Top Ten Most Ridiculous Items Purchased with IRS Credit Cards
The Treasury Inspector General for Tax Administration (TIGTA) released a review of the IRS employee credit card program this week. Many of the items that were purchased and approved may astound you. Taken directly from the report, Americans for Tax Reform has compiled a list of the ten most ridiculous items purchased with IRS credit cards:
Item #1: “Nerf Footballs”
IRS employees used their credit card to purchase $119 worth of Nerf footballs that were intended to be used for a “team-building exercise.” As if that wasn’t bad enough, they never used the balls, which are “currently stored in a filing cabinet” somewhere in the bowels of the IRS.
Item #2: “Related Alcohol Purchases”
At one luncheon, IRS credit cards were used for “related alcohol purchases” including 28 bottles of wine—for 41 guests. As a bottle of wine contains about five servings, this equates to three and a half glasses of wine per person. YOLO!
Item #3: “Thomas the Tank Engine Rubber Wristbands”
For the child in all of us, the IRS purchased these for “managers’ meetings.” These were part of the “almost $4,000 in improper decorative and give-away items” that TIGTA found in their review.
Item #4: World’s Largest Crossword Puzzle
Along with some jigsaw puzzles, the IRS purchased the “world’s largest crossword puzzle.” These purchases cost $89 of taxpayer money. Hopefully the IRS actually used these in their “team building” activities -- unlike those poor Nerf footballs.
Item #5: “Plush Animals”
Even IRS agents need a little love sometimes, which may be why plush animals were purchased with IRS credit cards as give away prizes. Who wouldn’t want to go home and squeeze their little teddy after a long day of harassing free-market grassroots groups?
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Item #6: “Bathtub Toy Boats”
Another one of the “give-away items” at the IRS managers’ meetings were “bathtub toy boats”. The IRS spent $418 to purchase these, along with some other “improper decorative and give-away items.”
Item #7: “Stove Top Hats”
Not many people can pull off the hat like Abe Lincoln did, but that didn’t stop IRS agents from trying to outdo our 16th President. Stove top hats were purchased using an IRS credit card as yet another “give-away prize.”
Item #8: “Kazoos”
The IRS must enjoy the sound of Kazoos. They used your tax money for “novelty decorations and give-away items, such as kazoos” which were awarded as prizes during their managers’ meetings. Don’t you really wish you knew what went on in these meetings?
Item #9: “Dinner at an approximate cost of $140 per person.”
The report notes a “dinner at an approximate cost of $140 per person, four times the Federal Government per diem rate in Washington D.C.” At the time of this conference the per diem rate was $36 for dinner.
Item #10: A $100 Per Person Lunch
The IRS spent five times the Federal Government per diem rate of $18 when they bought lunch at $100 per guest. And they say there is no such thing as a free lunch.
Even with a release of this report on the spend-thrift, fiscal insanity of the IRS, they are still granting employee bonuses totaling $70 million.
To learn more about the impending bonuses, check out ATR’s “Top 10 Reasons Your IRS Agent Deserves a Bonus (with GIFs).”
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Poll: Voters Want Infrastructure to be Paid for with Spending Cuts, Not Tax Increases
Voters want infrastructure to be paid for with spending cuts, not tax increases, according to a poll conducted by Echelon Insights.
Specifically, 50 percent of voters said they wanted to pay for infrastructure through spending cuts, only 23 percent say they want to pay for it through tax increases, and 9 percent said they wanted to pay for it through adding to the national debt.
Among independents, 53 percent want the plan paid for through spending cuts, 24 percent through tax increases, and 4 percent through adding to the national debt.
This is bad news for the Biden administration, as his two-part infrastructure plan includes trillions of dollars in new tax hikes.
Specifically, his plan would impose a corporate tax hike to 25 or 28 percent, which would be primarily borne by workers through lower wages and fewer jobs. His plan would also implement a second death tax through the repeal of step-up in basis, which would disproportionately fall on family-owned businesses, many of which are asset rich, but cash poor. The plan includes a doubling of the capital gains rate, which would harm investment and growth. Finally, the administration is pushing to impose a global minimum tax at 21 percent, which would make the United States uncompetitive and lead to inversions and foreign acquisitions.
