Alexander Hendrie

Tax Policy Center Data: Trump Tax Plan Beats Clinton with Higher Take-Home Pay for All Income Levels

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Posted by Alexander Hendrie, John Kartch on Monday, October 31st, 2016, 1:07 PM PERMALINK

Left of center group’s own numbers show after-tax income under Trump plan is higher than Clinton’s plan for all income levels

Donald Trump’s tax cut plan would increase after-tax income more than the Hillary Clinton’s tax plan regardless of income quintile, according to data published by the left-of-center Tax Policy Center.

As noted in the center-left Tax Policy Center’s data, the middle quintile of income earners would see a 1.8 percent increase in after tax-income under the Trump plan but would receive just 0.2 percent increase in after-tax income under the Clinton plan. The Trump tax cut in this income range is nine times the size of Clinton’s.

Clinton’s tax plan offers no income tax rate reduction for any American of any income level. No rate reduction for any business or any individual, regardless of size.

Data Source: Tax Policy Center

Clinton’s overall tax plan raises taxes by $1.4 trillion. Americans for Tax Reform is tracking all of Clinton’s tax hikes at

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Congress Should Not Use the Tax Code to Pick Winners and Losers in the Reinsurance Industry

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Posted by Alexander Hendrie on Wednesday, October 26th, 2016, 4:00 PM PERMALINK

Congressman Richard Neal (D-MA) and Senator Mark Warner (D-VA) recently introduced legislation (H.R. 6270 and S. 3424 respectively) that needlessly picks winners and losers in the reinsurance industry by distorting the tax code in an economically destructive way. While supporters of the legislation claim it would close a “loophole” in the tax code, it would do no such thing and would instead make the code more complex, while decreasing choice and increasing prices in the reinsurance industry.

Property and casualty insurers commonly purchase reinsurance as a way to spread risk so that no single insurer is overly exposed in the face of disaster. Under federal law, insurers are permitted to deduct from taxable income any premiums paid to a reinsurance provider. This makes perfect sense because it is a necessary business expense indistinguishable from any other.

The proposed legislation removes this business deduction only for foreign reinsurers based on the argument that foreign firms are using the deduction to shift profit outside the U.S. 

But this is argument misses the mark -- profit shifting concerns are not justified here. Reinsurance transactions are already heavily regulated to ensure the rules aren’t abused. Even if this were the case, the solution should not be to treat identical business purchases differently under the tax code based on the location of the reinsurer. 

Not only is this proposal protectionist, but it would make the code more complex, would arbitrarily picks winners and losers, and hurts the economy and consumers. Given it raises a miniscule amount of revenue, it is not a serious pay-for especially after accounting for the economic damage it causes.

Doesn’t Fix the Problem that Supporters Claim: Supporters of this proposal argue that reinsurance profits ending up outside the U.S. means that insurers are shifting profit to minimize taxes. This is not the case. By its nature, reinsurance is an industry that spreads risk across the globe, therefore profit (and loss) will naturally spread outside U.S. borders. In addition, reinsurance transactions are already subject to heavy scrutiny by IRS auditors to ensure they do not abuse discrepancies in international tax law to shift profit outside the country.

Makes the Tax Code More Complex: Tax policy should treat all economic decisions neutrally by minimizing the number of distorting credits and deductions in the code so that decisions are made based on economic growth. Current law over reinsurance premiums already treats business decisions equally, so H.R. 6270/S. 3424 would create more complexity in the code and encourage insurers to arbitrarily treat purchases differently based on the country of purchase.

Reduces Consumer Choice and Increases Reinsurance Prices: Changing the tax code in this way will distort the reinsurance market by giving domestic reinsurers an artificial advantage. This will narrow the choices available to insurance companies and consumers leading to decreased competition and higher prices. According to research by the Brattle Group, this proposal could reduce the supply of reinsurance by as much as 20 percent, and increase costs to American consumers by $11 to $13 billion due to higher prices.

Hurts Economic Growth: According to research by the Tax Foundation, this change would reduce GDP by $1.35 billion over the long term, due to increases in the cost of capital. As noted by the study, every additional dollar in revenue would come at the cost of more than four dollars to the economy. Equal treatment of foreign and domestic reinsurance allows consumers to spread the risk in an economically efficient way, but the proposed change creates unneeded market distortions.

