William H Paul

The IRS Horror Show

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Posted by William H Paul on Thursday, October 26th, 2017, 4:15 PM PERMALINK

This is the heartbreaking true story of the Kwon’s a hardworking immigrant family in pursuit of the American Dream – but greeted with an American Nightmare.

Oh Suk Kwon – South Korean immigrant and U.S. army veteran – was proud to run his small-business alongside his wife and two kids. But only a few years passed before a “hunch” led federal investigators to their doorstep in 2011. The agents accused Kwon of “structuring” his deposits in amounts less than ten thousand dollars. Since all that is needed for asset seizures is a suspicion of criminal activity to take a person’s property, the Kwon’s were helpless in the face of an IRS legal onslaught.

But despite having zero history of tax evasion, terrorist ties, or any criminal activity, the IRS continued to seize all of the service station’s capital through an unconstitutional abuse of power called civil asset forfeiture. The process allows for property to be seized and forfeited without ever charging, much less convicting the owner of a crime. These seizures are often justified by mere suspicion with little, if any, actual evidence tying property or currency to a crime. The practice negates an American’s right to due process and reflects an erroneous assumption that Americans are guilty until proven innocent.

Kwon innocently plead guilty to the technicality of structuring even though his intent wasn’t of a criminal nature. This would act as the final nail for the IRS to shut the coffin on a business that was, very much, alive. A Washington Post article stated that when his neighbors were interviewed during the investigation, Kwon said, “They saw me as Korean. As a veteran. They were surprised to see me as a criminal. I will never forget that.”

Out of the shame caused by having their business destroyed, the Kwon family left the neighborhood. Kwon’s wife in of the distress. The feds never uncovered any evidence of criminal activity, and still – to this day – possess the fifty-nine thousand dollars that tore this family apart.

Rep. Peter Roskam (R-IL) has since sponsored the RESPECT Act in efforts to restore these Constitutional rights. The Restraining Excessive Seizure of Property through the Exploitation of Civil asset forfeiture Tools (RESPECT) Act recently passed in the House and is pending a vote in the senate. Americans for Tax Reform released a coalition letter urging support for this act and the similar Due Process Act.

Photo Credit: Christina Storozkova

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“Big Tax” Bill de Blasio Demands Tax Hike to Fix NYC Subway

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Posted by William H Paul on Friday, September 29th, 2017, 12:45 PM PERMALINK

New York City Mayor “Big Tax” Bill de Blasio (D) ruffled feathers recently after proposing a targeted tax hike on the city’s high income earning residents in order to fix their struggling subway system.    

The Mayor’s plan, known as the “Fair Fix” plan, would also use the tax revenue to subsidize half-price bus and subway rides for 800,000 of the city’s qualifying residents. De Blasio’s misguided plan is even opposed by Democratic Governor Andrew Cuomo who controls the Metropolitan Transportation Authority (MTA). The MTA is the largest public transit authority in the U.S. serving downstate New York and Southwestern Connecticut.

Both Governor Cuomo and MTA Chairman Joe Lhota agree that the city should provide half of the $836 million needed. With support from Council Speaker Melissa Mark-Viverito, Governor Cuomo and the MTA have proposed a separate solution called “congestion pricing” which involves charging drivers to enter the busier parts of the city during peak hours.

MTA board member Veronica Vanterpool, appointed by de Blasio as executive director of the Tri-State Transportation Campaign, wrote an op-ed in the NY Daily News urging the mayor to adopt congestion pricing. However, in the days after the op-ed was released, she mysteriously switched her position and came out in support of de Blasio’s plan to hike taxes on New York residents.

 The grassroots campaign “Move NY” has been building support for the congestion pricing proposal that would put in place a $2.75 toll – the same price as a subway swipe – for the four bridges entering Queens, Brooklyn, and Manhattan. Additionally, the “user fee” structure of the plan would reduce prices up to 48% for the seven bridges currently with an MTA toll.

“Move NY” projects their plan would bring in $1.47 billion annually for both city and state infrastructure needs without raising taxes. This more fiscally minded solution would seem a better alternative to hiking taxes, especially considering the transit authority is already $33 billion in debt. Remember, this is coming from a city that currently can’t account for $84 million lost within their Education Department and $356 million in Medicaid payments.

Republican Mayoral Candidate, Assemblywoman Nicole Malliotakis, suggests NYC should help state-run subways by diverting rainy-day money the de Blasio administration has stocked away. “The money is there – You have surpluses. We don’t need to cut anything.” she said. Nicole Gelinas, senior fellow at the Manhattan Institute, says the city possesses over $2 billion in reserves. De Blasio, who has increased spending every year in office, claims that these funds are to brace for federal funding cuts threated by the Trump Administration.

These proposed tax hikes will hopefully be combatted by the Republican-controlled New York Senate. Chairman Lhota assures there will be a public update made to the MTA board soon. However, he and other officials and lawmakers recognize the obstacles posed by the Mayor’s “tax-and-spend” agenda.   

Photo Credit: Stephen Nessen

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Time to Pull Plug on KentuckyWired

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Posted by William H Paul on Thursday, September 28th, 2017, 11:17 AM PERMALINK

The Interim Committee on Appropriations and Revenue will be meeting this afternoon to begin discussing solutions for KentuckyWired.

KentuckyWired – a 3,000 mile government-run broadband network currently being constructed in Kentucky – is already a taxpayer’s nightmare and should be shut down as soon as possible. This undertaking was originally estimated to cost a whopping $350 million and be completed by April 2016, but those assumptions could not have been more wrong.

