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An End to IRS Taxpayer Abuse? 9 Most Insane Ex-Im Bank Loans! - Speaking of Taxpayers, June 13
Posted By: Douglas Kellogg - 06/13/14

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The IRS has instituted a "Taxpayer Bill of Rights", so, should we pop the corks? We review our latest Buzzfeed piece which highlights some wild taxpayer-backed loans abroad. Plus, Lee Schalk has a state roundup, including tax threats and minimum wage fails. Plus, the Outrage of the Week!

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House Republicans Scramble for Leadership Posts
Posted By: Brandon Arnold - 06/12/14

House Majority Leader Eric Cantor’s (R-VA) primary loss on Tuesday has turned the Washington political landscape upside-down. Soon after his surprising defeat, Cantor announced that he will step down from his role as the 2nd highest ranking member of the House in late July. The election to fill his leadership post will take place on June 19 and the race is already in full swing.

As of now, it appears from media reports that the top contenders for Majority Leader are current Majority Whip Kevin McCarthy (R-CA) and Rules Committee Chairman Pete Sessions (R-TX). Rumors suggest that Rep. Raul Labrador (R-ID) or Rep. Jim Jordan (R-OH) could also enter the race – especially if Sessions decides to back out.

While there are many factors that will help determine the outcome of this contest, one key element is the candidates’ fiscal policy credentials.  To that end, NTU’s annual Rating of Congress sheds a great deal of light on how consistently lawmakers have supported lower taxes and limited government. That’s because NTU’s scorecard incorporates every single vote that affects taxes, spending, and debt.

NTU generally does not make endorsements in Congressional leadership contests. However, given the reputation of our rating, we have received inquiries on how the potential candidates performed.

Here are the results:

Candidate 2012 Score 2012 Grade 2012 Rank Lifetime Average Score*
McCarthy 72% B- 144 79%
Sessions 81% B+ 69 74%
Labrador 90% A 5 90%
Jordan 87% A 19 88%

*Lifetime average score is the arithmetic mean of each year’s score. Please note that grading criteria changes from year to year.

If McCarthy wins, he will vacate the position of Majority Whip, which is the 3rd ranking leadership spot in the House. Currently vying for that role are Republican Study Committee Chairman Steve Scalise (R-LA), Rep. Pete Roskam (R-IL), who is currently the chief deputy whip, and Rep. Marlin Stutzman (R-IN).  

As with the Majority Leader race, more candidates could enter the picture at any time, but here’s how the current candidates stack up on NTU’s scorecard:

Candidate 2012 Score 2012 Grade 2012 Rank Lifetime Average Score*
Scalise 82% B+ 57 84%
Roskam 69% C+ 170 78%
Stutzman 86% A 24 87%

*Lifetime average score is the arithmetic mean of each year’s score. Please note that grading criteria changes from year to year.

For more information on NTU’s rankings, please click here. Our 2013 rankings will be released early this summer.

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Minimum Wage Hike Spells Trouble for Seattle Workers and Businesses
Posted By: Melodie Bowler - 06/12/14

Last week, members of the Seattle City Council voted unanimously to raise the minimum wage in The Emerald City to $15 per hour, from the already-highest-in-the-nation state rate of $9.32 per hour. The new rate will be phased in over a seven year period starting on April 1, 2015, based on the size of each business (smaller businesses will be on a longer phase-in time table). Additionally, businesses will be permitted to pay lower training wages to teenagers.

Unfortunately, the Seattle City Council ignored the fact that minimum wage hikes typically fail to raise overall wage levels and can reduce overall employment by making unskilled and young workers more expensive to hire. Furthermore, businesses are likely to pass on the cost of a minimum wage increase to their customers.

We can already see repercussions from a similar minimum wage increase in neighboring SeaTac, where the minimum wage soared to $15 on January 1, 2014, after squeaking by on the November ballot. One parking lot in SeaTac added a “living wage surcharge” of 99 cents per day to the price of parking to cover the increased cost of labor. The nearby Clarion Hotel closed its full-service restaurant abruptly, causing the loss of fifteen jobs. A hotel cleaning lady explained that her benefits were slashed, including 401K, health insurance, paid vacation, free food, and free parking.

Restaurateurs in Seattle have already begun to speak up. Jeremy Hardy, owner of Coastal Kitchen and Mioposto, suggested that the minimum wage increase is bad news for the Seattle economy, stating, “We are going to adjust using all of the tools at our disposal; pricing, reducing menu offerings, look at operating hours, reducing labor where we can and certainly not opening another business in our beloved Seattle.” Not only will entrepreneurs pause or perhaps not even consider opening new businesses in Seattle, but one restaurant owner believes customers will start spending less as well. Salaried workers unaffected by the wage increase will see local prices rise without increases in their own compensation. Angela Stowell, CFO and owner of Ethan Stowell restaurants, worries “that our guests will start spending less and going out less as they adjust to higher prices and their own wage compression.” To make matters worse, Brendan McGill, owner of Hitchcock and Hitchcock Deli, points out, “The public sentiment is shifting to ‘why tip? They already make $15 an hour.’ …I wouldn't expect service to improve around town.”

