McAuliffe: Municipal Broadband Networks Plunge Cities into Debt
Americans for Tax Reform’s Katie McAuliffe, the executive director of Digital Liberty and federal affairs manager, wrote an op-ed for the Hill on the false promise of 'municipal broadband' networks. McAuliffe found that while Americans may want faster internet, municipal broadband networks tend to be failures:
“The problem is – building and operating broadband networks is expensive and complex. They need to be rebuilt and updated almost continually to stay ahead of the breakneck pace of innovation in this space and the constantly spiraling demand for higher and higher speeds online.”
According to McAuliffe, most attempts to create municipal broadband networks results in horror stories, like “the failed iProvo network that cost the city $39 million to build but was ultimately sold to Google for $1 dollar are legion. Indeed, according to new data, over half of these municipal fiber systems fail to bring in enough revenue to cover their ongoing operating costs, bleeding red ink every day they operate and falling further and further into debt.”
These municipalities struggle to keep up with large private companies that can easily invest millions in maintaining the infrastructure for the broadband. Of the 20 municipalities that have tried to implement broadband networks, “only two bring in enough revenue to recover construction costs before the networks become obsolete in 40 years. The rest won’t be paid off for decades after they become useless – or even centuries!”
These risky investments seem troubling at a time when most governments are scrambling to fund more necessary projects, like education and transportation.
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Lisa Scheller First to Sign “No New Taxes” Pledge in PA-07 Race
Americans for Tax Reform (ATR) commends congressional candidate Lisa Scheller for becoming the first candidate in Pennsylvania’s Seventh Congressional District election to sign the Taxpayer Protection Pledge, a written commitment to Keystone State taxpayers that they will oppose and vote against all 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.
For those candidates who refuse to sign the Pledge, voters should wonder why this politician chooses to leave the door open to tax hikes.
“Pennsylvania voters are looking for solutions that get Americans back to work and grow the economy. Signing the Taxpayer Protection Pledge and holding the line on taxes is the first step in that process,” said Grover Norquist, President of Americans for Tax Reform
There are currently 178 Pledge signers in the U.S. House and 44 Pledge signers in the U.S. Senate. 88 percent of all congressional Republicans have made the written commitment to oppose higher taxes. In contrast, ZERO congressional Democrats have made that promise.
President Joe Biden has already promised a slew of tax increases – totally over $3.42 trillion. These tax hikes range from repealing the Trump tax cuts to an increase in the Death Tax and higher energy taxes.
“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 applaud Lisa Scheller for her commitment to the taxpayers of Pennsylvania and I encourage all candidates running in this race to make the same 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.
Photo Credit: The Morning Call
Maine's New Recycling Law Is a Regressive Tax That Will Harm Consumers
Low-income Mainers are already struggling with record high inflation and the twelfth highest state and local tax burden in the country. But a recycling law signed by Governor Janet Mills on Tuesday will make matters worse for those residents with higher prices at the grocery store and on other goods, doing the most harm to families who can least afford the higher costs.
The new program, known as Extended Producer Responsibility (EPR), will charge packaging manufacturers for collecting and processing recyclable materials, in addition to fees for discarding non-recyclable packaging. The Maine Department of Environmental Protection will set a packaging fee schedule on producers based on the per-ton costs of recycling their materials.
While environmentalists and other proponents of the program claim it will lead to funding for new recycling equipment and more efficient procedures, there is no evidence the new law will reduce the amount of trash in landfills. Nor will it improve recycling technology or allow for local tax relief, as some backers of the EPR program have claimed.
Instead, the EPR program will serve as a regressive, hidden tax as producers shift their higher costs onto consumers. Dr. Calvin Lakhan, a researcher at York University in Toronto, estimates that consumer prices will skyrocket anywhere from $99 million to $134 million every year as a result of the EPR program. For a family of four in Maine, monthly costs are estimated to rise between $32 and $59, thanks to higher costs on products that use disposable packaging.
Though the burden is concealed and indirect, all Maine residents will ultimately bear the economic consequences of the EPR legislation. But for low-income individuals and families, who already struggle to afford basic necessities, higher prices at the grocery store will have a far weightier impact.
