Inflation Hits a 31-Year High as Wages Decrease 

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Posted by Isabelle Morales on Wednesday, November 10th, 2021, 10:05 AM PERMALINK

The consumer price index increased by 6.2 percent on an annualized basis before seasonal adjustment in October, a 31 year high, according to the Bureau of Labor Statistics (BLS). In October alone, inflation increased by 0.9 percent.  

In January 2021, before Joe Biden took over the presidency, annual inflation was at a stable 1.4 percent. Inflation has remained consistently high since Biden took office. While inflation has already hit American families hard, Democrats are pushing policies which would make this problem even worse.  

Since July of this year, the Biden administration has been insisting this problem would go away. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen described this inflation as "transitory." Evidently, those claims have not held up.

Not only does inflation harm consumers by increasing household costs, but it can also have long lasting economic damage. Inflation erodes purchasing power, especially when wages do not keep up.  

The erosion of purchasing power is especially concerning given that wages are decreasing. Real average hourly earnings for all employees decreased 0.5 percent from September to October, seasonally adjusted. Real average weekly earnings decreased 0.9 percent over the month and hours worked in the average workweek decreased by 0.3 percent. In the past year, since October 2020, real average hourly earnings decreased 1.2 percent, seasonally adjusted. 

People are working less and earning less while inflation surges, meaning that purchasing power is being eroded. 

According to BLS, the cost of many goods and services have increased significantly over the past year:  

  • Gasoline has increased 49.6% in the past 12 months, 6.1% in October alone. 
  • Used cars and trucks have increased 26.4% in the past 12 months. 
  • Meats, poultry, and eggs have increased 11.9% in the past 12 months. 
  • Beef has increased 20.1% in the past 12 months. 
  • Bacon has increased 20.2% in the past 12 months. 
  • Fresh fish and seafood have increased 11.0% in the past 12 months. 
  • Furniture and bedding have increased 12.0% in the past 12 months. 
  • Bread and crackers have increased 7.5% in the past 12 months. 
  • TVs have increased 10.4% in the past 12 months. 

 

88 percent of voters say they are concerned about increased inflation, according to a recent Harvard CAPS and Harris poll. When asked what causes inflation, the top three answers were "Massive government spending," "Significant amounts of money being injected in the economy by the Federal Reserve," and "Uncontrollable government deficits."  

Still, Democrats are moving forward with two multi-trillion-dollar bills, the infrastructure bill and the reconciliation bill. The idea that this level of wasteful spending, packed with handouts to green energy, big labor, and welfare expansion, is appropriate during a time of such high inflation is careless and short-sighted.  

The reconciliation bill also includes massive tax hikes on businesses, like the 15 percent global minimum tax, 15 percent domestic minimum tax, and a new surtax on adjusted gross income (AGI) that will hit pass through businesses. This, similarly, will be passed on to consumers through higher prices. According to a 2020 National Bureau of Economic Research paper, 31 percent of the corporate tax rate is borne by consumers through higher prices of goods and services. By an 81 to 19 margin, voters believe raising taxes on corporations will increase the cost of goods and services, according to a new poll conducted by HarrisX.

The Biden administration and congressional Democrats should focus on growing the economy and helping businesses and working families. Instead, at the expense of Americans’ financial security, they are pushing tax increases and wasteful spending.  

Photo Credit: "Man holding empty wallet. No money" by Jernej Furman is licensed under CC BY 2.0.

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Minneapolis Proposes Permanent Fee Cap on Food Delivery Services

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Posted by Dennis Hull on Tuesday, November 9th, 2021, 1:28 PM PERMALINK

Democrats in Minneapolis want more arbitrary price controls, even though they never work.  

Restaurants were hit especially hard by Covid lockdowns. After emergency regulations banned the sale of food and alcohol indoors, restaurants relied on third-party delivery services like DoorDash and Uber Eats to continue serving their customers. 

But politicians in more than a dozen cities implemented fee caps on the amount paid by restaurants to use delivery app services, arguing that the move would protect restaurants from high commissions. In reality, however, fee caps shift the cost to the consumer and harm ordinary Americans by constraining supply. 

