IRS Handbook Still Includes Rule Allowing Agents to Target Conservatives

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Posted by Elizabeth McKee on Friday, March 31st, 2017, 1:21 PM PERMALINK

At a conference before the American Bar Administration in May 2013, Lois Lerner unleashed a political uproar by admitting the IRS unjustly targeted conservative organizations filing for tax-exempt status. Nearly four years after Lerner’s admission, the institutional mechanisms that allowed the IRS to target right-leaning groups have not been remedied. A study released by the Cause of Action Institute reveals Rule 7.29.3, which allowed the IRS to unjustly scrutinize groups based on their political viewpoints, is still a part of the IRS handbook.

Rule 7.29.3 of the Internal Revenue Manual advises tax law specialists to develop “Sensitive Case Reports” for certain groups requesting tax-exempt status that are “likely to attract media or Congressional attention.” According to Cause of Action’s study:

“The dangers in this approach are manifold. First, by focusing on media or congressional attention instead of looking at the merits of an application under the law, the IRS automatically politicizes the process in an attempt to avoid potential embarrassment, all at the expense of taxpayer rights. Second, the vague and open-ended standard used by the IRS allows partisan officials to selectively delay and obstruct those applications receiving higher scrutiny without a way to hold the officials accountable for their decisions. Third, given the power of the president to influence media coverage, no overt collusion or decision is necessary for the opponents of an administration to receive extra IRS scrutiny as a matter of course.”

The rule, which was adopted on July 14, 2008, led to the creation of a “Be on the Lookout List” (BOLO) in 2010. The list advised agents to flag applications that referenced "Tea Party," "Patriots" or "9/12 Project,” advocated education about the Constitution or the Bill of Rights, criticized how the government was being run, or that lobbied to “make America a better place to live.”

In June 2016, the IRS released a list of 426 organizations that were selected for increased scrutiny based on the criteria laid out in the BOLO. Of these, 60 have the word “tea” in their name, 33 include the word “patriot,” 30 include the number “912,” and eight refer to the Constitution.

The BOLO created unnecessary hurdles that blocked the applications of flagged organizations. During the three-year period between 2009 and 2012, only one conservative political advocacy group was approved for tax-exempt status.

When questioned about the targeting of organizations with a conservative viewpoint, Lois Lerner blamed the scandal on two unnamed “rogue agents” in the IRS’s Cincinnati office; however, we now know that institutional procedures within the IRS allowed and supported the agency’s attack on conservative organizations. In July, Judicial Watch released documents revealing that “top Washington IRS officials, including Lois Lerner and Holly Paz, knew that the agency was specifically targeting ‘Tea Party’ and other conservative organizations two full years before disclosing it to Congress and the public.”

Formal investigations into the scandal have been blocked at every turn by the IRS. In June 2014, IRS Commissioner John Koskinen testified before the House Ways and Means Committee that Lois Lerner’s hard drive had crashed and been destroyed; the American Center for Law and Justice notes that John Koskinen has contributed over $100,000 to the Democratic Party. Koskinen was later censured by the House Committee on Oversight and Government Reform, but retained his position as IRS Commissioner.

Four years ago, Senator Orrin Hatch asserted that more needed to be done in order to prevent tax audits from becoming a tool to undermine dissident political opinions. The senator declared, ““We need to have ironclad guarantees from the IRS that it will adopt significant protocols to ensure this kind of harassment of groups that have a constitutional right to express their own views never happens again.”

Despite Senator Hatch’s concerns, little has been done to protect political organizations from IRS targeting. Although they no longer use the BOLO, the rule that allows the IRS to subjectively target partisan organizations is still in full force. In January, Americans for Tax Reform reported that the IRS may still be targeting conservative groups. The Albuquerque Tea Party recently had their application for tax-exempt status denied by the IRS - seven years after they first applied.

According to Cause of Action’s study, amending the IRS handbook to abolish Rule 7.29.3 would be a relatively simple process. The study reports, “The IRS has the authority to change its internal policy at any moment, which means it can remove the problematic rules at its discretion. Doing so would eliminate the agency procedure that enabled the targeting scandal. To date, the agency has not made the required changes to its rules.” Until the agency removes Rule 7.29.3 from their handbook, the targeting of outspoken political organizations will remain an official component of standard IRS procedures.

