February 09, 2016

President Releases FY 2017 Budget

President Obama released his FY 2017 budget today. According to CNS News' Terry Jeffrey, the president proposes spending a record $4,147,224,000,000; collects a record $3,643,742,000,000 in taxes; and results in a $503,482,000,000 Deficit. Yes, those numbers are trillions of dollars. He adds:

"The taxing and spending totals would be records in inflation-adjusted dollars as presented by the White House Office of Management and Budget in the historical tables it released today along with the budget."

He includes a copy of Table 1.3, which provides a history of receipts and spending dating back to 1940 with dollars stated in constant 2009 dollars.

In today's Washington Times, Dave Boyer writes, the president's budget "would keep deficits in check only by relying on speculative liberal assumptions of tax increases, immigration reform and economic growth." Boyer goes on to say:

"House Speaker Paul D. Ryan, Wisconsin Republican, called the president’s proposal “a progressive manual for growing the federal government at the expense of hardworking Americans.”

“President Obama will leave office having never proposed a budget that balances — ever,” Mr. Ryan said. “Americans deserve better. We need to tackle our fiscal problems before they tackle us.”

"But the White House said Mr. Obama is still relevant and still has leverage to get most of what he wants from the Republican-majority Congress, as he did last fall.

"Shaun Donovan, director of the White House Office of Management and Budget, said some conservative lawmakers want to “blow up” the agreement by cutting spending below levels outlined in the October deal.

"The question here isn’t a fight between the administration and Republicans,” Mr. Donovan said. “It’s a fight within the Republican Party.”

Finally, at the Washington Free Beacon today, Elizabeth Harrington writes:

"The president’s final budget, widely considered to be dead on arrival due to the Republican-controlled Congress, projects the nation would face a $27.4 trillion debt in 2026.

"The budget set the actual total debt for 2015 at $18.1 trillion, projecting an increase of $9.3 trillion. When President Obama took office the debt stood at $10.6 trillion.

"The White House budget for fiscal year 2017 includes old and new items of the president’s agenda, including the “Fair Share Tax” on the rich, known as the “Buffett Rule,” and a new tax on oil that would increase taxes by $319 billion over 10 years.

"The $4.1 trillion budget also includes raising the minimum wage, “free community college” for two years, and the hiring of 200 new Bureau of Alcohol, Tobacco, Firearms, and Explosives special agents to “reduce gun violence.”

Concerned about the federal budget, the deficit, and the national debt? Take a few minutes, and write to one of your Congressional representatives. Contact information is available at the Library of Congress' Thomas (use left-hand column). 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

Remember to ask for a written response, and tell them ACTA sent you.

February 08, 2016

A Thought on the Wealth of Cities and Counties

"Economic freedom in U.S. cities faces a constant threat from those who would raise taxes, spend more on pet projects, redistribute wealth or impose restrictions on how others use property. The metropolitan areas that resist these demands reap the gains of greater economic freedom."

~ Michael Cox and Richard Alm

Source: their op-ed, 2/8/16, Investor's Business Daily

Michael Cox is founding director of the Cox School of Business at Southern Methodist University and former chief economist at the Dallas Fed. Richard Alm is writer-in-residence at the school.

The complete 28-page study is available at Southern Methodist University's Cox School of Business.

February 06, 2016

Tomorrow's Super Bowl 50, aka Subsidy Bowl 50

Jared Meyer, a fellow at the Manhattan Institute for Policy Research, posted an article at the Institute's economics portal about the subsidies provided by local taxpayers to professional football teams. Meyer writes, "As anticipation for Super Bowl 50 builds, one winner has already been decided. When it comes to what team treats its local taxpayers better, the Carolina Panthers blew out the Denver Broncos."

According to Meyer:

"To determine the winner, we can compare the burdens of direct taxpayer subsidies for the teams’ stadiums. The Broncos received $400 million (adjusted to 2016 dollars) for Sports Authority Field, or 75 percent of the total cost. Taxpayers gifted the Panthers $165 million, or 30 percent of Bank of America Stadium’s total bill."