From May 2020 to May 2021, Maine saw inflation of 6.6% – the largest rise in the final demand index since the Bureau of Labor Statistics started tracking the figure in 2010. Compared to a national rate of 4.9% over that same period, low-income Mainers are already struggling more than their friends and family in other states. The EPR program will cause even further price inflation during a period when those residents would be better served with tax relief.
At the same time that Governor Mills is imposing what is effectively a regressive tax hike, she’s shunning efforts to tax upper income filers. Lawmakers considered several bills to increase taxes on the wealthy during this year’s legislative session in Maine. LD 498 would have hiked the top income tax rate from 7.15% to 10.15%, an increase of more than 41%, while another bill would have raised the corporate tax rate from 8.93% to 12.4%. But even if they had passed, those bills would never have become law due to Governor Janet Mills’ firm opposition to the proposals.
While she won’t support a direct, progressive tax hike on the wealthy, Governor Mills takes little issue with imposing a hidden, regressive one that harms her poorest residents the most. Mills will have a tough time defending that duplicitous decision against her potential Republican challengers in 2022.
Maine was the first to impose an EPR fee scheme, but it may soon have company. Oregon lawmakers recently passed a similar EPR program under SB 582, which is awaiting Governor Kate Brown’s signature. That bill would raise recycling costs by 30% while only raising the recycling rate by 3%, according to a letter signed by nearly 40 manufacturing and business groups. Like in Maine, those higher costs will be passed on to consumers with higher prices for basic goods, many of which use disposable packaging. If Governor Brown blesses the program with her signature, Oregon will become the second state in the nation to impose a regressive recycling tax on its residents.
Expect lawmakers and governors in other states will continue to pursue EPR legislation in the coming years. This effective regressive tax first enacted in Maine should serve as a cautionary tale to avoid, and not a model for other states to emulate, though progressives will certainly try.
Photo Credit: Blahedo
Removal of $40 Billion in Extra IRS Funding From Senate Bill is Win for Taxpayers
Media reports indicate that $40 billion in new funding for the IRS has been removed from the bipartisan Senate infrastructure proposal. The purpose of this new IRS funding is not to help taxpayers navigate the tax code or receive better customer service, but to raise $100 billion in new revenues. It would have empowered 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.
While the removal of $40 billion in IRS funding from the Senate package is a win for taxpayers, President Biden and Congressional Democrats are pushing to include $80 billion in new funding for the agency in the partisan $3.5 trillion proposal that will be passed through budget reconciliation. This funding would add 87,000 new IRS agents that Biden claims will squeeze taxpayers for an additional $787 billion. 87,000 IRS agents could fill Nationals Park twice.
Any new IRS funding should be alarming given the IRS has a history of incompetence and corruption. In fact, just a few weeks ago, 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.
65 Percent of Voters say the IRS has Too much Power
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.
More IRS Funding Will Mean Thousands of New IRS Agents
Legions of new IRS agents will be unleashed for invasive and time-consuming audits of middle class Americans and small businesses.
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.]
Even Obama-era IRS chief John Koskinen – a longtime advocate of increasing the IRS budget – thinks President Joe Biden’s proposal to increase IRS funding by $80 billion is too much.
As reported by the New York Times:
“I’m not sure you’d be able to efficiently use that much money,” Mr. Koskinen said in an interview. “That’s a lot of money.”
Rather than fix the agency's longstanding mismanagement, ineptitude and abuse problems, Biden's approach will make the problem worse.
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.
Under Biden, the IRS Will Snoop on Your Venmo Account, Bank Accounts, and more.
The Biden administration also wants to sic the IRS on your Venmo account and bank accounts. As part of the proposal, banks and third-party payment providers, like Venmo and CashApp would be required to report ALL account holders’ aggregate account outflows and inflows to the IRS.
President Biden claims that this proposal is designed to “crack down on millionaires and billionaires who cheat on their taxes.” However, it is unclear how monitoring Venmo accounts – many of which are held by younger Americans – contributes to this goal. The average Venmo transfer amount is $60 and is popular among young people, with over 7 million Venmo users belong in the 18-34 age group. For users who have undergone identity verification, the weekly spending limit is $7,000. These trends exist for most third-party payment providers. It is hard to see how millionaires and billionaires are using Venmo or CashApp to launder mass amounts of money.