Raises a Miniscule Amount of Revenue: Congress is continually on the hunt for “pay-fors” as a way to offset tax reform proposals. Because this proposal is so damaging to economic growth, it would raise a miniscule amount of revenue and is essentially useless as a tax reform pay-for. After accounting for negative economic feedback, the proposal would raise just $4.4 billion over a ten-year period. Over that same period, federal revenues will total $41.7 trillion according to the Congressional Budget Office. The damage this proposal will cause to the economy and to property and casualty insurers far outweighs any benefit it may have as a tax reform pay-for.


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CMMI Tests Undermine Congressional Authority and Threaten Access to Healthcare

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Posted by Alexander Hendrie on Wednesday, October 26th, 2016, 10:00 AM PERMALINK

Obamacare created the Centers for Medicare and Medicaid Innovation (CMMI), an agency tasked with conducting demonstrations over new health care delivery and payment models in Medicare, Medicaid, and the Children’s Health Insurance Program with the intent of reducing healthcare costs. While the goals of this agency are laudable, CMMI is using its broad authority to marginalize the constitutional role of Congress in order to push bad healthcare policy.

CMMI tests are supposed to increase the efficiency of healthcare programs by either improving quality without increasing spending or reducing spending without decreasing quality. However, the agency has pushed tests with little evidence they will result in savings, while strong-arming providers into participating. 

The last eight years have seen the executive branch repeatedly push unilaterally actions that ignore the will of Congress and the American people. The actions of CMMI to unilaterally propose changes in law represents a new avenue for unelected bureaucrats to push their liberal agenda even in the face of opposition from doctors, patients, and Congress.          

Lawmakers must assert their constitutional authority over this wayward agency. The fact is, it is the job of Congress to make these changes to law.  

CMMI Not Subject to Congressional Oversight:  Federal agencies are typically funded through the annual appropriations process, which gives Congress control over funds each year and the opportunity to conduct oversight over the actions of an agency. 

CMMI is not subject to this process – the agency has been obligated $10 billion this decade and $10 billion every decade in perpetuity. As a result, the agency has free rein to do what it wants with these funds and Congress is limited as to the oversight it can conduct over the agency.  

To date, CMMI has spent more than $6 billion with no savings to show for it. In the real world, the agency’s poor performance would see its funds reduced. Instead, CMMI continues to receive funds automatically.

CBO Methodology Hampers CMMI Oversight: The Congressional Budget Office is the scorekeeper for Congress on all fiscal issues. It provides cost estimates on all legislation and is therefore an integral part of the budget making process. In measuring the fiscal cost/benefit of CMMI demonstrations, CBO is adjusting the trillion dollar federal baseline even though it is unclear whether there will be any savings at all.

The agency assumes that tests are recouping billions in savings as if they are successful even though these tests are in their early stages, and little, if any evidence has been compiled. Conversely, CBO is scoring any attempt to block or correct CMMI demos as costing the government money. This binds the hands of lawmakers by forcing them to consider offsetting spending cuts whenever they wish to exert proper oversight over CMMI.

Not only does this decision distort the federal baseline with misleading estimates, it makes it much harder for Congress to do its job by giving CMMI tests supremacy over the work done by lawmakers.

CMMI is Promoting Bad Healthcare Policy:  Because of its broad authority over mandatory spending, CMMI has been able to propose sweeping policy changes with little evidence of future savings. The latest CMMI test proposes a new, lower payment model for physician-administered prescription drugs under Part B of Medicare. 

Because CMMI has decided it can mandate participation in its tests, the rule rewrites existing payment models for as much as 75 percent of the country forcing thousands of doctors and patients across the country to participate. Because the rule drastically reduces reimbursement rates to doctors, it is likely that these tests will hurt access to care for seniors across the country. 

This massive test should be subject to careful scrutiny, especially as there are concerns that the demonstration will not save the money that CMMI claims. However, Congress is hamstrung in its ability to conduct meaningful oversight because of CBO methodology. 