If the new ordinance is approved, Minneapolis will become just the second city in the nation to impose a permanent cap on the fees charged to restaurants by food delivery companies at 10% of the order total. Facing significant losses in revenue, delivery companies will be forced to increase raw delivery costs on their customers, driving down demand and raising prices across the board. 

Mayor Jacob Frey approved a temporary version of the fee cap in December 2020, using Covid emergency powers to set a maximum charge of 15% – slightly higher than the newly proposed cap of 10%. 

A similar ordinance was unanimously approved in San Francisco in July. Just as in Minneapolis, the fee cap on third-party delivery services was initially approved as an emergency provision but was made permanent just a year later by the city’s Board of Supervisors. 

Food delivery companies immediately fought back against San Francisco’s new requirement. In a lawsuit filed by GrubHub and DoorDash, the two companies slam the ordinance as an “irrational law, driven by naked animosity and ill-conceived economic protectionism.” 

The suit also highlights the crippling economic consequences of otherwise well-intentioned fee caps: “Costs to facilitate food delivery that are not covered by restaurants will likely shift to consumers — irrespective of whether those restaurants would prefer to bear those costs to increase their own sales — thereby reducing order volume, lowering restaurant revenues, and decreasing earning opportunities for couriers.” 

Indeed, fee caps make it impossible for restaurants to bear the costs of delivering food to their customers voluntarily. Both parties contractually agree to the fees that restaurants pay to delivery companies. Rather than offer their own service, restaurants typically find it more profitable to use third-party companies like Postmates, with a full understanding that delivery costs are sometimes high. But under a fee cap, restaurants lose the ability to attract more customers by shouldering a higher portion of the delivery fee. 

As with any price control, the costs never honestly go away – instead, they are forcibly passed on to some other entity, usually the consumer. The result is a distorted market in which prices are higher, demand for delivery is lower, and costs skyrocket for businesses and customers alike. 

Companies are turning to flat rate “regulatory response fees” to mitigate the harm of fee caps on the food industry. For example, in Portland, Oregon, where the City Council approved a 10% fee cap nearly identical to the current proposal in Minneapolis, UberEats has to make up the lost revenue with an additional $3 surcharge on every order. Companies have implemented similar charges in response to temporary fee caps in Boston, Chicago, Denver, and several other cities. On average, consumers are charged an extra $2 per order in cities with price controls on food delivery. 

Politicians assert that companies can shoulder the burden of a fee cap, but not a single delivery app is currently profitable. Though 2020 was the most successful year for food delivery companies to date, DoorDash came in at a $461 million loss, despite making a small profit during one quarter. UberEats suffered an $873 million loss, while GrubHub lost $156 million. These companies each have drivers to pay, employees to support, and a business to grow, but fee caps cut a major source of their revenue and put profitability even farther out of reach. 

Customers begrudgingly accepted higher costs in the form of regulatory response fees as the pandemic drove up demand for food delivery. But now, with vaccines widely available and infection rates on the decline, fewer patrons will be willing to pay an extra $2–5 to have their food delivered. Unfortunately, that means fewer drivers and, ultimately, lower access to food delivery services for millions of Americans. 

Independent restaurants only stayed afloat during the pandemic lockdowns thanks to the crucial assistance of food delivery. In the face of rising inflation and uncertain economic prospects, restaurants in Minneapolis deserve the choice to freely contract with third-party delivery drivers to find new customers and generate more orders. 

Photo Credit: Solomon203

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Bloomberg, the World Health Organisation & the Vaping Misinfodemic

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Posted by Tim Andrews on Tuesday, November 9th, 2021, 12:32 PM PERMALINK

As the delegates are meeting for the World Health Organization’s Framework Convention on Tobacco Control behind closed doors this week, public health experts across the globe expressed their disappointment as to what is on the agenda, but rather what is missing.

Despite the overwhelming scientific consensus that vaping is 95% safer than smoking, multiple times more effective than any other smoking cessation method, and has been shown to have the power to save over 200 million lives in the next decade, any talk of tobacco harm reduction is strictly off the agenda. Yes that’s right, the first meeting of delegates to the world’s major tobacco control conference since 2018, are refusing to discuss… the most successful tobacco control product in history.

