ATR's Patrick Gleason Highlights Issues with Municipal Broadband (and more...)
Americans for Tax Reform director of state affairs Patrick Gleason wrote an op-ed for Forbes detailing the issues with implementing municipal broadband.
The inherent problem with municipal broadband is that government entities are incapable of fairly competing in the free market, as they are taxpayer-backed and therefore able to charge less for a service than it actually costs. Private businesses cannot do this, as doing so would result in bankruptcy.
The costs of building out and maintaining broadband networks are considerable. It is not a fiscally sound use of scarce taxpayer dollars for governments to compete with billion dollar networks already in existence.
Townhall ran an article by Ky Sisson regarding a recently revealed scandal involving Democratic Kansas gubernatorial candidate, Paul Davis.
During Brownback’s first term, he supported substantial tax reform that reduced the top income tax rate by 25 percent, lowered the state sales tax, and did away with a tax on small business income. Though many liberal opponents disagreed with his approach, the advocacy group, Americans for Tax Reform praised Governor Brownback and said that the “tax cuts are working.”
More from Americans for Tax Reform
GILTI High Tax Rule Provides Important Relief, But Can Still Be Improved
The Tax Cuts and Jobs Act contained numerous reforms to the U.S. tax code. Among these reforms were several changes to the international tax system.
Implementing these reforms has been a complex process. To its credit, the Treasury Department has done a good job mitigating some of the more problematic aspects of this transition. However, there is more that can be done to promote American competitiveness and offer relief to businesses.
One of the major changes to the international tax system was the creation of the Global Intangible Low-Taxed Income (GILTI) provision. GILTI was designed to prevent taxpayers from eroding the U.S. tax base by assigning income to low tax jurisdictions.
However, GILTI was based off the pre-TCJA tax system which required companies to allocate a portion of domestic expenses to foreign income calculations. This resulted in a post-TCJA tax code where American businesses faced additional foreign tax liability because GILTI inadvertently taxed high-tax foreign income that was previously exempt from U.S. taxation.
To resolve this problem, Treasury has proposed rules that allow businesses to elect a high-tax exclusion (HTE) for a Controlled Foreign Corporation’s (CFC) income if this income is subject to foreign taxes above 90 percent of the corporate rate (18.9 percent based on the 21 percent corporate rate). This HTE ensures the integrity of the new, territorial tax system in a way that protects the U.S. tax base without subjecting taxpayers to double taxation or creating perverse incentives for businesses to restructure.
However, there are ways to improve this rule.
For one, the effective date of the HTE should be available back to when the GILTI provision first took effect. The proposed rule applies “beginning on or after the date that final regulations are published.” Ideally, this rule should also apply for 2018 and 2019 – the years that GILTI has been in effect.
Second, the ability to elect the HTE should be available year-to-year. Under the proposed rule, any HTE election must be retained for five years, an unnecessary limitation that can lock taxpayers into an election that can result in increased taxes due to the complex interaction of various credits and deductions at the international level. Ideally, the HTE should be made on a year-to year basis.
There should be little concern that a taxpayer could use this flexibility to game the system as that would require a taxpayer to go through the complex task of manipulating income in multiple foreign jurisdictions and across multiple taxable systems with different anti-abuse regimes.
As it stands, a five-year limitation requires a taxpayer to project business changes, changes to tax law, and economic trends over this five-year period – a difficult, if not impossible task. Companies are already required to report financial information and file taxes ever year, so all the information to model and comply with electing into the HTE should already be available.
Third, the GILTI HTE determination made at the QBU (Qualified Business Unit) level should be relaxed. While Treasury decided on the QBU-by-QBU approach to prevent blending low-tax and high-tax income within a CFC, the existing approach is too stringent.
Taxpayers often do not have readily available information broken down at the QBU level so this could create extensive compliance burdens for taxpayers. In some cases, a taxpayer may have hundreds of QBUs in a single country.
A solution to this complexity could be allowing a taxpayer to aggregate QBUs in a single country for purposes of determining whether income is high-taxed. This solution would still uphold the integrity of the tax law as it would be difficult to blend high and low-tax income when aggregating income from the same country. Moreover, this approach is consistent with legislative intent of lawmakers to prevent allocating income to low-tax jurisdictions.
Lastly, the “All or nothing rule” should be removed from the proposal. The proposed rule applies the HTE broadly to each CFC in a group of commonly controlled CFCs. Like the QBU-by-QBU application, this all or nothing rule can result in extensive compliance burdens as it would require a taxpayer to compile (and the IRS to audit) new QBU-level data across all operations.
A better alternative is to follow the precedent set under the existing Subpart F high-tax exclusion. Under this exclusion, a taxpayer can make the election on an item-by-item basis. This will also significantly lessen compliance burden on taxpayers as reporting only has to be made on relevant QBUs.