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Congress Must Stop Obamacare Bailouts

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Posted by Toni-Anne Barry, Alexander Hendrie on Tuesday, October 18th, 2016, 10:00 AM PERMALINK

Six years after it was signed into law, Obamacare is failing. Insurers are hiking premiums or leaving Obamacare marketplaces because they cannot make any money. Taxpayer financed co-ops are collapsing despite generous loan terms. Individuals on the exchanges are losing their plans and find their already limited healthcare choices narrowing.

The President should acknowledge that the law is broken and work to reform the system to lower costs, improve quality, and ensure all Americans have access to healthcare that best suits their individual needs. Instead, the Obama administration is pushing several taxpayer funded bailouts of the law through the risk corridor and transitional reinsurance programs.

In the past few years, the government has stolen a total of $8.5 billion in taxpayer dollars to illegally fund Obamacare through programs like reinsurance. If Congress fails to act, the law could provide more than $170 billion in corporate welfare payments to special interests.


Over 50 conservative groups have signed a coalition letter urging congress to stop the Obamacare bailouts. Congress must reassert their authority and stop the Obama administration from using taxpayer dollars to bail out the failed programs.

Reinsurance Bailout Costing Taxpayers $3.5 Billion: In order to disguise the costs to American families, the law has relied on a web of confusing spending programs, subsidies, and taxes. One program, known as transitional reinsurance imposed a fee on each individual with private health insurance to raise $25 billion, including $5 billion that would go back to taxpayers via the Treasury general fund.

In both 2015 and 2014, the program failed to take in the expected sums, so the Department of Health and Human Services (HHS) decided to illegally funnel funds to Obamacare insurers. As announced earlier this year, Obamacare insurance companies would receive $7.7 billion through the reinsurance program – $6 billion obtained from a fee on private health insurance and $1.7 billion taken from the Treasury general fund.

Because HHS did the same last year, a total of $3.5 billion has been stolen from taxpayers using the reinsurance program.

Section 1341 of Obamacare, which establishes reinsurance, explicitly allocates that taxpayer dollars “shall be deposited into the general fund of the Treasury of the United States and may not be used for the [reinsurance] program established under this section.”

Multiple legal opinions have concurred that the reinsurance bailout is illegal:

  • A opinion released by the Government Accountability Office (GAO) found that HHS was ignoring federal law by diverting funds from Treasury to Obamacare insurers.
  • Similarly, a memo released by analysts at the nonpartisan Congressional Research Service found that federal law “unambiguously” states funds must be deposited into the Treasury general fund.
  • Former White House Counsel C. Boyden Gray also called the diverting of funds “unlawful” and questioned how it could possibly withstand legal scrutiny.


Congress a duty to step in and block this illegal action. They can do so by passing the Taxpayers Before Insurers Act, legislation introduced by Congressman Mark Walker (R-N.C.) and Senator Ben Sasse (R-Neb.) that forces HHS to return the stolen $3.5 billion to taxpayers. This pro-taxpayer legislation forces the Obama Department of Health and Human Services to obey the law and return billions in funds to their rightful owner – the American people. If they fail to do so, the legislation strips HHS of billions in taxpayer funds.

Risk Corridors Settlements Will Cost Taxpayers Billions More: Like the reinsurance program, the risk corridor program was created as a “stabilization” program when Obamacare was passed into law. The program was designed to encourage insurers to take on higher risk individuals by transferring funds from insurers who made financial gains to those that posted losses. Because insurers were unable to make any money from operating on exchanges the program failed to work as expected.

For the 2014 season, insurance providers requested $2.87 billion in payments but the program took in $362 million, just 12.6 percent. Federal law requires the program to be budget neutral, so the federal government was unable to pay out the remaining $2.5 billion to insurers off the backs of taxpayers, as they attempted at the end of last year.

Despite this restriction, the Obama administration is now looking to pay out this money in their final days of office. The Center for Medicare and Medicaid Services (CMS) blatantly announced in a memo that it intends to circumvent federal law and the will of Congress by offering settling with insurance companies that have sued over the Risk Corridor program. The federal government will do this by offering them settlements from the Judgment Fund, which is outside the scope of Congressional appropriations.