In addition to the vested interests of large national WHO donors in preventing smokers from making the switch, such as China, whose government owns one of the world’s largest tobacco companies, a significant reason for this is the hundreds of millions of dollars that US Billionaire Michael Bloomberg has used to combat harm reduction at the WHO, and attempt to deny smoking cessation alternatives to persons in developing countries.

Now, a new report entitled “Bloomberg, WHO and the Vaping Misinfodemic,” and compiled under the leadership of former World Health Organisation Senior Adviser Charles Gardner, PHD, examines in detail the corrupting influence of Michael Bloomberg on the World Health Organization, and how science has been distorted. Offering a clear, albeit shocking, portrait of how the World Health Organization, at the behest of Blooomberg, goes against its core mission of tobacco control, the report also offers concrete options for reform to improve transparency, accountability, as well as a return to science based policy.

At a time when Bloomberg has been under investigation by the Philippines Government for attempting to subvert their regulatory process, and leaked documents have revealed how extensive and pervasive Bloomberg’s Philanthropies attempts to manipulate governments are, this report is a wake up call to governments who care about the health of their populace, and to use it to achieve genuine change.  

Photo Credit: Seth Anderson

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50-State List of Top Tax Rates Under Democrat Bill

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Posted by ATR on Monday, November 8th, 2021, 5:40 PM PERMALINK

If the Democrats' tax-and-spend reconciliation bill is enacted, the average top tax rate on personal income would rise to 57.4 percent, according to the Tax Foundation.

This would give the U.S. the highest tax rate in the developed world, and stick all 50 states with a combined federal-state tax rate higher than 50 percent.

The combined federal and state top marginal income tax rates for each state under the Democrat bill are listed below. Please visit the Tax Foundation website for a handy map of the below rates compiled by Alex Durante and William McBride:

New York: 66.2%

California: 64.7%

New Jersey: 63.2%

Hawaii: 62.4%

Washington, DC: 62.2%

Oregon: 62%

Minnesota: 61.3%

Maryland: 60.4%

Vermont: 60.2%

Kansas: 59.6%

Delaware: 59.3%

Ohio: 59.1%

Wisconsin: 59.1%

Kentucky: 58.9%

Iowa: 58.6%

Maine: 58.6%

Connecticut: 58.4%

South Carolina 58.4%

Pennsylvania: 58.3%

Montana: 58.2%

Nebraska: 58.2%

Michigan: 58.1%

Idaho: 57.9%

Illinois: 57.9%

West Virginia: 57.9%

Missouri: 57.8%

Indiana: 57.5%

Rhode Island: 57.4%

Arkansas: 57.3%

New Mexico: 57.3%

Georgia: 57.2%

Virginia: 57.2%

North Carolina: 56.7%

Alabama: 56.4%

Massachusetts: 56.4%

Mississippi: 56.4%

New Hampshire: 56.4%

Utah: 56.4%

Oklahoma: 56.2%

Colorado: 56%

Arizona: 55.9%

Louisiana: 55%

North Dakota: 54.3%

Alaska: 51.4%

Florida: 51.4%

Nevada: 51.4%

South Dakota: 51.4%

Tennessee: 51.4%

Texas: 51.4%

Washington: 51.4%

Wyoming: 51.4%

See also:

Dem Plan Will Impose Highest Tax Rate in the Developed World

Dems Still Pushing IRS Bank Snooping Proposal, According to Biden Official

Dem Bill Gives Special Tax Handout for Reporters

Dem Bill Imposes Tax Hikes On Vaping Products, in Violation of Biden Tax Pledge

Dem Bill Includes $900 Handout for "Electric Bicycles"

Dem Bill Imposes Price Controls and 95% Excise Tax on Medical Innovation

Dem Bill Imposes Corporate Tax Hike Which Will be Borne by Working Families

 

 

 

 

Photo Credit: Gage Skidmore licensed under CC BY-SA 2.0


Popular Blueprint Nebraska Tax Plan Calls for Lower Income and Property Taxes

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Posted by Dennis Hull on Friday, November 5th, 2021, 3:48 PM PERMALINK

An innovative plan to overhaul the Cornhusker State’s tax code is gaining momentum among legislators as state revenue collections continue to smash expectations. 

