Coalition Warns Against Broadband Proposals

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Posted by Katie McAuliffe on Friday, July 23rd, 2021, 3:52 PM PERMALINK

Americans for Tax Reform led a coalition with other center-right organizations flagging concerning developments in the infrastructure bill negotiations. Price controls and rate regulation; dramatic expansion of executive brand and agency authority; and government-controlled internet should never be on the table.

You can read the letter below or click HERE for a full version:

July 23, 2021

RE: Broadband Infrastructure Spending

Dear Senators:

We write to you today over some concerning developments in the bipartisan infrastructure negotiations on broadband. We are guided by the principles of limited government and believe that the flaws in the infrastructure framework go well beyond the issues discussed here. Nonetheless, our present aim is to advocate specifically against proposals that would enact price controls, dramatically expand agency authority, and prioritize government-controlled internet. 

The infrastructure plan should not include rate regulation of broadband services. Congress should not authorize any federal or governmental body to set the price of any broadband offering. Even steps that open the door to rate regulation of broadband services will prove harmful in the long run.  

Nor should Congress continue to abdicate its oversight responsibilities to executive branch agencies like the National Telecommunications and Information Administration. Giving NTIA unchecked authority to modify or waive requirements, renders all guardrails placed by Congress meaningless. There must be oversight of the programs to ensure that taxpayer dollars go toward connecting more Americans to broadband as opposed to wasteful pet projects. 

Historically, attempts by NTIA to close the digital divide through discretionary grants have failed, leading to wasteful overbuilds, corruption, and improper expenditures. The American Recovery and Reinvestment Act of 2009 created the $4 billion Broadband Technology Opportunities Program (BTOP) grant program administered by NTIA. From 2009, when BTOP was instituted, to 2017, at least one-third of all the reports made by the Inspector General for the Department of Commerce were related to the BTOP program, and census data showed that the BTOP program had no positive effect on broadband adoption. And this was with only $4 billion in taxpayer dollars. We cannot afford to make the same mistake with much greater sums.

Legislation must be clear and not create ambiguities that are left to the whims of regulators. While “digital redlining” is unacceptable, the FCC should not be allowed to define the term however it sees fit and promulgate any regulations it thinks will solve problems—real or imagined. Doing so would give the agency carte blanche to regulate and micromanage broadband in any way it desires. This would be an egregious expansion of FCC authority. Moreover, definitions and regulations could change whenever party control of the agency changes, leading to a back-and-forth that creates uncertainty for consumers and businesses. 

Legitimate desire to ensure that low-income Americans have access to broadband infrastructure should not be used as a smokescreen to codify aspects of the recent Executive Order on Competition, which should not be included in any bipartisan infrastructure agreement. Republicans fought hard to support the FCC’s Restoring Internet Freedom Order. Any legislating on the functions and deployment of Internet technologies must move as a standalone bill through regular order with committee review. These questions are far too important to shoehorn into a massive bill without rigorous debate.   

Any funding for broadband buildout must target locations without any broadband connection first, and this should be determined by the Congressionally mandated FCC broadband maps. Congress has oversight over the FCC and the FCC has already conducted several reverse auctions. Reverse auctions get the most out of each taxpayer dollar towards closing the digital divide. Areas where there is already a commitment from a carrier to build out a network, should not be considered for grants, and the NTIA should not be able to override the FCC’s map to redefine “unserved” and subsidize duplicative builds.  

Government-controlled Internet should not be prioritized in any grant program. With few exceptions, government-owned networks (GONs) have been abject failures. For example, KentuckyWired is a 3,000-mile GON that was sold to taxpayers as a $350 million project that would be complete by spring of 2016. Those projections could not have been more wrong.   More than five years past the supposed completion date, fiber construction for KentuckyWired is still “in progress” in some parts of the state and a report from the state auditor has concluded that taxpayers will end up wasting a whopping $1.5 billion on this redundant “government owned network” over its 30-year life. NTIA should certainly not encourage these failures to be replicated.

We appreciate your work to help close the digital divide and agree that access to reliable internet is a priority, however we should not use this need to serve as a cover for unnecessary

government expansion. Please feel free to reach out to any of the undersigned organizations or individuals should you have questions or comments. 