Like the reinsurance bailout, there is no question this action is illegal. The Government Accountability Office has again said there is no legal justification. Their analysis shows that when a government agency cannot pay its dues, it must get funding through Congress. Even the Obama Department of Justice has said that insurers aren’t entitled to the billions that CMS wants to pay them. 

The law is clearly imploding. Rather than push bailouts to Obamacare at the expense of taxpayers, the administration should work with Congress to find fixes to the law.  

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IRS Wastes $12 Million on Unusable Email System

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Posted by Alexander Hendrie on Friday, October 14th, 2016, 12:46 PM PERMALINK

The IRS spent $12 million on an unusable email system, according to a report by the Treasury Inspector General for Tax Administration (TIGTA). The agency purchased two years’ worth of email software subscriptions before finding out the system was not unusable. 

The IRS was required to procure new software because of a 2014 Office of Management and Budget directive that required federal agencies to manage permanent and temporary email records starting December 2016.

As the report notes, the IRS failed to perform the required and necessary cost analysis, security assessments, and requirements analysis prior to purchasing the software. As the report notes:

“The purchase was made without first determining project infrastructure needs, integration requirements, business requirements, security and portal bandwidth, and whether the subscriptions were technologically feasible on the IRS enterprise.”

As a result, the software was never used despite $12 million in taxpayer funds being spent acquiring two years’ worth of licenses. In addition, the IRS failed to ensure the contract was awarded with full and open competition as required by federal law. As the report notes:

“The IRS violated the Federal Acquisition Regulation requirements by not using full and open competition in its acquisition of Microsoft Office 365 ProPlus and Exchange Online monthly subscriptions.”

This is not the only time the IRS has struggled with technology. A TIGTA report released last year found that the IRS failed to upgrade Windows software on its computers and servers by end of life deadlines, despite being expected to spend almost $140 million in taxpayer funds. At the time of the report, the agency had spent nearly four years upgrading this technology, but had only upgraded half of its servers.

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Medicare Price Negotiation is a Destructive and Unnecessary Proposal

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Posted by Alexander Hendrie on Thursday, October 13th, 2016, 3:30 PM PERMALINK

Morning Joe host Joe Scarborough yesterday called for the government to “negotiate” prices for Medicare Part D prescription drug spending.

This is bad policy and would not fix the problems that Scarborough claims it would. Medicare Part D is a success because it empowers free market competition to ensure access to medicines at low prices.

The government shouldn’t mess with a program that isn’t broken, and doing so would do almost nothing to address runaway federal spending. Instead this proposal would decrease access to life-saving medicines and increase costs to the healthcare system over the long term.

Supporters of giving the government power to negotiate over Part D make it sound like a simple solution. But in practice the government would be a terrible negotiator.

Medicare Part D is a Success
Medicare Part D has been successful—for both beneficiaries and taxpayers—due to “rigorous competition in the program.” As noted by Grace-Marie Turner in Forbes, prices are already negotiated down because of “private sector competition through consumer choice and price negotiations by PBMs (Pharmacy benefit managers) and insurers.”  

There is a 90% satisfaction rate among Part D beneficiaries because the program provides a great number of choices for beneficiaries at affordable prices, without putting a price control on drug manufacturers. Part D spending is also 45 percent lower than initial projections and monthly premiums are just half the projected amount.

The program is effective because of “the competition among purchasers who also operate within the commercial market.” The clause that prohibits government interference in private negotiations has been crucial in the program’s success.  

Part D works much better than government programs that have price controls, like the Veterans Affairs Agency. Part D is able to provide far more innovative, life-saving drugs, than the VA does. The VA currently negotiates prices, but has to be selective about which drugs it covers. As a result, veterans are frequently locked out of accessing life-saving medicines, resulting in worse health outcomes, and higher costs to the system.

Part D Protects Medical Innovation
Costs associated with medical development are already significant. On average it costs $2.6 billion and more than a decade of research time for each new medicine that hits the market.