 

 

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ATR Supports Bill to Make Tax Code More Equitable

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Posted by Natalie De Vincenzi on Thursday, March 30th, 2017, 4:28 PM PERMALINK

Congressman Curbelo (R-Fla.) and Congressman Blumenauer (R-Ore.) have introduced H.R. 1810, the Small Business Tax Equity Act of 2017, which will remove the inequities in the tax code that are biased against marijuana dispensaries claiming tax credits or deductions. Section 280E of the tax code prevents businesses with expenditures connected to illegal drug sales from utilizing deductions or tax credits.

However, in 28 states, D.C., and Guam, marijuana businesses are not considered illegal, yet are unfairly discriminated against by Section 280E. Because of this, marijuana businesses nationwide face income tax rates as high as 90%. This bill will remove marijuana businesses from the arbitrary measures of Section 280E and entitle them to the same deductions and credits any other legal business has. Americans for Tax Reform urges support for this bill. Please read the letter here or below. 

The Honorable Carlos Curbelo
United States House of Representatives
1404 Longworth House Office Building
Washington, D.C. 20515

The Honorable Earl Blumenauer
United States House of Representatives
1111 Longworth House Office Building
Washington, D.C. 20515

Dear Congressman Curbelo and Congressman Blumenauer,

I write in support of H.R. 1810, the Small Business Tax Equity Act of 2017, legislation which allows legal marijuana dispensaries to take common necessary business deductions under the tax code.

Under 280E of the tax code, marijuana businesses that are operating legally under state law in 28 states, D.C., and Guam are not allowed to deduct necessary business expenses like wages, equipment, and rent from taxable income.

This law was originally created in 1982 to stop drug dealers from taking tax credits and deductions. Today, it is hitting legal businesses across the country resulting in federal income tax rates close to 90 percent.

The Small Business Tax Equity Act addresses this with a simple and commonsense change – amending federal law so that Section 280E does not apply to legal businesses.

The fact is, marijuana businesses that are operating legally should be entitled to the same deductions and credits under the tax code as any other business.  Passage of the Small Business Tax Equity Act will remove the arbitrary and punitive measures of the tax code that treat legal marijuana businesses as illegal. All members of Congress should have no hesitation supporting and co-sponsoring this important legislation.

Onward,

Grover G. Norquist
President, Americans for Tax Reform

 

 

 

 

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Fox News: 73% of Americans Want Tax Reform

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Posted by Hannah Daniel on Thursday, March 30th, 2017, 3:59 PM PERMALINK

According to a survey conducted by Fox News released yesterday, 73% of Americans responded “yes” to the question, “Do you think the country’s tax system should be reformed this year?”.

In addition, the study found that 45% of Democrats think their taxes are too high, and 61% of Democrats want to see tax reform happen this year.

Fox News conducted this poll in conjunction with Anderson Robbins Research and Shaw & Company Research. The entire study is available here.

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Norquist: Obamacare Repeal Must Come Before Tax Reform, “Because The Alternative Is Too Awful.”


Posted by Hannah Daniel on Wednesday, March 29th, 2017, 3:56 PM PERMALINK

Today ATR President Grover Norquist was a guest on Fox Business Network’s Varney & Company. Norquist made clear that Obamacare repeal/replace needs to get done BEFORE tax reform.

Stuart Varney, host: “I want a prediction. Will we go back and get rid of Obamacare in the immediate future? Are we going to do that quickly, as the president said?”

Norquist: “I believe we will, and the reason is that the alternatives are awful. And the people who voted ‘no’ thought they were negotiating, and doing something on healthcare. They didn’t understand they were sinking fundamental tax reform if we didn’t get healthcare first. Why? Because there’s a trillion dollars per decade in tax reduction in getting rid of Obamacare. Obamacare was a series of twenty taxes adding up to a trillion dollars in a decade, and they put a stethoscope on it and called it Obamacare. It was an additional trillion dollars in spending. This is the largest spending and tax cut most of these congressmen will ever vote on in the rest of their lives.”