This isn't an isolated finding. Polling conducted by HarrisX found that voters believe we should not raise taxes coming out of a pandemic by an overwhelming 80 to 20 margin.
These findings should be instructive to lawmakers as President Biden pushes trillions of dollars in new taxes, even as voters would prefer the administration’s plan be paid for through spending cuts.
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Civil Asset Forfeiture Reform Passes Overwhelmingly in Arizona
The Arizona Senate has passed civil asset forfeiture reform by a huge 29-1 vote margin. The bill already sailed through the House with 57 yes votes to only 2 nays. It is an overwhelming and deserved victory for legislation that will finally protect innocent Arizonans from having their property taken by the police.
Sponsored by Rep. Travis Grantham, House Bill 2810 requires a criminal conviction for someone to permanently lose their property. If there is no crime, it remains a dangerous standard to allow the authorities to take the property of citizens.
Last year, similar legislation looked primed to pass, but Democrats in the House killed the effort, unanimously rejecting the bill.
Under current asset forfeiture laws, Arizonans can have their property seized by law enforcement without a crime having been committed. They can also lose their property if it was used in a criminal activity without their knowledge – authorities do not have to prove the property owner knew. Combine these issues with a difficult-to-navigate process for citizens trying to get their property back, and the deck is inappropriately stacked against Arizonans.
On top of the conviction requirement, reforms in HB 2810 will address these issues through transparency and more reasonable time frames for petitioning to get one’s property back.
Despite the claims of opponents, the bill will not impede prosecutors’ ability to build a case. Anything seized that is evidence in a case can be kept by the authorities, and people who flee or allowed their property to be used in a crime lose that property just like before.
The bill heads to Governor Doug Ducey for his signature. Should the Governor sign the bill, Arizona will join 15 other states who have conviction requirements. Three states, New Mexico, Nebraska, and North Carolina ended civil asset forfeiture entirely.
Photo Credit: Wikimedia Commons
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Biden Labor Task Force A Last-Ditch Lifeline To Humiliated Union Bosses
President Joe Biden has created a task force to find ways to leverage government power to increase union membership. Vice President Kamala Harris and Labor Secretary Marty Walsh will lead the task force composed of more than twenty Cabinet and agency heads.
Make no mistake about it – Biden’s labor task force is nothing but a last-ditch lifeline to humiliated union bosses, and American workers will pay the price.
Within 180 days, the task force must provide recommendations on two issues:
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How to use existing legislation or government power to increase union membership
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What future policies need to be imposed to increase union membership
Whatever recommendations the task force provides will be unlikely to stop the membership bleed organized labor has suffered over the past five decades. In 1954, 34.8 percent of American workers were in a union – in 2020, just 10.8 percent of workers were unionized.
Unions have continued to take a beating during the Biden presidency, despite Biden’s promise to be the “most pro-union president you’ve ever seen.” Organized labor’s most recent embarrassment was a crushing loss in Bessemer, Alabama, where 71 percent of Amazon warehouse workers voted against unionization. The final tally was a lopsided 1,798 votes against unionization to 738 votes for unionization.
One of the task force’s top recommendations will likely be passage of the “Protecting the Right to Organize” (PRO) Act, the left’s other lifeline to Big Labor.
The PRO Act is a grab-bag of liberal provisions designed to screw over American workers. Key provisions would:
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Violate worker privacy by forcing employers to give union organizer sensitive employee contact information, including home addresses, cell phone and landline numbers, and email addresses. This would allow union bosses to intimidate workers into joining unions at homes or workplaces.
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Nullify state Right-to-Work laws, which protect 166 million Americans in 27 states from being forced to pay union dues just to get a job.
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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.