Blueprint Nebraska, an economic report sponsored by the Platte Institute, outlines 15 concrete steps to modernize the state’s economy, primarily by lowering key taxes and broadening the sales tax base. The recommendations aim to improve five key priorities: job growth, quality of life, population growth, income growth, and research and development. 

Most notably under the Platte Institute’s plan, taxpayers would see $2 billion in additional property tax relief. With a property tax rate of 1.65% – the 7th highest in the country – Nebraska remains uncompetitive in the region, where states like Oklahoma and North Dakota have property tax rates below 1%. The Blueprint plan would significantly ease the burden on Nebraskan homeowners and create a lucrative new incentive for families moving to the region. 

Lawmakers already approved a “Truth in Taxation” law during the 2021 legislative session, requiring municipalities that raise property taxes by more than 2% to inform voters of the increase directly by mail. With the new notification requirement, property owners will no longer be hit with surprise bills as a result of secretive local tax hikes. 

The Platte Institute also hopes to dramatically revamp corporate taxes in the state. Rates currently at 7.81% for income above $100,000 would be lowered biannually before reaching 4.99% in 2028. Small businesses making under $100,000 would see rates slashed immediately by more than a quarter, from 5.58% to 4%. 

The report’s third major priority calls for eliminating the state income tax on Nebraskans’ first $50,000 in earnings. All other income would be subject to a flat tax identical to the corporate rates, phased down to 4.99% in 2028. In exchange for the tax cut, itemized deductions would also be eliminated, ultimately making the tax code fairer and flatter. 

These income tax cuts would allow every family and small business to keep more of their hard-earned dollars in their wallets, while giving potential new residents another reason to choose to invest in Nebraska. 

The true strength of the Blueprint framework, however, is in its proposed alternatives for state funding. The state sales tax rate of 5.5% – already lower than Nebraska’s peer states – would not increase, nor would it be applied to groceries. Instead, the plan would end most other sales tax exemptions, apply the tax to services, and broaden the tax base. 

Polling shows this approach is popular with voters across the political spectrum. In a survey conducted earlier this year, 58% of Democrats, 57% of independents, and 61% of Republicans approved of a tax plan that cut property and income taxes while eliminating sales tax exemptions. 

Relying more on sales taxes gives families and businesses more control over the amount of taxes they pay. With substantially lower property, corporate and income tax rates, as well as an elimination of the inheritance tax, residents will save money and pay taxes in a way they are more comfortable with. Families on both sides of the aisle understand the tremendous implications of the Platte Institute’s modernization plan. 

This year, Nebraska legislators approved a small cut in the top corporate income tax rate from 7.81% to 7.25% over two years. But as state revenues soar to new highs, Platte Institute Policy Director Sarah Curry says the extra money could encourage the legislature to take a bolder approach to cutting taxes. 

“As these revenue numbers continue to be positive, it’s clear a faster implementation of the rate reduction is affordable for the state budget,” she said. Even without adopting the Blueprint plan, “the Legislature intends to eventually match the top personal income tax rate, which is currently 6.84%."  

As the state offers a more welcoming tax structure to future residents and businesses, state finances will also benefit under the Blueprint framework. A modernized tax code would bring nearly $500 million in additional revenue to Nebraska despite big rate cuts, according to an independent fiscal analysis. 

Nebraska legislators should look to the Blueprint framework during next year’s session as they consider how to best utilize higher state revenue and more than $1 billion in federal stimulus funds. Nebraska families and businesses deserve lower rates and a more competitive economy. 

Photo Credit: Tequask

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ATR Leads Coalition Letter Opposing Biden's Banking Regulator Nominee

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Posted by ATR on Friday, November 5th, 2021, 1:08 PM PERMALINK

Today, Americans for Tax Reform led a coalition letter to the Senate Committee on Banking, Housing, and Urban Affairs, opposing President Biden's nominee to serve as the head of the Office of the Comptroller of the Currency (OCC), Saule Omarova. 

"President Biden’s nominee to head the OCC is one of the most radical picks he has made since his time in office. Saule Omarova’s adoration for big government and desire to eliminate private banking in the United States is evidenced by her writings. It would be a mistake for the United States Senate to confirm someone whose policy ideas would restructure the banking system in such a way that would eliminate free market enterprise and surely cripple an economy that is already struggling to fend off inflation and the economic repercussions of the COVID-19 pandemic," said Grover Norquist, President of Americans for Tax Reform. 