The IRS will use these powers against Americans of all income levels. Requiring banks and third-party payment providers to report this kind of information is an indefensible invasion of privacy. Giving the IRS access to this private information is a disaster waiting to happen.
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 a recent 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.”
Photo Credit: Ted Eytan
$3.5 Trillion Democrat Spending Blowout Contains Anti-Worker PRO Act
The $3.5 trillion spending blowout announced by Senate Democrats will include the job-killing “Protecting the Right to Organize Act,” according to media reports.
The PRO Act would benefit Big Labor at the expense of the American worker. The PRO Act’s inclusion in the spending blowout gives further insight into the Senate Democrats’ proposal, the details of which are below:
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The PRO Act nullifies Right to Work laws across the country, which protect 166 million Americans in 27 states. Right to Work laws prevent employers from being able to force workers to join a union as a condition of employment. If Right to Work laws were banned, every American worker would be forced to choose between paying a union boss and putting food on the table.
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The PRO Act enacts a stringent three-step test that would force independent contractors to reclassify as W-2 employees. This would jeopardize the livelihoods of the more than 59 million Americans that engage in freelance work.
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Codify the NLRB’s disastrous 2015 Browning-Ferris Industries decision that muddled the definition of “joint-employer,” overturning decades of labor law precedent. If implemented, this would decimate the franchise business model that employs 7.6 million Americans in 733,000 locations.
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Change union elections to allow union bosses to collect cards from workers to demonstrate support for the union, rather than holding a secret ballot election. If labor bosses fail to unionize a workplace via a secret ballot election, the union can appeal to the NLRB for a second chance to unionize the workplace.
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Violate worker privacy by forcing employers to give union organizers sensitive employee contact information, including home addresses, cell phone, shift information and landline numbers, and email addresses. This would allow union bosses to intimidate workers into joining unions at homes or workplaces.
In addition, the PRO Act would increase costs for employers, harming businesses and consumers. According to the American Action Forum, the independent contractor provision would impact 8.5% of GDP and cost between $3.5 billion and $12.1 billion annually. The joint employer provision would cost between $17.2 billion and $33.3 billion annually for the franchise business sector and affect 44% of private sector employees. Finally, the provision that restricts employers from replacing strikers permanently could cost employers an additional $1.9 billion every year.
The PRO Act is a return on the investment of the hundreds of millions of dollars that Big Labor poured into the Democrat party's campaigns to capture the House, Senate, and White House. Employers will be able to force workers into unions as a condition of employment, and union bosses will have access to personal information to bully workers into compliance. Tens of millions of independent contractors would face losing their jobs.
1.4 Million Small Businesses Will Face a Tax Hike Under Biden’s Corporate Tax Increase
1.4 million small businesses organized as C-corporations will face a tax hike under President Biden’s corporate income tax hike, according to the U.S. Chamber’s analysis of IRS and Census data.
President Biden’s proposal would raise the corporate income tax rate from 21 to 28 percent. What the administration fails to mention is that numerous small businesses are organized as C-corporations. Thus, the tax rate these small businesses pay would be increased by one-third. The rate would also be higher than Communist China's corporate income tax, which stands at 25 percent. This comes at a time when main street businesses are still trying to recover from months of shutdowns, restrictions, and increased costs.
To be clear, the corporate tax hike will not be the only tax increase on small businesses. Biden's increase in the top marginal income tax rate to 39.6 percent will hit small business organized as sole proprietorships, LLCs, partnerships and S-corporations. Also, Biden seeks to eliminate stepped up basis, creating a second death tax on small business. Thus, the amount of small businesses negatively affected by Biden’s tax hikes will certainly exceed 1.4 million.
As noted by the U.S. Chamber of Commerce, the corporate income tax hike will hurt small businesses in every sector of the economy: “agriculture, construction, health care, real estate, finance, and more.”
The analysis also details the state-by-state impact of this tax hike on small businesses:
- In Arizona, 31,315 employers will see their taxes increased, including 21,646 small businesses with fewer than 500 employees. Under Joe Biden’s plan, Arizona’s combined state and federal corporate tax rate would be 31.5 percent.