The intended purpose of the minimum wage increase is to improve the lives of low-wage, unskilled workers. Yet for some workers in SeaTac, we have already seen that the opposite is true. As Seattle’s wage hike begins next year, concerned taxpayers throughout the country will be watching closely. Hopefully, city and state officials considering a similar wage increase will take note and avoid making the same mistake.

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Japan to Leave US in the Dust on Corporate Income Tax; Energy Taxes Again?- The Late Edition, June 12 2014
Posted By: Jihun Han - 06/12/14

Today's Taxpayer News!

In the Washington Times today, NTU’s Executive Vice President Pete Sepp argued that a “tax extenders” deal in Congress should not come with a tax increase on the energy industry. Read here!

Japan has made progress on cutting its corporate income tax rate, though it can still be as high as 36 percent in some circumstances. Not for long though, as they are set to clarify plans that would see the rate cut to under 30 percent, and perhaps to 25 percent, in the coming years. Reuters has the story! 

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Relief for Veterans Waiting on VA? THUD! & More - On Capitol Hill, June 11
Posted By: Douglas Kellogg - 06/11/14

On Capitol Hill is back, because Congress is back, and not a week goes by where your tax dollars aren't on the line.

This week: An attempt to help vets waiting on the VA, a tax & spend student loan proposal from Sen. Elizabeth Warren, THUD, & more!

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Eric Cantor's Spending Agendas, IRS Adopts New TABOR - The Late Edition, June 11, 2014
Posted By: Jihun Han - 06/11/14

Today's Taxpayer News!

National Taxpayers Union offered some analysis of the IRS' recent adoption of a 10-point taxpayer bill of rights. Read here.

The biggest news of the day is Rep. Eric Cantor's primary election loss in Virginia. The 7-term House Member's agendas averaged just over $11 billion in savings per term, ranging from a high of $56.6 billion in spending during the 109th Congress to a low of $87 billion in savings in the 111th. Click for more.

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Olympic-Size Spending
Posted By: Samantha Jordan - 06/11/14

Residents of Washington D.C. could be seeing Olympic sized increases to their taxes. Amongst six cities including Boston, Dallas, Los Angeles, San Diego and San Francisco, Washington D.C. is under consideration to host the 2024 Olympic games. 

Wednesday morning’s Washington Post stated under the United States Olympic Committee’s (USOC) requirements, the chosen city would have to provide 45,000 hotel rooms, housing in the Olympic village to fit 16,500 athletes, work space for 15,000 journalists, an “extensive public-transport system,” a work force of 200,000 and should expect an operations budget of $3 billion.  However, Bob Sweeny, who is leading the DC 2024 Olympic Initiative, estimates the total costs at $4-6 Billion.

The Olympic Committee has become notorious for underestimating Olympic budgets. A study conducted by the University of Oxford examines cost overruns in the Olympic Games by studying both the summer and winter Olympics between 1960 and 2012. The project discovered that The Games overran their budget in every case without exception, averaging an overrun in nominal terms of 324 percent.

If you’ve done the math, by following the trend presented in the study the 2024 Olympic games could cost Washington D.C. between $12.96 and $19.44 Billion. But even this estimate seems suspiciously low when looking at the recent Sochi Olympics, which cost around $51 Billion.

Advocates of the DC 2024 Olympic Initiative explain their plan will eliminate cost by integrating existing facilities and locating the Olympic Stadium and village in a region that needs redevelopment as is. But with the rising cost of extravagant stadiums, this plan doesn’t seem reassuring.

National Taxpayers Union’s own study, “Stadiums and Subsidies: Home Run for Wealthy Team Owners, Strike-out for Taxpayers,” explains megaprojects funded by the public, such as Olympic Stadium, are an inefficient investment of taxpayer dollars.  The study illustrates trends in taxpayer subsidies and rising construction costs, concluding taxpayer tabs and stadium construction costs have direct relationships. As the taxpayer tab increases, so does the total stadium construction cost.

Olympic games showcase cities, bring in tourists and supposedly promote general infrastructure development. But D.C. is already host to frequent political events attracting the public eye and tourists alike. Unless taxpayers voice their concerns to the USOC, D.C. could soon be home to the 2024 Olympics and the financial bane that comes with them.