Regards,

Grover G. Norquist
President
Americans for Tax Reform
 
Jennifer Huddleston*
Director of Technology & Innovation Policy
American Action Forum
 
Phil Kerpen
President
American Commitment
 
Krisztina Pusok, Ph. D.
Director
American Consumer Institute
Center for Citizen Research
 
Brent Wm. Gardner
Chief Government Affairs Officer
Americans for Prosperity
 
Jeffrey Mazzella
President
Center for Individual Freedom
 
Andrew F. Quinlan
President
Center for Freedom and Prosperity
 
Jessica Melugin
Director Center for Technology and Innovation
Competitive Enterprise Institute
 
Matthew Kandrach
President
Consumer Action for a Strong Economy
 
Roslyn Layton, PhD
Founder
China Tech Threat
 
Ashley Baker
Director of Public Policy
The Committee for Justice
 
Tom Schatz
President
Council for Citizens Against Government Waste
 
Katie McAuliffe
Executive Director
Digital Liberty
 
Adam Brandon
President
FreedomWorks
 
George Landrith
President
Frontiers of Freedom
 
Garrett Bess
Vice President
Heritage Action for America
 
Carrie Lukas
President
Independent Women's Forum
 
Heather Higgins
CEO
Independent Women's Voice
 
Bartlett Cleland
Executive Director
Innovation Economy Alliance
 
Tom Giovanetti
President
Institute for Policy Innovation
 
Seton Motley
President
Less Government
 
Matthew Gagnon
Chief Executive Officer
Maine Policy Institute
 
Matthew Nicaud
Tech Policy Specialist
Mississippi Center for Public Policy
 
Brandon Arnold
Executive Vice President
National Taxpayers Union
 
Tom Hebert
Executive Director
Open Competition Center
 
Eric Peterson
Director
Pelican Center for Technology and Innovation
 
Lorenzo Montanari
Executive Director
Property Rights Alliance
 
Jeffrey Westling
Resident Fellow, Technology & Innovation Policy
R Street Institute
 
James L. Martin
Founder/Chairman
60 Plus Association
 
Saulius “Saul” Anuzis
President
60 Plus Association
 
David Williams
President
Taxpayers Protection Alliance
 

* individual signer; organization listed for identification purposes only

 

Photo Credit: Denny Müller

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ATR Partners on International Tax Burden Index, USA Ranks Second-Best

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Posted by Rowan Saydlowski on Friday, July 23rd, 2021, 3:45 PM PERMALINK

Americans for Tax Reform Foundation partnered with the Paris-based free-market think tank Institut Économique Molinari for the publication of the first edition of "The Tax Burden of Global Workers: A Comparative Index," published by James Rogers and Nicolas Marques of the Institut Économique Molinari.

In the index, South Africa and the United States had the lowest tax burdens, while European Union member states took the bottom 25 spots in the 34-country ranking. The 34 countries studied represent 58.2% of the global economy. The annual study calculates a "tax liberation day" for each country, indicating how many days' worth of work compensation is extracted from workers by their governments each year. The amount of taxes extracted were calculated as a combination of income taxes and social security contributions by both the employee and employer for an average worker in each country.

The governments of three countries (Austria, France, and Belgium) were found to extract more money than the worker himself or herself receives; for example, in Austria, the government receives $1.35 for every $1.00 that the average worker receives in take-home pay, for a total real tax rate of 54.76%. Meanwhile, in the United States, the government only receives $0.41 for every $1.00 that the average worker takes home, for a total real tax rate of 27.11%.

According to the index, Austria and France share the latest tax liberation day (July 19th), while South Africa has the earliest day (March 7th). American workers can celebrate their tax liberation day on April 9th this year.

The study notes that this year the overall average "real tax rate" throughout Europe decreased as a result of small policy changes and pandemic relief measures, though different European countries saw differing effects. 2021's tax liberation days arrive earlier in 10 European countries, later in 8, and on the same day in 10 as compared to last year, according to the authors.

"We are excited to partner with the Institut Économique Molinari to analyze tax burdens from major countries around the world," said Grover Norquist, President of Americans for Tax Reform. "While the United States fortunately performed well in this ranking, U.S. officials must remain wary to not fall into the burdensome taxation trap implemented by many of their European allies. Lower tax rates allow workers to keep more of their own hard-earned money and provide an environment for innovation to thrive. We need to stop the $2.9 trillion USD tax increase proposed by the Biden-Harris Administration, otherwise we will end up with the same level of taxation burden as European Union workers."

"Expanding our research to include all continents reveals a sharp contrast between the European Union and the rest of the world when it comes to taxing the salaries of workers," said James Rogers, co-author of the study and Research Fellow at Institut Économique Molinari. "Workers outside of the EU, with the exceptions of tiny Malta and Cyprus, get to keep significantly more of their earnings. American workers celebrate their 'tax liberation day' earlier than any of their European counterparts and enjoy the third-highest take-home pay around the world––while the cost of hiring them, thanks to the relatively labor-friendly tax rates, is cheaper than in 10 European countries."

"Through 12 years of study, the correlation between payroll taxes and the unemployment rate is clear in many European Union countries," added Rogers. "Looking at the global picture, this is generally the case, with low-tax countries such as Australia, Ireland, the U.S. and the U.K. experiencing lower unemployment than the EU average."

