Study Suggests Tobacco Heating Products Reduce Risk of Lung Cancer, Cardiovascular Disease


Posted by Michael Mirsky on Tuesday, November 30th, 2021, 2:17 PM PERMALINK

A new study found a significant reduction in indicators of potential harm over six months for smokers switching to exclusive use of tobacco heating products compared with continuing to smoke cigarettes. This research, published in the journal of Internal and Emergency Medicine, represents the first ever long-term study showing sustained reduction in exposure to certain toxicants and indicators of potential harm in smokers switching completely to tobacco heating products. The results of the study unequivocally demonstrated the harm reduction benefits of tobacco heating products.

To test the effects of tobacco heating products, researchers conducted a randomized clinical study carried out at four sites across the UK. Participants included smokers aged 23 to 55 in good general health who either did or did not want to quit. What makes this design so unique is that it tested the risk reduction potential of tobacco heating products when used in a real world setting rather than in a controlled setting. Amazingly, the researchers found that, for most biomarkers measured, the reductions seen in people using tobacco heating products were similar to those in participants who stopped smoking completely.

These findings come on the heels of previous scientific studies which have shown that e-cigarettes are an effective way to get people to quit the deadly habit of smoking. According to the latest analysis from Public Health England, vaping has a positive association with successfully quitting smoking. They found that, in 2017 alone, 50,000 people used vaping products to stop smoking. Coupling their propensity for smoking cessation with the fact that vaping is 95% less harmful than combustible tobacco, it is hard to imagine why lawmakers oppose giving people access to these potentially life-saving products. 

Bolstering the arguments of those who want to reduce barriers to vaping products, this study provides essential data in the fight against vaping misinformation. The main findings of the study can be read below, while the full study is available here

Key Findings: 

  • Tobacco heating products were associated with a significant reduction in a biomarker for lung cancer risk

  • Participants who used tobacco heating products saw improvement in their HDL cholesterol. This is associated with reduced risk of cardiovascular disease

  • Those who used tobacco heating products saw improvements in key indicators of lung health

These findings underscore the need for policies around vaping to be guided by science, not misinformation. Countries should look to Japan as a shining example of what can be accomplished with tobacco heating products. In Japan cigarette sales have decreased by 43% over the past five years, the greatest decrease in recorded history. This drastic reduction in cigarette use is a direct result of tobacco heating products. 

This new research represents an important step toward fully understanding the public health benefits of vaping products. Professor John Newton, Director of Health Improvement at Public Health England recently stressed: "For anyone who smokes, particularly those who have already tried other methods, we strongly recommend they try vaping and stop smoking."

Lawmakers need to focus on helping smokers to quit their deadly habit, rather than pushing to restrict access to products that have the potential to save lives.


Socialist Tax Hike Package Intends to Crowd Out Private Financing


Posted by Bryan Bashur on Tuesday, November 30th, 2021, 2:05 PM PERMALINK

The Democrats’ socialist spending package includes trillions of dollars in tax hikes and new spending on superfluous government projects such as subsidies for electric bicycles and planting trees. 

The bill also would expand the size and scope of the Small Business Administration (SBA). Specifically, section 100502 of the package appropriates nearly $4.5 billion to establish and run a new lending program that would provide direct loans to small businesses. New direct financing under this program runs the risk of reducing available capital from private lenders because the federal government will crowd out private competition. Increasing reliance on federal loans will also likely be met with future tax hikes on middle class Americans to fund the program. This will lead to a circular phenomenon where advocates of big government push for additional tax hikes to fund more federal spending.  

Under the new program, the loan amounts can go up to as much as $150,000, or even $1 million if the borrower is small government contractor or small manufacturer. The bill also only gives the SBA three months to publish “interim final rules” that would set the underwriting criteria for the program. 

It is hard to imagine how a federal bureaucracy that had a hard time processing the Paycheck Protection Program (PPP), is going to have a much easier time creating, establishing, and operating a whole new direct lending program. 

Make no mistake, small businesses are the backbone of the American economy. According to the SBA, there are 32.5 million small businesses in the United States employing over 46 percent of the private workforce. Additionally, small businesses “have accounted for 62% of net new job creation since 1995.”