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Nationalize California’s “ABC” test for independent contractors, which has forced the mass reclassification of California's independent contractors and limited freelance opportunities statewide. More than 57 million freelancers could risk losing work if the ABC test were adopted at the federal level.
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Codify the expanded joint employer standard, severely harming franchises and their employees.
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Codify shortened representation election time frames, giving the unions a large advantage in these elections by shortening the time for debate over unionization.
The fact is, American workers just aren’t buying what unions are selling, and haven’t for decades. The Biden labor task force’s mission is to figure out how to use government power to force as many Americans into unions as possible.
Photo Credit: Gage Skidmore
Biden Plan to Impose Second Death Tax Will Harm US Economy and Family-Owned Businesses
President Joe Biden is proposing to create a second Death Tax by repealing step-up in basis. This will impose the capital gains tax (which Biden has proposed raising to 43.4 percent) on the unrealized gains of every asset owned by a taxpayer when they die and will be imposed in addition to the existing 40 percent Death Tax.
Repeal of step-up in basis, which has been proposed as part of Biden’s “American Families Plan,” will create new complexity for many taxpayers including family-owned businesses. It will force businesses to downsize and liquidate assets, leading to fewer jobs, lower wages, and reduced GDP.
Repealing step-up in basis will disproportionately fall on family-owned businesses, many of which are asset rich, but cash poor. These businesses are already forced to liquidate structures, equipment, land, and other assets because of the Death Tax. Repealing step-up in basis will compound this problem and force family-owned businesses to sell a significant portion of their business or go into significant debt to pay their tax liability.
Repealing step-up in basis will create new complexity for taxpayers. Because of this tax increase, taxpayers would have to determine the cost basis of all assets owned, many of which may have been owned for decades. As noted by an Ernst and Young study, if the taxpayer is unable to provide sufficient evidence to prove the cost basis, then it may set to $0. In other words, the 43.4 percent tax would be applied to the entire value of taxpayer assets:
“Family-owned businesses may also find it difficult to comply because of problems in determining the decedent’s basis and in valuing the bequeathed assets. It seems likely that these administrative problems could lead to costly disputes between taxpayers and the IRS. Additionally, if sufficient evidence is not available to prove basis, then $0 may be used for tax purposes. This may result in an inappropriately large tax at death.”
In addition, repealing step-up in basis will harm the economy, costing jobs and wages. As noted by the Ernst and Young study, repeal of step-up basis will increase the cost of capital and discourage new investment. This negative economic impact will cost 80,000 jobs each year for the first ten years, increasing to 100,000 jobs each year thereafter.
One third of the tax will also fall on American workers in the form of lower wages. In other words, every $100 in federal revenues raised will result in $32 in lower wages by workers. Because of these negative economic effects, repeal of step-up in basis will reduce GDP by $10 billion per year.
Repealing step-up in basis has already been tried and failed. In 1976 congress eliminated stepped-up basis but it was so complicated and unworkable it was repealed in 1980 before it took effect.
As noted in a July 3, 1979 New York Times article, it was "impossibly unworkable":
“Almost immediately, however, the new law touched off a flood of complaints as unfair and impossibly unworkable. So many, in fact, that last year Congress retroactively delayed the law's effective date until 1980 while it struggled again with the issue.”
As noted by the NYT, intense voter blowback ensued:
“Not only were there protests from people who expected the tax to fall on them -- family businesses and farms, in particular -- bankers and estate lawyers also complained that the rule was a nightmare of paperwork.”
Biden’s plan to repeal step-up in basis will hit families and small businesses hard. It will harm the economy and job creation, and create new complexity in the tax code. It also has a history of failure as it was quickly repealed the last time it was tried.
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Obama IRS Chief Thinks Biden IRS Funding is Excessive
Even Obama 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, Koskinen thinks $25 billion, or roughly 30 percent of Biden’s proposal would be a more appropriate funding increase:
“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.”
Mr. Koskinen said he thought an extra $25 billion over a decade would help bring the I.R.S. budget back to where it was around 2010, allowing it to hire enforcement agents who have been lost to attrition and revamp the agency’s customer service capabilities.