The full study can be found here: https://www.institutmolinari.org/wp-content/uploads/sites/17/2021/07/tax_burden_on_global_workers2021.pdf


States Get a Win in Lawsuit Over Blue State Bailout’s “No Tax Cut” Mandate

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Posted by Matt Haynie on Friday, July 23rd, 2021, 2:20 PM PERMALINK

Infamously, the American Rescue Plan (ARP) included language that barred states from “directly or indirectly” reducing tax burdens with the federal money they received. This vague, over-broad restriction left it unclear whether any state tax cut that occurred after the bailout could be challenged by the federal government.  

This spurred lawsuits from coalitions of states over the ‘no tax cut’ mandate. On July 2nd, a federal judge sided with Ohio in a lawsuit over restrictions in the American Rescue Plan – a big victory for taxpayers.  

Ohio and Arizona have spearheaded separate legal challenges, joined by other states to the language in the blue-state bailout package. This comes at a time when Americans need tax relief as the country returns to work after the pandemic.  

The Ohio lawsuit asserts that the federal government overstepped its bounds by issuing the “tax mandate” in the ARP.  The judge agreed, ruling that the prohibition of tax cuts with relief funds “falls short of the clarity required by Supreme Court precedent”. Further, the Judge ruled that the tax mandate meets the requirements for injunctive relief, meaning the law will, at least temporarily, no longer apply.  This comes as a win to Ohio taxpayers, and signals that other states may find success in their efforts to cut taxes with ARP funds.   

Arizona has also filed suit against the ARP’s tax mandate. After receiving over $4.9 billion dollars from the ARP, Arizona cut the state’s income tax by $1.9 billion dollars, putting much needed cash back in the hands of hardworking Arizonans. In the currently pending case, Arizona is arguing that the Federal Government offers a coercive amount of money in the ARP and is attempting to commandeer the state’s policy making process through the tax mandate.   

The court victory for Ohio taxpayers is a positive signal for Arizona’s lawsuit to protect their taxpayers. The tax mandate is a display government overreach, as the ARP attempts to interfere in the constitutionally prescribed domain of the states. This ruling is vital for protecting the states from the federal government trying to micromanage their budgets.   

Photo Credit: Flickr - Ohio Attorney General

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IRS Unit Has More Cars than Agents and Fails to Ensure Cars Are Used for Official Business

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Posted by Michael Mirsky on Friday, July 23rd, 2021, 12:15 PM PERMALINK

If a regular American taxpayer failed to show proper documentation for vehicle use related to their tax return, they would be in civil and criminal trouble with the IRS. But a new Inspector General report shows that the IRS would not pass the same audit it subjects Americans to.

The IRS Criminal Investigation (IRS-CI) division fails to perform basic due diligence to ensure its vehicles are being used properly. And many agents are assigned individual vehicles even though they do not need one and are not qualified for one, according to a recent report by the Treasury Inspector General for Tax Administration (TIGTA).

The inspector general found "questionable and missing information reported by special agents for commutes and commuting miles."

How would the IRS react if you were under audit and gave them "questionable or missing information"?

The division also has more vehicles than it does agents, costing taxpayers millions in unnecessary expenses. These findings are alarming given that President Biden has proposed a massive expansion in the size and power of the IRS.

Key excerpts from the report are as follows:

Excerpt #1: 

"questionable reporting of commutes and commuting mileage brings into question CI’s maintenance of sufficiently detailed, accurate information and data to support day-to-day oversight of the fleet as well as its compliance with requirements under the Home-to-Work authorization."

Excerpt #2:

"Our analysis of the number of pool vehicles compared to CI’s utilization criteria found there were excess pool vehicles in the CI fleet inventory."

Excerpt #3:

"Our review of fleet usage information provided by CI found that its data were often inaccurate or incomplete."

Excerpt #4:

"Our analysis of CIMIS usage data from April 2017 through January 2020 found questionable data reported for individually assigned vehicle use. Specifically, we identified three special agents who reported between 95,000 and 242,000 total mission miles in a 12-month period. The mileage reported is significantly greater than the 7,200 mile utilization criteria used by the IRS’s Facilities Management and Securities Services Division."

Excerpt #5:

"We also identified questionable and missing information reported by special agents for commutes and commuting miles. Specifically, 125 special agents reported zero commutes or commuting miles in a 12-month period. The information reported by these 125 special agents would indicate that they did not drive their assigned fleet vehicle to or from their place of  employment during this period. As such, the information reported by these special agents does not support his or her need to have an individually assigned vehicle based on criteria and requirements associated with Home-to-Work authority, which is discussed further in this report."

Excerpt #6: 

"the Home-to-Work data provided included missing and questionable information."

Excerpt #7:

"Our review found that the information provided by CI fleet management during this review was inadequate to support proper fleet management."