However, loans from the federal government have flaws. According to a report by the SBA’s Inspector General (IG), as of June 2020, the SBA approved “more than $250 million in COVID-19 economic injury loans and advance grants to potentially ineligible businesses.” The SBA also approved nearly 300 duplicate economic injury loans amounting to more than $45 million in duplicate loans. The IG’s serious concerns with fraud control protections at the SBA are warranted. The establishment of a new direct loan program is bound to be filled with fraudulent transactions and waste millions of taxpayer dollars. 

Moreover, certain SBA loans have experienced significant rates of default. According to one study, from 2006-2015 the 10-year default rate was 65.6 percent for mortgage and nonmortgage loan brokers, 46.2 percent for residential property managers, and 42.8 percent for multifamily housing construction. 

Clearly the SBA already has issues with its current loan programs. Taxpayer dollars could be put to better use reforming the existing programs.

While banks, credit unions, and online lenders all finance small businesses, banks continue to be the most prolific source of credit. According to a small business credit survey conducted by all twelve Federal Reserve Banks, in 2020, 42 percent of small businesses that applied for “a loan, line of credit, or cash advance” sought financing from a large bank; 43 percent sought financing from small banks; and 20 percent approached online lenders about financing opportunities. Additionally, according to the National Credit Union Administration (NCUA), since 2019 the number of commercial loans financed by credit unions increased by 12 percent and the dollar amount of commercial financed last year was “up by 22%.”

Private financing from bank and nonbank lenders is providing the necessary credit to small businesses. A new direct lending program from the SBA could increase the government’s foothold in loans and crowd out private lenders. 

Instead of appropriating billions of dollars in new funding for a redundant lending program, Congress should reform the SBA’s current 7(a) program to ensure that it runs efficiently. Unnecessary spending is fiscally irresponsible and will only further contribute to the inflation crisis the United States is already facing.

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Sen. Theresa Gavarone Makes “No New Taxes” Commitment in OH-09 Congressional Race


Posted by Adam L. Radman on Tuesday, November 30th, 2021, 11:45 AM PERMALINK

Americans for Tax Reform (ATR) commends state Sen. Theresa Gavarone for signing the Taxpayer Protection Pledge in her race for Ohio’s Ninth Congressional District seat. The Pledge is a written commitment to Buckeye State taxpayers that she will oppose and vote against all income tax hikes.

Candidates running for public office like to say they will not raise taxes, but often turn their backs on the taxpayer once elected. The idea of the Taxpayer Protection Pledge is simple enough: Make them put their no-new-taxes rhetoric in writing, so the promise is much harder to break.

“Ohio voters are looking for solutions that get Americans back to work and grow the economy. I commend Sen. Gavarone for signing the Taxpayer Protection Pledge and promising to hold the line on taxes. It’s the first step in jump-starting the economy,” said Grover Norquist, President of Americans for Tax Reform.

There are currently 179 Pledge signers in the U.S. House and 44 Pledge signers in the U.S. Senate. 85% percent of all congressional Republicans have made the written commitment to oppose higher taxes. In contrast, ZERO congressional Democrats have made that promise.

President Biden has been championing a $3.5 trillion reconciliation bill, which includes the largest tax increase since 1968. These tax hikes will disproportionately hurt workers, retirees, consumers, and small businesses.

“Voters have a right to know where candidates stand on taxes before heading to the voting booth. The Taxpayer Protection Pledge is a simple litmus test that tells voters I’ll work to protect your wallet. I encourage all candidates for elected office to make this commitment today,” continued Norquist.

New candidates sign the Taxpayer Protection Pledge regularly. For the most up-to-date information on this race or any other, please visit the ATR Pledge Database.

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Taxpayers in Indiana, Colorado, and Oregon Set to Receive Automatic Rebates


Posted by Dennis Hull on Tuesday, November 30th, 2021, 10:11 AM PERMALINK

As states project eye-popping budget surpluses, lawmakers are debating how much of that to put toward new spending, how much to set aside in the rainy day fund, and whether to return money back to taxpayers. Thanks to state laws that automatically trigger refunds when a certain level of surplus is achieved, taxpayers in Indiana, Colorado, and Oregon will soon be entitled to major tax refunds under existing automatic refund laws. 

