September 30, 2016

Massachusetts Governor is September's Porker of the Month

Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers.

Citizens Against Government Waste (CAGW) has named Massachusetts Governor Charlie Baker (R) its September Porker of the Month for signing into law a destructive and foolish tax on citizens who use ride-sharing apps in order to bailout the stalled taxi industry, according to this press release.

Here's how CAGW justified its selection of Gov. Baker as September's Porker of the Month:

"On August 5, 2016, Gov. Baker signed into law a “first of its kind” tax on ride-sharing services like Uber and Lyft.  The five-cent tax will be added onto each ride and is required by law to be hidden from invoices so as to minimize political backlash.  The money raised from the new tax will be used to help the taxi industry develop “new technologies and advanced service.”

"Gov. Baker’s attempt to prop up the politically powerful taxi cartel by taxing its competition is the worst kind of government cronyism.  The state should not be picking winners and losers, or worse, aiding one industry at the expense of another.

"The alarming nature of this scheme is best exemplified by Mark Sternman, the spokesman for the MassDevelopment agency, which will be in charge of the funds.  He admitted that plans for how to spend the influx of cash “still need to be drawn up.”  The fact that a tax is set to be levied with an amorphous and unwritten goal sets a dangerous precedent for Massachusetts taxpayers, as well as other jurisdictions that may be considering similar action.  As CAGW has detailed for decades, when taxpayer dollars are funneled through a system with minimal oversight and nebulous objectives, that money will always be squandered.

"For setting up a wasteful scheme that picks winners and losers by taxing innovative businesses in order to bailout a failed cartel, CAGW names Gov. Charlie Baker its September Porker of the Month."

Kudos to Citizens Against Government Waste (CAGW) for their continuing work on behalf of America's taxpayers.

September 29, 2016

Virginia Slides 4 Places in State Business Tax Climate Index

The Tax Foundation released the 2017 State Business Tax Climate Index yesterday -- the 13th annual edition. The index "gives taxpayers, the media, and policymakers a barometer to judge state tax systems against the rest of the country, while providing a roadmap to reform their tax codes to a simpler, more neutral, more transparent system." The report's authors are Jared Walczak, Scott Drenkard, and Joseph Henchman.

To provide context for the index, here's a portion of the introduction:

"Taxation is inevitable, but the specifics of a state’s tax structure matter greatly. The measure of total taxes paid is relevant, but other elements of a state tax system can also enhance or harm the competitiveness of a state’s business environment. The State Business Tax Climate Index distills many complex considerations to an easy-to-understand ranking.

"The modern market is characterized by mobile capital and labor, with all types of businesses, small and large, tending to locate where they have the greatest competitive advantage. The evidence shows that states with the best tax systems will be the most competitive at attracting new businesses and most effective at generating economic and employment growth. It is true that taxes are but one factor in business decision making. Other concerns also matter—such as access to raw materials or infrastructure or a skilled labor pool—but a simple, sensible tax system can positively impact business operations with regard to these resources. Furthermore, unlike changes to a state’s health care, transportation, or education systems, which can take decades to implement, changes to the tax code can quickly improve a state’s business climate.

"It is important to remember that even in our global economy, states’ stiffest competition often comes from other states. The Department of Labor reports that most mass job relocations are from one U.S. state to another rather than to a foreign location.[1] Certainly, job creation is rapid overseas, as previously underdeveloped nations enter the world economy without facing the third highest corporate tax rate in the world, as U.S. businesses do.[2] State lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Detroit, Michigan, to Dayton, Ohio, than from Detroit to New Delhi. This means that state lawmakers must be aware of how their states’ business climates match up against their immediate neighbors and to other regional competitor states.

"Anecdotes about the impact of state tax systems on business investment are plentiful. In Illinois early last decade, hundreds of millions of dollars of capital investments were delayed when then-Governor Rod Blagojevich proposed a hefty gross receipts tax.[3] Only when the legislature resoundingly defeated the bill did the investment resume. In 2005, California-based Intel decided to build a multibillion dollar chip-making facility in Arizona due to its favorable corporate income tax system.[4] In 2010, Northrup Grumman chose to move its headquarters to Virginia over Maryland, citing the better business tax climate.[5] In 2015, General Electric and Aetna threatened to decamp from Connecticut if the governor signed a budget that would increase corporate tax burdens, and General Electric actually did so.[6] Anecdotes such as these reinforce what we know from economic theory: taxes matter to businesses, and those places with the most competitive tax systems will reap the benefits of business-friendly tax climates. (emphasis added)

"Tax competition is an unpleasant reality for state revenue and budget officials, but it is an effective restraint on state and local taxes. When a state imposes higher taxes than a neighboring state, businesses will cross the border to some extent. Therefore, states with more competitive tax systems score well in the Index, because they are best suited to generate economic growth.