- In West Virginia, 6,081 employers will face tax hikes, including 4,203 small businesses. West Virginia’s state corporate tax rate, in addition to the federal 28 percent, would result in a 32.7 percent tax rate for these small businesses.
- In New Jersey, which has the highest corporate tax rate, 45,053 small businesses would face a combined state and federal corporate tax rate of 36.3 percent.
Construction, retail trade, and professional/scientific/technical service industries across the nation would be hit the hardest by Biden’s tax hike.
Biden’s corporate tax hike will lead to fewer jobs and lower wages. In a 2017 report, Stephen Entin of the Tax Foundation notes that 70% of corporate taxes are borne by labor. Other economists argue that anywhere from 20% to 50%, to even 100% of the tax hits workers.
During his campaign, President Joe Biden promised the American people that he would not raise taxes on small businesses. The promise was made on Feb. 20, 2020 before a national audience during a Democratic debate hosted by MSNBC:
MSNBC's Hallie Jackson: "I want to ask you about Latinos owning one out of every four new small businesses in the United States. Many of them have benefited from President Trump's tax cuts, and they may be hesitant about new taxes or regulations. Will taxes on their small businesses go up under your administration?"
Biden: "No. Taxes on small businesses won't go up."
Now that he is in office, he has shown no sign of keeping this promise. Many of the tax increases proposed by Biden including the corporate income tax hike directly violate this pledge.
Despite Democrats’ claims, millions of main street businesses will foot the bill for their wasteful spending projects.
Photo Credit: Randy von Liski
Washington State Prohibits Voters From Having a Say Over Unconstitutional Income Tax
Washington state legislators are making their latest attempt to impose an unconstitutional income tax on its residents. With the passage of S.B. 5096, Washington residents may soon be subject to a 7% tax on the sale of stocks, bonds, businesses, and other investments whose profits exceed $250,000.
Progressives have long tried to impose an income tax on Washingtonians. However, since the passage of a 1930 constitutional amendment that made all taxes “uniform upon the same class of property,” with property defined as “everything, whether tangible or intangible, subject to ownership,” Washington has successfully evaded every attempt to impose an income tax. Just two years after the passage of the 1930 amendment, a graduated income tax was ruled unconstitutional by the state supreme court – a precedent that holds today. Courts also struck down a 2017 Seattle ordinance establishing a progressive income tax.
That hasn’t stopped legislators from repeatedly proposing an income tax to voters. Since 1930, Washington voters have defeated 10 ballot measures to impose a personal or corporate income. Most were rejected by a resounding 2/3 majority. Voters expressed their opposition most recently in 2010 with a 64-36% vote against a state income tax – even though it would only have affected income higher than $200,000 and reduced other taxes in return.
Washingtonians have frequently made their preferences clear. But this year, politicians have shrewdly labeled their capital gains tax legislation as an excise tax. Excise taxes are imposed on the sale of specific goods and services. They’re legal under the state constitution – in fact, the state already imposes a real estate excise tax that ranks as the highest in the region. Democrats insist that the labeling ploy will allow the capital gains tax to withstand scrutiny in the courts, where several lawsuits have already been filed by the Freedom Foundation and the Opportunity for All Coalition.
But capital gains are already considered income in every other state that taxes them. According to the IRS, capital gains are taxable as income since “almost everything you own and use for personal purposes, pleasure, business or investment is a capital asset” – including your home, stocks, jewelry, and business property.
“The Washington Constitution is unambiguous,” said Freedom Foundation CEO Aaron Withe. “Taxpayers can’t be treated differently based on the amount of their income. It’s both punitive and illegal.” Indeed, besides its unconstitutional status as an income tax, the capital gains tax would not be uniform, as is required under the constitution. Moreover, the Freedom Foundation points out in its lawsuit that the capital gains tax is unlawful under the Commerce Clause of the United States Constitution because it treats all sales of capital by Washington residents as taxable gains – including sales that occurred out-of-state.