Excerpt #8: 

"Based on the evidence and documentation provided by CI, there were 342 special agents who did not report any commutes during the three-year period shown above in Figure 4. If these agents’ individually assigned vehicles were transitioned into pool vehicles at a two-to-one ratio, CI could potentially have realized cost savings of more than $871,682."

Excerpt #9: 

"Our review of inventory reports and Home-to-Work reports provided by CI fleet management found that CI is unnecessarily retaining and paying for an excessive number of fleet vehicles."

Excerpt #10: 

"eliminating questionable positions from Home-to-Work authority could have provided cost savings of over $1,714,943 over the three 12-month time frames included in our analysis. Appropriate analysis, controls, and measurable use associated with vehicle utilization, including realistic estimates on new hires and employee attrition and evaluating the necessity for Home-to-Work authority for special agent positions that do not qualify, are needed to ensure that CI reduces excess vehicle inventory and reduces unnecessary costs when possible."

CI’s fleet manager is responsible for providing timely information reports on the status and utilization of the CI fleet to the U.S. Department of the Treasury Fleet Manager under the Assistant Secretary for Management. 

As of January 1, 2020, the CI fleet program included 2,221 vehicles compared to just 2,030 agents. Of these vehicles, 1,698 vehicles were assigned individually to special agents and 523 vehicles were assigned as “pool cars”, or vehicles assigned to one or more IRS offices. All CI special agents with field investigative responsibilities and a select number with protective service responsibilities are authorized for Home-to-Work transportation. The annual cost of CI’s vehicle fleet inventory is shown below.

Federal agencies are required to maintain logs and other records to establish the official purpose of their Home-to-Work programs. Special agents are required to log all daily use of the vehicle outside the normally scheduled tour of duty. Despite these mandates, the TIGTA report found the IRS agents routinely ignored protocol. 

The IRS does not meet the standards it demands of taxpayers.

"If a small business owner gets audited, the IRS demands to see a detailed 'contemporaneous log' of their business miles, organized just so. But IRS agents themselves have no problem using taxpayer-funded company cars with a far more lax standard," said tax expert Ryan Ellis, certified as an IRS Enrolled Agent and president of the Center for a Free Economy.

Incomplete or inaccurate data do not support an efficient fleet program

TIGTA’s analysis of Criminal Investigation Management Information System (CIMIS) usage data between April 2017 and January 2020 found questionable data reported for individually assigned vehicles. The investigation uncovered three special agents who reported between 95,000 and 242,000 total mission miles in a 12-month period. This number greatly exceeds the 7,200 mile utilization criteria used by the IRS’s Facilities Management and Securities Services Division. Furthermore, the number of mission miles reported by these three agents were well above the average mission miles reported by other CI special agents.

The report also found that 125 special agents reported zero commutes or commuting miles in a 12-month period. The information reported by these 125 special agents would indicate that they did not drive their assigned fleet vehicle to or from their place of employment during this period. As such, the information reported by these special agents does not support their need to have an individually assigned vehicle based on criteria and requirements associated with Home-to-Work authority.

IRS fails to ensure accuracy of reported mileage

IRS procedures indicate that the manual input of mileage and usage information for these vehicles is to be completed monthly by administrative support staff. The guidance explicitly states that responsibility for the accuracy of the database rests with each CI employee. 

The procedures clearly identify which CI employee is responsible to ensure the accuracy of the database, with special agents entering data into their diaries, and administrative support staff transcribing the information from the diaries into the CIMIS. This leads to CIMIS administrators not correcting errors when they are identified. 

CI fleet management indicated that supervisory special agents are not required to physically verify the ending mileage on Government-operated vehicles on a month‐to‐month basis, allowing issues to go unnoticed, such as excessive mileage reported by special agents.

CI fleet management often provided incomplete data

TIGTA requested copies of the vehicle use data that CI fleet management is required to maintain to ensure effective management and oversight of its fleet. Some information, such as vehicle inventory reports, internal Home-to-Work analyses, and monthly expense reports, was provided to the investigators, while other important information was not always complete or up to retention standards. 

The report found that the Home-to-Work data provided included missing and questionable information. In addition, several older mileage reports were not available. 

The investigators also found that Fleet management does not track consolidated data on the number of special agents whose authorizations were suspended, why they were suspended, or the number of reinstatements that had been processed. 

Problematic guidance led to inaccurate reporting practices

Through their investigation, TIGTA found that special agents were not provided clear guidance to accurately input commuting miles. The guidance instructed CI agents to record commuting data without specifying whether the commute was within their tour of duty. 

Because this information lacks important details, there is a risk that the account includes an insufficient record of vehicle use outside of the normally scheduled tour of duty hours as required. 