To be clear, Treasury’s proposed GILTI rule is on the right path. A high-tax exclusion will mitigate unnecessary double taxation while upholding the integrity of the TCJA.
However, there remains some outstanding issues with the rule that should be resolved. Doing so will dramatically improve the GILTI high-tax exclusion to promote flexibility, ease compliance burdens, and ensure the international tax system remains strong.
Photo Credit: Flickr
USMCA's Biologics Provision Is An Important Step Towards Stronger IP Protections
The United States-Mexico-Canada Agreement (USMCA) represents a much-needed update to the 25-year-old North American Free Trade Agreement (NAFTA).
The global economy has changed significantly since the United States, Mexico, and Canada signed the NAFTA in 1992. The new USMCA recognizes this reality and modernizes trade relations between the three nations to better fit the new realities of the 21st century.
Importantly, the USMCA includes 10 years of data protection for lifesaving biologic medicines. This change will bring Mexico and Canada’s intellectual property protections up to U.S. standards that have existed for nearly a decade.
Strong protection for biologics is critical. Biologics are the next generation of medicines, and are more costly and complex to produce than other cures. Data protection recognizes the extraordinary time, resources, and opportunity cost that innovators must devote to go through the FDA approval process.
A recent study from the Tufts Center estimates that it costs an average of $2.6 billion over the course of 10 to 15 years to develop a new medicine. The USMCA’s 10-year period allows innovators to earn a positive rate of return on the immense costs associated with research, development, and the FDA approval process. The USMCA’s 10-year standard has bipartisan support and was signed into law by President Obama.
America is a world leader in medical innovation. In 2017, the U.S. exported $51.2 billion in biopharmaceuticals. Such exports have grown 174 percent from 2002 to 2017. This research and development supports high-paying U.S. jobs across the country.
IP rights are also key to the U.S. economy at large. The U.S. Department of Commerce and U.S. Patent & Trademark Office found that IP-intensive industries contributed $6.6 trillion to the U.S. economy in 2014, or 38.2 percent of GDP. These industries directly and indirectly support 45.5 million jobs, account for $842 billion in merchandise exports, and generate $81 billion in service exports—well over half of all US exports.
While the USMCA will better ensure that North America remains a centerpiece of innovation, the agreement’s strong protection of IP rights is not universal. Many countries have policies that restrict innovation and punish ingenuity.
As the Trump administration continues to negotiate better trade deals, the USMCA’s strong protections for biologics should serve as the model.
Photo Credit: Marco Verch
New 2020 Battleground Poll Shows Vaper Voters Will Turn on Trump Over a National Flavored Vapor Product Ban
In a new national poll conducted by McLaughlin & Associates, a significant number of adults that use e-cigarettes in seventeen key battleground states indicate that they will reject President Donald Trump’s re-election bid if his administration moves forward on a proposed plan to ban all flavored e-cigarettes, on that issue alone. The proposal to ban flavored vapor products is currently under consideration by the Food and Drug Administration and being championed by Health and Human Services Secretary Alex Azar.
The McLaughlin firm was a principle polling firm for Donald Trump in 2016 and remains a trusted ally for the administration. The poll was commissioned by the Vapor Technology Association. According to the pollsters:
Four in five (83%) vapor consumers are likely to decide their vote based solely on a candidate’s position on nicotine vapor products and issues. Half (50%) are “very” likely to be single issue voters.
This is almost identical to the polling conducted in part by Americans for Tax Reform in October of 2016, which can be found here.
McLaughlin further concluded:
Nearly all (96%) of these vapor consumers are likely to vote in the 2020 general elections. Four in five (85%) are “definitely” voting. Among the 4% who are less likely to vote, the majority (59%) would be likely to come out to vote if lawmakers banned the sale and use nicotine vapor products.
These vapor consumers favor the Republican candidate on the generic ballot (46% to 24%), but 30% are undecided and up for grabs in the battleground states.
Supporting a ban on flavors in all nicotine vapor products is a political liability. Nearly all (96%) vapor consumers are LESS likely to vote for a candidate who supports a flavor ban. The intensity (92% much less likely) shows the passion they share on this issue.
The White House recently confirmed to the Washington Post that the “opinion of the [Trump] campaign" was that ‘banning flavored e-cigarettes might cost Trump reelection,’ an assertion published in the Washington Examiner based on an ATR analysis of likely single-issue adult vapers in key battleground states.
McLaughlin also concluded that there “is political upside for candidates who oppose a ban on flavors in all nicotine vapor products. Virtually nine in ten (88%) vapor consumers are MORE likely to vote for a candidate who opposes a flavor ban. Eight in ten (79%) are ‘much’ MORE likely to support such a candidate.”