Democrats have also carefully worded their legislation to ensure that voters will not have the opportunity to consider it as a referendum. Allowing voters to have a say could seriously endanger the capital gains tax proposal – judging by history, voters would likely make it the 11th consecutive income tax proposal to fail. So, Democrats wrote an emergency clause into the law, thereby prohibiting voters from collecting signatures and mobilizing against the new tax in a referendum movement. With the inclusion of the phrase that the bill is “necessary for the support of state government and its existing public institutions,” Democrats have insulated the proposal from the likelihood that it will appear on the ballot in November. The courts, not the people, are now left to decide the validity of the tax.
Rather than tiptoeing around the state constitution to create an income tax, Washington legislators should look to their record state revenues to advance their priorities. Washington has more than $3.8 billion in surplus funds, primarily as a result of Covid-era policies. 12 states across the country, including regional competitors like Arizona, Wisconsin, and Montana, used their surpluses to cut taxes across the board, often on both income and property.
If enacted, a capital gains tax will ultimately create a less competitive business environment in the state of Washington. Entrepreneurs in Washington will start looking to business-friendly states like Florida, Texas, and regional competitors, rather than subject themselves to a high capital gains tax on their burgeoning profits. Rather than hobbling their competitive advantage and burdening their residents with a historic new tax, Washington should follow the example of these states and promote pro-growth, low-tax policies to facilitate a flourishing economy.
Photo Credit: Masaccio
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The Threat of Labor Actions in Democrat-Controlled State Governments
The Biden administration continues advocating for the PRO Act to increase Big Labor’s power at the expense of jobs for workers and opportunities for small businesses. Despite the numerous threats on the federal level, serious pro-union damage has been occurring at the state and local level to the detriment of the American people.
One of the biggest pro-big labor pushes, for example, is occurring in Illinois. Next November, voters will vote on a so-called “Worker’s Rights Amendment” that ironically eliminates the rights of workers by banning “right-to-work.” Effectively this law will force Illinois workers to choose between paying off a union boss and putting food on the table.
The 27 states that have implemented right-to-work laws have generally seen positive economic outcomes. Economic output from 2001-2016, for example, rose by 38 percent in right-to-work states compared to 21 percent in non-right-to-work states. This had a beneficial effect on workers, as from 2001-2016, personal income in right-to-work states increased by more than 10% compared to non-right-to-work states. Based on household survey data from the Bureau of Labor Statistics, from 2007-2017, the percentage of growth in the number of people employed in right-to-work states was 8.8% compared to 4.2% in forced-unionism states. Additionally, the growth in total private sector employment increased by 13.0% in right to work states compared to 10.1% in forced-unionism states. The Illinois constitutional question essentially would cap the capacity for states to take measures to enhance the rate of economic progress for workers and businesses.
This amendment would crush Illinois workers. All the surrounding states to Illinois, besides Missouri, qualify as right-to-work states. The states that Illinois competes with most economically have the exact right-to-work laws that the Worker’s Rights Amendment will permanently abolish. Historical data supports these trends as, according to the Bureau of the Census, the growth in the number of residents aged 35-54 was 1.6% in right-to-work states compared to a 7.4% decline in growth in forced-unionism states. More businesses will develop outside of Illinois than within the state, due to the immense, unchecked power granted to labor unions, permanently harming their economy. Due to the geographically convenient and beneficial surroundings for businesses, there is a unique ease of access for businesses to move outside Illinois.
If the Worker’s Rights Amendment removes rights from workers or employers, then who gains rights from this amendment? Big Labor. By giving Big Labor the right to force workers to enter unions, their power in workplaces increase. They also would receive more money from more workers as workers would be forced to pay union dues, even if they normally would prefer to keep their paycheck over any potential union benefits. This money many times also gets spent for partisan purposes. In the last election cycle, over 85% of the Laborers Union PAC donations went to Democratic political candidates. Furthermore, the Illinois Policy Institute pointed out that unions gave $15.1 million to the Illinois lawmakers who pushed to put this amendment on the ballot. Even if an employee identifies as a Republican, their paychecks may go to increasing the electoral chances of Democratic candidates without their consent or awareness. Under the Worker’s Rights Amendment, unions would have the right to greater control over workers and their paychecks, while workers lose the right to opt out of this disastrous arrangement.