CI cannot justify its fleet program size

TIGTA’s review of CI fleet management inventory reports and Home-to-Work reports found that the unit is unnecessarily retaining and paying for an excessive number of fleet vehicles. CI’s vehicle utilization criteria allow for one vehicle per special agent in the field and one pool vehicle for each supervisory special agent’s staff. However, a review of mission miles reported by special agents found that the mission miles reported by hundreds of these special agents would not have met the minimum requirements.

A breakdown of mission miles for individually assigned vehicles can be found below. 

CI’s fleet inventory has an unnecessary number of pool vehicles

The report found that 58, 140, and 10 vehicles were added to pool inventory due to attrition in FYs 2017, 2018, and 2019, respectively. Despite the push for this increase in the size of the fleet, none of these vehicles were accessed during these time frames, effectively increasing the number of vehicles in CI’s pool fleet. A cost savings of $1,016,606 could have been realized over three years.

Due to poor management, the taxpayer-funded vehicle fleet is too large.

Not all positions in CI require an individually assigned vehicle

Back in 2011 CI reduced the number of individually assigned vehicles in certain positions. The division also reduced the positions qualifying for Home-to-Work authority. This led to 64 special agents and approximately 127 special agent positions being identified as no longer requiring Home-to-Work authorization. 

Despite their conclusion that these positions were unnecessary for individual vehicle assignment, CI bulletins indicate that these positions were added back into the Home-to-Work request in February 2014, which was subsequently approved by the Department of the Treasury.

All told, eliminating questionable positions from Home-to-Work authority could have provided cost savings of over $1,714,943 over the three 12-month time frames included in the analysis. The breakdown of those potential savings is shown in the table below. 

This latest audit of the IRS is more evidence of an agency-wide problem with basic competence and due diligence resulting in wasted taxpayer funds and poor execution of core duties.


The FTC’s Integrity Crumbles Under Chair Khan’s “Leadership”

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Posted by Joseph Murgida on Thursday, July 22nd, 2021, 4:28 PM PERMALINK

In the first month of Lina Khan’s surprise tenure as chair of the FTC, she has extended false olive branches of transparency while working overtime to smash bipartisan limits on the agency’s enforcement authority. If gone unrestrained, Khan’s aggressive pursuit of radical partisan goals will harm the intellectual integrity of the FTC.

Khan’s decision to hold open FTC meetings may seem like a positive development, but the actual transparency is illusory at best. Even though the public has the opportunity to submit comments before the meetings, the comments are only considered after the commission already voted. Khan ignores the public’s concerns in her quest to fundamentally reshape the FTC. 

The only actual effect of the public meetings, as Commissioner Christine Wilson pointed out during Wednesday’s meeting, is forcing the commissioners to “avoid both staff participation and a dialogue among the commissioners.” Instead, she recognized that the commissioners “are left to deliver monologues with no interaction making these events more akin to theater than the reasoned decision-making that should characterize the FTC.” FTC commissioners are losing oral briefings, robust conversations or detailed memoranda describing the consequences of the proposals in the meetings. Wilson justifiably fears that these losses are crippling the FTC’s ability to fully understand the analytical impacts of the changes. 

Commissioner Noah Phillips also highlighted the procedural concerns of Khan’s leadership. He pointed out that, for the second time this month, Khan has given “the minimum notice required by law” for the meeting’s agenda, without adequately opening up the items for public comment. On top of all that, Khan is using a partisan, temporary 3-2 majority to undo bipartisan previous FTC enforcement standards. Although this majority will disappear once current FTC Commissioner Rohit Chopra transitions to his new role as the Director of the Consumer Financial Protection Bureau, for the indefinite future it looks like Khan will jam through as many changes as possible. Continued erosion of long-held enforcement principles will cause businesses to pull their punches when competing with rivals, robbing us of the robust competition that delivers the best prices and best choices for American consumers. 

Khan’s reckless pursuit of “reforming” the FTC likely is guided by her belief that the agency needs “bold leadership willing to use the full breadth of its expansive authority.”  The “bold” approach that she has theorized about for over five years turns out to be a cold disregard for bipartisan limits on government power. Khan’s blind pursuit of her radical agenda is willingly ignoring the commissioners outside of the temporary Democrat majority, the perspectives of other scholars, and the will of the public. In this pursuit, the FTC’s integrity is crumbling before our very eyes.

Photo Credit: New America


Massachusetts Sports Betting Proposals Look to Fleece, Not Foster, the Emerging Industry

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Posted by Doug Kellogg on Thursday, July 22nd, 2021, 3:38 PM PERMALINK

Massachusetts going into sports betting with high tax rates is like the Patriots playing without Tom Brady. They’ll be in the game, but performing worse.