"State lawmakers are mindful of their states’ business tax climates, but they are sometimes tempted to lure business with lucrative tax incentives and subsidies instead of broad-based tax reform. This can be a dangerous proposition, as the example of Dell Computers and North Carolina illustrates . . . ."

From Table 1, we learn Virginia's overall rank as well as the component ranks, which were:

  • Overall Rank -- 33
  • Corporate Tax Rank -- 6
  • Individual Income Tax Rank -- 40
  • Sales Tax Rank -- 11
  • Unemployment Insurance Tax Rank -- 39
  • Property Tax Rank --  28

Then in the Executive Summary's Table 2, we learn that Virginia's State Business Tax Index ranking has been sliding since 2014 when it ranked #25 to its 2017 ranking of #33.

  • 2014 -- 25
  • 2015 -- 27
  • 2016 -- 29
  • 2017 -- 33

Virginia's slide of 4 places was exceeded on the 2017 index only by Delaware (-5), Louisiana (-5), and the District of Columbia (-7).

The 6 top ranked states were: Wyoming, South Dakota, Alaska, Florida, Nevada, and Montana. The 6 lowest ranked states were Ohio (45), Minnesota (46), Vermont (47), California (48), New York (49), and New Jersey (50).

The report's 8-page Executive Summary is here. The compete 83-page report is here.

The Tax Foundation included the following map to provide an easy comparison of the  2017 State Business Tax Climate Index:

On August 25, 2016, we growled that Virginia had improved its fiscal ranking on the Mercatus Institute's fiscal ranking of the states, moving from #21 to #19. However, as the Tax Foundation noted, a state's "stiffest competition often comes from other states." With North Carolina's overall ranking improving from #41 in 2014 to its 2017 ranking of #11, it may be time for Virginia to make a major move to improve its business tax climate ranking.

Growls readers are urged to tell their members of the Virginia General Assembly that the Governor and the General Assembly need to assure Virginia's taxpayers that Virginia's policymakers are doing everything possible to improve Virginia's business climate. The following legislators represent Arlington County in the Virginia General Assembly: Senators (Adam Ebbin, Barbara Favola, or Janet Howell) and Delegates (Rip Sullivan, Patrick Hope, Alfonso Lopez, or Mark Levine). Contact information for members of the General Assembly can be found here  -- use one of the "quick links" to locate the senator and delegate who represent you.

And tell them ACTA sent you.

Kudos to the nonpartisan Tax Foundation for its efforts to provide principled and insightful research and analysis.

September 28, 2016

Cost To Avoid Last 8 Yrs of National Debt? 44% Tax Increase

Although it may seem to some that we growl only about the national debt, that's not true. However, we do growl about it a lot, e.g., on February 1, 2016, we growled when the national debt hit the $19 trillion mark. Then, on March 16, 2016, we growled when the national debt debt hit a World War II high as a percentage of GDP.

Most recently, we growled on September 1, 2016 when the debt hit $19.5 trillion. Then, yesterday, we growled that the U.S. government is poorly equipped to handle the next recession.

We probably should wait a few more days before growling about the national debt, however, a column today by Terry Jeffrey, editor-in-chief of CNS News (HT Mark Levin Show) caught our attention when he wrote:

"President Barack Obama has presided over a federal government that has already taxed more than $20 trillion away from the American people. But to cover the federal spending he has presided over without increasing the federal debt, he would have needed to increase federal tax revenues by about 44 percent." (emphasis added)

He explains the numbers-crunching this way:

"Since he was inaugurated in January 2009, Obama has completed 91 full months in office, running from February 2009 through August 2016. As this writer has reported at, the Monthly Treasury Statements show that during those 91 months, the federal government collected approximately $20,197,437,000,000 in total revenues.

"But the Treasury's "Debt to the Penny" database shows that during those same 91 months, the total federal debt increased by $8,878,290,996,028.69. $20,197,437,000,000 in total taxes was not nearly enough to cover the spending the federal government did in the first 91 months of the Obama era.

"To avoid any increase in the federal debt over those 91 months, the federal government would have needed to haul in approximately $29,075,727,996,029 in total taxes. In other words, the government would have needed to impose a tax bill on the American people over those 91 months that was approximately 44 percent higher than the tax bill it did impose.