On the flip side, if HHS Secretary Alex Azar and Acting FDA Commissioner successfully convince the White House to implement a flavor ban, McLaughlin concluded that “vapor consumers in Trump’s base would likely turn on him over this single issue.”
Although vapor consumers currently approve of the job Donald Trump is currently doing as President (51-44), 74% said that they would be less likely to vote for him, with 65% saying they would be “much less” likely to vote for Trump. Among key base and supporters, it’s significant:
- Approve Trump: 65% less likely;
- Republicans: 65% less likely;
- Conservatives: 62% less likely;
- Independent Men: 83% less likely;
- Independent Women: 79% less likely.
Prior to e-cigarettes, 84% of respondents smoked a pack of cigarettes a day or more, with 94% reporting no longer smoking cigarettes due to nicotine vapor products. More than half smoked for at least 20 years before quitting.
“This new poll further confirms what Americans for Tax Reform has long argued, that millions of adults who use flavored nicotine e-cigarettes to quit smoking will vote on that issue and that issue alone. Banning flavors would be a significant political liability in every single one of the states that Donald Trump needs to win next year, especially in states like Michigan, Florida, Pennsylvania, and Wisconsin which have at least two million adult vapers alone,” said Paul Blair of Americans for Tax Reform.
“As McLaughlin suggests, 74% of vapers in these states voting against the President because of this issue would cost him big. McLaughlin is a trusted pollster for the President so it is our hope that this puts a stop to the FDA and HHS's misguided plans to hand Democrats a win in 2020 by banning life-saving flavored e-cigarettes. Prohibition is not a winning proposition. Instead of demonizing people who are improving their own health by transitioning to products that are 95% less harmful, the federal government should focus its attention on the true cause of recent illnesses and death: black market THC and marijuana,” said Blair.
The poll of adult vapor voters was commissioned by the Vapor Technology Association and conducted between October 17 and 22 in Arizona, Colorado, Florida, Georgia, Iowa, Maine, Michigan, Minnesota, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and Wisconsin. The full crosstabs can be found here.
Read more: Conservative Groups Urge President to Reject Flavored E-Cigarette Ban
More from Americans for Tax Reform
Employment Numbers A Red Flag for Wyoming Tax Hikers
The 2020 legislative session in Wyoming will have a long list of new and higher taxes to consider. The Joint Revenue Committee, under the leadership of Senator Cale Case and Representative Dan Zwonitzer, is more determined than ever to pass everything from higher property taxes to a corporate income tax.
The 7-percent corporate income tax has already made it out of committee – and businesses in Wyoming are already paying attention.
It is well known that tax hikes are never good for the economy, but even the talk about higher taxes can have negative consequences for the economy. Wyoming is now seeing, in real time, how this psychology goes to work: a steady trend of jobs growth over the past couple of years is coming to an end.
In 2015 the the Cowboy State’s economy went into a short but tough downturn. Over two years it lost 17,000 private-sector jobs (while government payrolls kept steady). Since the bottom of that downturn, the private sector has slowly crawled itself back to growth again. By January 2018 hard-working businesses had recovered almost 22 percent of the jobs lost since 2015.
In January this year half the jobs lost were back. With a little bit of luck and a lot of hard work, the private sector could recover all the lost employment. In fact, for the first seven months of this year Wyoming businesses kept adding jobs: on average they had 2.2 percent more employees than the same month a year before. A slow but steady recovery.
Then, in August, the Revenue Committee passed its corporate income tax:
Source of raw data: Bureau of Labor Statistics
Many factors influence business decisions to hire and fire people, but the tax burden is definitely one of them. It is only common sense that when a state says it wants to go from zero to a 7-percent corporate income tax, those expected to pay the tax will pay attention – and respond accordingly.
For now, the tax is “limited” to corporations with at least 100 shareholders, though that cap is likely to vanish soon after the tax goes into effect. It was put in the bill to soften opposition and give the impression that a new tax is not really a new tax. The big step for now is to just get the tax in place; once it is up and running, the legislature can easily “tweak” it as they see fit.
And prospective taxpayers are paying attention. Here are more September jobs numbers for Wyoming, courtesy of the Bureau of Labor Statistics:
- The minerals industry has ended a three-year stretch of jobs growth;
- In retail, general merchandise stores – supermarkets – continued a jobs-cutting streak that began in June (when the Revenue Committee made clear they were going for the corporate income tax);
- Business-to-business employers also continued a jobs-cutting trend from the summer.
There are also emerging signs of pull-back in parts of the leisure and hospitality industry.
It is important to keep in mind that the corporate income tax is far from the only tax on its way in Wyoming. The increase in the state property tax would add nine millings, there are proposals for and expanded sales tax and higher local sales taxes.