While forcefully reducing the costs of medicine may succeed in reducing the upfront costs of drugs, over the long term it is an incredibly destructive policy. By forcing lower prices, the government creates a disincentive to innovate because there are less profits available to finance the next generation of life-saving and life-improving prescription medicines. In turn, this results in higher long term healthcare costs due to a lack of cures for a variety of illnesses.

As noted by Joseph Gulfo in the Hill, Part D ensures that medical innovation is encouraged:

The 2003 Medicare law exempts Part D drugs from "best price" rebates that drugmakers have been required to give to the state Medicaid programs since 1991. Medicare is prohibited from receiving "best price" to provide incentives to drugmakers to develop drugs for conditions that affect patients over 65 years of age. And this incentive is working — in the first few years after Medicare D was enacted, there was an estimated 40 percent increase in all clinical trials versus expected trends and a 59 percent increase in the number of drugs entering the final phase before FDA approval.

Part D Spending is a Small Percentage of Overall Medicare Spending
Scarborough is correct that spending on federal entitlements are unsustainable. By 2046, the Congressional Budget Office projects that Medicare, Medicaid and Social Security spending will account for half of all non-interest spending.

While there is a need to restrain these costs, Part D Medicare prescription drug spending accounts for a small percentage of overall Medicare spending (and an even smaller percentage of mandatory spending). As shown below, prescription drug spending accounts for just 12 percent of all Medicare spending -- roughly $76 billion. 

This is a small fraction of mandatory spending. In 2015, federal spending on Medicare totaled $634 billion, and all mandatory spending totaled $2.29 trillion according to CBO. Prescription drug spending equals roughly $76 billion.

Scarborough makes it sound as if this is the solution to runaway federal spending. However, reducing Part D prescription drug outlays would hardly dent federal mandatory spending.

Source: Kaiser Family Foundation (Note: Total Medicare spending differs because of updated CBO baseline)

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America’s Corporate Tax Ranked Worst in the World

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Posted by Alexander Hendrie on Wednesday, October 12th, 2016, 10:00 AM PERMALINK

The United States has the worst corporate tax system in the developed world, according to the Tax Foundation’s 2016 International Tax Competitiveness Index. The report, which analyzes the tax codes of all 35 developed countries, placed the U.S. tax code 31st overall.

In ranking the tax code of each developed country the report, authored by Kyle Pomerleau, divides each countries' tax code into five different categories – corporate taxes, consumption taxes, property taxes, individual taxes, and international taxes.

The report further divides each category into subcategories. For corporate taxes, the report includes three subcategories: the top marginal rate, cost recovery (to what extent the corporate tax system allows business expenses to be deducted), and the incentives and complexity in the code.

The U.S. ranks poorly in all three categories – our tax code is ranked last in the top marginal rate subcategory, 20th of 35 for cost recovery, and 27th of 35 in the incentives and complexity subcategory.

The corporate tax is a tax directly on labor and capital, so reducing it would benefit workers and the economy, not just businesses. As noted by the Congressional Budget Office, domestic workers bears 70 percent of the corporate tax, while shareholders bear the other 30 percent.

Reducing the corporate income tax to 20 percent, as the House Republican “Better Way” Tax Reform blueprint proposes, would have strong, positive economic effects. A 20 percent rate, like the blueprint calls for would create more than 600,000 full time jobs and increase GDP by more than 3 percent over the long term.

Top Marginal Rate

With the highest corporate tax rate in the world at 35 percent (plus a state average of 4 percent), it is unsurprising that the U.S. finishes last in the marginal rate ranking.

America’s corporate income tax rate is close to 15 percent higher than the average in the developed world. The tax rate has barely changed since tax reform was passed 30 years ago in 1986.  At the time, we lowered our rate to 39 percent – below the developed average of 44 percent. Since then, other countries have cut their rates aggressively.

32 of the 35 developed countries have reduced their corporate rates since 2000. Only the U.S. and Chile have higher corporate tax rates than they did in 2000. Our high rate makes it difficult, if not impossible for our businesses to compete with competitors that have much lower rates Canada (26.3 percent), the United Kingdom (20 percent), and Ireland (12.5 percent).