Indiana reported a 14% increase in tax collections last year, driven primarily by sales taxes as consumers ramped up spending. After state reserves topped $3.9 billion, taxpayers will see most of last year’s budget surplus returned to their wallets under the Hoosier State’s automatic refund law. The law mandates a tax refund if reserves exceed 12.5% of general fund appropriations; this year, reserves topped 23%. 

In 2022, a total refund of $545 million will be divided evenly into estimated payments of $170 per taxpayer – a 62% increase from the last time state revenues triggered a refund in 2012. Even with the refund, Indiana will still have billions in surplus to spend – a nearly $3.4 billion figure that Rep. Greg Porter called an “embarrassment of riches.” 

Looking ahead to next year’s session, lawmakers are already discussing a potential reduction to Indiana’s 7% sales tax, which is higher than the rate in any surrounding state. Gov. Eric Holcomb said he is keeping an open mind as the tax cut debate continues. 

On the West Coast, for the fourth year in a row, Oregon taxpayers will benefit from a unique provision known as the “kicker” law. When government revenue collections exceed 2% of the initial forecast, the state is constitutionally obligated to refund the full amount of excess revenue. Since Oregon collected nearly $1.9 billion in surplus last year, taxpayers will get 17% of their 2020 income taxes back as a kicker credit – an average refund of $850. 

That $1.9 billion kicker is a shocking figure for many Oregon lawmakers, several of whom described an earlier, smaller forecast of a $1.18 billion surplus as “unbelievable” and “stunning.” This year’s kicker smashes the previous record of $1.6 billion that was paid out to taxpayers last year. 

But revenue continues to beat expectations in Oregon. Economists are already projecting another $558 million kicker in 2024, halfway through the next two-year budget. 

In Colorado, a constitutional provision, one viewed by many as the gold standard of state spending limits, will provide a temporary tax cut in addition to $454 million in tax rebates. Known as the Taxpayers Bill of Rights (TABOR), the 1992 amendment created an annual spending limit tied to population growth and inflation. That allowable revenue growth was 3.1% in FY 2020-21, when Colorado collected 8.2% more in revenue subject to TABOR than the previous year. As such, residents will enjoy an average sales tax refund of $69 for individual filers and $166 for those who filed jointly – the largest refund in 20 years. 

Colorado voters already approved an income tax cut last November by a 56–43% margin. Initiative 16 permanently cut the state income tax from 4.63% to 4.55%. But TABOR provisions will temporarily lower the rate even further, to 4.50% over the course of 2021. 

While the TABOR tax cut is temporary, the stage is set for the possibility of more permanent tax cuts in the future. Democratic Gov. Jared Polis, who has praised the TABOR tax relief, recently proposed bringing the state income tax to zero. Meanwhile, after the resounding success of Initiative 16 in 2020, another income tax cutting ballot measure has now garnered more than enough signatures to appear on next year’s ballot as Initiative 31. If voters approve, Initiative 31 would permanently lower the income tax rate from 4.55% to 4.40%. 

Thanks to automatic tax refund laws, taxpayers in these three states – Indiana, Oregon, and Colorado – will enjoy greater financial security in the coming year. Given rising prices for basic goods and services, state taxpayer refunds will provide relief to households at a time when it is greatly needed. It’s nice that existing law is automatically triggering such refunds in IN, CO, and OR. Lawmakers and governors elsewhere would do well to follow suit. 

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As Dems Try to Revive IRS Bank Account Snooping, Even Charlie Crist Says Don't Do It


Posted by John Kartch on Monday, November 29th, 2021, 3:30 PM PERMALINK

"I ask that you avoid adding divisive IRS account reporting requirements to the package"

The Biden administration and Senate Democrats are trying to sneak the IRS bank account snooping provision back into the Democrats' enormous tax-and-spend bill.

But even congressman Charlie Crist (D-Fla.) is warning them to stop.

In a new letter to Senate Finance Committee chairman Ron Wyden (D-Ore.) and ranking member Mike Crapo (R-Idaho), Crist wrote:

The American public, tax policy experts, financial institutions, and state legislatures have lined up to oppose including this new policy in the House version of the bill. All share a concern that this policy is too broad and will likely disadvantage small businesses, community banks and working families – those most vulnerable as the economy strives to rebound from the COVID-19 pandemic. 