Varney: “To repeat, Grover Norquist, the guy who knows his way around Washington, he says, yes, it will be done. Correct?”

Norquist: “Yes, because the alternative is too awful.”

Varney & Co. airs Monday through Friday from 9:00 a.m. to 12:00 Noon on the Fox Business Network.

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Norquist Praises Trump Executive Orders Rescinding Obama-era Energy Regulations

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Posted by Justin Sykes on Tuesday, March 28th, 2017, 12:14 PM PERMALINK

ATR President Grover Norquist issued the following statement in support of President Donald Trump’s release of his executive order on energy independence that will halt a number of costly Obama-era regulations such as the former President’s signature Clean Power Plan:

“President Trump’s release this week of his executive order on energy independence is a positive step towards rolling back a number of Obama-era regulations which would have had drastic economic impacts on the U.S. with little to no environmental benefits. 

“The President’s executive order will halt past regulations such as President Obama’s Clean Power Plan, but will also look to create a framework to encourage U.S. energy production and independence moving forward.

“Under President Obama Americans witnessed a massive increase in the regulatory state and executive overreach that deterred innovation while driving up the cost of energy in the U.S. for taxpayers and businesses while providing no real environmental impacts.

“For instance the President’s executive order will begin rolling back the Clean Power Plan, which would have increased electricity rates by double-digits in 44 states while killing thousands of jobs and decreasing U.S. competitiveness. 

“Trump’s order will also require reviews of other costly and duplicative Obama energy policies such as the Bureau of Land Management’s rules on methane emissions and the Interior Department’s moratorium on new coal leasing on federal land.

“I applaud President Trump’s for his leadership rolling back anti-energy Obama policies and his work to encourage U.S. energy production and independence.”

 

Photo credit: Gage Skidmore

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Arkansas Should Not Lose Ground on Public Safety

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Posted by Sarah Caplin on Tuesday, March 28th, 2017, 11:40 AM PERMALINK

In a letter sent to the Arkansas Legislature, Americans for Tax Reform urged state lawmakers to oppose mandatory minimum sentencing in SB 177.  

Increasing sentences arbitrarily and limiting parole options can result in severe sentencing outcomes that neither fit the crime nor the individual's unique circumstances. This is why over 30 states have reassessed prison sentences and corrections spending in the last 15 years.

If passed, SB 177 would undo Arkansas’ progress in establishing a more effective criminal justice system. More taxpayer dollars would be spent on low level offenders instead of serious violent criminals. After passage, the prison population would increase by 5,500 mostly non-violent people at a cost of $692 million over ten years.

Read the letter here or below.

March 28, 2017

Dear Members of the Arkansas Senate,

On behalf of Americans for Tax Reform and our supporters across Arkansas, I write today in strong opposition of SB 177. If passed, SB 177 would undo Arkansas’ progress in establishing a more effective criminal justice system. More taxpayer dollars would be spent on low level offenders instead of serious violent criminals.

Thanks to Act 423, enacted earlier this month, Arkansas took needed steps to stabilize its prison population and averted an increase in its prison population of 1,650 people by 2023. This will relieve pressure on the already at-capacity prisons from the added strain, and allow the state to avoid building more prisons. Act 423’s passage look to projected savings of over $288 million. Rolling back these reforms would be a mistake.

Increasing sentences arbitrarily and limiting parole options can result in severe sentencing outcomes that neither fit the crime nor the individual's unique circumstances. This is why over 30 states have reassessed prison sentences and corrections spending in the last 15 years.

An impact estimate done by Arkansas’ Sentencing commission found that enacting SB 177 would have costly consequences for the state’s budget. After passage, the prison population would increase by 5,500 mostly non-violent people at a cost of $692 million over ten years.

SB 177 would take sentencing discretion away from the judges who know the specifics of a case and can properly determine what an appropriate sentence is. This encourages excessive incarceration and risks breaking families apart unnecessarily. Children and spouses would be deprived of breadwinners, risking negative effects on their own lives.