As anyone watching Wyoming politics over the past few years can testify to, the Revenue Committee is more determined than ever to raise taxes. This also means that once they get the corporate income tax in place, they will continue to work with it in order to maximize revenue.
And this is only the beginning. Once the corporate tax is in place, it will be a simple matter for the legislature to expand it. Today, Wyoming law grants a deduction for property and sales taxes against any income taxes paid. This deduction will last about as long as the 100-shareholder threshold for the corporate income tax, namely to the next legislative session.
Bluntly: once the Wyoming legislature passes the corporate income tax, its burden will only grow from there. The 2020 session will be more important than ever for Wyoming taxpayers.
Sven R Larson, Ph.D., is a political economist residing in Wyoming.
Photo Credit: Roger Smith
Vape Shop Forced to Close Due to State-imposed Flavor Ban
A sign of things to come if federal government imposes national flavor ban
In a preview of what could come nationally, a Rhode Island vape shop is being forced to go out of business because of a flavored vaping product ban signed by Democrat Gov. Gina Raimondo.
NBC 10 went to one of the stores which is being forced to shut down, and found that the state is taking away his ability to help others quit smoking cigarettes.
NBC10 said:
Six years in, he said he felt he was helping people. He even created a wall with people's photos as a tribute to those who were able to quit smoking thanks to vaping.
"It's a big deal when people quit smoking, when they haven't been able to quit for years, trying to gum, patch, hypnotism, all sorts of stuff," said Del Sesto.
He explained the flavored products were the most helpful to people trying to stop smoking cigarettes because they didn’t remind them of tobacco.
But the "tobacco free" wall will be boxed up with the rest of the flavor cartridges the governor's executive order forced him to take off the shelves.
Del Sosto said:
“I’ve just lost. My pride and passion gone. I called the governor four times, not even a call back. Nothing.”
If the federal government imposes a ban on flavored vaping products, more small business owners like Del Sesto will be forced to close their doors and be left with no job, and former smokers will start smoking again.
Watch the heart-wrenching interview below
Biden Calls for 28% Corporate Tax Rate
Joe Biden called for the U.S. corporate income tax to be raised to 28% during a town hall in Scranton, Pennsylvania on Wednesday morning.
“[Corporations] don’t need their tax cut reduced to 20 percent, it should be raised back to 28 percent,” Biden said.
The Tax Cuts and Jobs Act permanently cut the corporate rate from 35 percent to 21 percent.
The Biden 28 percent rate would give the U.S. a higher rate than the United Kingdom (19 percent), China (25 percent), Canada (26.8 percent), and Ireland (12.5 percent). It would impose a tax rate higher than the current combined corporate rate across the 36 member Organisation for Economic Development and Cooperation (OECD), which is currently 23.7 percent.
"Hiking the tax rate on American businesses will kill jobs, lower wages, and reduce new investment in America," said Grover Norquist, president of Americans for Tax Reform. "Why does Biden want to damage American competitiveness and job creation?"
An increase in the corporate tax rate would directly raise the cost of utility bills in all 50 states.
Biden has also repeatedly threatened a full repeal of the Tax Cuts and Jobs Act.
“First thing I’d do is repeal those Trump tax cuts,” said Biden during a campaign stop in Columbia, South Carolina on May 4.
Biden also continues to lie about the tax cuts. The Washington Post gave Biden four pinocchios when he said: “All of it went to folks at the top and corporations.” In its fact check, the Washington Post stated: “Most Americans received a tax cut.”
Even left-leaning and establishment media outlets confirm the good news arising from the Tax Cuts and Jobs Act:
- The New York Times also flatly stated: "Most people got a tax cut."
- CNN's Jake Tapper did his own fact check and concluded: "The facts are, most Americans got a tax cut."
- CNN's Jake Tapper also stated: "In fact, estimates from both sides of the political spectrum show that the majority of people in the United States of America did receive a tax cut."
- FactCheck.org stated: "Most people got some kind of tax cut in 2018 as a result of the law."
- FactCheck.org also stated: "The vast majority (82 percent) of middle-income earners — those with income between about $49,000 and $86,000 — received a tax cut that averaged about $1,050.
- The NYT also stated: “To a large degree, the gap between perception and reality on the tax cuts appears to flow from a sustained — and misleading — effort by liberal opponents of the law to brand it as a broad middle-class tax increase.”
If you want to stay up-to-date on Democratic candidates and their threats to raise taxes, visit www.atr.org/HighTaxDems.
See more:
Biden: “Every Single Solitary Person” Will Pay 40% Capital Gains Tax
Warren Dodges the Middle Class Tax Question Again
Buttigieg Says He Will Raise Corporate Tax Rate to 35%
Watch: CNN Analyst Gets Visibly Irritated as Warren Dodges Tax Hike Question
Andrew Yang to Elizabeth Warren: Wealth Tax Would Have “Massive Implementation Problems”
Biden on Warren Dodging Middle Class Tax Question: “This is Ridiculous. Absolutely Ridiculous.”