The American people have shown firm, principled opposition to the snooping provision, as seen in this video compilation of on-the-street interviews.

Democrats openly refer to the bank snooping plan as a "comprehensive financial account reporting regime." Media reports indicate the Biden Treasury Dept. was "perplexed" that this is not a popular idea.

The Biden administration proposed to give the IRS new power to automatically access and store bank account, Venmo, Paypal, and CashApp account inflows and outflows for all business and personal accounts.

Even the Tax Policy Center says the plan is "poorly conceived," and will "bury the agency in a sea of unproductive information" and "won't help" and "will fail."

On Oct. 19 Tax Policy Center senior fellow Steve Rosenthal wrote on Twitter

"Biden's Treasury doubles-down on a poorly-conceived reporting proposal, casting its net far too wide, which may catch small businesses, but not the big fish (who cheat by stretching the tax law, not by hiding their cash flow). I tried to help at the start, but I gave up."

On Oct. 20 Rosenthal wrote on Twitter

"If Congress wants to collect more money from the rich, it must pass better tax rules, which measure and time income accurately and do not create ambiguities that aggressive taxpayers and their highly-paid advisers can exploit. Bank reports on aggregate cash flows won't help."

On Oct. 16 Rosenthal was quoted in The Hill

Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, whose former director now works in the Biden administration, said the proposal is too expansive and thinks bank lobbyists “have touched a raw nerve” with their customers who are concerned about privacy.

“I think at the end of the day, this bank proposal will fail,” he said.

On May 3, Rosenthal wrote:

"In practice, the IRS’ task would be daunting and, in fact, bury the agency in a sea of unproductive information.

Biden’s plan is expansive: deposits and withdrawals must be reported for every account, individual or business, at every financial institution. Then, to construct taxpayer-specific information, the IRS must collate taxpayer-account information across many different financial institutions. That is because taxpayers often hold multiple accounts. Yet, whether collated or not, deposits and withdrawals are not income, unlike wages or interest. And deposits and withdrawals cannot be netted to calculate income, without substantial adjustments."

On Oct. 18 Rosenthal was quoted in The Washington Post:

"It’s still a deeply flawed proposal,” Rosenthal said. “Even at $10,000, the Biden bank proposal is still too sweeping, throws a net very wide, and it’s hard to see what fish they want to catch here.”

The big Democrat bill provides funding to deploy 87,000 new IRS auditors and agents. The IRS plans a 50% increase in small business audits.

In the bill, IRS "enforcement" funding is 23 times greater than the amount allocated to "taxpayer services."

The bill will impose 1.2 million additional annual IRS audits; about half will hit households making less than $75k.

 

 

Photo Credit: "Tax Notice" by Catawba County, North Carolina (Government)


In Face of Surging Gas Prices Under Biden, DeSantis Proposes Tax Pause

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Posted by Doug Kellogg on Wednesday, November 24th, 2021, 12:23 PM PERMALINK

Florida Governor Ron DeSantis has proposed pausing the state's gas tax to give weary Florida families a break as they are pummeled by high fuel prices due to inflation and restrictive regulations imposed by the Biden administration. 

The Governor announced the push to pause the gas tax, urging state legislators to step in, during visits to Daytona Beach and Jacksonville:

It is no wonder Gov. DeSantis is looking for relief, gas prices have hit their highest level since Thanksgiving 2012.

Floridians pay the 11th-highest gas tax burden in the nation, pausing the state's tax would reduce the total that people pay at the pump by 26.5 cents.

President Biden has done his part driving up energy costs by submarining the Keystone XL pipeline. Democrats in Congress are looking to add to the damage with their reconciliation bill, which includes an $8 billion home heating tax.

The Florida state legislative session starts on January 11, 2022.

Photo Credit: Office of Governor Ron DeSantis

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Norquist Warns Against Democrats’ Socialist Tax-and-Spend Package

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Posted by Isabelle Morales on Tuesday, November 23rd, 2021, 5:20 PM PERMALINK

Americans for Tax Reform President Grover Norquist appeared today on Fox Business Network’s Mornings with Maria to discuss the Democrats' socialist tax-and-spend plan, legislation they’ve named, “Build Back Better.” Norquist warned the bill will lead to higher taxes, reduced American global competitiveness, and tax carveouts for Democrats’ special interests.  