Here's a portion of what he has to say about each team playing in Super Bowl 50:

"Denver Broncos

"The Denver Broncos play at Sports Authority Field at Mile High Stadium. Taxpayers took on a $300 million share of the $400 million cost of the stadium when construction began in 2002. One of the ways this public financing was paid for was through a 0.1 percent sales tax that was applied to taxpayers in six Colorado counties until 2012.

"Even though taxpayers funded the majority of the stadium, they are forced to split the $6 million annual profits from naming rights 50-50 with the Broncos. Instead of the operating revenues going back to the taxpayers, Sports Authority Field’s proceeds go to the Broncos’ billionaire owners, the Bowlen family.

"Carolina Panthers

"The Panthers' home field since 1996, Bank of America Stadium in Charlotte, North Carolina, was billed as "privately financed," even though the city provided $40 million for land, and the county provided $10 million for building relocation.

"In April 2013 the Charlotte City Council voted unanimously to give the Panthers $87.5 million to upgrade their stadium and renovate luxury suites. In exchange for this handout, the Panthers promised to stay in Charlotte for six more years. One of the reasons for the package's unanimous approval was a fear that the team would pack up and move to the Los Angeles area.

"Maybe now that the St. Louis Rams and the San Diego Chargers are moving to Los Angeles, the commonly-used bargaining chip of threatening to move a NFL team there will finally be off the table. However, NFL owners are professionals at extracting public funds. Rumor has it that the Oakland Raiders are considering a move to Las Vegas, so it is likely that taxpayer extortion will continue.

"Publicly-funded stadiums are not unique to the Broncos and Panthers. All but two NFL stadiums received direct subsidies for their stadiums (the Jets’ and Giants’ Meadowlands and Patriots’ Gillette Stadium are the exceptions)."

He also provides details about the subsidies provided for the San Francisco 49ers' new home, Levi's Stadium, where Super Bowl 50 is being played. He also provides links to his other analyses: Bengals, Seahawks, Steelers, Vikings. Cardinals, and Patriots.

In summary, Meyer writes:

"Even if the Broncos are able to pull out an upset against the Panthers on Sunday, at least Carolina residents can still celebrate. When it comes to the Super Bowl of tax subsidies, Denver taxpayers have already lost. Unfortunately, most other taxpayers also lose to the NFL."

This article originally appeared in Forbes magazine.

For more about the Manhattan Institute's economics portal, click here.

Enjoy tomorrow's Super Bowl 50! May the team you are rooting for wins.

February 05, 2016

Raising Taxes on the Top 1%. How much would be Raised?

In a December 15, 2015 Taxpayer's Tab posted at the National Taxpayers Union Foundation (NTUF), Demian Brady and Timothy Howland answer the question of how much could be raised by raising taxes on the the top 1%.

The question is especially relevant since one of the 2016 presidential candidates -- Bernie Sanders (D) -- has as his leading issue, income and wealth inequality. According to the campaign website, the first step he would take to reduce income and wealth inequality would be:

"Demanding that the wealthy and large corporations pay their fair share in taxes. As president, Sen. Sanders will stop corporations from shifting their profits and jobs overseas to avoid paying U.S. income taxes. He will create a progressive estate tax on the top 0.3 percent of Americans who inherit more than $3.5 million. He will also enact a tax on Wall Street speculators who caused millions of Americans to lose their jobs, homes, and life savings."

But let's go back to the question of just how much revenue would be raised by increasing taxes on the top 1%. According to Brady and Howland:

"A new report from the Pew Research Center shows that the middle class is shrinking. This confirms what NTUF has observed in the tax statistics reported by the Internal Revenue Service showing that a taxpayer with income of $74,000 is included the top 25 percent of earners, while over a third of filers have no income tax obligation, up from one in four in 2000. We have a progressive tax system so that those who earn more, pay more as they move up the income ladder. And as we pointed out in our last edition of the Tab, the income tax burden has shifted significantly upward. The top 1 percent of earners have shouldered an increasingly disproportionate share of taxes, and an amount nearly twice as much as their percentile’s share of income.