Act 423 uses the money saved from reductions in prison spending on recidivism reduction initiatives such as mental health services and addiction treatment. Rather than warehousing low risk offenders, this approach can reduce crime rates at a faster rate without breaking the budget.

Given the undeniable costs and dubious benefits of mass, long-term incarceration of nonviolent offenders, the Arkansas Legislature should turn away from sentencing practices that have been shown not to work. The Natural State has already passed legislation to improve public safety through smarter crime policies, this bill represents a significant step in the wrong direction.

I encourage you to extend your opposition 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                                                                                                                   

Photo Credit: 
Thomas Hawk

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Stop The FCC's False Privacy Rules


Posted by Katie McAuliffe on Tuesday, March 28th, 2017, 10:17 AM PERMALINK

Americans for Tax Reform supports using the Congressional Review Act authority to vacate the Federal Communications Commission's false privacy rules.

The rules are an excuse to expand agency power.  There is already a cop on the beat when it comes to privacy, the Federal Trade Commission.  There are already laws on the books governing the use of sensitive consumer data, including health and financial.  

By vacating the rules, we maintain the structure that has successfully protected consumer data while also encouraging innovation and a competitive ad based market for apps and other services.  This market gives consumers more choice often for free.

Read our letter to the House supporting the CRA.

 

Use the CRA to Remove
False Broadband Privacy Rules
 
Grover G. Norquist
President

       
March 27, 2017

RE:  Federal Communications Commission False Privacy Rules 

Dear Congressmen:

I write urging you to use your Congressional Review Act authority to withdraw the Federal Communications Commission’s broadband privacy rules and support the Federal Trade Commission framework for privacy protection.

We should always be wary of regulation for regulation’s sake. Duplicative rules at different agencies often create confusion and added costs without a significant benefit.

The Federal Trade Commission has been policing privacy for the last decade, and there has been no indication that another agency is needed.  The FCC is not needed here.

In a time when our goal is to pare down the cost of government and let taxpayers keep more of their hard earned paycheck, the FCC is no poster child for efficiency.  

FCC Commissioner Mike O’Rielly pointed out that the FCC, through information gathering requests alone, requires 73 million hours and $800 million just to fill out requests. The Competitive Enterprise Institute found that in FY 2015 the FCC spent around $464 million in regulatory development and enforcement, and it accounts for more than $100 billion annually in regulatory and economic impact.

Please find enclosed a coalition letter from 21 organizations detailing why the FTC rules are the correct approach and our opposition to the FCC rules.  This letter requested that Congress use its Congressional Review Act authority to rescind the broadband privacy rules. It also details why we do not believe the rules will do as they claim. 

Americans value their privacy.  That is why Americans for Tax Reform has been a vocal defender of privacy and the Fourth Amendment. However, the FCC rules use our highly valued privacy as a tool to empower agency regulatory expansion at the expense of consumers.

If you have any questions, please contact Katie McAuliffe by email, kmcauliffe@atr.org, or by phone, 202-785-0266.


Onward,

Grover G. Norquist
 


Enclosure

 
 
21 State & Federal Organizations Support the CRA
 
January 26, 2017

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

The Honorable Nancy Pelosi 
Minority Leader
U.S. House of Representatives
Washington, DC 20515
 

Dear Speaker Ryan & Minority Leader Pelosi:

We urge you to use the authority provided in the Congressional Review Act to rescind the Federal
Communications Commission’s Broadband Privacy Order.

Congress is fully justified in rescinding these rules both because the Order lacks proper legal grounding and because of the need to ensure real consumer privacy across contexts of user experience.

The FCC’s approach is inconsistent with that of the Federal Trade Commission for nearly two decades, and will likely render harm unto consumers.

The FTC focuses on what data are held, the level of data sensitivity, and how consumers are affected if the data are misused. This outcomes-based approach takes consumers’ preferences into account while preventing actions that harm consumers.