The OCC is an independent bureau housed within the Treasury Department, which "charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks."

Townhall also published an ATR op-ed underscoring concerns that both Republicans and Democrats have with Omarova. 

Text of the coalition letter can be read below:

November 5, 2021

 

The Honorable Sherrod Brown                                 

Chairman                                                                   

Senate Committee on Banking, Housing, and Urban Affairs

534 Dirksen Senate Office Building                         

Washington, D.C. 20510                   

 

The Honorable Patrick Toomey

Ranking Member

Senate Committee on Banking, Housing, and Urban Affairs

534 Dirksen Senate Office Building                         

Washington, D.C. 20510

 

Dear Chairman Brown and Ranking Member Toomey:

The undersigned organizations oppose the nomination of Saule Omarova to head the Office of the Comptroller of the Currency (OCC).

Omarova will undoubtedly expand the size, scope, and authority of the OCC to the limit. There is also no question that she will advocate for instituting a cultural shift in the banking industry that will drive private financial institutions out of business and centralize all financial power with the federal government, all in the name of “equity.”

If Omarova is confirmed to the position, she will be able to serve a five-year term as comptroller of the currency. As comptroller, Omarova would head the bureau that “charters, regulates, and supervises all national banks, federal savings associations, and federal branches and agencies of foreign banks.”

As you are aware, Omarova is a Cornell University law professor who graduated from Moscow State University and is a recipient of the Lenin Personal Academic Scholarship.

On her resume, Omarova states that she was a senior fellow at the Berggruen Institute from 2020-2021. The think tank was founded by Nicholas Bergguren, a self-proclaimed Marxist, and has a history of promoting Chinese communist propaganda in the news. Fox Business also reported that Omarova appears to have joined a Facebook group called Marxist Analysis and Policy. The group describes itself as “a platform for analysis, policy and polemics from the perspectives of a diverse range of Socialist and anti-capitalist views.”

What is most concerning about Omarova is that she would use her role to push “equity” policies that increase the federal government’s footprint in the market. Most notably, Omarova has advocated for the Federal Reserve to provide deposits and lending for individuals in the country—crowding out any private banking opportunities in the United States. Omarova has explicitly stated her support for replacing private bank deposits with the Federal Reserve in the name of “equity.” Omarova says that, “the ultimate ‘end-state’” in her writing is where “FedAccounts fully replace—rather than compete with—private bank deposits.” This would be a total overhaul of the banking system in the United States, effectively eliminating all free market competition in the banking system.

Consolidating all deposits under the aegis of the Federal Reserve would be devastating for community banks. The Federal Deposit Insurance Corporation (FDIC) pointed out that in 2019 on average 84 percent of community banks’ assets were funded with deposits. Omarova would effectively eliminate the main source of financing for small businesses and rural communities while Wall Street banks would continue to thrive off underwriting fees, M&A, and securities trading.  

Omarova also harbors resentment toward the banking industry she has been tapped to regulate. In a CBC produced documentary entitled, Assholes: A Theory, Omarova expresses her bias toward the private banking industry. Omarova describes the financial services industry as “a quintessential asshole industry” with the goal of making “certain types of asshole behavior systemically unprofitable” so that this “behavior will naturally kind of fall away.” This explicit bias against the industry by itself should make her unqualified for the position she has been nominated for.

Additionally, Omarova has advocated for increased centralization of the American economy. In a 2016 paper she co-authored, Omarova states her belief that the federal government of the United States is best suited to regulate prices of commodities such as “fuels, foodstuffs, and some other raw materials” and “wage or salary indices.” These “systemically important prices and indexes”, in her opinion, are the key to promoting financial market stability. This radical proposal would convey unprecedented authority to federal financial regulators to the extent that the financial markets in the United States would be totally controlled by the federal government.

