Lois Lerner’s utter contempt for Republicans was on full display in a newly uncovered email in which she railed: “They called me back to testify on the IRS ‘scandal,’ and I too[k] the 5th again because they had been so evil and dishonest in my lawyer’s dealings with them.”

The question has to be asked, will Lerner’s use of such inflammatory language be enough to wake the Big Three (ABC, CBS, NBC) network evening and morning shows out of their IRS scandal coverage slumber? 

So far, they have yet to report on any of the recent IRS scandal revelations such as Lerner setting her sights on Bristol Palin, her glee when she found out instant messaging emails were not automatically archived, and the IRS’s targeting of donors to conservative organizations.

On ThursdayPolitico’s Katy O’Donnell, in article headlined “Lerner Slammed ‘evil and dishonest’ GOP Inquisitors,” reported on a “Politico examination of thousands of pages of emails and other material recently released by the Senate Finance Committee” that uncovered  particularly spiteful emails Lerner had sent to a friend:

When she was under investigation by Congress, she offered a blistering critique of her inquisitors. In a March 6, 2014, email, Lerner told a friend: “They called me back to testify on the IRS ‘scandal,’ and I too[k] the 5th again because they had been so evil and dishonest in my lawyer’s dealings with them.”

In June 2014, Lerner told the same friend that an unflattering picture of her appearing before Congress kept surfacing because “it serves their purposes of hate mongering to continue to use those images. I was never a political person — this whole fiasco has only made me lose all respect [for] politics and politicians. I am merely a pawn in their game to take over the Senate.”

These emails come on the heels of new evidence that Lerner’s IRS was holding up approval of conservative groups. 

On August 11, Americans for Tax Reform’s Alexander Hendrie reported that Lerner’s IRS granted only one conservative group non-profit status in three years:

Lois Lerner’s political beliefs led to tea party and conservative groups receiving disparate and unfair treatment when applying for non-profit status, according to a detailed report compiled by the Senate Finance Committee.

Because of Lerner’s bias, only one conservative political advocacy organization was granted tax exempt status over a period of more than three years:

“Due to the circuitous process implemented by Lerner, only one conservative political advocacy organization was granted tax-exempt status between February 2009 and May 2012. Lerner’s bias against these applicants unquestionably led to these delays, and is particularly evident when compared to the IRS’s treatment of other applications, discussed immediately below.”

As the report notes, Lois Lerner became aware in April or May of 2010 that the IRS Exempt Organizations (EO) division had begun receiving a high number of applications from Tea Party organizations. But as the backlog of applicants increased, Lerner added “more layers of review and raised hurdles for applicants to clear.”

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Frankie

I'd agree with Lerner if she were referring to conservative Judaism.
Conservative Judaism is the de facto ideology of Republicans.
However, reformed-secular Judaism is just as evil as conservative Judaism.


ATR urges Michigan lawmakers to reform civil asset forfeiture laws

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Posted by Danil Zelenkov on Wednesday, August 19th, 2015, 11:00 AM PERMALINK


Grover Norquist, president of Americans for Tax Reform, sent a letter to the Michigan Senate Judiciary members in support of the civil asset forfeiture reform package composed of House bills 4500, 4503, 4504, 4506, 4507, and 4508. This criminal justice reform package is a step in the right direction. It would safeguard the Fifth Amendment rights of Michigan citizens while preserving the ability of police officers to confiscate property involved in illegal and illicit activities. The text of the letter is as follows:

 

Dear Senator Jones

On behalf of Americans for Tax Reform and our supporters across Michigan. I write today in strong support of a legislative package pending in the Michigan legislature that, if passed, would safeguard the Fifth Amendment rights of your constituents. While the reform package—encompassing House bills 4500, 4503, 4504, 4506, 4507, and 4508,--does not solve the problem of civil asset forfeiture in its entirety, it does, represent a giant leap forward in ensuring innocent civilians are protected. Furthermore, these reforms preserve the ability of police officers to confiscate profits of legitimate offenders.

On average, Michigan police collect a staggering $18.6 million per year on forfeitures alone; creating a tempting draw to use this questionable practice aggressively. Last year alone police seized over $24 million. Unfortunately, civil asset forfeiture can prove to be a powerful incentive for some over-zealous officers.