Buttigieg Grills Warren for Dodging the Middle Class Tax Question
Biden: I Will Raise the Capital Gains Tax to 39.5%
Elizabeth Warren Can’t Stop Dodging the Middle Class Tax Question
VIDEO: 17 Times Elizabeth Warren Has Dodged the Middle Class Tax Question
VIDEO: Warren Keeps Dodging the Middle Class Tax Question
Biden: “I’m Gonna Double the Capital Gains Rate to 40%”
Tax Hike Bernie Says He’ll Tax All Income Over $29K
Video: Warren Dodges Middle Class Tax Question Again
Biden Calls for Full Repeal of Trump Tax Cuts
Biden Attacks Warren: "She's Going to Raise People's Taxes”
Video: Media Fed Up with Elizabeth Warren Tax Dodge
Biden: End "Trump's Tax Cut for The Top Tenth of One Percent"
Booker: “My plan would reverse those toxic Trump tax cuts”
Stephen Colbert Calls Out Warren for Dodging Middle Class Tax Question
Video: Warren Dodges MSNBC’s Middle Class Tax Questions
Elizabeth Warren is Still Dodging the Middle Class Tax Question
Video: 2020 Democrats Promise Higher Taxes
Biden Caught Lying about GOP Tax Cuts
Bill De Blasio: “As President, I Would Issue a Robot Tax”
Kamala Harris Calls for Ban on Plastic Straws
Elizabeth Warren's Climate Plan Calls For "Reversing" GOP Tax Cuts
Sanders: We’re Going to “Absolutely” Raise the Corporate Tax Rate
Elizabeth Warren on Corporate Tax Cuts: “I really want to see them rolled back.”
Bill de Blasio Calls for Corporate Tax Rate Hike
Amy Klobuchar: Raise the Corporate Tax Rate to 25%
Biden on capital gains tax: “We should raise the tax back to 39.6 percent”
Kamala Harris Threatens to Repeal GOP Tax Cuts 3 Times in August
Joe Biden: “I’m going to eliminate most all” of GOP Tax Cuts
Cory Booker Calls for Repeal of "Toxic" GOP Tax Cuts
Marianne Williamson Joins Dems Calling for TCJA Repeal
Kamala Admits Her Plan Would End Employer Insurance
“Medicare for All” is a Middle Class Tax Increase, Say Dems
Elizabeth Warren Can’t Dodge the Middle Class Tax Question Forever
Dem Socialized Healthcare Plan Will Lead to Middle Class Tax Hikes
Supposed “Moderate” Democrat John Delaney Wants to Impose Carbon Tax on the American People
Klobuchar Suggests Capital Gains Tax Hike and “Doing Something” About TCJA
VIDEO: 2020 Democrats Will Raise Your Taxes
Kamala Harris Campaign Headquarters Located in Opportunity Zone Created by GOP Tax Cuts
Julian Castro: “We’re going to have to raise taxes.”
Biden and Harris: Raise the Corporate Tax Rate
Biden tweet: Ignore the fact I’ve already called for middle class tax hikes
Kamala Harris: “I Will Reverse” Trump’s Tax Cuts
Kamala Harris Calls for Repeal of Tax Cuts Four Times in Three Minutes
Julian Castro Caught Lying about GOP Tax Cuts
NYT: Bidencare Will be Funded by “rolling back” GOP tax cuts
Kamala Harris: I Will Repeal “That Tax Bill”
Cory Booker: “I do support” Imposing Carbon Tax on Americans
Harris: “We are Going to Repeal That Tax Bill”
Biden: I Will Raise Corporate Tax Rate to 28%
Kamala Harris Continues to Lie about Tax Cuts
Jay Inslee: “Repeal the Trump Tax Cuts”
Biden Running Ads to “Repeal Trump’s Tax Cuts.”
VIDEO: Ten Times Biden Threatened to Repeal Tax Cuts
Here’s what happens if Dems repeal tax cuts
VIDEO: 10 Times 2020 Democrats Have Threatened to Repeal TCJA
Kamala Harris: When I Enter Office "I Will Repeal" the TCJA
Biden: “First thing I would do as President is Eliminate the President’s Tax Cut.”
Bernie Sanders claims people would be “delighted to pay more in taxes”
Biden: Tax Cuts Will be “Gone” If I’m Elected
Kamala Harris: I Will Repeal Tax Cuts “on day one”
Biden again says capital gains tax is “Much too Low”
Biden: Capital gains tax “much too low”
VIDEO: Five Times Biden has Threatened to Repeal Tax Cuts
Biden: “First thing I’d do is repeal those Trump tax cuts.”