Omarova is not shy about expanding the size of the federal government. For example, in an article she wrote in April of 2020, Omarova stated the need for a new permanent federal agency to bail out companies during crises. Omarova states that “having a permanent institutional platform for coordinating the national crisis response, including bailouts of private companies, would help to ensure that these emergency measures are executed in an efficient, transparent, and democratically accountable, and socially just manner.” Omarova calls this agency the National Investment Authority. She envisions this new centralized investment juggernaut to “act directly in financial markets as a lender, guarantor, securitizer, and venture capitalist with a broad mandate to mobilize, amplify, and direct public and private capital to where it’s needed most.” So, the federal government gets to decide where capital should be allocated, not private banks who have actual shareholders that will hold them accountable. 

Omarova is also critical of cryptocurrencies. In an article Omarova wrote for the Harvard Law School Forum on Corporate Governance, she claims that cryptocurrencies contribute to financial instability, fail to produce “activity in the real economy,” and “fuel financial speculation on an unprecedented scale.” In light of her opinions on cryptocurrencies, it is unlikely that Omarova would be supportive of potential proposals to engender greater collaboration or partnerships between fintechs and national banks. She would also likely support the development of a central bank digital currency to crowd out private tokens and push all crypto innovation out of the United States.

Senators should oppose Omarova and vote against her nomination to serve as the head of the OCC. The Senate needs to avoid confirming someone to the helm of the OCC that will overhaul the national banking system to reflect that of a totalitarian regime.

 

Sincerely,

 

Grover Norquist

President, Americans for Tax Reform

 

Ryan Ellis

President, Center for a Free Economy

 

David M. McIntosh

President, Club for Growth

 

Andrew F. Quinlan

President, Center for Freedom and Prosperity

 

Phil Kerpen

President, American Commitment

 

Carrie Lukas
President, Independent Women’s Forum

Heather R. Higgins
CEO, Independent Women’s Voice

 

Tom Hebert

Executive Director, Open Competition Center

 

Bryan Bashur

Executive Director, Shareholder Advocacy Forum

 

Katie McAuliffe

Executive Director, Digital Liberty

 

Andrew Langer

President, Institute for Liberty

 

Dick Patten

President, American Business Defense Council

 

Seton Motley

President, Less Government

 

Jeffrey Mazzella

President, Center for Individual Freedom

 

Thomas Jones

Founder, American Accountability Foundation

 

James L. Martin,

Founder/Chairman, 60 Plus Association

 

Saulius “Saul” Anuzis,

President, 60 Plus Association

 

Dave Wallace

President, FAIR Energy Foundation

 

John Berlau

Senior Fellow, Competitive Enterprise Institute

 

David Williams

President, Taxpayers Protection Alliance

 

Photo Credit: "The Treasury Department" by Robert Lyle Bolton is licensed under CC BY 2.0

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Build Back Better Act Protects Big Tobacco & Robs From The Poor To Give To The Rich

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Posted by Tim Andrews on Friday, November 5th, 2021, 11:40 AM PERMALINK

Press Release: Build Back Better Act Protects Big Tobacco & Robs From The Poor To Give To The Rich

Americans for Tax Reform today called on House Democrats to match their rhetoric with their votes and vote NO on new taxes on people quitting smoking.  H.R. 5376, The Build Back Better Act, includes new taxes on lifesaving alternative nicotine delivery systems which would see some prices double and could make them more expensive than deadly combustible cigarettes. Democrat leadership plan to use these funds to pay for the SALT Deduction tax break for the super-wealthy.  

“If House Democrats truly cared about social justice and poorer Americans, they would oppose the immoral new taxes in the Build Back Better Act designed to protect cigarette companies, discourage smokers from quitting, and redistribute funds from low-income earners to the wealthy elite” said Tim Andrews, Director of Consumer Issues.

“Millions of Americans have successfully quit smoking through reduced risk tobacco alternatives, which the FDA has ruled appropriate for the protection of public health. To tax products these products higher than deadly combustible cigarettes is simply outrageous, and will lead to more Americans smoking – with tragic consequences.  Academic research estimates these taxes would lead to 2.75 million more American smokers, and security analysts are already urging investors  to purchase shares in tobacco companies as the Build Back Better Act would “would effectively protect U.S. cigarette sales

Andrews also noted how the nicotine tax is being used to pay for SALT deductions, almost all of which will be used to benefit persons earning over $1 million annually, while users of these products overwhelmingly come from the poorest segments of society:

“With the vast majority of users of reduced risk tobacco alternatives low-income earners, this highly regressive tax not only blatantly violates Joe Biden’s pledge to not increase taxes on persons earning under $400,000, by using it to fund the SALT deduction for the wealthy elite, it is quite literally a tax on the poor to give to the rich. It beggars belief that so-called “progressives” could ever support this reverse Robin Hood.”