The FTC’s approach rests on well-established standards of Unfairness (preventing substantial consumer injury) and Deception (enforcing material promises). Consumers generally agree on what constitutes financial and physical injury. Consumers deem data that could lead to these types of injuries more sensitive, and expect higher security for these data.

The sensitivity of other “private” information is, as the FTC rightly recognizes, often subjective, depending on its use. Some people might choose to post everything about themselves online — details that others might find invasive or embarrassing if made public — while others chose not to join social networks. Some might find value in an application using data about their geolocation in a particular way, while others decline participation because they consider the benefit of the service outweighed by its privacy cost. None of these approaches to privacy is incorrect. Each is a personal decision about tradeoffs. Taking varying consumer preferences into account, the FTC’s standards functioned reasonably well, requiring opt-out in most instances and opt-in only for particularly sensitive kinds of data.

The FCC approach focuses on who holds the data, rather than what — and how sensitive — the data are. This hinders services that consumers want while failing to protect sensitive data across contexts.

The FCC's questionable ability to regulate privacy standards, and its narrow view on what constitutes privacy protection, make its rules counterproductive to actual consumer privacy protections. In contrast, the FTC's approach to privacy does a better job of balancing protection of consumers’ privacy online with economic incentives to innovate in consumer products and services.

There are many reasons for Congress to negate these rules: The legality of the Open Internet Order, which these rules are based on, is questionable; the FCC's expanded interpretation of customer proprietary network information from section 222 is incorrect, as it applies specifically to voice services; and sections 201, 202, 303(b), 316 and 705 of the Communications Act also do not give the FCC the authority to enter rules of this nature.

Rescinding the Privacy Order would promote both innovation and effective, consistent privacy protections in over-the-top, application, wireless and wireline markets. It would also send a clear signal that the FCC has lost its way in interpreting the statute Congress gave it. Doing so would not create a gap in privacy protection because the FCC would retain the ability to police privacy practices of broadband companies on a case-by-case basis.

If Congress fails to use the CRA in such a clear-cut case of agency overreach, the statute will fail in its original goal: encouraging regulatory agencies to respect the bounds of Congressional authority.

Sincerely,

Americans for Tax Reform
Digital Liberty 
American Commitment
American Consumer Institute
Caesar Rodeny Institute
Center for Freedom & Prosperity
Center for Individual Freedom
Competitive Enterprise Institute
FreedomWorks
Frontiers of Freedom
International Center for Law & Economics
Institute for Policy Innovation
The Jeffersonian Project
John Locke Foundation
Less Government
The Main Heritage Policy Center
NetCompetition
Oklahoma Council of Public Affairs
Small Business & Entrepreneurship Council
Taxpayers Protection Alliance
TechFreedom
 

Americans for Tax Reform would like to bring to your attention some interesting statistics on the 20


Posted on Monday, March 27th, 2017, 12:28 PM PERMALINK

 

2002 Tax Facts

Individual Income Tax Returns Filed (projected):
(Calendar Year (CY) 2002)

132 million
Filers using 1040EZ 9.8 million (7%)
Filers using 1040A 13.9 million (11%)
Filers using 1040 57.9 million (44%)
Electronic Filings 50.1 million (38%)
Filers using 1040PC Returns Discontinued after 2000 tax year

 

Filers Using Professional Preparers:

69.2 million
(53% of all returns)
(Tax Year (TY) 1999)  
  1040EZ 761 thousand
(3% of EZ filers)
  1040A 3.7 million
(13% of 1040A filers)
  1040 64.7 million
(91% of 1040 filers)

 

Estimated Preparation Time (TY 2001):
  Form 1040 13 hr., 27 minutes
  Schedule A (Itemized Deductions) 5 hr., 37 minutes
  Schedule B (Interest and Dividend Income) 1 hr., 26 minutes
  Schedule C (Profit or loss from a Business) 10 hr., 35 minutes
  Schedule D (Capital gains and losses) 7 hr., 36 minutes

 