Joe Biden broke his middle class tax pledge
“Mayor Pete” Calls for Steep Tax Hike on Homes and Businesses
Kamala Harris Vows Repeal of Tax Cuts “on Day One”
Biden: “When I’m President, if God willing I am, we’re going to reverse those Trump tax cuts.”
ATR Supports Fix to Elderly Home Detention Pilot Program
ATR joined a coalition of 34 groups in support of H.R. 4018, a technical fix to the Elderly Home Detention Pilot Program of the monumental First Step Act.
The pilot program transfers nonviolent offenders in federal incarceration to home detention if they are at least 60 years old and have served two-thirds of their sentence. This legislation clarifies that good time credit applies to the two-thirds calculation, enabling more Americans to spend time with their families and receive any medical attention they need outside of prison while saving taxpayer dollars.
You can read the letter below and linked to here.
October 18, 2019
Dear Speaker Pelosi and Republican Leader McCarthy,
On behalf of the 34 undersigned organizations, we write this letter to voice our strong support of H.R. 4018, introduced by Representatives Ted Deutch (FL), Jerrold Nadler (NY), Doug Collins (GA), Hakeem Jeffries (NY), Matt Gaetz (FL) and Karen Bass (CA). This non-controversial bill is a technical fix to the Elderly Home Detention Pilot Program (the “Elderly Program”) of the First Step Act. H.R. 4018 has passed out of the House Judiciary Committee with a strong bi- partisan vote and we urge you to advance this legislation as soon as possible.
Our federal prisons are looking more and more like old-age homes. It is inhumane, and it is unsustainable. It is a crisis that deeply affects us fiscally, and more importantly, goes to the core of who we are as Americans.
The United States Inspector General, Michael Horowitz, found that “According to BOP data, inmates age 50 and older were the fastest growing segment of its inmate population, increasing 25 percent from 24,857 in fiscal year (FY) 2009 to 30,962 in FY 2013.” The human cost is reprehensible. But the fiscal cost is equally irresponsible. Mr. Horowitz further writes, “Based on BOP cost data, we estimate that the BOP spent approximately $881 million, or 19 percent of its total budget, to incarcerate aging inmates in FY 2013.” This is untenable.
This is why we supported the Elderly Home Detention Pilot Program in the First Step Act, passed into law this past December. This program transfers nonviolent federal individuals in prison to home confinement if they are 60 years-old or older and have served two-thirds of their sentence. Obviously, home confinement is much cheaper for the taxpayer than housing and feeding someone in a prison. It further goes without saying that the medical care available on ‘the outside’ is incomparably better than the mediocre medical care available in prison.
The problem is that the two-thirds is currently interpreted to be 2/3 of the original sentence, not 2/3 of the sentence with good time credit included.
The issue stems around the language of the statute. The language in the Second Chance Act of 2007 is “of the term of imprisonment to which the offender was sentenced.” Based on this language, when BOP conducted this elderly pilot program in 2010, it calculated the 75% of the sentence as the full sentence imposed by the judge, without good time included. [1]
The challenge is that back in 2010 this question was reviewed by the judicial branch and the Tenth Circuit Court of Appeals agreed with the BOP that the statute does not include good time credit -- Mathison v. Davis and Izzo v. Wiley, 620 F. 3d 1257 (10th Cir. 2010). In light of this case, the BOP has concluded that this is how it is obligated to calculate the 2/3 requirement under the First Step Act.
It is clear the only way to fix this is legislatively. Congress must clarify the language to show that the 2/3 calculation should include good time credit. Hence, the need for H.R. 4018, which is a technical fix that clarifies what was probably a drafting error so that these eligible elderly incarcerated individuals, who were “model inmates” that followed the rules, should receive good time credit like everyone else.
This technical fix is the right thing to do for the following reasons:
1) The current method is a departure from the way BOP calculates all other transfer decisions. For each transfer and release decision—except those in the “Elderly and family reunification for certain nonviolent offenders pilot program”—BOP always calculates good conduct time credits. As soon as a federal offender arrives in the custody of BOP:
• His/her projected release date is determined by taking the term of imprisonment to which he/she was sentenced and subtracting the maximum number of good conduct time credits they can possibly earn and accrue.
• Working back from this projected release date, BOP then determines the projected dates of transfers from higher to lower-security and supervision facilities. For example: when BOP calculates when an offender will become eligible to transfer from a “Low-security” facility to a “Camp”; and from a “Camp” to a “Residential Reentry Center,” etc....with all these examples, the calculation of the release date is with good time included. There is no reason that elderly transfer should be treated differently.
2) Moreover, this is an issue of fairness. Why should these elderly men and women lose their good time credit when they did in fact act with good behavior? It would not be fair to penalize them and would counter the compassionate purpose of this provision.