"What the government did instead was tax away $20,197,437,000,000 and then borrow $8,878,290,996,028 — placing an essentially permanent burden on future American taxpayers who must cover the cost of maintaining that $8,878,290,996,028 in new debt.

"Obama apologists will argue that the debt increased so dramatically during the Obama years because he took office while the Great Recession was still in progress (it started in December 2007 and ended in June 2009), that the massive "stimulus" law he signed in 2009 was needed to get the economy going, and that annual deficits have since declined.

"So are we now going to balance the budget and start paying down the debt — or at least stop it from growing even more? Not under current law, according to the Congressional Budget Office. In an August update to its budget and economic outlook, the CBO estimated that if "current laws generally remained unchanged," the federal government would tax away $41.658 trillion over the 10 fiscal years from 2017 through 2026 while spending $50.229 trillion.

"That would result in a cumulative 10-year deficit of $8.571 trillion. In the last three years of the coming decade, the CBO estimated, the annual deficits would be $1 trillion, $1.128 trillion and $1.243 trillion. In 2017, the CBO estimated, the federal government will tax away 17.9 percent of gross domestic product and spend 21 percent. By 2026, it will tax away 18.5 percent of GDP and spend 23.1 percent."

Jeffrey also writes, "To eliminate the $8.571 trillion deficit that the CBO estimates the federal government will incur over the next decade while spending $50.229 trillion, the federal government would need to increase taxes by almost 21 percent above the $41.658 trillion CBO now estimates it will collect," adding:

"This fiscal year ends Friday. The current law funding the federal government expires that day.

"And that means Obama and the Republican Congress will be making another deal — to spend your money and borrow from your children." (emphasis added)

If you have a few minutes, write your member of Congress. Tell them your position on the national debt. Contact information is available at the Library of Congress' Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

September 27, 2016

U.S. Poorly Equipped to Handle Next Recession

In a paper posted earlier this month, the Committee for a Responsible Federal Budget (CRFB) asks whether the federal government has sufficient 'fiscal space,' which is "the flexibility of a government in its spending choices, and, more generally, to the financial well-being of a government," according to Wikipedia.

More specifically, CRFB says, "the United States is more poorly equipped to handle the next recession than it was to handle the most recent one. This reality is even more troubling because the Federal Reserve has less monetary space due to already-low interest rates and a very large Federal Reserve balance sheet."

Here is what amounts to the paper's executive summary:

"The national debt increased dramatically during and after the Great Recession, rising from 35 percent of Gross Domestic Product (GDP) in 2007 to 66 percent by 2011. Though that recession was uncharacteristically large, debt has also risen in every other recession since 1970 by an average of 5 percent of GDP.

"In past recessions, the country has had reasonably low debt levels, allowing us to withstand automatic increases in debt as unemployment rose and incomes fell, while also having flexibility to adopt fiscal stimulus measures to boost the economy.

"Since 1970, there has been a recession every 5 1/2 years on average. Though it is impossible to predict the timing of the next recession, the fact that one has not occurred in the last 7 years suggests one is likely on the horizon. Unless there is a dramatic reduction in debt, we will enter the next recession with the highest debt level in nearly 70 years (and higher than any time prior to World War II).

"This has led to legitimate concerns about the available “fiscal space” in the United States, or the federal government’s financial capacity to respond to emergencies. While there is not a single definition of fiscal space and it is impossible to know the precise amount, the United States clearly has less fiscal space today than it did a decade ago and is projected to have less in the years to come.

"As a result, the United States is more poorly equipped to handle the next recession than it was to handle the most recent one. This reality is even more troubling because the Federal Reserve has less monetary space due to already-low interest rates and a very large Federal Reserve balance sheet.

Our simulations show that in ten years, a recession could lift debt levels to within 8 to 17 percentage points of GDP of the country’s all-time record high debt levels set after World War II, leaving less capacity for fiscal stimulus than was available during the Great Recession.

"In order to create the necessary fiscal space, policymakers should enact an agenda that slows the growth of federal debt while accelerating economic growth."

Note especially the spreadsheet (Figure 1) on the first page showing debt before and after recessions as a percentage of GDP. In the recession of 1973-1975, debt increased only 2%. After the recession of 1980, debt increased 3%. Debt increased 9% after the recessions of 1981-1982 and 1990-1991, and debt increased 2% after the recession of 2001. However, debt increased 31% after the so-called Great Recession of 2007-2009, increasing from a pre-recession level of 35% to a post-recession level of 66%.