Norquist explained that the bill would give the US the highest top personal income tax rate in the OECD, the 3rd highest capital gains rate in the OECD, and create numerous tax carveouts for left wing special interests: 

“Well, it’s not good news and it could get worse. Remember, the Senate gets to play with this… The ideas that we worried about, like spying on your bank account, didn’t pass the House, but Biden still wants to do it and the Democratic Senators still want to do it. So, keep in mind, the list of horribles from the House: highest personal tax rate in the developed world, capital gains tax going up to 37 percent (the highest since Jimmy Carter), and then a series of targeted tax cuts – subsidies – that are political payoffs. Billions for trial lawyers to sue people… billions to the press… a tax cut for the rich people in blue states [through a SALT expansion].” 

Norquist also noted that the bill’s tax hikes on corporations will be primarily felt by middle-class workers and consumers:  

“One trillion dollars in “business taxes,” or corporate income taxes – that’s just a disguise tax on wages and higher prices. 70 percent of the corporate income tax is paid by workers directly in lower wages. We saw the opposite of that when Trump and the Republicans cut the corporate income tax and wages went up. Raise the corporate income tax, wages go down again. Politicians love the corporate income tax because it’s a way of hiding that they’re taxing the middle class.” 

Norquist also explained that this bill is part of the Biden administration's larger goal to impose a global minimum tax on corporations across the world: 

“The Democrats look at what’s happening to California and New York because people can choose to move to Texas and Tennessee and Florida. They realize that if they have the high taxes they want on Americans they have to protect against companies starting up in other countries, which is what’s going to happen – they’re going to drive investment overseas and they think with this corporate minimum tax that they can reduce that. Do you really believe that China will impose that tax on their businesses? Or Russia? It does give the Russians and the Europeans a veto over our tax cuts.” 

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Every House Democrat Endorsed by the Chamber of Commerce Voted for the Reconciliation Bill

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Posted by Jack Fencl on Monday, November 22nd, 2021, 11:45 AM PERMALINK

All 15 House Democrats endorsed by the U.S. Chamber of Commerce during the 2020 election voted in support of President Biden's multi-trillion dollar tax and spend bill, despite the Chamber publicly opposing the legislation. 

The Democrat reconciliation package passed the U.S. House of Representatives on Friday with a 220 to 213 vote, with only one House Democrat joining Republicans in opposition.  Of the 23 House Democrats endorsed by the U.S. Chamber during the 2020 election cycle, 15 won re-election. All 15 of these Democrats voted to pass the "Build Back Better Act". 

Prior to the vote, the U.S. Chamber of Commerce – the world’s largest pro-business trade association – issued a "key vote letter" warning that "no member of Congress can achieve the support of the business community if they vote to pass this bill as currently constructed."

The Chamber also launched a paid advertising campaign opposing the bill just one day prior to House passage of the reconciliation package, targeting 9 Democrat House Members - 6 of which the Chamber endorsed during the 2020 election cycle. Despite this opposition, the Chamber was unable to convince a single Democrat backed by the organization during the 2020 election to oppose the bill.

The U.S. Chamber’s endorsement of 23 House Democrats was a notable increase compared to prior years. During the 2018 cycle, the Chamber reportedly endorsed only 7 House Democrats. According to the U.S. Chamber’s own assessment of its impact on the 2020 House elections, the “U.S. Chamber endorsements are known to have a big impact and that rang true in 2020.”

Below are the House Democrats endorsed by the U.S. Chamber of Commerce who voted in favor of the reconciliation package and the percentage of the vote they received as candidates during the 2020 election:

Rep. Colin Allred (Texas-32), won re-election with 51.9% of the vote.

Rep. Lizzie Fletcher (Texas-07), won re-election with 50.8% of the vote.

Rep. Haley Stevens (Michigan-11), won re-election with 50.2% of the vote.

Rep. Josh Harder (California-10), won re-election with 55.2% of the vote.

Rep. Cindy Axne (Iowa-03), won re-election with 49.7% of the vote.

Rep. Susie Lee (Nevada-03), won re-election with 48.8% of the vote.