Andrews concluded: “Small increases in revenue must never come at the expense of human lives. We call on all Democrats to stand up for their constituents, and vote against this immoral new tax. Millions of lives quite literally depend on it.”

Photo Credit: Centophobia

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Dem Bill Gives Special Tax Handout to Media Companies with Up to 1,500 "Local Journalists"

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Posted by John Kartch, Michael Mirsky on Thursday, November 4th, 2021, 3:20 PM PERMALINK

TAKE ACTION: Reject Democrats Reckless Tax-and-Spend Bill 

The reconciliation bill working its way through the U.S. House calls on the American taxpayer to subsidize Democrats' media allies. The bill provides a special tax cut for the media under the guise of helping "local journalists" but eligible media companies will receive the funds for up to 1,500 reporters per company.

This provision would provide a refundable payroll tax credit equal to 50 percent of wages up to $12,500 per quarter per employee for the first four calendar quarters and a 30 percent credit for each calendar quarter thereafter.

On page 1,957 of the 2000+page bill, section 138516 would create a tax credit for news organizations, including newspapers and broadcasters such as radio and television:

“The number of local news journalists which may be taken into account under subsection (a) with respect to any eligible local news journalist employer for any calendar quarter shall not exceed 1,500.”

The Poynter Institute today bragged that the tax handout would benefit "broadcasters, public and commercial" in addition to newspapers.

It appears that both NPR and PBS will be eligible to receive this special tax handout. The bill specifically mentions that the credit is not to be applied to “the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing”; however there is an exception for public broadcasting entities as defined in the Communication Act of 1934. These public broadcasting entities are defined as:

“the Corporation, any licensee or permittee of a public broadcast station, or any nonprofit institution engaged primarily in the production, acquisition, distribution, or dissemination of educational and cultural television or radio programs.”

The progressive group ProPublica, which is trafficking in the stolen personal IRS files of thousands of Americans seems to be eligible as well. The bill disqualifies 501(c) (4) groups but allows 501(c)(3) groups such as ProPublica -- to be eligible.

Perhaps not coincidentally, while congressional Democrats push for tax increases, ProPublica publishes stolen private tax information and laments the "lavish lifestyles" of disfavored, "rich" Americans.

The bill also appears to be a big-media power play against small, one-person local outfits.  The bill specifically excludes journalists who do not have "media liability insurance." This could be a cost barrier for many individuals seeking to truly cover local events in their community.

Several large, legacy daily newspapers, tv and radio broadcasting companies also appear eligible for the tax handout. Any newspaper eligible to receive these funds now needs to disclose this fact while editorializing in favor the Democrats' reconciliation bill.

Photo Credit: "Journalist with pipe" by C.A.D.Schjelderup licensed under CC BY-SA 4.0


Dem Bill Includes $900 Handout for Electric Bicycles

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Posted by Mike Palicz on Wednesday, November 3rd, 2021, 6:39 PM PERMALINK

Taxpayers are on the hook for up to $900 of the purchase of an electric bicycle in Democrats’ most recent version of their reckless tax and spending spree.

According to the text of the bill, Section 136407 would create a new 30% refundable tax credit for electric bicycles purchased before January 1, 2026. The bill allows up to $3,000 of the cost of an “e-bike” to be taken into account for the credit, creating a maximum allowable credit of $900 for individuals. E-bikes costing as much as $4,000 would be eligible for the credit.

Could send up to $7,200 to e-bike owners before provision expires

The credit begins phasing out for joint filers earning $150,000 ($75,000 for individuals) at a rate of $200 per $1,000 of additional income. Filers would be allowed to claim 1 credit per year (2 per year for joint filers) meaning taxpayers would potentially subsidize multiple e-bikes purchased by the same filer year after year. The bill would allow for a married couple earning $150,000 to purchase two new electric bicycles every year and claim up to $7,200 in e-bike credits before the provision expires in 2026.   