High tax rates are a big threat with Senate Bill 269, which includes rates of 20% for in-person bets and 25% for mobile bets. These rates would be among the highest in the nation, behind only Pennsylvania’s absurd 36% effective tax rate. The 25% tax rate on mobile would beat out Tennessee’s 20% rate. These are extremely high tax rates that will make it tough for sports books to succeed, and grow.

Low tax rates are best, they make the legal market more competitive with other states, make it easier for sports books to make ends meet, and help the industry grow and create jobs. Low taxes also make legal betting more attractive to bettors, so they are not betting in the black market.  

For comparison, 6.75% is the lowest rate among U.S. states. While Massachusetts’ neighbors are awful on taxes, Connecticut’s 13.75% rate would be notably lower than the proposed rates.

It is not just taxes that cause concern, both Senate and House have proposed significant recurring licensing costs (on top of the initial, one-time fee), from a $200,000 annualized cost, to $1 million. Pennsylvania hits operators with a whopping $10 million initial licensing fee, but even the Keystone State’s recurring fee amounts to a much lower $50,000 annualized.

Fees are supposed to cover the cost to government to run a program, or service. If they are generating revenue, they amount to taxes. These flat costs also are more burdensome to smaller operators.

The hits don’t stop coming, as the Senate version does not allow for betting on college sports. This kind of blanket restriction would keep all betting on collegiate sports in the black market, or the state’s neighbors.

The House version looks better in comparison on tax rates. Its 12.5% rate on in-person betting revenue, 15% on online, are clearly preferable. Yet, tax rates around 15% and up have been shown to reduce betting activity, keeping bettors in the black market.

Further, the House version allows sports leagues to require betting operators use “official league data.” This is a giveaway to sports leagues that is not necessary for protecting gaming integrity. Nevada has operated for decades, and now New Jersey has operated for years without such mandates.

In National Basketball Ass’n v.Motorola,Inc. a court of appeals held that sports statistics are not copyrightable, and that compiling and distributing statistics was legal.

It makes sense, the number of touchdowns Tom Brady throws is a fact, it can’t be copyrighted. State lawmakers should not step on this legal precedent, especially when the market is working, and the leagues are cashing in on data agreements without government interference.

There are many companies that collect sports data, and sports betting operators can decide which they would like to use. There is no need for government to force one private company to use another’s services.  

If Massachusetts legislators want to foster a competitive market for sports betting and follow the lead of a northeastern state, they should copy New Jersey. The Garden State’s tax rate on in-person betting is 8.5%, and the state avoiding any significant regulatory pitfalls – like the completely unnecessary data mandate.

The State Senate saw a much better proposal put forward earlier in session.

These current proposals are too focused on maximizing paydays for government, and their pals, rather than doing what is best for consumers and an emerging industry. In the process, they could fail on all counts.  

Photo Credit: Wikimedia

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Massachusetts Legislators Vote to Keep Taxpayers in the Dark

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Posted by Dennis Hull on Thursday, July 22nd, 2021, 2:04 PM PERMALINK

As a state that ranks 47th out of 50 for political transparency, Massachusetts is already infamous for doing business behind closed doors. But despite growing calls from residents and activist groups for a more open process, legislators on Beacon Hill passed a rules package last week that will deceptively conceal voting records and burden the public with even more opaque procedures. 

One proposal in the package would have ensured that legislators and the public have at least 48 hours to read a bill before it’s brought up for a vote. Many Massachusetts bills often reach legislators’ desks just a few hours before the vote, giving them almost no time to file amendments. Ironically, the rules package itself was revealed less than 4 hours before the deadline to file amendments. But business will continue as usual on Beacon Hill after the amendment to require a 48-hour interim period failed miserably in a 39-119 vote. 

The legislature also scratched an amendment to reveal how most lawmakers vote on legislation in committee. Now, only committee members who vote “no” on a bill will be identified by name. The rest of the votes, including those who vote “yes” or abstain from voting, will be bundled into a single aggregate number, thus leaving those politicians free from public criticism. As a result, Massachusetts voters will have even less of an ability to hold their other representatives accountable for their support bills. 

Perhaps the most straightforward of the failed amendments was one aimed at reinstituting a 4-term limit for the Speaker of the House. Those who opposed term limits pathetically argued that they would “discriminate” against the Speaker (since no one else faces term limits) or that they’re undemocratic (since legislators would no longer be able to choose whomever they want for Speaker at any time). But the failure of the term limits amendment in a 35-125 vote reflects the powerful grip of the legislative leadership over the vast majority of its members. Establishment politicians, particularly Speaker Ron Mariano, opposed all of these amendments to rid the Massachusetts legislature of its secretive, top-down procedures. But, for low-ranking representatives, voting for transparency was simply not worth the cost of future retaliation from the people at the top.  