The sweeping pro-union boss anti-worker effort in Illinois presents an example of developments that threaten workers and businesses at the state level, even if the PRO Act has received more national attention.
Photo Credit: Harry Carmichael
Democrats Announce Funding for Green New Deal Hall Monitors in $3.5 Trillion Spending Package
Included in the $3.5 trillion spending package announced by Senate Democrats on Tuesday is funding for the creation of a uniformed “Civilian Climate Corps” tasked with the vague mission of “advancing environmental justice.”
The Civilian Climate Corps’ (CCC) inclusion in the package is a major concession to far-left environmental advocates calling for the creation of the CCC as a year one priority of the Green New Deal while lauding the “government jobs” it would create for climate activists.
The CCC is a make-work program for progressive activists complete with free government housing and transportation to work. Enrollees would be paid to wag their finger and lecture taxpayers on climate change activism. CCC members would be the government-stamped Hall Monitors of the Green New Deal.
The CCC's inclusion in the Democrats’ spending package comes after Senate Majority Leader Chuck Schumer vowed last week that he would “work tirelessly to achieve a big and bold Civilian Climate Corps that places justice at the center and urgently addresses our interlocking climate and economic crisis.”
Details on the level of proposed funding for the CCC are not yet available, but President Biden’s own proposal previously called for $10 billion in new spending while progressive House members such as Rep. Alexandria Ocasio Cortez have called for a number as high as $132 billion to hire 1.5 million climate activists.
While details are still forthcoming, the plan is modeled off of the 21st Century Civilian Conservation Corps Act introduced by House Democrats last Congress.
The legislation provides further insight into Senate Democrats' proposal, the details of which are below:
Taxpayer-funded housing, clothing, and feeding of Climate Corps members.
According to the legislation, taxpayers would be responsible for paying the cost of Climate Corps members’ housing, clothing, feeding, allowance, and medical expenses. Nothing screams good-paying jobs like an “allowance” from the government. Here it is straight from the bill’s text:
“The President may provide housing for persons employed in the Civilian Conservation Corps and furnish them with such subsistence, clothing, medical attendance and hospitalization, and cash allowance, as may be necessary, during the period they are so employed.”
Taxpayer-funded transportation to “work” for Climate Corps members.
Not only will the government provide food, clothing, housing, and an allowance, it will also pick up members of the Climate Corps and drive them to work for them.
"The President may provide for the transportation of persons employed in the Civilian Conservation Corps to and from the places of employment."
Allows President Biden to seize private property through land condemnation.
President Biden would be empowered to seize public land deemed necessary to construct projects authorized under the bill.
“The President, or the head of any department or agency authorized by the President to construct any project or to carry on any public works under this Act, may acquire real property for such project or public work by purchase, donation, condemnation, or otherwise.”
Jobs are prioritized for individuals who have already used up unemployment benefits
According to the text of the legislation, the President shall prioritize “unemployed citizens who have exhausted their entitlement to unemployment compensation,” over other citizens still “eligible for unemployment compensation payable under any State law or Federal unemployment compensation law.”
80 percent of funding used on employment, not conservation.
While the Biden administration claims the proposal is about conservation and addressing climate change, the legislation mandates that 80 percent of funding is to be used just on the salaries of staff.
“Not less than 80 percent of the funds utilized pursuant to paragraph (1) must be used to provide for the employment of individuals under this Act.”
Based on a failed 1930’s program that housed “employees” in military camps.
The effort is reportedly an attempt by the Biden administration to revive a long-defunct jobs program created in 1933 as part of the New Deal and similarly titled the Civilian Conservation Corps (CCC). In 1937, shortly after the CCC’s creation, Congress elected to phase out funding for the program, officially ending the CCC in 1942.
According to a September report from the Congressional Research Service, The CCC was a government employment program for unemployed males aged 18-25 in which “enrollees were recruited, hired, and trained by the federal government, worked under federal supervision, lived in government-run military camps, and received stipends paid for with federal funding.”
CCC was extremely accident-prone.