Rep. Angie Craig (Minnesota-02), won re-election with 48.2% of the vote.

Rep. Andy Kim (New Jersey-03), won re-election with 53.2% of the vote.

Rep. Abigail Spanberger (Virginia-07), won re-election with 50.9% of the vote.

Rep. Sharice David (Kansas-03), won re-election with 53.6% of the vote.

Rep. Antonio Delgado (New York-19), won re-election with 54.2% of the vote.

Rep. Elaine Luria (Virginia-02), won re-election with 51.5% of the vote.

Rep. Dean Phillips (Minnesota-03), won re-election with 55.6% of the vote.

Rep. Greg Stanton (Arizona-09), won re-election with 61.6% of the vote.

Rep. David Trone (Maryland-06), won re-election with 58.9% of the vote.

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ATR Op-Ed in Townhall: How Stablecoins Can Help the Underbanked

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Posted by ATR on Monday, November 22nd, 2021, 10:31 AM PERMALINK

In an op-ed published in Townhall yesterday, ATR Federal Affairs Manager Bryan Bashur outlined how stablecoins (digital tokens backed by reserve assets such as the U.S. dollar or short-term debt) can provide financial services to Americans who have previously lacked easy access to capital.

Lower-income individuals, minorities, and rural communities are the most likely to benefit from access to digital assets. As Bashur explains:

According to a Morning Consult poll, 37 percent of the underbanked population own cryptocurrency compared to only 10 percent of individuals who are fully banked.

Most importantly, the unbanked or underbanked individuals in the United States tend to be minorities. Black and Hispanic households are about five times as likely to be unbanked as white households. According to a survey conducted by the Federal Deposit Insurance Corporation (FDIC), in 2019 “unbanked rates were higher among lower-income households, less-educated households, Black households, Hispanic households, American Indian or Alaska Native” households.

Rural communities are also more likely to lack access to financial services. The FDIC reported that “64.6 percent of rural households used bank credit, compared with 69.2 percent of urban households and 77.3 percent of suburban households.”

Finally, low-income households are also disconnected from banking. The FDIC found that “only 37.0 percent of households with less than $15,000 in income used bank credit, compared with 89.9 percent of households with income of $75,000 or more.”

Unfortunately, the Biden administration opposes the development of stablecoins and the innovative financial services that they can offer. Bashur points out that:

This month, the President’s Working Group on Financial Markets, the FDIC, and the Office of the Comptroller of the Currency (OCC) published a report on stablecoins that asked Congress to pass legislation that would only allow federally insured depository institutions to issue stablecoins. The report also says that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have broad authority to regulate stablecoins.

Biden’s Office of the Comptroller of the Currency (OCC) has been particularly opposed to stablecoin development and promotion. Bashur states that:

Following the publication of the Biden administration’s report on stablecoins, Acting Comptroller of the Currency, Michael Hsu, recently said that stablecoin development is “not what you want” and that the outcomes of innovation are “not going to be good.”

Fortunately, some groups have the right idea when it comes to protecting investors while also encouraging the usage of stablecoins. The Cato Institute has written a detailed framework that avoids burdensome regulations but requires adequate disclosures so that bad actors will not take advantage of investors. Bashur explains that:

The framework would amend current statute so that issuers of digital tokens are regulated as “limited purpose investment companies” and have certain collateral requirements they must meet. The proposal would also require the issuers to disclose “a detailed explanation of its reserve holdings” including the value of the assets and the percentage of each asset. For example, how much of the stablecoin is backed by the U.S. dollar versus short-term debt.

Bashur concludes by stating that any new regulatory framework should promote stablecoin innovation, expand access to financial services for the underbanked, and provide safeguards for crypto investors.

Click here to read the full op-ed.

Photo Credit: "Tether USDT" by The Focal Project is licensed under CC BY-NC 2.0

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Dem Bill Spends 23x More on IRS Enforcement than Taxpayer Services

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Posted by Isabelle Morales on Monday, November 22nd, 2021, 9:50 AM PERMALINK

Funding for audits, investigations, and other tax enforcement would be 23 times greater than funding for taxpayer education and assistance under Democrats’ just-passed tax and spend bill.