The high rate has resulted in close to 50 American businesses leaving the country through an inversion in the past decade, according to data compiled by Democrats on the Ways and Means Committee. The uncompetitive code has also resulted in a net loss of more than $700 billion in assets that have been acquired by foreign competitors according to a report by Ernst and Young.

Cost Recovery
The ideal tax policy from a cost recovery perspective would be allowing businesses to immediately expense the cost of investments from taxable income. But this is not the system the U.S. uses.

Instead of full business expensing, American businesses have to deduct, or “depreciate,” business costs over several years depending on the asset they purchase, as dictated by complex and arbitrary IRS tables. These rules create needless complexity, and force business owners to make decisions based on tax, not management reasons. 

With the existing depreciation schedules, business purchases are treated differently under the tax code, with no clear pattern or common theme. Businesses have two different systems of depreciation and investments can be depreciated over 3, 4, 5, 7, 10, 12, 14, 15, 20, 25, 27.5, 30, 35, 39, 40, or 50 years depending on the system used and the asset purchased. 

Implementing full business expensing would eliminate needless complexity in our tax code, and it would also lead to strong economic growth. According to past research by the Tax Foundation, full business expensing would result in 5.4 percent higher long-term GDP, would create more than 1 million full time jobs, and would increase after-tax income by 5.3 percent.

Incentives and Complexity

Tax policy should treat all economic decisions neutrally by minimizing the number of distorting credits and deductions in the code. At close to 75,000 pages the U.S. tax code is exceedingly complex. An estimated 8.9 billion hours and $409 billion will be spent complying with IRS tax filing requirements this year. 

Clearly, there is a need to simplify the code and this should be done within pro-growth tax reform that lowers tax rates for all Americans and eliminates many credits and deductions in an overall net tax cut.

Making the tax code simpler and fairer also has the added benefit of taking power from the IRS. With the existing, byzantine code, the IRS or a similar agency is necessary, but making the code simpler can make the agency obsolete.

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Tax Policy Center: Trump Plan Gives Americans of All Income Levels Bigger Tax Cuts Than Hillary

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Posted by Alexander Hendrie, John Kartch on Tuesday, October 11th, 2016, 3:49 PM PERMALINK

Left of center group’s own numbers show after-tax income under Trump plan is higher than Clinton’s plan for all income levels

Donald Trump’s tax plan would increase after tax income more than the Hillary Clinton plan regardless of income, according to data published by the left-of-center Tax Policy Center.

As noted in the graphic compiled by the Wall Street Journal, the middle quintile of income earners would see a 1.8 percent increase in after tax-income under the Trump plan but would receive just 0.2 percent increase in after-tax income under the Clinton plan. The Trump tax cut in this income range is nine times the size of Clinton’s.

Clinton’s tax plan offers no income tax rate reduction for any American of any income level. No rate reduction for any business or any individual, regardless of size.

Clinton’s overall tax plan raises taxes by $1.4 trillion. Americans for Tax Reform is tracking all of Clinton’s tax hikes at

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Report: Federal Government Spends $1.5 Billion Per Year on Public Relations

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Posted by Alexander Hendrie on Wednesday, October 5th, 2016, 4:55 PM PERMALINK

The federal government spends $1.5 billion annually on public relations -- $1 billion on PR and advertising contracts, and another $500 million on salaries for 5,000 federal PR employees, according to a report by the Government Accountability Office (GAO).

The report, requested by Senate Budget Committee Chairman Mike Enzi (R-Wyo.) found that advertising and PR contracts have ranged from $800 million to $1.3 billion annually over the past decade. As the report notes, the government spends taxpayer dollars on numerous advertising platforms:

“In addition to more traditional public relations media such as television and radio, agencies are expanding the use of various media technologies to facilitate communication with the public. These media technologies include e-mail, websites, blogs, text messaging, and social media such as Facebook.”

In addition, the federal government has close to 5,000 public relations employees with a combined salary of close to $500 million per year averaged over the past decade. These employees have a median salary of close to $90,000 in 2014. According to the Census Bureau, the average median household income in 2014 was $53,657.