Miscellaneous Statistics (TY 1999):
Filers who Itemize: 40.2 million (32%)
Filers with Charitable Deductions: 35.5 million (28%)
Filers with Interest Deduction: 33.7 million (27%)
Filers with Medical Deductions: 5.9 million (5%)
Filers with Capital Gains or Losses: 21.5 million (17%)
Filers with Dividend Income: 32.2 million (25%)
Filers with Taxable Interest Income: 67.2 million (53%)

 

Filing Status (TY 1999):
  Single Filers: 56.9 million (45%)
  Joint Filers: 49.9 million (39%)
  Married Filing Separately: 2.4 million (2%)
  Head of Household: 17.9 million (14%)

 

Number of Returns with Presidential Election
Campaign Fund Checkoff (TY 1999):
14.2 million (11%)

 

Individual Tax Refunds Expected (FY 2001): 93 million
  Taxpayers with Direct Deposit of Refunds (CY 2001): 29.4 million

 

Federal Tax Revenues:
Total Taxes Paid (Fiscal Year 2001): $1.991 trillion
Individual Income Taxes: $994 billion (49.9%)
Social Insurance Taxes: $694 billion (34.8%)
Corporate Income Taxes: $151 billion (7.6%)
Other (excise, estate, and others): $152 billion (7.6%)
**misc. receipts not included  

Income Taxes Due:
(Taxable Income for tax year 2001, taxes payable by April 15th, 2002)

Taxable Income Income Taxes Due
Single Filer:
Joint Filer:
$10,000 $1504 $1504
$20,000 $3004 $3004
$30,000 $4876 $4504
$40,000 $7626 $6004
$50,000 $10,376 $8107
$60,000 $13,126 $10,857
$70,000 $16,010 $13,607
$80,000 $19,060 $16,357
$90,000 $22,110 $19,107
$100,000 $25,157 $21,850

(* taxes may be reduced due to the earned income credit)

Tax Rates:
(Taxable Income for tax year 2002, taxes payable by April 2003)

Single Filer
Married Filing Jointly
Taxable Income
Tax Rate
Taxable Income
Tax Rate
$0 to $6,000 10% $0 to $12,000 10%
$6,001 to $27,950 15% $12,001 to $46,700 15%
$27,951 to $67,700 27% $46,701 to $112,850 27%
$67,701 to $141,250 30% $112,851 to $171,950 30%
$141,251 to $307,050 35% $171,951 to $307,050 35%
over $307,050 38.6% over $307,050 38.6%

Who Pays The Income Tax? (Calendar Year 2001):
Income Category
Share of Population
Share of Income Taxes
$200,000 and over 2.7% 49.7%
$100,000 to $200,000 9.0% 23.9%
$75,000 to $100,000 9.1% 11.6%
$50,000 to $75,000 15.4% 10.6%
$40,000 to $50,000 9.2% 3.5%
$30,000 to $40,000 11.1% 2.4%
$20,000 to $30,000 13.0% 0.4%
$10,000 to $20,000* 16.4% -1.3%
Less than $10,000* 14.0% -0.7%
(*due to cash payments to EIC recipients)    

Payroll Taxes:
Employee Tax Rate 7.65%
Employer Tax Rate 7.65%
Social Security, or Old Age and Survivor\'s Disability Insurance Portion 6.2%
Medicare, or Hospital Insurance Portion 1.45%
Self-Employed Tax Rate 15.3%

Maximum Taxable Earnings Base for 2002:
  Social Security $84,900
  Medicare Unlimited

Maximum Tax for 2002:
  Social Security $5,264 ($10,528 for both employer and employee share)
  Medicare Unlimited

Age Which Workers Must Reach to Fully Recover Their Social Security Taxes Plus Interest (Based on retirement at Age 65)
(Age When Workers Fully Recover payroll taxes plus interest)
Year of Retirement
Minimum Earner*
Average Earner*
Maximum Earner*
1940
65
65
65
1960
66
66
66
1980
67
68
68
2000
77
82
89
2010
78
85
96
2020
80
87
107
2030
78
89
113
(* minimum earner: $10,712; average earner: $33,897; maximum earner: $80,400 -- in 2001 dollars)