In one particularly egregious incident, Michigan mom Ginnifer Hency saw police come into her home and seize everything from her husband’s tools to her children’s Christmas presents. Her crime? Six ounces of marijuana—which she was legally allowed to possess thanks to her medical marijuana license. The case was so farcical on its face that a St. Clair County judge dismissed it. Unfortunately the prosecutor then sought to take her property in civil court.

To help curb these abuses, the new law would increase the standard of proof from “preponderance of the evidence” to “clear and convincing.” Though a conviction should be required of any asset forfeiture, this shift of the burden of proof balances the onus in against the state in a positive way.

Moreover, these new reforms would improve reporting standards and transparency, which will help prevent civil asset forfeiture abuse. By requiring reporting on seized assets, legislators in Lansing, and their constituents, can keep better track of the funding police agencies get from the sale of confiscated assets.

Police forces need the trust of their communities to do their jobs effectively. Civil asset forfeiture, as the authority exists in Michigan, erodes that trust and antagonizes innocent civilians. These reforms help to restore trust in local and state police by reassuring constituents that their civil liberties are paramount in Michigan law.

I implore your colleagues to extend their own support for this important legislation. For more information, please contact Jorge Marin in my office at jmarin@atr.org.

 

Regards,                                                                                             

Grover G. Norquist                                                                        

President                                                                                           

Americans for Tax Reform

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Rafael Marquez https://www.flickr.com/photos/rafaelmarquez/

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IRS Failure to Heed Watchdog Warnings Puts 330,000 Taxpayers at Risk

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Posted by Alexander Hendrie on Tuesday, August 18th, 2015, 3:56 PM PERMALINK


Earlier this week, the IRS acknowledged the data breach that exposed the personal information of over 100,000 taxpayers was worse than first thought. The agency now says that the tax data of about 330,000 taxpayers was stolen during the hack. As ATR has previously pointed out, the IRS was repeatedly warned by watchdog groups to better protect taxpayer information. This latest revelation proves they did not heed these warnings until it was far too late.

Back in May, the IRS disclosed that hackers exploited a loophole in the “Get Transcript” application to obtain information on the tax returns of individuals. The hackers then used this information to file fraudulent tax returns. At the time, the agency said that the hackers succeeded in stealing as much as $39 million but these latest revelations surely increase that figure. The IRS is now taking several measures to protect data including sending letters to taxpayers warning of potential identity theft and offering credit protection.

Following the hack, Treasury Inspector General for Tax Administration (TIGTA) Chief J. Russell George revealed that the IRS failed to implement 44 recommendations that would improve the IRS’s ability to protect taxpayer information from hackers. Of these 44, ten recommendations were over three years old.

Since 2007, the IRS has been warned at least seven times by watchdog groups that it needed to strengthen its protections of taxpayer information. Most recently:

  • In a 2014 report, TIGTA warned that if stronger protections are not implemented, “taxpayers could be exposed to the loss of privacy and to financial loss and damages resulting from identity theft or other financial crimes.”  
  • 2013 report found that the IRS had failed to fully implement eight recommendations that would increase security over taxpayer data despite telling TIGTA they had been implemented.
  • A 2011 report found that taxpayer data was vulnerable to hackers and stronger security measures were needed
  • In 2010, TIGTA found that the agency had inadequate safeguards to protect taxpayer information from contract workers.

 

Clearly, the IRS knew that theft of taxpayer information was a serious threat. But instead of adopting dozens of recommendations from the Inspector General, the agency chose to sit on its hands and hope nothing went wrong. Now, thanks to the ineptness of the IRS, the personal information of hundreds of thousands of taxpayers has been stolen and these individuals are at risk of identity theft. 

See Also:

 

Photo Credit: 
Martin Haesemeyer; https://www.flickr.com/photos/haesemeyer/

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President of Ex-Im Bank Vows to Continue Fighting For Corporate Welfare

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Posted by Alexander Hendrie on Tuesday, August 18th, 2015, 3:19 PM PERMALINK


With the expiration of the Export-Import Bank in June, opponents of corporate welfare won a key victory against wasteful, unnecessary spending. Despite a concerted effort by big government advocates to reauthorize the bank, Congress has so far stood firm and refused to bow to special interests. However, the fight is not over and Ex-Im President Fred Hochberg remains determined to restore the bank when Congress returns in September.  

In an August 12 letter, Hochberg signaled his “hope and determination” to ensure the bank is reauthorized once Congress returns in September. Listening to Hochberg, one could be forgiven for thinking the bank is a key pillar to the success of American small business overseas.  His comments are the latest in a false narrative that exporters – especially small businesses –have no hope of competing overseas without Ex-Im.

But these scare tactics do not matchup with reality. For one, small businesses hardly rely on the Bank. According to information released by the White House, the Ex-Im Bank supported just 0.42% of exporters, 0.28% of small businesses and 1.9% of total exports between 2009 and 2014.  Even Ex-Im’s definition of a small business is misleading. The majority of government agencies define a small business as having 500 employees or less, but Ex-Im defines a small business as having three times that number.

Even after inflating their numbers, most of Ex-Im’s loans still go to well-connected corporations that can easily compete without these government subsidized loans. Even worse, taxpayer funded loans often provide major foreign corporations with extremely attractive sales terms that give them an unfair advantage over American competitors.

Some of the bank’s activities in recent years include billions in loans to state owned companies in China, Saudi Arabia, and the United Arab Emirates and has financed energy projects for foreign companies in India and Papua New Guinea with terrible human rights records.

Worse yet, the bank’s loans have been involved time and time again with fraud and corruption, resulting in countless indictments and millions in lost taxpayer funds. Most recently, a report by the Department of Justice alleged that a Miami small business used Ex-Im to continue a Ponzi scheme after private loans dried up.

Given this record, it is clear that Ex-Im no longer serves the best interest of the American people.

Supporters of Ex-Im have already tried to attach reauthorization of Ex-Im to must-pass Highway Trust Fund legislation last month, despite the two issues being completely unrelated. When Congress reconvenes next month, it appears that supporters of Ex-Im will do all in their power to reauthorize the bank. When this inevitably happens, members of Congress must stand firm and refuse to finance corporate welfare.

Photo Credit: 
DonkeyHotey, https://www.flickr.com/photos/donkeyhotey/

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Joe Franklin

What you label corporate welfare is really crony capitalism.
The Obama administration has been famously notorious for at least 2 illicit activities; crony capitalism and victim cult advocacy.
You can bet that Obama's 2 illicit activities are interrelated.


Vapers Remain Top Target of Lawmakers and Bureaucrats

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Posted by Paul Blair on Tuesday, August 18th, 2015, 3:04 PM PERMALINK


In my last podcast with ATR president Grover Norquist, we discussed the newest target of tax hikes at the state level. The new “sin,” an alternative to combustible cigarettes, is vaping, or the use of electronic cigarettes.

Click here to listen to our January podcast, “The Grover Norquist Show: Leave Vapers Alone!”

With nearly every state legislative session coming to a close, Grover and I re-examined the status of e-cigarette taxation at the state level and the looming threat of Food and Drug Administration (FDA) over-regulation. In this podcast, we preview the two temporary Congressional pathways to prevent the prohibition of the products currently on the market.

Click here to learn more about one of those solutions, Rep. Tom Cole’s H.R. 2058.

We last examined the lay of the land in January of this year. At the time, I predicted 25-30 states would look to raise taxes on e-cigarettes and vapor products and wrote about the trend in Forbes, which you can read here. Listen to the podcast to see if my predictions were correct!

Click here to support our efforts to fight higher taxes and unnecessary regulations on e-cigarettes and vapor products.

Photo Credit: 
Vaping360.com

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VAPING IT on Twitter

I appreciate what you & ATR do. Thank you.


HUD Subsidies Allow Nebraska Millionaire to Pay $300 Rent

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Posted by Kendyll Ferrall on Tuesday, August 18th, 2015, 1:30 PM PERMALINK


An individual worth $1.6 million living in Oxford, Neb. pays $300 a month for a one-bedroom apartment, but not because of the Nebraska housing market.

This tenet is among the more than 25,000 well-off families and individuals that have a taxpayer-subsidized roof over their heads thanks to ‘egregious’ abuse of the public-housing system.

According to an Inspector General (IG) audit of the Department of Housing and Urban Development (HUD) released in July, thousands of ‘over income’ families have received housing assistance despite exceeding the program’s income eligibility limits.

In some cases, the tenets’ income far exceeded the amount to qualify for government assistance, like the case from Nebraska:

Also, this tenant had total assets valued at nearly $1.6 million, which included stock valued at $623,685, real estate valued at $470,600, a checking account with a balance of $334,637, and an individual retirement account with a balance of $123,445. As of April 2014, the tenant paid a flat rent of $300 monthly for the public housing unit.

Taxpayers aren’t just footing the bill for millionaires.

The report found a family of four in New York making nearly $500,000 a year, but paying only $1,574 a month for a three-bedroom apartment and a Los Angeles family of five making over $200,000 but only paying $1,091 a month for a four-bedroom apartment. The low-income threshold in New York was $67,100 and $70,450 in Los Angeles.

Of the 25,226 over income families receiving taxpayer-funded housing, 17, 761 families, or 68 percent, had been earning more than the qualified for over a year. Over half of those families, 13,388, earned more than $10,000 over the 2014 income limits. Seventy-percent of the over income families had resided in government housing for over a year.

The report estimated that taxpayers will pay over $104.4 million this year to keep these families in subsidized housing.

Despite the IG’s report, HUD has no plans to evict any of these families. The department doesn’t require HUD officials to remove over income families –it urges them to stay.

HUD claims that by implementing a policy to evict families that no longer qualify for public housing would ‘negatively affect their employment and destabilize properties.’

Under current regulations, tenets may remain in government-provided housing as long as they want, regardless of income. HUD only considers income when an individual or family applies for housing, it does not perform financial reassessments. 

HUD officials attempted to shrug off the report’s findings, arguing that because families that were found to be abusing the system account for 2.6 percent of the 1.1 million families receiving assistance, it wasn’t necessary to implement any changes.

The 25,226 families in government housing receive it at the expense of over 300,000 families stuck on waiting lists that actually qualify for assistance. According to the report, 65-percent of over income families remain in public housing for up to 8 years and 5-percent stay for over 9 years.

 

Photo Credit: 
Tim Evanson https://www.flickr.com/photos/23165290@N00/

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If You’re Running for President, Do You Really Want This Endorsement?

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Posted by Caroline Anderegg on Tuesday, August 18th, 2015, 9:47 AM PERMALINK


Yesterday morning, presidential hopeful John Kasich joined Alabama Governor Robert Bentley at the Alabama Sports Hall of Fame in Birmingham, where Gov. Bentley announced his endorsement of the Ohio governor’s presidential bid. In his statement following the announcement, Gov. Kasich touted the endorsement as an honor given Bentley’s “incredible record.”

“What’s also significant to me is that Gov. Bentley reached out to our campaign, unsolicited, to offer his support,” he went on to say.

This makes Gov. Bentley the third Republican governor to offer an endorsement to a presidential candidate—both Maryland Gov. Larry Hogan and Maine Gov. Paul LePage are throwing their support behind Chris Christie, who served as the chairman for the Republican Governors Association during their 2014 gubernatorial elections.

An endorsement of this nature, particularly so early in a primary campaign with such a wide field, is unusual. Kasich’s camp highlighted the handful of topics on which he and Bentley disagree in an effort to prove that this endorsement represents the governor’s leadership as a consensus builder.

However, the similarity that they conveniently glossed over is the governors’ weak fiscal records. Both Kasich and Bentley have been at odds with their Republican legislatures during budget negotiations over the last several months. Fortunately for Ohio taxpayers, the Republican House leadership was able to pass real tax relief that saved Ohioans over $3 billion more than would have been enacted by Kasich’s proposal. This contradiction has not stopped the governor from flaunting his fiscal record on the campaign trail as he attempts to win over the Republican base.

With this goal in mind, it begs the question why would Kasich want Gov. Bentley’s endorsement? Despite being a Taxpayer Protection Pledge signer, and subsequent pledge-breaker, Bentley’s fiscal record is abysmal. He reneged on his promise of “No New Taxes” and has called for a second special session in another attempt to strong arm the legislature into adding $300 million in new taxes. In a primary race where moderate candidates are vying for support from the conservative base, Gov. Kasich is hitching his horse to the wrong wagon.

Some early responders warned that Bentley’s endorsement is a blow to other governors, particularly fellow southerners such as Bobby Jindal or Jeb Bush, because Alabama is one of a handful of southern states holding an early primary—becoming known as the “SEC primary.” But Bentley’s endorsement will likely make no difference for Kasich in the early primaries. Not all endorsements are created equal, and when it comes to Gov. Bentley’s flagging reputation the unsolicited endorsement is irrelevant at best, and at worst an association Kasich’s team should be hesitant to embrace.

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Scott Walker's Obamacare "Repeal and Replace" Plan Good for Taxpayers

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Posted by Ryan Ellis on Tuesday, August 18th, 2015, 8:51 AM PERMALINK


Wisconsin governor and 2016 GOP presidential hopeful Scott Walker is out today with his version of an Obamacare "repeal and replace" plan. No doubt all the serious candidates will have their own before primary season is over.

The most important part of the Walker plan is the first section, which completely repeals every jot and tittle of Obamacare. For taxpayers, that means repealing the 20 new or higher taxes in Obamacare. Right away, this plan is a large net tax cut as a result.

The plan also creates refundable tax credits for people on the individual health insurance market, uncapped by income but variable by age. The older you are, the bigger a tax credit you get. This reflects what health care actually costs for people as they age. The individual tax credit would be paid for by a very high cap on the tax-excluded value of employer-provided health insurance.

Walker's plan also creates a $1000 tax credit "bonus" for new people opening health savings accounts (HSAs), raises HSA contribution limits, and allows for greater HSA portability.

It makes sense that the insurance plan options these tax credits will apply toward will be cheaper than today, as Obamacare's costly restrictions and mandates are lifted.

Finally, the Walker plan begins to break down the barriers for people buying health insurance across state lines, allows consumers to pool together to purchase health insurance, gives states incentives to enact medical malpractice reform, and gives Medicaid a new mission by splitting it into several smaller goals for states to manage.

The Walker plan is a net tax cut, a net spending cut, and is intended to be budget neutral. It joins several other good Obamacare replacement plans out there, including the House Republican Study Committee plan, the plan advanced by Congressman Tom Price (R-Ga.), and the Burr-Hatch-Upton plan. No doubt more will join in the fun.

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The F-35 is a 'Big government' disaster in its worst form

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Posted by Danil Zelenkov on Monday, August 17th, 2015, 3:18 PM PERMALINK


Fiscal hawks are fighting to reform costly government spending programs and trim a bloated bureaucracy and the F-35 program is becoming an exorbitant Pentagon failure.  The most expensive military program in history is getting a free pass from otherwise fiscally responsible lawmakers.

The F-35 fighter jet program looks increasingly like a failure, and many politicians in Washington D.C. don’t want to admit it. The extravagant military program is hitting one obstacle after another in its development; from failing to meet testing benchmarks to ballooning costs. A report by Stars and Stripes reveals that although it is supposed to replace the F-15, F-16, and F-18, and the A-10 Warthog, the F-35 does not appear up to the task.

In its latest testing, the supposed zenith of military aviation was outmaneuvered by the very F-16 it is supposed to replace. The simulated dogfight resulted in numerous disappointing encounters with the older jet--the Lightning’s lack of energy maneuverability – a qualitative engineering method used to calculate an aircraft’s capabilities - being the most important shortcoming. The report goes on to state that “Even with the limited F-16 target configuration, the F-35A remained at a distinct energy disadvantage for every engagement.”

Not only does it prove inferior to older U.S. air crafts, but the F-35 is also under-performing in face-offs against foreign style jets, Russian or Chinese. It is noted in a report by military.com that “the 5th generation jet [F-35], will be outmaneuvered in dogfights with current Russian and Chinese jets as well as the U.S. aircraft it is slated to replace.” Such disappointing results point to a compromised national defense.

Construction costs stand at $400 billion at the moment, almost twice the initial estimate. In a time of budgetary restraints and cutting back, the federal government insists on sinking $1.45 trillion over the next 50 years on a plane that is proving itself to be a lemon. Considering the estimate was only at $1 trillion in 2011, the $450 billion increase in required funds indicates that the $1.45 trillion will likely increase further.

The U.S. atomic bomb Manhattan Project cost $26 billion in its entirety measured in today’s dollars. To put it in perspective, the F-35 program costs grew by “approximately one Manhattan Project every three weeks between 2011 and 2012.”

A Stars & Stripes report indicates that if the F-35 program continues this course, it “may needlessly gamble away a sizable margin of American air power at great expense and unnecessary risk to American lives.”

If conservative fiscal hawks and defense hawks want to regain their credibility of handling the nation’s finance, while securing for the national defense, they need to address government waste on all fronts, including Pentagon and the military.

Americans for Tax Reform supports a strong national defense and a strong military, but that should not allow careless waste of U.S. tax payer money.

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Samuel King Jr https://www.flickr.com/photos/49840571@N02/

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