IRS Fiscal Year 2021 funding is $11.9 billion, including $5.2 billion for enforcement (audits, criminal investigations etc.) and just $2.5 billion for taxpayer services (taxpayer advocacy, assistance, education etc.). Assuming all new IRS funding goes to enforcement, Biden would be increasing spending on audits and investigations by 150 percent.
This funding is clearly excessive and will grant the IRS new tools to target taxpayers, including middle class Americans and small businesses. The agency has a history of mismanagement, ineptitude and abuse. Rather than fixing these problems, Biden’s funding will provide the IRS with new funding to target taxpayers.
Photo Credit: Brookings Institution
Biden Must Reimburse Taxpayers for “Aggressive” Tax Avoidance
President Joe Biden repeatedly utilized a tax “loophole” that allowed him to avoid paying taxes on $13 million of income including the 3.8 percent Obamacare Medicare Surtax on net investment income. Even left-leaning tax experts describe Biden’s avoidance as “aggressive.” Biden is now proposing to end the same loophole that he utilized.
Given this development, President Biden should explain why he used this loophole and should set an example and agree to reimburse taxpayers. After all, this is a man who once said paying higher taxes is “patriotic.”
As noted in a recent letter by Republican Study Committee Chairman Jim Banks (R-Ind.), President Biden avoided paying $500,000 in payroll taxes including $121,000 in Obamacare taxes by sheltering $13 million of income in several S-corporations:
“Your 2017, 2018, and 2019 tax returns show that you and the First Lady sheltered over $13 million of income in two S-corporations: the CelticCapri Corporation and the Giacoppa Corporation. Press reports indicate that you both directed revenue from book royalties and speaking appearance fees into these two corporations.”
One of these taxes he avoided paying was the 3.8 percent Obamacare Medicare Surtax on net investment income. Biden’s recently released American Families Plan calls on ensuring all high-income Americans pay this tax. As the plan notes:
“High-income workers and investors generally pay a 3.8 percent Medicare tax on their earnings, but the application is inconsistent across taxpayers due to holes in the law. The President’s tax reform would apply the taxes consistently to those making over $400,000, ensuring that all high-income Americans pay the same Medicare taxes.”
It is clear hypocrisy that Biden used the same loophole that he now wants to close. Moreover, Biden supports expanding Obamacare and routinely says “the rich” need to pay their fair share.
Biden’s decision to shelter $13 million of income was done for the sole purpose of avoiding tax. As the letter by Rep. Banks notes:
“Tax experts have questioned the propriety of diverting funds raised from one’s own intellectual property through an S-corporation. One accountant interviewed by the Wall Street Journal said ‘there’s no reason for these [earnings] to be in an S-corp – none, other than to save on self employment tax.”
Joe Biden has repeatedly railed against the “rich” using tax loopholes. For instance, during his speech at the 2020 Democrat National Committee he said loopholes should be repealed and the wealthy need to pay their fair share:
"We can pay for these investments by ending loopholes, unnecessary loopholes... Because we don’t need a tax code that rewards wealth more than it rewards work. I’m not looking to punish anyone. Far from it. But it’s long past time the wealthiest people and the biggest corporations in this country paid their fair share.”
Joe Biden has also said that paying taxes is a "patriotic" act. By this standard, Biden’s tax avoidance is clearly unpatriotic. This hypocrisy is made worse by the fact that Medicare faces significant funding shortfalls as the letter explains:
“Just this year, the Congressional Budget Office estimated its Hospital Insurance Trust Fund will face insolvency in the middle of Fiscal Year 2026—roughly five years from now.”
The Biden tax dodge was first reported in the Wall Street Journal:
Democratic presidential candidate Joe Biden used a tax loophole that the Obama administration tried and failed to close, substantially lowering his tax bill.
Mr. Biden and his wife, Dr. Jill Biden, routed their book and speech income through S corporations, according to tax returns the couple released this week. They paid income taxes on those profits, but the strategy let the couple avoid the 3.8% self-employment tax they would have paid had they been compensated directly instead of through the S corporations.