As the report notes, it is difficult to definitively determine the full amount spent on advertising because government contracts may encompass multiple activities. Many contracts were not included in GAO’s scope that may or may not have involved PR and advertising. As the report notes:

“We found 55 contract actions with the term “public relations” and 161 contract actions with the term “advertising” that had not been coded under the codes we included in our scope.”


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Hillary's Death Tax Hypocrisy

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Posted by Alexander Hendrie on Monday, September 26th, 2016, 3:02 PM PERMALINK

Hillary has organized her own finances in a way to shield her estate from death taxes. 

Hillary Clinton has adopted the proposal of socialist Bernie Sanders to increase the top Death Tax rate to 65 percent.


Clinton previously called for a hike to the top Death Tax rate, from 40 to 45 percent, as part of a more than $1,000,000,000,000 (one trillion) net tax increase on the American People over the next ten years. The true net tax hike figure is likely much higher because Clinton’s campaign has not released specific details for many proposals. To date, the campaign has proposed multiple capital gains tax hikes, an income tax increase, a business tax increase, a tax on stock trading, an "Exit Tax" and even a “fairness” tax.

Clinton’s tax plan offers no tax rate reduction for any individual or business.

And now, Hillary is proposing Death Tax brackets of 50 percent, 55 percent, and 65 percent.

As noted by the Wall Street Journal:

The left claims only the super-wealthy will pay high rates, but the Sanders plan that Mrs. Clinton is copying did not index exemption levels for inflation. One reason a bipartisan movement emerged to reform the death tax in the 1990s was because the then 55% rate engulfed ever more taxpayers over time. Mrs. Clinton would also end the “step-up in basis” on stock valuations for many filers, triggering big capital gains taxes for a much broader population.

She also knows most of her rich friends will set up foundations, as she and Bill Clinton have, to shelter most of their riches from the estate tax. As Americans have learned, these supposed charities can be terrific vehicles for employing political operatives while they wait for Chelsea to run for the Senate.

While Hillary continues to push for a steep Death Tax on the American people, when it comes to her own finances, it is a different story. Clinton’s newly released tax returns show she still uses tax avoidance strategies to shield her Death Tax liability.

According to a 2014 report by Bloomberg News, the Clintons created trusts in 2010 and shifted ownership of their New York home to it in 2011. In doing so, they will avoid paying hundreds of thousands of dollars in future death taxes.

As Bloomberg reports:

To reduce the tax pinch, the Clintons are using financial planning strategies befitting the top 1 percent of U.S. households in wealth. These moves, common among multimillionaires, will help shield some of their estate from the tax that now tops out at 40 percent of assets upon death.

The Clintons created residence trusts in 2010 and shifted ownership of their New York house into them in 2011, according to federal financial disclosures and local property records.

But Hillary Clinton’s official campaign website, in calling for a steep Death Tax hike, scolds:

She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are.

Oh! Let’s go back to the Bloomberg article:

Among the tax advantages of such trusts is that any appreciation in the house’s value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes, said David Scott Sloan, a partner at Holland & Knight LLP in Boston.

“The goal is really be thoughtful and try to build up the nontaxable estate, and that’s really what this is,” Sloan said. “You’re creating things that are going to be on the nontaxable side of the balance sheet when they die.”


Clinton said that “the estate tax has been historically part of our very fundamental belief that we should have a meritocracy.”

The newly released Clinton tax return shows the continued use of an Article 4 Trust, as shown on Schedule E, page 2.

Hillary has a long history of opposing Death Tax relief:

- In 2001, Clinton voted no on H.R. 1836, “the Economic Growth and Tax Reconciliation Act,” which contained a series of tax cuts, one of which increased the Death Tax exemption level to $3.5 million.

- In 2005, Clinton voted no on H.R. 8, “the Death Tax Repeal Permanency Act of 2005,” which fully repealed the Death Tax.

- In 2006, Clinton voted no on H.R. 5970, “the Estate Tax and Extension of Tax Relief Act of 2006,” which increased the Death Tax exemption level to $5 million.

- In 2008, Clinton voted no on S.Amdt.4191, legislation to increase the Death Tax exemption level to $5 million.

To learn more about Hillary’s tax hike plan, visit ATR’s dedicated website,

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