The bill will fund 1.2 million more annual IRS audits; about half will hit households making less than $75k.

Out of nearly $80 billion in new IRS funding, $44.9 billion, more than half, will go directly towards enforcement. The agency will receive a comparatively meager $1.93 billion in funding for taxpayer services, which include things like pre-filing assistance and education, filing and account services, and taxpayer advocacy services.

Clearly, the goal of this funding is to empower the IRS to audit and harass millions of American families, self-employed people, and small businesses including cash heavy businesses like nail-salons, barbershops, and food trucks. It would add a whopping 87,000 new IRS agents – enough to fill Nationals Park twice. That is a greater quantity of agents than all the personnel on all 11 U.S. aircraft carriers.

Any new IRS funding should be alarming given the IRS has a history of incompetence and corruption. In fact, most recently, the progressive group ProPublica announced it had the tax returns of thousands of taxpayers stretching back 15 years. This sensitive taxpayer data was either obtained through an unauthorized leak by an IRS employee or through a data breach – either way the IRS failed to safeguard taxpayer information.

More IRS Funding Will Lead to More Audits of the Middle Class and Small Businesses

Legions of new IRS agents will be unleashed for invasive and time-consuming audits of middle class Americans and small businesses. The IRS previously announced a goal to increase small business audits by 50%.

As previously reported by CNBC, experts say a fattened-up IRS would go after small businesses that necessarily depend on cash transactions:

Certain small businesses may face an audit under the plan. “I think the industries that should be concerned are those in cash,” said Luis Strohmeier, a Miami-based CFP and partner at Octavia Wealth Advisors.

[He expects the agency to scrutinize cash-only small businesses like restaurants, retail, salons and other service-based companies.]

The wealthy and large corporations already have armies of lawyers and accountants that ensure they legally take advantage of the plethora of credits and deductions offered by the tax code.

Further, the IRS already audits the largest corporations at high rates. It doesn’t matter how much more the agency receives in funding – they will not find violations in the law that do not exist. 

After the agency comes to this obvious conclusion, they will still be pressured to go find the $400 billion this funding is supposed to create. They will go after easier targets to find this money instead: businesses and individuals without legal teams and accountants.   

New IRS enforcement will fall on American families and small businesses, not the “rich.” 

Additional Funding Will Empower the IRS to Harass and Abuse Taxpayers

The IRS has been notorious for using its power to harass and abuse taxpayers.

The last time the Democrats were in power, the IRS wrongly used its authority to target and harass taxpayers, especially conservative non-profits. Most notably, the Obama IRS was caught unfairly denying conservative groups non-profit status ahead of the 2012 election. Lois Lerner’s political beliefs led to tea party and conservative groups receiving disparate and unfair treatment when applying for non-profit status, according to a detailed report compiled by the Senate Finance Committee. Because of Lerner’s bias, only one conservative organization was granted tax exempt status over a period of more than three years.

Additionally, TIGTA has repeatedly documented the IRS violating taxpayer rights. In one 2017 example, the IRS Criminal Investigation Division (IRS-CI) regularly violated taxpayers’ rights and skirted or ignored due process requirements when investigating taxpayers for allegedly violating the existing $10,000 currency transaction reporting requirements.  

In these reporting requirement cases, almost none found actual fraud, the IRS seized financial assets before ever having talked or consulted with the investigated taxpayers, the IRS didn’t attempt to verify reasonable explanations investigated taxpayers offered, taxpayers were not informed of important information nor the purpose of the interview, and IRS-CI agents most often didn’t properly identify themselves. These were all offenses considered flat out violations of taxpayer rights afforded in the Internal Revenue Manuals.

Most voters are aware of this abuse, and subsequently believe that the IRS is already too powerful. A June 19 - 22 Fox News National Survey of 1,001 registered voters asked if the IRS has "too much power." 65 percent said yes, 31 percent said no. The same question asked in June 2019 produced a result of 60 percent yes, 34 percent no.

Because of this radical increase in funding coupled with no reforms, the agency will continue with its culture of abuse except now with more resources.

IRS Funding is Yet Another Way to Funnel Taxpayer Money into Democrats’ Campaigns.  