CRFB concludes, saying:

"Having sufficient fiscal space is important to give the federal government flexibility to respond to emergencies and other needs. It is difficult to know how much fiscal space the United States currently has, but the recent run-up in debt has put the federal government in mostly uncharted territory. For that reason, it has become at least a little more likely that the federal government’s fiscal capacity will not be sufficient when substantial new borrowing is needed.

"Lawmakers should work to reduce the current projected high level of debt (as a percent of GDP), rather than letting it rise unsustainably, in part to help provide enough fiscal space to respond to new needs and emergencies. Even reducing the future debt relative to the economy may create more fiscal space today by re-assuring markets and policymakers about the long-term sustainability of the country’s fiscal situation.

"High and rising levels of debt can tie the hands of policymakers, making it more difficult for the government to respond to important national needs, particularly during an economic downturn. President John F. Kennedy once said, “the time to repair a roof is when the sun is shining.” The time to fix the debt and to ensure we have the fiscal space to respond to emergencies is now."

The 5-page paper includes several embedded links.

If you have a few minutes, take a look at the CFRB paper cited above. Then write your member of Congress. Tell them your position on the national debt. Contact information is available at the Library of Congress' Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

September 26, 2016

A Thought about Tax Legislation

"The wise and correct course to follow in taxation and all other economic legislation is not to destroy those who have already secured success but to create conditions under which every one will have a better chance to be more successful."

~ Calvin Coolidge

Source:  page 154, "As Certain as Death: Quotations about Taxes," 2010, compiled by Jeffrey Yablon,

For more information about the 30th U.S. President of the United States (1923-1929), visit the Miller Center at the University of Virginia.

September 25, 2016

Where, oh Where is the Science Underlying Climate Change?

At the Daily Caller News Foundation on Thursday, Michael Bastasch reports on a new study that shows "the 'fingerprint' of global warming doesn't exist in the real world."

He begins the article, writing:

"One of the main lines of evidence used by the Obama administration to justify its global warming regulations doesn’t exist in the real world, according to a new report by climate researchers.

"Researchers analyzed temperature observations from satellites, weather balloons, weather stations and buoys and found the so-called “tropical hotspot” relied upon by the EPA to declare carbon dioxide a pollutant “simply does not exist in the real world.”

"They found that once El Ninos are taken into account, “there is no ‘record setting’ warming to be concerned about.”

“These analysis results would appear to leave very, very little doubt but that EPA’s claim of a Tropical Hot Spot (THS), caused by rising atmospheric CO2 levels, simply does not exist in the real world,” reads the report by economist James Wallace, climatologist John Christy and meteorologist Joseph D’Aleo.

“Also critically important, even on an all-other-things-equal basis, this analysis failed to find that the steadily rising atmospheric CO2 concentrations have had a statistically significant impact on any of the 13 critically important temperature time series analyzed,” they wrote.

"When EPA released its CO2 endangerment finding in 2009, it used three lines of evidence to bolster its argument that greenhouse gases threatened human health through global warming.
The crux of EPA’s argument rested on the existence of a “tropical hotspot” where global warming would be most apparent. That is, there should be enhanced warming in the tropical troposphere — the “fingerprint” of global warming.

"EPA’s endangerment finding is the legal basis for agency global warming regulations, including the Clean Power Plan (CPP) now being fought over in federal court. CPP aims to cut power plant carbon dioxide emissions 32 percent by 2030 and could cost $41 billion a year, according to independent estimates.

"D’Aleo and his colleagues looked at the data and controlled for El Ninos and La Ninas. What they found was that once natural oceanic warming and cooling events are accounted for, there’s no warming trend."

Read the remainder of his article for additional details and links to his source material.

One of those links takes you to the August 2016 68-page report by James Wallace, economist, John Christy, climatologist, and Joseph D'Aleo, meteorologist. Here is the report's abstract:

"These analysis results would appear to leave very, very little doubt but that EPA’s claim of a Tropical Hot Spot (THS), caused by rising atmospheric CO2 levels, simply does not exist in the real world. Also critically important, even on an all-other-things- equal basis, this analysis failed to find that the steadily rising Atmospheric CO2 Concentrations have had a statistically significant impact on any of the 13 critically important temperature time series analyzed.

"Thus, the analysis results invalidate each of the Three Lines of Evidence in its CO2 Endangerment Finding. Once EPA’s THS assumption is invalidated, it is obvious why the climate models they claim can be relied upon, are also invalid. And, these results clearly demonstrate--13 times in fact--that once just the ENSO impacts on temperature data are accounted for, there is no “record setting” warming to be concerned about. In fact, there is no ENSO-Adjusted Warming at all. These natural ENSO impacts involve both changes in solar activity and the 1977 Pacific Shift.