The Earned Income Credit (TY 1999):
Number of Returns Claiming an EIC: 19.3 million (15%)
  Number of Returns with No Income Tax Liability: 16.1 million

 

Maximum Allowable Adjusted Gross Income Required to Qualify (TY 2001):
  Taxpayers with Two Children: $32,121
  Taxpayers with One Child: $28,281
  Taxpayers with No Children: $10,710

 

Maximum Annual Credit (TY 2001):
  Recipients with Two Children: $4,008
  Recipients with One Child: $2,428
  Recipients with No Children: $364

 

Percentage of Recipients (TY 1999):
  With Two or more Children: 43%
  With One Child: 40%
  With No Children: 17%

The Internal Revenue Code:
Number of Words: Over 2.8 million

War and Peace
Number of Words: 660,000

The Bible
Number of Words: 774,746

The Internal Revenue Service:
Annual Budget $9.4 billion (FY 2002)
Number of Employees: 99,887

 

The F.B.I. The Border Patrol
Annual Budget: $4.2 billion (FY 2002) Annual Budget: $1.5 billion (FY 2002)
Number of Special Agents: 12,582 Number of Agents: 10,551

 


Keep Central Planning Out of Space

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Posted by Jorge Marin on Monday, March 27th, 2017, 10:51 AM PERMALINK

Private space company Blue Origin is planning to test their own manned missions later this year while Space Exploration Technologies (SpaceX) gears up for the first launch of its Falcon Heavy rocket, the most powerful rocket since the Saturn V that first got Americans to the moon. Exciting things are happening in space thanks to new technologies being developed by private companies.

On March 10, the Center for a New American Security published a study by Robert Zimmerman that took a look at the history of the American space industry to compare how different approaches in space policy yielded radically different results in outcome and costs.

The study compared space systems developed with heavy government control versus private-industry centric approaches to see which path was better for taxpayers and the industry at large. It is no surprise, then that Zimmerman found the most dramatic success stories in the private sector, while centrally planned programs floundered and stalled.

In 2005 the United States committed itself to a long term program to get people to the moon, and possibly beyond. NASA was tasked with replacing the Space Shuttle program with what was dubbed the Crew Exploration Vehicle, set to explore the solar system and get to the moon in ten years. It has, of course, failed the time frame for the mission. The program was modified by the following administration to create what we now call the Orion Space Capsule and Space Launch System (SLS).

After more than 15 years and $43 billion spent, the United States has not been able to produce the much anticipated SLS and has yet to find a use for it. This is a rocket without a mission.

A healthy space ecosystem serves many purposes. Besides the obvious military implications, the global economy has reaped massive dividends from technologies birthed in space development. Without satellite GPS, lasers, and water purification it is difficult to imagine modern society; yet they were all developed thanks to the space race.

Regrettably, billions of dollars have been squandered in heavy-handed approaches that do little to advance space technology. Zimmerman found that

When we add in the cost to build Ares/SLS as well as all NASA’s carrying costs, the total outlay to build and launch these three capsules equals about $43 billion. From conception to first operational flight will take about 15 years, assuming that first manned Orion flight occurs in 2021.

Meanwhile, after spending $5.4 billion and 7 years of development, the private sector has been able to launch 42 cargo and unmanned flight capsules and 42 rockets.

In fact, while the government is still struggling to get its massive rocket without a mission airborne, SpaceX has announced that by the end of the year they will send two people on a trip to circumnavigate the moon before returning to earth on their Falcon Heavy rocket.

The SLS will likely launch for the first time in 2018, and is likely to only launch once per year. It may have a higher payload than the Falcon Heavy, or other heavy lift rockets currently in development, but the current estimates for each launch run at a low end of $500 million. For that price a costumer could launch 5 (!) Falcon heavies at $90 million per launch, and have change to spare for space ice cream.

Space is too important to leave to government central planning. In spite of decades of over-regulation, breakthrough companies are reshaping the world’s aerospace industry. Not only is it becoming cheaper for space programs to perform science in space, but more companies are entering the launch market, and new players are finding ways to innovate, making telecommunications cheaper for everyone and paving the road for affordable space travel. 