As noted by WSJ, even left-leaning tax experts called out Biden for his "pretty aggressive" tax maneuvers:
To the extent that the Bidens’ profits came directly from the couple’s consulting and public speaking, “to treat those as other than compensation is pretty aggressive,” said Steve Rosenthal, a senior fellow at the Tax Policy Center, a research group run by a former Obama administration official.
Biden should explain why he avoided paying taxes and should be made to answer whether he intends to undo this hypocrisy and pay the funds back to the American people.
Photo Credit: U.S. Secretary of Defense
Hungary Attacks Biden's Global Minimum Tax Plans
The Biden administration is pushing for a global minimum tax to be set at 21% - a much higher rate than initially proposed by the OECD - to eliminate international tax competition as his administration is advocating for a massive increase of the domestic corporate income tax rate.
The Biden administration will tax American companies at a higher rate at home and also allow foreign nations to tax U.S. companies abroad.
Now traditionally low-tax countries like Hungary who favor tax competition, are attacking Biden's plan. The Hungarian state secretary for tax affairs Norbert Izer said:
"The concept violates states' financial sovereignty and attempts to reverse the progress of those countries that have made serious efforts to introduce lower taxes."
Hungary's nine percent corporate tax rate is the lowest in the European Union and highly competitive for businesses.
Izer also said that "Hungary will not consent to any solution that makes life more difficult for local businesses or reduces the financial sovereignty of the Hungarian state."
The fact that the European Union who is attacking American companies with Digital Services Taxes, fines, and regulations is backing Biden's proposal is a clear sign of how bad the consequences of the Biden plan will be for American businesses and the American worker.
Photo Credit: European People's Party
New Poll Shows Voters Support Using Tax Cuts to Promote Manufacturing and Innovation, Support Full Business Expensing
Voters overwhelmingly support using tax cuts to promote manufacturing products in the U.S. and using tax cuts to promote innovation in the U.S, according to a new poll released by HarrisX. The poll, which was commissioned by Americans for Tax Reform, also found that voters support full business expensing, a key reform included in the 2017 Tax Cuts and Jobs Act.
These findings should be instructive to lawmakers given that a number of important, pro-growth tax cuts will soon expire. For instance, full business expensing will begin phasing down in 2022 and fully expires in 2026. Senator Pat Toomey (R-Pa.) and Congressman Jodey Arrington (R-Texas) have introduced legislation making expensing permanent.
In addition, a $100 billion tax hike on research and development will go into effect at the end of the year if lawmakers fail to act. Senators Maggie Hassan (D-N.H.) and Todd Young (R-Ind.) and Representatives John Larson (D-Conn.) and Ron Estes (R-Kan.) have introduced legislation preventing this tax hike.
The poll was conducted by HarrisX between March 31 to April 6 among 4,577 registered voters. The margin of error of this poll is plus or minus 1.45% and the results reflect a nationally representative sample of U.S. adults weighted for age by gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population.
Key findings include:
Voters Support Using Tax Cuts to Promote Manufacturing Products in the United States
- 78 percent of voters support using tax cuts to promote manufacturing products in the United States. 28 percent of voters strongly support this policy and 49 percent somewhat support this policy. Just 17 percent somewhat oppose the policy and only 6 percent strongly oppose the policy.
- 84 percent of Republicans support using tax cuts to promote manufacturing in the U.S, while 73 percent of Democrats and 77 percent of Independents support this policy.
- 78 percent of suburban voters and 78 percent of urban voters support using tax cuts to promote manufacturing.
Voters Support Using Tax Cuts to Promote Innovation in the United States
- 77 percent of voters support using tax cuts to promote innovation in the United States. 28 percent of voters strongly support this policy and 49 percent somewhat support this policy. Just 17 percent somewhat oppose the policy and only 6 percent strongly oppose the policy.