Ignores Ways and Means amendment cutting credit to 15%

While the original draft of the reconciliation package included a 30% e-bike credit, the Ways and Means committee amended the bill during mark-up to limit the credit to 15% and a maximum credit of $750. The latest version of the ignores amendments that passed in committee with Democrat support and instead increases the credit to 30% capped at $900.

Democrats want e-bikes to replace cars

Democrats’ e-bike tax credit is modeled off of legislation introduced earlier this year by Rep. Jimmy Panetta (D-California) and Rep. Earl Blumenauer (D-Oregon). In a press release accompanying the rollout of the legislation, Rep. Panetta stated the purpose of the e-bike credit was to “transition to greener modes of transportation” by "incentivizing the use of electric bicycles to replace car trips.”

Photo Credit: Richard Masoner

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Senator Cruz Introduces Bill to End Taxation of Inflationary Gains

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Posted by Isabelle Morales on Wednesday, November 3rd, 2021, 5:35 PM PERMALINK

Today, Senator Ted Cruz (R-Texas) introduced the Capital Gains Inflation Relief Act, a bill that would index many assets to inflation to protect taxpayers from paying taxes on inflationary gains. Rep. Warren Davidson (R-Ohio) introduced the same bill in the House of Representatives. 

Senate cosponsors of this bill include Sens. Thom Tillis (R-N.C.), Mike Braun (R-Ind.), John Barrasso (R-Wyo.), Pat Toomey (R-Pa.), Jim Inhofe (R-Okla.), and James Lankford (R-Okla.). 

“Senator Cruz should be commended for reintroducing the Capital Gains Inflation Relief Act. Not only does this bill end the unfair practice of taxing inflationary gains, but it will help grow the economy by encouraging saving, investment, and innovation.  It is always a good idea to index capital gains to inflation but because of Joe Biden's inflation, it is more important than ever to do it now,” said Grover Norquist, President of Americans for Tax Reform. 

Senator Cruz's legislation would index to inflation any common stock in a C corporation, digital assets, and any tangible property which is a capital asset or property used in the trade or business.  

This bill is incredibly important, as the taxation of phantom gains has distortionary, perverse effects on investment. For example, it creates a “lock-in” effect, discouraging investors from selling their assets. This prevents investors from productively moving their money to invest in newer, more promising companies. It also discourages investors from investing in companies, particularly long-term investments. Stifled investment has a plethora of negative outcomes: slowed wage growth, new business growth, lower retirement account values, etc. 

Inflation comprises a significant portion of capital gains taxes. In 2019, ATR calculated that inflation would have comprised 70 percent of the tax owed on IBM shares purchased in 1970, 64 percent of the tax owed on Exxon Mobil shares purchased in 2000, and the entire gain of Coca-Cola shares purchased in 1998. 

Senator Cruz’s legislation is especially important now given inflation is running rampant. In September, the consumer price index increased by 5.4 percent on an annualized basis. The cost of gasoline has increased 42.1 percent in the past 12 months, used cars and trucks have increased 24.4 percent, while meats have increase 12.6 percent.

88 percent of voters say they are concerned about increased inflation, according to a recent Harvard CAPS and Harris poll. In fact, inflation is a top concern for voters across the country.  

These trends will also erode the returns investors will get after selling and paying taxes on assets.

Interestingly, even current Senate Minority Leader Chuck Schumer (D-N.Y.) once supported ending inflation tax on capital gains. In a 1992 video then-congressman Chuck Schumer stated: 

“If we really want to increase growth, there are proposals that we can do. I would be for indexing all capital gains and savings and borrowing.” 

Current House Majority Leader Steny Hoyer (D-Md.) also supported indexing capital gains to inflation in 1992. He said:  

“The capital gains provisions in H.R. 4287 benefit small business by indexing newly purchased assets. Income gauged would be much more reliable so that, real not inflationary gains will be taxed, and taxed at the same 28 percent maximum rate on gains.”  

The federal government should not continue their unfair practice of taxing phantom gains. Congress must act in order to protect retirees and investors from the rampant inflation they created. All lawmakers should support Senator Cruz’s Capital Gains Inflation Relief Act, spurring investment, economic growth, and innovation.  

Photo Credit: "Ted Cruz" by Gage Skidmore is licensed under CC BY-SA 2.0.

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