"Yet we continue to hear that the wealthy are not paying their “fair share”.

"In the second debate among the Democratic presidential hopefuls, the candidates were asked how they would pay for their proposals [note: they were not asked how they would address the federal debt].  All three on the stage indicated that they would increase taxes. Senator Bernie Sanders fell short of specifying a rate, but did declare that he would not raise the top rate to 90 percent.

"With a hat tip to the Tax Foundation who used to feature these calculations, we thought it would be interesting to see how much additional revenues could be raised by increasing rates on the wealthy, and for how many days would the theoretical new revenues fund the government?"

Brady and Howland provide an answer in the following graphic:


(The above version of the 12/15/15 actually appears on this page).

The entire Taxpayer's Tab can be found here. Brady and Howland conclude by writing:

'There are also economic consequences. Senator Sanders was referring back to the top marginal tax rate last seen in the early 1960s. What he didn’t note was that under President Kennedy’s proposal to reduce it to 70 percent (enacted in 1964 after his death), the economy grew and employment rates improved.

"Equity is an important part of a tax system and as the data reflects, our system is quite progressive. And if the “fair share” crowd argue that tax hikes are necessary because of inequality, a study by the Brookings Institution study found that raising the top rates would not reduce income inequality. A fair tax code also encourages individual achievement and economic growth. The political rhetoric imploring higher taxes runs the risk of undermining these tax reform principles."

If you are concerned about federal taxes, take a few minutes, and write to one of your Congressional representatives. Contact information is available at the Library of Congress' Thomas (use left-hand column). 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

Remember to ask for a written response, and tell them ACTA sent you.

Kudos to the National Taxpayers Union -- "The Voice of America's Taxpayers/"

February 04, 2016

United States Drops from 6th to 11th in Economic Freedom

At CNS News.com on Monday, Anthony Kim wrote, "Millions of people around the world are emerging from poverty thanks to rising economic freedom. But by sharp contrast, America’s economic freedom has been on a declining path over the past decade."

Kim, who researches international economic issues at the Heritage Foundation, continues:

"America’s declining score in the index is closely related to rapidly rising government spending, subsidies, and bailouts.

"According to the 2016 Index of Economic Freedom, an annual publication by The Heritage Foundation, America’s economic freedom has tumbled. With losses of economic freedom in eight of the past nine years, the U.S. has tied its worst score ever, wiping out a decade of progress.

"The U.S. has fallen from the 6th freest economy in the world, when President Barack Obama took office, to 11th place in 2016. America’s declining score in the index is closely related to rapidly rising government spending, subsidies, and bailouts. (emphasis added)

"Since early 2009:

  • Government spending has exploded, amounting to $29,867 per household in 2015.
  • The national debt has risen to $125,000 for every tax-filing household in America—a total over $18 trillion.
  • The government takeover of health care is raising prices and disrupting markets.
  • Bailouts and new government regulations have increased uncertainty, stifling investment and job creation.

"This is not something to take lightly. Economic freedom is the foundation of U.S. economic strength, and economic strength is the foundation of America’s high living standards, military power, and status as a world leader. The perils of losing economic freedom are not fictional."

He embeds a 3-minute video that covers much of what he writes about in his CNS News opinion piece here, which also was published in the Heritage Foundation's Daily Signal.

The Heritage Foundation's complete 2016 Index of Economic Freedom is available here, and includes:

  • country rankings
  • tools to graph the data
  • an interactive 'heat map'
  • tools to further explore the data, and
  • links to download report chapters

If you are concerned about America's decline in economic freedom, take a few minutes, and write to one of your Congressional representatives. Contact information is available at the Library of Congress' Thomas (use left-hand column). 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

Remember to ask for a written response, and tell them ACTA sent you.

February 03, 2016

A Thought about Taxpayers and Government's Beneficiaries

"Government grows as its beneficiaries find ways to outmaneuver the interests of the taxpayers.”

~ Lawrence H. White

Source: page 336, The Clash of Economic Ideas.

HT Cafe Hayek, 1/29/16.

February 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