New IRS funding will be a boon for the union that represents IRS employees. This union overwhelmingly supports Democrat candidates so new IRS funding will also shovel more money into Democrat campaign coffers:   

  • The left-wing National Treasury Employees Union represents 150,000 taxpayer-funded federal employees across 31 departments and agencies. The NTEU is famous for aggressive use of lawsuits in order to advance Democrat union priorities.   
     
  • NTEU collects dues from roughly 70,000 IRS employees, nearly half of NTEU’s total membership.  
     
  • NTEU shovels 97 percent of their money into Democrat campaign coffers. In the 2019-2020 campaign cycle, NTEU’s political action committee raised $838,288. Out of $609,000 in spending on federal candidates, an overwhelming 97.04 percent went to Democrats.   
     
  • IRS employees regularly perform Democrat union work on the taxpayer dime. In fiscal year 2013, IRS employees spent over 500,000 hours on union activity, costing taxpayers $23.5 million in salary and benefits. To add insult to injury, the IRS had at least 40 out of 201 workers solely devoted to union activities that made $100,000. In 2019, 1,421 IRS and other Treasury Department employees spent 353,820 hours of taxpayer-funded union time (TFUT), costing $19.77 million in salary and use of government property.
     

New IRS Funding Would Reward Incompetence and Irresponsibility.  

The IRS has proven time and time again it cannot spend responsibly and complete the most basic of tasks. The agency needs reform, not more money and more power.   

Several audit reports have demonstrated how the agency’s inability to do its job is due to incompetence, not lack of funding:  

  • A Treasury Inspector General for Tax Administration (TIGTA) report on the 2021 Filing Season found that almost 40 percent of printers were not working at tax processing centers in Ogden, Utah and Kansas City, Missouri. However, in many cases the only thing wrong with the printers is that no employee had replaced the ink or emptied the waste cartridge container: “IRS employees stated that the only reason they could not use many of these devices is because they are out of ink or because the waste cartridge container is full.”  
     
  • This year, despite having funding for new hires, the IRS only achieved 37 percent of their hiring goal. They had trouble onboarding new hires as well, as it was “difficult to find working copiers (as noted previously) to be able to prepare training packages.”  
     
  • In 2016, the IRS has lost track of laptops containing sensitive taxpayer data. TIGTA estimates that the IRS had failed to properly document the return of 84.2 percent, or more than 1,000 computers due to be returned by contract employees.   
     
  • A TIGTA report in 2017 showed that the IRS rehired more than 200 employees who were previously employed by the agency, but fired for previous conduct or performance issues.
     
  • Each year the IRS hangs up on millions of callers -- a practice they refer to as “Courtesy Disconnects.” Currently, if you call the IRS, you have a 1-in-50 chance of reaching a human being.   
     
  • According to the National Taxpayer Advocate’s 2014 Annual Report to Congress the IRS was unable to justify spending decisions. As the report stated: "The IRS lacks a principled basis for making the difficult resource allocation decisions necessitated by today’s tight budget environment.”   
     
  • The agency has repeatedly failed to compile legally required tax complexity reports. These reports are supposed to contain the IRS's specific recommendations on how to make the tax code easier to comply with. Since 1998, the IRS has done so just twice – in 2000 and 2002.   
     
  • In 2015, the IRS was spending $1,000 an hour hiring a litigation-only white shoe law firm for an investigation, despite having over 40,000 employees dedicated to enforcement efforts.    
     
  • In 2015, the agency has been caught red-handed wasting taxpayer dollars on Nerf footballs, the world’s largest crossword puzzle, extravagant $100 dollar lunches, and more.

 

As Norquist wrote in one op-ed, “The IRS should not be rewarded for failing to reform, failing to obey the law, failing to fire those who break the law, and spending tax dollars to act as the enforcer for a partisan political machine.”

Despite claims that additional IRS funding is needed to solve problems with taxpayer services, like taxpayers being incapable of getting an IRS employee on the phone, of navigating through paperwork, of paying taxes, etc., virtually none of the funding in this plan would go towards these initiatives.

Democrats seek to supersize the IRS for the sole purpose of unleashing the agency on the American people via audits and investigations. Inevitably, low-income Americans, middle-income Americans, and small businesses will be the primary targets.

Photo Credit: Photo from IRS-CI Annual Report 2020

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