Thanks to the cowardice of freshman legislators who ran on transparency but voted with the establishment, not much will change in the Massachusetts legislature. Even with dozens of protestors on the capitol steps, an open process will once again take a backseat to the personal interests of lawmakers who want to minimize accountability and stay in power. 

Photo Credit: Nidavirani

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Ohio Enacts Bill to Protect Customer Access to Natural Gas

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Posted by Matt Owens on Thursday, July 22nd, 2021, 1:42 PM PERMALINK

Radical groups have been attacking natural gas in Ohio. In particular, they have been trying to pass local measures that block new natural gas hook ups, putting Ohioans are at risk of losing access to reliable, affordable energy.

Fortunately, legislators have responded to this threat, passing House Bill 201 to prevent municipalities throughout the state from passing legislation that restricts natural gas. Governor Mike DeWine quickly signed HB 201.  

Sponsors of the bill argued that it was important to keep natural gas prices from rising from unneeded restrictions. Natural gas has reliably kept Ohio warm for years, but that has been jeopardized by predatory local regulations designed solely to achieve radical left-wing goals.

Natural gas supports 375,000 total jobs in Ohio, contributing $59 billion to the state’s GDP, according to a new study

“This would be an incredible problem for people across the Buckeye State if we don’t get out in front of this,” Senator Rob McColley said during floor debate on the bill. A small but troubling number of cities on the east and west coast have passed fuel price increasing restrictions, now Ohio residents can feel more secure about their future energy bills.

According to census data Compiled by the legislative service commission, over two-thirds of Ohio residents use natural gas for heat, 25% for electricity. The sponsor of the bill, Rep. Jason Stephens stated that this legislation will safe guard the Ohio economy and benefit all citizens, “Here in Ohio, we want to promote a fair market for all Ohioans, consumers, to have energy options that work best for them — this legislation helps make that a reality… With this bill, I’m ensuring my constituents; all Ohioans and businesses have accessibility within their communities to the abundance of natural gas that our great state has preserved.”

The bill also ensures that customers who want natural gas have a right to purchase the product “the right to obtain any available distribution service or retail natural gas service from a natural gas company with capacity to provide”. This is a win for consumers both in their liberty to patronize what energy service they prefer, and ensuring low prices and competition. This bill continues Ohio’s track record of being one of the least expensive energy states in the country.

Republicans have scored a major win by passing this latest piece of energy legislation. In order to protect consumers, advocates of limited government are having to use state preemption as a tool to stop cities from hampering or banning all sorts of products.

Photo Credit: Bestbudbrian

More from Americans for Tax Reform


Sen. Mark Kelly's Support for PRO Act's "Overall Goals" Spells Doom for Arizona Workers

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Posted by Tom Hebert on Thursday, July 22nd, 2021, 9:00 AM PERMALINK

Senator Mark Kelly (D-Ariz.) told a reporter that he is open to passing parts of the anti-worker “Protecting the Right to Organize” (PRO) Act through budget reconciliation and supports the "overall goals" of the bill. The PRO Act would impose a nationwide ban on Right to Work, forcing every Arizona worker to join a union whether they want to or not. 

Kelly has been one of three Democratic Senate holdouts on the PRO Act. If Kelly reverses course and supports the PRO Act, it would be a devastating blow to Arizona’s freelancers and franchises. 

The PRO Act would dismantle the franchise business model by expanding the definition of “joint employer,” increasing corporate control over mom-and-pop independent franchise locations. Franchises employ 7.6 million Americans nationwide. 

Arizona has 14,500 franchise businesses that support 153,300 jobs. Franchises provide $5.5 billion a year in payroll and contribute $8.2 billion a year to Arizona’s economy. 80 percent of Arizona voters view franchises favorably, and 71 percent of Arizona voters say that franchise businesses are a part of their everyday lives. 30 percent of franchises are minority owned, as opposed to 20 percent of non-franchised businesses. 

The PRO Act also endangers Arizona’s freelancers by codifying an onerous three-step test that would force independent contractors to reclassify as W-2 employees. Independent contractors come in all shapes and sizes – the Uber you took this week had a freelancer behind the wheel, and your favorite Etsy store is run by an independent contractor. Medical transcriptionists, court stenographers, nurse practitioners, comedians, ballroom dancers, interpreters, and architectural designers often work as freelancers.

Freelancers overwhelmingly prefer the freedom and flexibility of freelancing to the rigidity of traditional employment. According to the Bureau of Labor Statistics, fewer than one in 10 independent contractors want to reclassify as W-2 employees. The PRO Act would jeopardize the livelihoods of the 59 million Americans that engage in freelance work. 

Finally, the PRO Act would endanger the privacy of every Arizona worker. The PRO Act forces employers to hand over sensitive employee contact information – including shift information, home addresses, email addresses, and phone numbers – to union bosses during organizing efforts. This would allow union bosses to intimidate Arizona workers at home or workplaces at all hours of the day. 