3) One of the goals of this program is to save taxpayer dollars. (In fact, one of the eligibility factors is that the “release to home detention under this section will result in a substantial net reduction of costs to the Federal Government”.) Obviously, the older incarcerated individuals get the more it costs to house them in prison. Hence, getting them to home confinement earlier -- by including good time -- will result in tremendous savings to the Federal Government.
Based on these important factors, we urge all members of Congress to vote in favor of H.R. 4018. It will have a truly positive impact on the lives of these elderly human beings and their families, not to mention it will save much needed federal dollars housing these nonviolent people who have the least risk of recidivating.
We thank you for your consideration and look forward to joining you in supporting the passage of this legislation.
Sincerely,
CC: Chairman Jerrold Nadler & Ranking Member Doug Collins
[1] With the Elderly Pilot Home Detention Program in the Second Chance Act incarcerated individuals became eligible for home confinement after serving 75% of the sentence. Whereas the First Step Act changed that to 2/3 of the sentence.
Photo Credit: JoshuaDavisPhotography
Democrats Expose Their Hypocrisy with SALT CRA Vote
Senate Minority Leader Chuck Schumer (D-N.Y.) forced a floor vote today on a resolution that will repeal the Trump tax law’s cap on state and local tax deductions. While Democrats campaign on raising taxes on the wealthy, 42 Democrat senators proved their hypocrisy by voting for this massive tax break for their richest constituents.
The Republican-passed Tax Cuts and Jobs Act (TCJA) implemented a $10,000 cap on state and local tax (SALT) deductions. The wealthy mainly took advantage of the unlimited SALT deduction. A recent report from the nonpartisan Joint Committee on Taxation shows that repealing the SALT cap would cut $40 billion in taxes for millionaires. In total, 94 percent of the tax breaks generated from ending the cap would be enjoyed by taxpayers making more than $200,000 a year.
Functionally, the unlimited SALT deduction created two different federal tax rates: one for the wealthy in blue states, and one for the middle class in red states. Technically, a New Yorker with a $20,000 state tax bill had access to the same SALT deduction as a Nebraskan with a $5,000 state tax bill. In a pre-TCJA world, the Nebraskan would take the standard deduction instead of the SALT deduction, while the New Yorker would itemize and take the full SALT deduction. This creates a de facto subsidy for blue states.
During the TCJA’s passage, Schumer said that eliminating the deduction “socks it to the middle class,” and called on fellow Democrats to “not go along with a tax plan that includes a tax cut for the folks who need it least.”
Hypocritically, Schumer is now pushing a tax scheme that helps those who need it least. 42 Democrats voted for the Schumer scheme to give the wealthiest blue state taxpayers a massive federal tax break:
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Sen. Tammy Baldwin (Wis.)
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Sen. Richard Blumenthal (Conn.)
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Sen. Cory Booker (N.J.)
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Sen. Sherrod Brown (Ohio)
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Sen. Maria Cantwell (Wash.)
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Sen. Benjamin Cardin (Md.)
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Sen. Tom Carper (Del.)
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Sen. Bob Casey (Penn.)
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Sen. Chris Coons (Del.)
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Sen. Catherine Cortez Masto (Nev.)
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Sen. Dick Durbin (Ill.)
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Sen. Tammy Duckworth (Ill.)
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Sen. Dianne Feinstein (Calif.)
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Sen. Kirsten Gillibrand (N.Y.)
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Sen. Maggie Hassan (N.H.)
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Sen. Martin Heinrich (N.M.)
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Sen. Mazie Hirono (Hawaii)
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Sen. Doug Jones (Ala.)
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Sen. Tim Kaine (Va.)
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Sen. Angus King (Maine)
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Sen. Amy Klobuchar (Minn.)
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Sen. Patrick Leahy (Vt.)
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Sen. Joe Manchin (W.V.)
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Sen. Ed Markey (Mass.)
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Sen. Bob Menendez (N.J.)
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Sen. Jeff Merkeley (Ore.)
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Sen. Chris Murphy (Conn.)
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Sen. Patty Murray (Wash.)
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Sen. Gary Peters (Mich.)
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Sen. Jack Reed (R.I.)
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Sen. Jacky Rosen (Nev.)
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Sen. Brian Schatz (Hawaii)
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Sen. Chuck Schumer (N.Y.)
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Sen. Jeanne Shaheen (N.H.)
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Sen. Kyrsten Sinema (Ariz.)
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Sen. Tina Smith (Minn.)
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Sen. Debbie Stabenow (Mich.)
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Sen. Jon Tester (Mont.)
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Sen. Tom Udall (N.M.)
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Sen. Chris Van Hollen (Md.)
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Sen. Mark Warner (Va.)
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Sen. Ron Wyden (Ore.)