It turns out taking untrained youths and asking them to perform manual labor in the wilderness is a dangerous idea. “Given the nature of the work (“most of which consisted of manual labor”) and the inexperience of most enrollees, accidents were inevitable,” according to a National Archives report cataloging the accident reports of the CCC program.
According to the report, over 7,600 workplace accidents were filed during the CCC’s short existence and included several workplace deaths and life-threatening injuries. The report details cases of drownings and construction accidents.
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The Harms of Proposed Antitrust Reforms on Consumers
Antitrust policy has long been focused on promoting consumer welfare. In sharp contrast to this decades-long tradition, the sloppy House Judiciary Committee antitrust package includes sweeping changes to antitrust law that effectively bans “covered platforms” from certain products or enter certain industries in ways that often benefit American consumers through better choices and lower prices. Modern conveniences that we take for granted will be eliminated in favor of higher prices and less variety of choice. Chamber of Progress CEO Adam Kovacevich presented a list of 15 different ways that consumers will be harmed by this weaponization of antitrust law.
Amazon
Currently, Amazon offers many resources to help save consumers money, making affordability a key element of their business model. For example, Amazon voluntarily gives discounts based on socioeconomic disadvantages, such as providing EBT and Medicaid cardholders 50% off Amazon Prime subscriptions. Amazon also includes features to help consumers purchase the cheapest available version of a particular product, such as the Amazon Buy Box and offering AmazonBasics products. This service can be assigned to sellers that offer a product for the cheapest price and if a third-party verified seller offers a product for a cheaper price, Amazon “reserve[s] the right not to feature [the buy box].” Kovacevich points out that the Cicilline antitrust package will ban these consumer-friendly services.
The American Innovation and Choice Online Act, sponsored by Rep. David Cicilline (D-R.I.), bans “self-preferencing,” where a platform promotes its own private label goods next to name-brand products just as brick-and-mortar retailers do. This bill prevents Amazon from extending the buy box option to any seller, eliminating a key motivator for businesses to price items cheaply on the online marketplace. It would also ban AmazonBasics products from being sold on Amazon. These products are often cheaper for consumers and encourage competition among online sellers to lower prices. These measures make it harder for consumers to find cheap prices for products and disincentivizes businesses from providing cheaper prices.
Apple
Apple prioritizes security and privacy measures for their products. Kovacevich, however, points out two key ways that the Cicilline antitrust package undermines Apple’s commitment to protecting consumers. The App Store has been critical to securing the iOS system by allowing Apple engineers to screen apps for malware or hacking before enabling users to download them onto their devices. The Ending Platform Monopolies Act, however, would force Apple to sell off the App Store. Courts are already deciding whether Apple has engaged in anti-competitive practices through the App Store, so lawmakers should let those cases play out. Forcing Apple to sell off the App Store could create security risks and reduce usability of Apple devices. The American Innovation and Choice Online Act would ban Apple from pre-installing apps on new devices, including iMessage, FaceTime and Find My. These users greatly benefit from select apps being pre-installed on iPhones. If a person does not know how to download apps, they would have a heightened barrier of access for certain essential apps. This would make an iPhone more difficult to use out of the gate.
Kovacevich also recognizes that similar conveniences would disappear in a consumer’s use of Google products. Users would not be able to locate Google Maps in their search results when looking for a location. Google would also be prevented from displaying YouTube videos when searched.
The government should not decide the algorithm of Google’s search engine. If Google’s methods alienate consumers, then people can simply use another search engine. At the moment, however, consumers prefer Google to meet their search needs. Similar to Amazon’s inability to show users the cheapest product through the Amazon Buy Box, Google would also be unable to show people the highest reviewed restaurants, shops, etc. on their search results. The elimination of this feature advantages services that appeal less to consumers regarding the quality of their service/products and their pricing.
Conclusion
The Cicilline Antitrust Package poses a significant threat to the modern economy that will not just hurt big business, but also hurt middle class consumers. Republicans should reject these bills to preserve the conveniences American shoppers use every day.
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New Reporting Requirements on Institutional Investors Would Harm Retirees and the U.S. Economy
House Financial Services Chair Maxine Waters (D-Calif.) is pushing discussion draft legislation that would impose unnecessary new reporting requirements on institutional investors. This new regulatory burden would do little to solve the perceived problems being discussed by the Left. Instead, these requirements would impose duplicative, needless compliance burdens on investors that would undermine the free market and threaten retirement security for millions of Americans.