If Kelly votes for the PRO Act, union bosses would win and Arizona workers would lose. 

Photo Credit: Gage Skidmore


Lawmakers Should Reject Government “Negotiation” in Medicare Part D

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Posted by Alex Hendrie on Wednesday, July 21st, 2021, 12:55 PM PERMALINK

Senate Finance Committee Chairman Ron Wyden (D-Ore.) has released a set of drug pricing principles that will likely be folded into the Democrat’s upcoming multi-trillion tax and spend reconciliation legislation. Wyden’s plan includes a number of concerning proposals including the imposition of price controls on Medicare Part D under the guise of “negotiation.”

Inserting government price setting into Medicare Part D has long been a priority of the progressive left as part of their push for federal control over the American healthcare system.

The fact is, Part D already promotes competition that keeps costs low. Government price setting would do nothing to reduce costs.

Instead, Wyden’s proposal would insert federal bureaucrats into the healthcare system and would harm medical innovation and access to care. It could also threaten high-paying manufacturing jobs across the country at a time that we should be pushing policies that create more of these jobs.

Medicare Part D already has competition and negotiation

Wyden’s call to insert negotiation into Medicare Part D is misleading because there already is competition and negotiation in the healthcare program. Part D facilitates negotiation between pharmacy benefit managers (PBMs), pharmaceutical manufacturers, and plans. This system works because Congress created a non-interference clause when Part D was created which prevents the secretary of Health and Human Services (HHS) from interfering with the robust private-sector negotiations.

Since the law’s enactment, the program has proven to be a successful model of healthcare by saving taxpayers billions of dollars and granting patients access to medicines at low costs. Under this system, plans are free to compete based on the goal of maximizing access and minimizing coverage costs.

Federal spending on Part D has come in 45 percent below projections and is just 14 percent of total Medicare spending. Average monthly premiums in 2019 were just $32.50 and have been stable since 2011. Part D spending also helps keep costs in the rest of Medicare down – it has decreased hospital admissions by 8 percent, resulting in $2.3 billion in annual savings.

According to a 2020 survey, 84 percent of seniors found their Part D premiums affordable and 93 percent found their plan convenient to use. 9 in 10 seniors are satisfied with the Part D drug coverage.

Government “negotiation” would do nothing to lower costs

While Wyden says this proposal is about reducing costs, experts have repeatedly found that negotiation and the imposition of price controls would have little or no effect on reducing costs. A 2007 letter by the Congressional Budget Office noted that there would be very little savings from having the government insert itself in negotiations between private sector stakeholders.

This finding was reaffirmed in a 2019 letter by CBO Director Keith Hall who noted that “providing broad negotiating authority by itself would likely have a negligible effect on federal spending.” In addition, actuaries at the Centers for Medicare and Medicaid Services have also concluded that government negotiations would not produce any savings.

Government “negotiation” would put Washington bureaucrats in charge of Part D

Rather than promoting competition and allowing prices to be set by the free market, Wyden’s plan would allow federal bureaucrats to set prices on arbitrary basis.

This would have several adverse consequences.

First, it would harm the incentive for manufacturers to innovate because there are fewer profits available to finance the next generation of lifesaving and life-improving prescription medicines. In turn, this will result in higher long-term healthcare costs because illnesses need to be treated in a reactive, not proactive way.

Second, restricting innovation will also harm access. The U.S. is currently a world leader in medical innovation and access because it promotes free market competition. As a result, the majority of cures are developed in the United States and are launched years before other developed nations have access to them.

According to research by the Galen Institute, 290 new medical substances were launched worldwide between 2011 and 2018. The U.S. had access to 90 percent of these cures, a rate far greater than comparable foreign countries. By comparison, the United Kingdom had access to 60 percent of medicines, Japan had 50 percent, and Canada had just 44 percent.

Government “negotiation” could threaten high-paying manufacturing jobs

In addition to harming the healthcare system, a sweeping federal plan to impose government price controls on medicines could also have economic damage.

Nationwide, the pharmaceutical industry directly or indirectly accounts for over four million jobs across the U.S and in every state, according to research by TEconomy Partners, LLC. This includes 800,000 direct jobs, 1.4 million indirect jobs, and 1.8 million induced jobs, which include retail and service jobs that are supported by spending from pharmaceutical workers and suppliers.

The average annual wage of a pharmaceutical worker in 2017 was $126,587, which is more than double the average private sector wage of $60,000.

President Biden has repeatedly promised to create millions of new high paying manufacturing jobs in America. However, proposals being considered by Democrats like Sen. Wyden would threaten existing jobs.

Photo Credit: Senate Democrats


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