Schumer’s skin in the game is clear: in 2015, before the SALT cap, Schumer wrote off $58,000 in state and local taxes.
Since President Trump signed the TCJA into law, blue-state Democrats have worked overtime to find ways for their wealthiest residents to avoid the SALT cap. Governor Andrew Cuomo attempted an end-run around the cap by allowing New Yorkers to pay their local property taxes into a state-run charitable fund.
The IRS recently issued new rules and guidance to stop these blue-state schemes. By voting to nullify the IRS guidance, Schumer and 41 other Democrats are aiding and abetting blue-state taxpayers that commit federal tax arbitrage by circumventing the SALT cap.
Photo Credit: Senate Democrats - Flickr
Congress Should Reject the "SHIELD Act"
The House of Representatives is voting today on H.R. 4617, the “SHIELD Act,” legislation sponsored by Rep. Zoe Lofgren (D-Calif.) that would erode freedom of speech and federalize state and local elections. The House should reject this misguided bill.
Election security is a serious issue. Last year, the Department of Homeland Security notified 21 states that hackers had targeted their election systems in 2016. A majority of states are using election infrastructure that is outdated and ripe for cyberattack from foreign adversaries. While there is no evidence that Russia hacked our vote totals in 2016, it is clear that hackers are testing the waters.
Unfortunately, some Democrats are more interested in clamping down on freedom of expression for Americans than securing our elections.
Democrats have pushed to have government take over political speech in the past. House Democrats tried introducing a number of the SHIELD Act’s provisions earlier this year in H.R. 1, the misleadingly-named “For the People Act of 2019.”
The SHIELD Act is a wishlist of Democrat priorities that focuses on restricting the political speech of Americans instead of targeting foreign meddlers abroad.
Strangely enough, the bill does nothing to prevent troll farms, which was the primary means Russia attempted to influence the 2016 election. Additionally, nothing in the SHIELD Act would give law enforcement the resources necessary to counter foreign actors that attempt to influence our elections.
If enacted, the SHIELD Act would:
- Give the federal government the responsibility of determining what qualifies as “legitimate” press/news. This is a blatant infringement on freedom of the press, and a provision ripe for abuse by left-wing bureaucrats.
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Allow the U.S. Attorney General to interfere in state elections, a blatant violation of the constitutional principle that states and localities have primary administration of elections.
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Apply television disclaimers to internet ads. A four second disclaimer (the standard on television ads) would take up half of most internet ads.
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Expand the definition of “electioneering communication” to include “issues of national importance,” a broad term not defined in law or regulation. In effect, this would take ads that are not political in nature and classify them as such, which would have a chilling effect on free speech.
Thankfully, Republicans have an alternative. House Administration Committee Ranking Member Rodney Davis (R-Illinois) has introduced H.R. 4736, the Honest Elections Act. Instead of federalizing state and local elections, the Honest Elections Act empowers states and localities to secure their elections while upholding constitutional principles.
In reality, the SHIELD Act would do next to nothing to secure our elections while trampling all over the Constitutional guarantee of freedom of expression.
The House should reject the Democrat-led SHIELD Act and pass legislation that would actually secure our election in 2020 and beyond.
Photo Credit: KidTruant - Flickr
Biden: “Every Single Solitary Person” Will Pay 40% Capital Gains Tax
Joe Biden said that “every single solitary person” will pay a 40% capital gains tax, during a speech in Scranton, Pennsylvania on Wednesday morning.
“So every single solitary person, their capital gains are going to be treated like real income and they are going to pay 40 percent on their capital gains tax,” Biden said.
Raising the capital gains tax would harm Americans’ ability to build a nest egg and hurt the value of their homes, farms, and businesses.
Biden’s comments and his long Senate voting record mean voters should expect him to push for capital gains tax hikes if elected. During his time in the Senate, Biden consistently voted against tax cuts on capital gains.
In 2003, Biden voted against the reduction in the capital gains rate from 20 percent to 15 percent. In 2005 and 2006, Biden voted against extending the 15 percent rate.
In 2012, then-Vice President Biden and President Obama insisted the cap gains rate revert to 20 percent.
Biden and Obama then piled on another 3.8 percent capital gains tax hike -- the Net Income Investment Tax -- one of the many tax increases in Obamacare. The 3.8 percent tax hike took effect Jan. 1, 2013.
Currently, long-term capital gains are taxed at zero percent, 15 percent, or 20 percent, depending on income level.
Households subject to Obamacare’s 3.8 percent Net Income Investment Tax end up paying a 23.8% rate. And under Biden’s cap gains scheme, such households will face a 43.4 percent rate.
If you want to stay up-to-date on Democratic candidates and their threats to raise taxes, visit www.atr.org/HighTaxDems.
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Biden Running Ads to “Repeal Trump’s Tax Cuts.”
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