- 81 percent of Republicans support using tax cuts to promote innovation, along with 75 percent of Democrats and 77 percent of Independents.
- 77 percent of suburban voters and 79 percent of urban voters support using tax cuts to promote innovation.
Voters support full business expensing, a provision which was included in the Republican Tax Cuts and Jobs Act
- 64 percent of voters indicated their support for allowing businesses to immediately deduct investments instead of spreading it over multiple years.
- Support for full business expensing included 69 percent of Republicans, 60 percent of Democrats, and 63 percent of Independents.
- 62 percent of suburban voters supported this provision, along with 69 percent of urban voters, and 61 percent of rural voters.
Biden's Bloated IRS Means More Democrat Campaign Cash
President Joe Biden has called for $80 billion in new taxpayer funding for the Internal Revenue Service.
Even Obama-era IRS chief John Koskinen, who often claimed that the IRS was underfunded when he was in charge, says the Biden IRS proposal is way out of line. “I’m not sure you’d be able to efficiently use that much money,” Koskinen said. “That’s a lot of money.”
This massive funding increase will be a boon for the union that represents IRS employees.
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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.
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NTEU collects dues from roughly 70,000 IRS employees, nearly half of NTEU’s total membership.
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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.
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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.
The $80 billion Biden IRS bailout is just another way to funnel taxpayer money to Democrat campaign coffers.
Photo Credit: Gage Skidmore
New Poll Shows Voters Reject Higher Taxes to "Address Climate Change"
New polling conducted by HarrisX and commissioned by Americans for Tax Reform reveals voters are unwilling to pay more in taxes to "address climate change."
Voters indicated by a 16-point margin that they’re unwilling to pay more in taxes if revenue would be used to address climate change, with 58 percent responding they were not willing to raise taxes compared to 42 percent who were.
Intensity of voter opposition was also apparent in the polling, signaling further trouble for Biden’s infrastructure plan. Intensity of preference was heavily skewed towards those unwilling to raise taxes, with 35 percent of respondents "very not willing" to raise taxes to address climate change compared to only 11 percent who were "very willing" to raise taxes. This gap only grew among key demographics with only 9 percent of independents and 7 percent of suburban voters "very willing" to raise taxes.
The findings reveal a blind spot for the Biden administration as it proposes raising trillions of dollars in new tax revenue to fund an infrastructure package heavily composed of “green” spending programs taken from the framework of the Green New Deal.
Conservative criticism of Biden's tax hikes are likely to carry weight as Republican lawmakers draw the public's attention to wasteful spending of Biden's Green New Deal programs and the proposed tax increases required to pay for them.
Poll respondents were asked the following:
Would you be willing or not willing to pay more in taxes to address climate change?
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Very willing
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Somewhat willing
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Somewhat not willing
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Very not willing
Only 42 percent of respondents indicated that they were willing, while 58 percent of respondents indicated that they were not willing. Specifically, 11 percent of respondents were very willing, 31 percent of respondents were somewhat willing, 23 percent of respondents were somewhat not willing, and 35 percent of respondents were very not willing.
The poll was conducted by HarrisX overnight online survey between March 31 to April 6 among 4,577 registered voters. The margin of error of this poll is plus or minus 1.45 percent and the results reflect a nationally representative sample of U.S. adults weighted for age by gender, region, race/ethnicity, and income where necessary to align them with their actual proportions in the population.
Below is a demographic breakdown of the results:
- Only 20 percent of Democrats, 19 percent of Joe Biden voters, and 23 percent of urban residents indicated that they would be “very willing” to pay more in taxes to address climate change.
- 79 percent of Republicans, 36 percent of Democrats, and 59 percent of independents are not willing to pay more in taxes to address climate change.
- 63 percent of suburban voters and 73 percent of rural voters are not willing to pay more in taxes to address climate change.
These findings should be instructive to lawmakers as President Biden and other Democrats consider tax increases with the intentions of paying for wasteful climate initiatives.
The polling results can be found here.
Photo Credit: WikiMedia Commons
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