Photo Credit: 
Robert Couse-Baker

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Free Market Groups Urge Opposition to Importation of Price Controls

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Posted by Alexander Hendrie on Monday, March 27th, 2017, 10:00 AM PERMALINK

In an open letter to Congress, 18 conservative, free market organizations and activists urged federal lawmakers to oppose efforts to allow the importation of price controls of prescription medicines. 

Importation schemes are NOT the solution to lower prices and will NOT result in a more efficient healthcare system. Implementing an importation policy is simply adopting market-distorting price controls from other countries, which would disrupt U.S. innovation of life- saving and life-preserving medicines. 

In addition, these proposals open the door to deadly medicines flooding the market. Importation should not be confused with free trade and should be opposed.

The full letter can be found here and is below:

Dear Member of Congress:

On behalf of the undersigned conservative, free-market organizations, we write in opposition to proposals calling for the importation of prescription medicines.

Importation schemes are NOT the solution to lower prices and will NOT result in a more efficient healthcare system.

Instead, implementing an importation policy is simply adopting market-distorting price controls from other countries, which would disrupt U.S. innovation of life- saving and life-preserving medicines. Over the long-term this will result in substantially higher costs to the healthcare system, because there will be fewer research dollars to reinvest, thousands of jobs will be lost, and fewer lifesaving treatments will be available that will keep people out of the hospital and enable them to lead productive lives.

The United States is a leader in medical innovation, with more than half of pharmaceutical / biotech research being conducted in this country.  Even so, it costs more than $2.6 billion and takes 10-12 years to develop a drug, conduct clinical trials, and obtain Food and Drug Administration (FDA) approval for each drug that makes it onto the market.

In contrast, almost every country in the world has excessive price controls that hinder medical innovation.  In these countries, prices are often determined by politicians offering voters seemingly cheap medicines.  In reality, the world rides on U.S. research and taxpayers.

Importation of prescription medicines should not be mischaracterized as an issue of free trade.  Free trade means transparent prices with no tariffs, barriers, or price controls.  Drug importation is the opposite of free trade.

Importation schemes are also potentially dangerous to consumers.  The FDA has stated there is no way to assure the safety, authenticity, or effectiveness of imported drugs, or whether the drugs are from the country the packaging claims it to be. 

Even attempting to construct such a system would be incredibly costly to taxpayers. In addition to drugs being adulterated, they could be deadly. The FDA has long expressed concern with the importation of medicines for these very reasons.

While some argue that importation would increase competition and lower costs, the solution to lower prices should be less government interference, not more. 

Lawmakers need to help create an environment that encourages competition in the pharmaceutical realm. For example, Medicare Part D has provided medicines to seniors at less than half the projected costs because it facilitates private competition and encourages different stakeholders to offer savings.

Prescription drug importation would have disastrous effects on the economy, would hurt American innovation, and is dangerous to consumers. Members of Congress should reject these proposals.

Sincerely,

Grover Norquist
President, Americans for Tax Reform

Marty Connors
Chair, Alabama Center Right Coalition

Phil Kerpen
President, American Commitment

Matt Schlapp
Chairman, American Conservative Union

Robert Alt
President and CEO, The Buckeye Institute (Ohio)

Peter J. Pitts
President, Center for Medicine in the Public Interest
Former FDA Associate Commissioner

Thomas Schatz
President, Council for Citizens Against Government Waste

Kent Lassman
President, Competitive Enterprise Institute

Richard Watson
Co-Chair, Florida Center Right Coalition

Grace-Marie Turner
President, Galen Institute

Joseph Bast
President and CEO, The Heartland Institute

Don Racheter Ph.D.
Iowa Conservative Activist

Tom Giovanetti
President, Institute for Policy Innovation

Kevin Waterman
Chair, Maryland Center Right Coalition

Pete Sepp
President, National Taxpayers Union

Lorenzo Montanari
Executive Director, Property Rights Alliance

Karen Kerrigan
President and CEO, Small Business & Entrepreneurship Council

David Williams
President, Taxpayers Protection Alliance

 

 

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

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