Rep. Waters wants to expand existing 13F reporting requirements that exist under the Securities Exchange Act of 1934 so that any short or long position in equities or in derivatives needs to be reported. This is part of a concerted effort from the Left to take aim at institutional investors. Securities and Exchange Commission Chair Gary Gensler has also said he wants to impose new disclosure requirements on short selling through regulatory authority.
The new reporting requirements are duplicative and unnecessary. The Dodd-Frank Act of 2010 requires SEC to adopt rules that increase transparency in the market. This process is already underway through the SEC Regulation Reporting and Dissemination of Security-Based Swap Information (SBSR), rules designed to enhance price discovery, create transparency, and lower transaction costs.
Given the existence of this regulatory framework, it makes little sense for Congress to impose additional requirements.
New reporting requirements would not solve the problems the Left claims it would. SEC staff have explained that increasing the disclosure of short and long positions would have little or no use to them.
A June 2014 study by the staff of the Division of Economic and Risk Analysis of the SEC concluded that, “… the Division believes that Real-Time Short Position Reporting would provide regulators with little additional information than would be available from CAT.”
Current reporting provides regulators access to short sale transaction information within a single day – so the problem is not a lack of data. Additional reporting requirements are a solution in search of a problem.
New reporting requirements will be devastating to tens of millions of Americans who depend on institutional investors for retirement and income. The costs of this new regulatory burden will not be absorbed by institutional investors, instead it will be passed along to the millions of Americans that rely on investments for their retirement savings. Pension funds, mutual funds, charities, and others rely on stock lending to earn millions of dollars for Americans across the country.
According to the Managed Funds Association, pensions, university endowments, and nonprofit foundations invest more than $1.4 trillion in hedge funds, a quarter of all U.S. pension assets. This investment vehicle provided strong returns for retirees -- for instance, actively managed hedge funds outperformed the S&P 500 index by nearly 10% during the 2020 market crash.
At a time when retirement insecurity is a growing problem, these reporting requirements would contribute to the issue further.
In California alone, hedge funds deliver for pensions, colleges, and nonprofits through $164.5 billion in investments. California State Teachers' Retirement System, which invests $15.1 billion in hedge funds, covers 1,209,590 teachers.
In New York, hedge funds deliver for pensions, colleges, and nonprofits through $121.5 billion in investments. New York State Common Retirement Fund and New York City Police Pension Fund invest $15.6 billion in hedge funds, covering 1,157,643 participants. In Texas, hedge funds deliver for pensions, colleges, and nonprofits through $115 billion in investments. The Teacher Retirement System of Texas invests $14.1 billion, covering 1,629,682 Texas teachers.
More public disclosure could also essentially force investors to reveal their trading strategies, compromising their ability to manage market risk exposure. It would also lead to others copying their strategies, reducing their return on the immense amount of research they do. This would reduce possible returns, which would harm the retirement security for millions of Americans.
New reporting requirements would play havoc with the free market. While there is little utility to expanding 13F reporting requirements, it would disrupt the natural functions of a free market.
For instance, these new reporting requirements could result in short-sellers facing public shaming and retaliation.
The fact is, there is nothing to fear from short selling, as it is a common function of the free market. An investor will short a stock when they believe it to be overvalued.
In-depth empirical research has found that short selling is not responsible for market crashes and economic downturns. Instead, it provides efficiency and information to markets, ultimately softening the blow of a downturn. The 2008 market crash could have been far more widespread if short-sellers hadn’t recognized the housing market was overvalued. Rather than solving market volatility, these reporting requirements could make the market more volatile and exacerbate the pain felt during future market crashes.
In extreme cases, short selling can help expose corruption. In the past, short-sellers have been instrumental in uncovering corporate fraud such as the Enron and Wirecard cases.
Rep. Waters' bill to impose new regulatory requirements is completely unnecessary. This legislation would provide little or no useful information to regulators and would instead harm Americans’ retirement securit and remove important market signals that expose corruption and soften the blow of economic downturns.
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