As of last month, $175 million had been poured into just 123 miles of fiber, a cost of $1.3 million per mile, and with no clear cost estimate, the new date of completion is likely to be sometime in 2019. So, in addition to increased labor costs resulting from delays, taxpayers may now be forced to foot $50 million in contract penalties due to “supervening events”.

KentuckyWired just adds to the numerous case studies that have already proven government has no place in the broadband industry. “Municipal Fiber in the United States: An Empirical Assessment of Financial Performance,” a 2017 study, examined 20 municipal broadband networks and concluded they are not a good deal for taxpayers. More than half are reported to be cash-flow negative and the majority of those classified as cash-flow “positive” are generating returns so small they are expected to take more than 100 years to recover project costs.

Similarly, a 2012 study titled The Hidden Problem with Government Owned Networks concluded, “Government-owned networks have fared quite poorly because they have neither the resources nor the expertise necessary to provide consumers with reliable state-of-the-art broadband connections.” Government simply is not fit for this industry.

In addition to being a complete waste of scarce taxpayer resources, government-owned broadband networks (GONs) could also leave taxpayers with fewer internet service providers to choose from. Government entities unfairly compete with the private sector because they are able to subsidize their costs with taxpayer dollars. Private providers do not have this luxury and, therefore, are not able to charge consumers below the cost of service because it would result in bankruptcy. Naturally, this un-level playing field deters private providers from remaining, expanding, and launching their services in areas where GONs are present.

Fortunately for Kentuckians, it seems some lawmakers are willing to protect their constituents from the great deal of harm that will result from KentuckyWired. Sen. Chris McDaniel (R-Taylor Mill) has explained:

“I said within the first 20 minutes of what was a terrible presentation that the schedule on this would never work…Even if you had everything in place you couldn’t meet the construction schedule, let alone, all of the other components that go with it...I’m betting it’s going to be substantially cheaper to just stop and eat what we got versus what we are about to do here...This is the 21st century version of the big dig in Boston.”

Rep. Phil Moffett (R-Louisville) and Rep. Michael Meredith (R-Oakland) have also questioned the necessity and practicality of the project. Hopefully more lawmakers begin to recognize that no good will come from KentuckyWired and that the best solution for Kentuckians is bringing the GON to a permanent stop. Americans for Tax Reform made this point very clear in a letter to the Interim Appropriations and Revenue Committee earlier this week.

To read the full letter, click here.

Photo Credit: Jason Presser

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Open Competition Laws Can Save American Taxpayers Billions on Infrastructure

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Posted by William H Paul on Thursday, September 21st, 2017, 11:27 AM PERMALINK

Funding for state infrastructure improvement projects has increasingly become a point of contention in the last decade. With state and local lawmakers examining new sources of revenue, tax increases are often pinned as the solution. Yet increasing taxes ignores more efficient legislative solutions that could free up billions in funding, such as implementing “Open Competition” laws. Currently, outdated “Closed Competition” laws are wasting taxpayer dollars, promoting cronyism, and whittling out American firms from the procurement process.    

State and local governments throughout the country are imposing these anti-competitive practices – most notably in regards to materials used in water infrastructure projects. Certain products and materials, often proven to be safer and more affordable, are unfairly outlawed from being used in publicly funded projects.

Many closed competition laws were put in place decades before new and advanced materials existed, or were put in place for protectionist reasons. As a result, American taxpayers have been deprived of savings that result from competition in the procurement process by governments eager to pick winners and losers.

Cities in Arkansas, Michigan, North Carolina, South Carolina and Ohio have all significantly saved taxpayer dollars since implementing open competition laws. Fayetteville, Arkansas implemented open competition laws and saved taxpayers $278,625 per mile on water infrastructure piping compared to Hot Springs, which has closed competition laws in place.

Similarly, Charlotte North Carolina implemented open competition laws resulting in taxpayer savings of $155, 902 per mile of pipe compared to closed competition Raleigh. All told open competition cities see on average taxpayer savings of $100,000 or more per mile of pipe compared to closed competition cities, and that is just with regard to water infrastructure. 

Opponents of open competition naturally are the protected interests white-knuckling their 100 year-old monopolies that see competition as a threat to the status quo. Yet it is the status quo that is driving up the cost of infrastructure projects for state and local taxpayers and pushing lawmakers to turn to big government solutions such as increasing the gas tax.

Additionally, open competition laws could also be beneficial at the federal level. A study released by the National Taxpayers Union (NTU) found that an entire replacement of U.S. water infrastructure would cost $1.32 trillion. Transitioning to an open competition process would reduce that number by 28% or $371 billion.

As these taxpayer savings relate only to water infrastructure projects, the savings to taxpayers from a wider application of open competition laws to the government infrastructure procurement process could be even greater. In addition to states, Congressional lawmakers should look to introduce federal legislation that allows for an open and competitive procurement process for construction materials.

In May of this year, Americans for Tax Reform, joined by 23 other organizations, led a coalition letter to Congress requesting that any federal infrastructure legislation should include language that clearly requires an open and competitive bidding process for materials that will be used in infrastructure projects.

In the coming year as state and federal lawmakers begin looking for ways to shore up spending on infrastructure projects, passing legislation to implement open competition laws should be an obvious free-market solution. Doing so would provide lawmakers a chance to be efficient stewards of taxpayer dollars, prevent misguided tax hikes, and improve America’s infrastructure. 

Photo Credit: Jenny Tabrum

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