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Welcome to NTU and Foundation’s Largest Intern Class Ever!
Posted By: Dan Barrett - 06/10/14

On Thursday, Team Taxpayer welcomed 12 interns to NTU and Foundation headquarters. With the addition of one more today, this is the largest group of students and young professionals that we have ever had in our program. Over the next few months they will learn how to fight for taxpayers across the country, the different ways we connect with taxpayer groups (at the local, state, and national levels), and how the two grassroots nonprofit organizations operate. Check out a short bio on each of them below. Interested in interning at NTU and Foundation in the future? Check out our programs.

2014 Summer Interns for NTU & NTUF

Government Affairs Interns:

  • Melodie Bowler recently graduated from the University of North Carolina at Chapel Hill with degrees in political science and philosophy. Previously, Melodie researched state tax issues for another organization.
  • Michael Liguori is also a student at the University of North Carolina at Chapel Hill. Aside from working on political campaigns, Michael is working towards an international studies degree.

Foundation Communications Interns:

  • Jihun Han is a student at Syracuse University in New York. He aims to graduate with a degree in broadcast and digital journalism. Jihun has also worked on campaigns in his home state of Oregon.
  • Samantha Jordan goes to George Mason University in Virginia, majoring in economics and Eurasian/Russian studies. Samantha is also on the university’s forensics team.

Foundation Research Interns:

  • Steve Adams is a student at Hampden-Sydney College in Virginia and is seeking a degree in government. He previously interned in the U.S. House of Representatives.
  • Paul Bartow hails from Wheaton College in Illinois. He is pursuing a degree in history while also serving as a research intern at the university’s archives.
  • Alex Eblen goes to Rhodes College in Tennessee. His areas of study include political science and international studies. Alex also has experience as a research intern at a property development company.
  • Catherine Fitzhugh studies political science at Grove City College in Pennsylvania. She is also a research fellow for the school’s Center for Vision & Values.
  • Kelly Hastings just graduated from Berry College in Georgia with a degree in economics. She has also served as an economic forecasting intern at the Tennessee Valley Authority.
  • Ian Johnson is an economics student at Brigham Young University in Utah. He is originally from Florida.
  • Gordon Miller studies at Troy University in Alabama. He is working towards a music education degree but has a demonstrated interest in economics as well.
  • John Ridley is a student at Vanderbilt University and studies political science, computer science, and management. He started his own web design company and will also be helping out with NTUF’s technology needs.
  • Daniel Simmons graduated from the University of Houston with his MBA. Previously, he was a personal banker and started his own pressure washing company.

As you can see, we’ve got a lot of talent and a lot of hands on deck to help shine a light on taxpayer issues this summer. NTU and Foundation staff will keep you updated on our internship programs and of the accomplishments of each intern as we work through the summer.

How can you help? Support our interns with a contribution to NTU or NTUF! Our interns need office supplies, transit stipends, and the occasional cup of coffee to help us track government spending. With your donation, they will have the tools they need to fight for you and your tax dollars.

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Health Care Fraud: A $272 Billion Malady
Posted By: Michael Tasselmyer - 06/09/14

Medicaid and Medicare disburse over $1 trillion in benefits per year, representing a massive portion of the $2.7 trillion that goes into healthcare-related spending in the U.S. each year. On top of that, the bureaucratic system that determines who receives those benefits (and how much) has grown increasingly complex over the years: next year, Medicare alone will have nearly 140,000 different codes doctors must choose from to describe their patients' injuries if they want to make a claim through that program. The massive amount of money in the system, combined with the complicated and often difficult-to-enforce regulatory checks in place, makes it a target for those looking to rip off taxpayers for their own monetary gain.

The estimated cost of healthcare fraud for taxpayers? $272 billion.

A recent article in The Economist makes note of some of the ways fraudsters can take advantage of the system, including overbilling for treatments and partnering with doctors and pharmacies to obtain, and then resell, prescription drugs for profit. Federal investigators report that incidences of healthcare fraud have increased by four times over the past five years. The problem takes significant resources to fight, but with fraud so rampant and lucrative, doing so can yield significant savings for taxpayers: the Department of Health and Human Services reported earlier this year that over the past three years, enforcement teams have recovered $8 for every $1 they spend to investigate fraud. Last year, the government recovered $4 billion, which is just a fraction of the total amount lost to fraud but represented a record-high success rate.

Still, the high cost of health care fraud illustrates the dangers that overly-complicated entitlement programs can pose to taxpayers -- they are easy targets for thieves looking to take advantage of a system that offers millions of transactions to hide behind every day.

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Late Edition, June 9: What Obamacare Tax is it this Time? One Whistleblower’s Tribulations
Posted By: Douglas Kellogg - 06/09/14

Today's Taxpayer News!

How are business owners prepping for Obamacare’s new 3.8% investment tax? The Wall Street Journal examines why ducking it won’t be easy.

Tax reform is stirring in New Mexico. Legislators are examining the gross receipts tax many feel is broken. But will the end result increase the tax burden?

Exposing wasteful spending is a big risk for federal employees. Read here to find out what happened to this particular whistleblower!


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