"Moreover, on an all-other-things-equal basis, there is no statistically valid proof that past increases in Atmospheric CO2 Concentrations have caused the officially reported rising, even claimed record setting temperatures. To validate their claim will require mathematically credible, publically available, simultaneous equation parameter estimation work.

"The temperature data measurements that were analyzed were taken by many different entities using balloons, satellites, buoys and various land based techniques. Needless to say, if regardless of data source, the results are the same, the analysis findings should be considered highly credible."

The Manhattan Contrarian also reported on the Wallace, Christy and D'Aleo study last Monday, September 19, 2016 in a post entitled, "The "Science" Underlying Climate Alarmism Turns Up Missing." In addition, on Thursday, he posted an item about "Climate Alarmism Airheads."

Finally, in the Science and Environmental Policy Project's (SEPP) latest newsletter, The Week That Was, president Ken Haapala writes about the EPA's so-called endangerment finding and the hot spot, CO2, and importance to U.S. policy.  His write-up is especially help because it provides a history of EPA's endangerment finding.

It's not likely any of this research will change the minds of climate change's true believers. Interestingly, though, there is a website, Skeptical Science, that is set-up as "a non-profit science education organisation." Their goal is to refute the 193 global warming & climate change myths" held by global warming skeptics. At the moment, they currently rank the tropical hot spot as myth #59, and their position is they "see a clear 'short-term hot spot' - there's various evidence for a 'long-term hot spot.'" According to Skeptical Science, "The IPCC confirms that computer modeling predicts the existence of a tropical, mid-troposphere 'hot spot' about 10km above the Earth’s surface."

I bring your attention to the Skeptical Science website chiefly because its expertise is cited in an environmental e-newsletter sponsored by Representative Don Beyer (D-Virginia), who represents portions of Northern Virginia, including Arlington County, Alexandria, Falls Church, and portions of Fairfax County. The September 22, 2016 issue of "Just the Facts" tries to dispel "several of the most common myths related to climate change," and references the Skeptical Science website because it "provides science-based responses of customizable complexity to 193 different arguments often offered by climate 'skeptics.'"

Amazing! The federal government has spent billion of dollars of American taxpayers money for global warming research, and the staff of a member of Congress is using half-baked arguments from an Australian website endorsed by Naomi Oreskes and Michael 'Hockey Stick' Mann. Incredible!

If you have a few minutes, look over the sources cited above, and write your member of Congress. Tell them your position on anthropogenic global warming, and whether you think the government should be raising the cost of electricity and other forms of energy that you use in pursuit of solutions to global warming. Contact information is available at the Library of Congress' Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

September 24, 2016

A Thought about Freedom

“If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that, if it is comfort or money it values more, it will lose that too.”

~ William Somerset Maugham, 1941

Source; Walter E. Williams' collection of quotations.

September 23, 2016

A Thought about the Economy

"The Federal Reserve's holding pattern on interest rates should signal one thing to investors: start brushing up on astrophysics if you want to understand why the world's economy might be approaching a cosmic conclusion.

"Like a massive star exploding into a supernova, debt is rising at a blistering pace. There is currently more than $230 trillion in global debt—that's three times the amount of debt the world held during the credit crisis.

"Central bank intervention has fueled this explosion in debt, including historic levels of quantitative easing, zero interest rate policies and the adoption of negative rates. In the U.S. alone, there's more than $63 trillion in combined public and private debt. In stark contrast, there are only $3.8 trillion total dollars in circulation, and each of these dollars has been lent and borrowed more than 16 times. The amount of leverage continues to climb.

"At the end of every supernova comes a black hole. Black holes have such a strong gravitational effect that nothing can escape their pull. And fundamental laws of physics are distorted at the center of a black hole, also known as the gravitational singularity. We're seeing a similar phenomenon in the investment world: the crushing weight of all this global debt is distorting some fundamental economic principles.

< . . . . >

"What happens at the center of this economic black hole is anybody's guess, but there are some signs to look out for. For example, the Federal Reserve has historically lowered interest rates between 400 and 500 bps during a recession. If they do this in response to the next economic slowdown, that would plunge us deep into negative territory and further contort the natural rules that govern the market. One way to protect a portfolio when you don't know what rule will be distorted next is to maximize the diversification in your portfolio. Because when even your normal safe haven isn't safe, all you can do is diversify your risk."

~ Stephen Scott, managing director at Longboard Asset Management

Source: his 9/23/16 commentary, "The Economy is Edging Closer to a 'Black Hole," posted at

September 2016
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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister