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January 31, 2012

Another Wacky Progressive Idea

Thanks to the Council for Citizens Against Government Waste (CCAGW) for condemning the wacky idea proposed by Rep. Dennis Kucinich (D-Ohio). He was joined by several other far left members of the House of Representatives -- Reps. John Conyers Jr. (D-Mich.), Bob Filner (D-Calif.), Marcia Fudge (D-Ohio), Jim Langevin (D-R.I.), and Lynn Woolsey (D-Calif.).

H.R. 3784, the Gas Price Spike Act of 2012, would “amend the Internal Revenue Code of 1986 to impose a windfall profit tax on oil and natural gas,” which is the profit on sales that “exceeds a reasonable profit” as determined by a three-member independent Reasonable Profits Board. Here’s how CCAGW justified their decision:

“If passed, the bill would create taxes of 50 percent on profits 100 to 102 percent above a “reasonable” amount, taxes of 75 percent for profits between 102 and 105 percent of a reasonable profit, and a 100 percent tax on anything above 105 percent.  According to Kucinich, the new revenue would be used on “forward-thinking transportation alternatives.”

“This bill represents populist demagoguery in its lowest form,” said CCAGW President Tom Schatz.  “Gas prices, like all others, are determined by supply and demand.  The idea that they can be lowered by imposing exorbitant, arbitrary taxes on the companies that provide consumers with gasoline and natural gas reveals an unflattering degree of economic ignorance among these members.  The predictable result, which has already been observed in states that have experimented with price ceilings on gasoline, will be shortages and a dramatically more inconvenient gas-buying experience.

“It is not the business of government to determine which industries may or may not benefit from increased demand for their products,” added Schatz.  “Nor is it possible to define ‘reasonable’ profits in any objective manner.  The notion that such a threshold should be decided by the political class is frightening, to say the least, and a plan to lower the price of valuable products by reducing firms’ incentives to produce those products is about as likely to be effective as pixie dust or séances.  Consumers decide which firms to patronize, and consumers determine businesses’ fates.  Political meddling with that system leads to disasters like Solyndra.”

Kudos to the Council for Citizens Against Government Waste (CCAGW). By the way, CCAGW is the lobbying arm of Citizens Against Government Waste.

Express your outrage. Call Rep. Kucinich’s office on Capitol Hill at (202) 225-5871. Other contact information for Rep. Kucinich is available at his website here.

January 30, 2012

Today's Quote

"Despite (its) record, communism's utopian underpinnings and characteristics attract sympathetic attention, including in America and especially among the intelligentsia and malcontented, as it is romanticized as "social justice" and a "liberation" movement . . . ."

~ Mark R. Levin, page 82, "Ameritopia: The Unmaking of America"

January 29, 2012

Vituperations for Rep. Jan Schakowsky

We growled on January 13, 2012 about the results of a Gallup poll. According to Gallup, “Americans name jobs, the national debt, continuing economic decline, outsourcing, and politicians' bickering -- including President Obama and Congress -- when asked to say what worries them most about the national economy at this time.”

Now comes Rep. Jan Schakowsky (D-Illinois), a tin ear politician. According to Josiah Ryan, writing at Floor Action Blog of the Capitol Hill newspaper, The Hill, on Wednesday, January 25, 2012 (but significantly updated on Thursday, January 26, 2012):

“Twenty thousand jobs is really not that many jobs, and investing in green technologies will produce that and more,” she said on Chicago’s WLS Radio Don Wade and Roma Show on Wednesday morning. “But I’ll tell you what, you know it seems to me that the Republicans would rather have an issue than a pipeline.”

“Schakowsky contacted The Hill on Thursday to clarify that she supports job creation but thinks it ought to be done on a larger scale.

"We need to be talking about millions of jobs and that’s what the American Job Act does," she said, speaking of the latest iteration of President Obama's job plan, presented at the State of the Union on Tuesday. "[W]e have to be thinking big."

By the way, Rep. Schakowsky is not some backbench member of the U.S. House of Representatives. Rather, as Joel Pollak points out at Big Government, she “is Chief Deputy Whip of the House Democrats–a core leader of her party in Congress, not just a marginal representative.”

There hasn’t been a great deal of mainstream media news about the comments that Ms. Schakowsky’s made on the Don Wade and Roma WLS radio show, but for Rep. Schakowsky to contact The Hill the following day suggests that her Capitol Hill office received a large number of critical phone calls. Ethel Fenig has more at American Thinker on Thursday.

You can listen to Wade and Roma interviewing Rep. Schakowsky here at WLS 890 radio, here at Moonbattery, or here at Real Clear Politics.

If you wish to comment directly to Rep. Schakowsky’s office, her Capitol Hill phone number is (202) 225-2111. Her district’s constituents can e-mail her using her webform.

January 28, 2012

IRS Employees Use Tax Preparation Assistance, Too

In an audit report published earlier this month (requires Adobe), the Treasury Inspector General for Tax Administration (TIGTA) reports. “Overall, IRS employees are less likely to use a paid preparer to prepare their tax returns when compared to the general taxpaying population.” Specifically, for tax year 2009, 27% of IRS employees used a paid preparer while 60% of the general taxpaying population did so. They conducted a similar analysis for tax year 2010, and found “similar results.”

TIGTA also analyzed the extent to which tax returns were “self-prepared manually” or used “tax preparation software.”

Here’s why TIGTA performed the analysis, according to the detailed objective, scope and methodology of the report:

“We conducted this analysis in response to House Conference Report 112-331, which accompanied H.R. 2055, the Consolidated Appropriations Act, 2012, to determine the extent that IRS employees hire tax return preparers or use electronic tax preparation software and how their use of these services compared to that of the taxpaying public.”

Need further evidence why the nation should adopt a flat tax or the FairTax?

January 27, 2012

Today's Quote

"Had I been asked to deliver the State of the Union address, it would not have delayed your dinner plans: 'The State of our Union is broke, heading for bankrupt, and total collapse shortly thereafter. Thank you and good night! You've been a terrific crowd!'"

~ Mark Steyn

Source:His column for Investor's Business Daily

January 26, 2012


An online story in today’s Sun Gazette says that Arlington County’s efforts to resurrect a 0.25 percent surtax on hotel bills “looks dead.” Here’s Scott McCaffrey’s report:

“County economic-development officials appear to have abandoned their effort to win back taxing authority to fund tourism promotion in Arlington.

“No bills have been introduced this legislative session to return to Arlington officials the ability to levy a 0.25-percent surtax on hotel stays, with the funds (about $1 million a year) supporting efforts at targeting both business and leisure travelers.

“Arlington had levied the tax for decades, but the General Assembly last year stripped the taxing authority away, after Republicans and some Democrats were infuriated by the County Board’s lawsuit against state and federal officials over high-occupancy-toll (HOT lanes) on I-395 and I-95.

“County Board members seemed disinterested in pursuing the matter in this year’s General Assembly session, and efforts by county staff to convince the hotel community to financially support a lobbying effort in support of the tax hit a dead end."

Looks like the poohbahs on the County Board will have to decide this year just how much they really need those tourism bureaucrats. Or will the Arlington County Board finally admit they were just throwing away all those millions of dollars for all those years?

January 25, 2012

Still Mum in Arlington County

We’ve growled four separate times now (November 20, November 22, December 4, and January 5, 2012) about Arlington County’s efforts, including the possible use of eminent domain, “to acquire a seven-story commercial building, 2020 14th Street North, the county hopes to use for staff offices and “a year-round homeless-services center,” according to an online report in today’s Arlington Sun Times Gazette. (Apologies to the good people at the Arlington Sun Gazette. El Growler Grande)

Here is how the newspaper reported the latest news:

“County Board Chairman Mary Hynes on Jan. 21 said the county government had made a final offer to the owner of the building, and expected to hear back in the “next few days.” When queried a few days later, both sides declined to shed light on the status of negotiations.

“Brookfield has no comment at this time,” said Andrew Willis, senior vice president of communications and media for Canada-based Brookfield Asset Management, which owns the building at 2020 14th Street North that county officials covet.

“County officials have made a number of offers to the building’s owner, but have so far been rebuffed. Officials have taken the highly unusual step of publicly threatening to use their power of eminent domain to acquire the building, whose value was pegged by an appraiser at $25 million.

“Mary Curtius, a spokesman for the county government, also declined to comment on the status of negotiations.”

The newspaper’s Scott McCaffrey closed by saying:

“County officials may be playing a game of beat the clock, as the General Assembly is likely to send to voters a constitutional amendment that, if approved, would make it more complicated and potentially much more expensive for local governments to use their powers of eminent domain to acquire property. If approved by the legislature, that measure would go to state voters in November.”

What a way to run a local government!

January 24, 2012

CAGW Names February 2012 Porker of the Month

Citizens Against Government Waste (CAGW) is a a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. 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.

In their press release announcing the February 2012 Porker of the Month, CAGW’s says that “in commemoration/lamentation of the 1,000th day since the United States Senate Budget Committee last performed its most significant task, which is to pass a budget resolution, Citizens Against Government Waste (CAGW) named Senate Budget Committee Chairman Kent Conrad (D-N.D.) its January Porker of the Month.” The last time the Senate approved a budget was April 29, 2009. The House has voted in favor of two budget resolutions during the past two years.” CAGW then goes on to explain why they named Senator Conrad its February 2012 Porker of the Month: (emphasis added)

“Today marks an important milestone in fiscal ineptitude and mindless brinksmanship,” said CAGW President Tom Schatz.  “When the Senate last passed a budget, the national debt was an already appalling $11.15 trillion. In 2011, House Republicans drafted and passed a budget plan that would dramatically reduce America’s deficit and debt. The only Senate actions on budget resolutions last year were to vote 97-0 against President Obama’s fiscal year (FY) 2012 budget and 40-57 against House Budget Committee Chairman Paul Ryan’s (D-Wis.) Roadmap for America’s Future.

“Since April 2009, the budget deficit has exceeded $1 trillion for three straight years, and the national debt has climbed by more than $4 trillion to $15.27 trillion,” added Schatz. “Chairman Conrad’s bewildering reputation as a budget hawk makes his legislative catatonia all the more frustrating.”

“The lack of activity by Chairman Conrad has not gone unnoticed. In June 2011, Rep. Ann Marie Buerkle (R-N.Y.) introduced the “Just Do Your Job” Act, which would prohibit further transfer of funds to the House or Senate Budget Committees and the corresponding Office of the Majority Leader if that body of Congress failed to approve a budget resolution for FY 2012. As Rep. Buerkle pointed out at the time, “Even the Libyan government, in the middle of a civil war, passed a budget on June 15, 2011.”

“However, Chairman Conrad and Majority Leader Harry Reid (D-Nev.) have made it clear that their decision to not enact a budget resolution is conscious, unified, and partisan. In a May 23, 2011 article in The Washington Examiner, Majority Leader Reid said, “There’s no need to have a Democratic budget, in my opinion. It would be foolish for us to do a budget at this stage.” The Examiner article also noted Chairman Conrad’s intent to “defer” work on the fiscal year (FY) 2012 budget indefinitely.

“Consequently, for being the Kim Kardashian of the Senate budget entourage and cashing a hefty paycheck for doing nothing in the last 1,000 days, CAGW names Senate Budget Committee Chairman Kent Conrad its January 2011 Porker of the Month.”

Express your outrage. Call Senator Conrad on Capitol Hill at (202) 224-2043, or you can send him an e-mail.

January 23, 2012

Good Economic News and Not-So Good News

Writing at Big Government today, Joel Pollak says that any “reports of (economic) recovery have been greatly exaggerated.” According to Pollak:

“As President Barack Obama prepares for his State of the Union address in Congress, where he will no doubt claim credit for signs of economic recovery, new analyses by economists suggest that growth will slow and unemployment will remain virtually unchanged by year’s end.”

Pollak links to a USA Today story today that says:

“The U.S. economy's growth will slow this year after a blast of stronger growth in late 2011, leaving the 8.5% unemployment rate about where it is now on Election Day, according to USA TODAY's quarterly survey of economists.

“The economy will grow at an 2.2% annual rate the first half of 2012 after an estimated 3.1% gain in fourth-quarter gross domestic product, according to the median forecast of the 48 economists surveyed. The government reports on fourth-quarter GDP Friday.

“The biggest reason for slower growth is that a late-2011 bounce back from the effects of the Japanese earthquake last March won't last, according to Diane Swonk, chief economist at Mesirow Financial. Slower growth will help keep unemployment at 8.4% or higher through year's end, economists predict.”

The USA Today article cites several good pieces of news, e.g., the decreasing risk of a U.S. recession. On the other hand, USA Today presents such bad news as employment not returning “to what’s considered a healthy level until 2014 or later.” The newspaper added the following piece in their “not-so-good” category:

“Job growth will slow to a monthly pace of 144,000 new jobs early this year, after an estimated rise of 165,000 a month in the fourth quarter, the panel predicted. In fact, the economy produced an average of 137,000 new jobs a month in the fourth quarter, driven by December's better-than-expected gain of 200,000 new jobs.”

Great news considering that taxes are expected to rise in 2012 not to mention the taxes that will be implemented as ObamaCare goes into effect. Not!

Reference. The non-member summary of the National Association for Business Economics survey is here. Only NABE members can read the full survey.

January 21, 2012

Environmentalism and the Leisure Class

The American Spectator posted a great essay yesterday by William Tucker, which explains that in turning down the application for the Keystone XL pipeline this week, for the second time, President Obama has:

“uncovered an ugly little secret that has always lurked beneath the surface of environmentalism. Its basic appeal is to the affluent. Despite all the professions of being "liberal" and "against big business," environmentalism's main appeal is that it promises to slow the progress of industrial progress. People who are already comfortable with the present state of affairs -- who are established in the environment, so to speak -- are happy to go along with this. It is not that they have any greater insight into the mysteries and workings of nature. They are happier with the way things are. In fact, environmentalism works to their advantage. The main danger to the affluent is not that they will be denied from improving their estate but that too many other people will achieve what they already have. As the Forest Service used to say, the person who built his mountain cabin last year is an environmentalist. The person who wants to build one this year is a developer.”

Tucker explains further that “(E)nvironmentalism has spent thtree decades trying to hide this simple truth . . .It has spent decades trying to pretend it has common cause with the working people. With the defeat of the Keystone Pipeline, this is no longer possible. Too many blue-collar and middle-class jobs have been sacrificed on the altar of carbon emissions and global warming.”

How did Tucker determine the connection of environmentalism and the leisure class? He explains it this way, and includes a Thorstein Veblen quote:

“What finally focused my attention on the aristocratic roots of environmentalism, however, was a chapter in Thorstein Veblen's Theory of the Leisure Class. Although the book is justly famous for coining "conspicuous consumption" and "conspicuous waste," there is a lesser-known chapter entitled "Industrial Exemption" that perfectly describes the environmental zeitgeist. Veblen posed the question, why is it that people who are the greatest beneficiaries of industrial society are often the most passionate in condemning it? He provided a simple answer. People in the leisure class have become so accustomed affluence as the natural state of things that they no longer feel compelled to embrace any further industrial progress:

“The leisure class is in great measure sheltered from the stress of those economic exigencies which prevail in any modern, highly organized industrial community.… [A]s a consequence of this privileged position we should expect to find it one of the least responsive of the classes of society to the demands which the situation makes for a further growth of institutions and a readjustment to an altered industrial situation. The leisure class is the conservative class.”

Before the enviros run off yelling that your conservative scribe doesn't care a twit about the environment, Tucker makes this important point:

“It is not that the average person is not concerned about the environment. Everyone weighs the balance of economic gain against a respect for nature. It is only the truly affluent, however, who can be concerned about the environment to the exclusion of everything else. Most people see the benefits of pipelines and power plants and admit they have to be built somewhere. Only in the highest echelons do we hear people say, "We don't need to build any pipelines. We've already got enough energy. We can all sit around awaiting the day we live off wind and sunshine."

A great analysis, Mr. Tucker!

UPDATE (1/21/12): John Hinderaker blogs at Power Line takes note of an "open rift that has now developed between the laborers' union and the environmental movement, writes:

"It is hard to understand how any union can explain to its members why it supports Obama’s job-destroying energy policies, but it is has been a long time since many union leaders have taken their members’ interests seriously."

January 20, 2012

Arlington County Property Values Up 6.6% Overall

Effective January 1, 2012, the value of the average residential property increased 1.8% while commercial properties, including office and apartments, increased 13.5%, according to a an Arlington County press release today. The value of the proverbial average residential property increased from $510,200 to $519,400.”

Although the overall single-family assessment was up 1.8%, that number depends on where you live in Arlington County. In the far west corner (area 1 on this map of Arlington County trend areas), assessments were up 3.6%. In the north (area 3, which is east of North Glebe Road and north and west of I-66), the average assessment increased 1.0%. In south Arlington, the average assessment in area 11 (east of I-395 and north of South Glebe Road) dropped 1.0%.

The press release adds that “46% of residential owners will see no change in their assessment; 22% will see declines of varying amounts. Of the 32% with increased values, the amount also will vary.”

You can look-up your property assessment here. Assessments are due to be mailed on January 20, 2012.

The press release provided this additional information about real estate assessments:

“Real estate assessments are appraisals -- the County's opinions of value for each parcel of real property in Arlington. Assessments are made according to accepted methods, techniques, and standards of the real estate appraisal and assessment profession. The 2012 assessment is an estimate of the fair market value as of January 1, 2012.

“Residential assessments were based primarily on neighborhood sales occurring July 1, 2010 through June 30, 2011. The real estate tax rate determines the amount of tax that is levied on the property. A uniform tax rate for all real property is set by the Arlington County Board; state code requires the County Board to use a uniform tax rate. In addition, Arlington levies additional taxes on commercial and industrial properties dedicated to transportation investments, as well as taxes for business improvement and sanitary sewer needs.

“For more information, visit the County website.”

The Arlington Sun Gazette has stories on the commercial sector fueling assessments and on the mail-out of updated property assessments. The ARLnow.com online news outlet also reports on the updated assessments.

If you disagree with your 2012 property assessment, you may do so between January 20 and March 1, 2012. Procedures are available at the above county website.

Finally, it looks as if the Arlington County Board gets about a 3% windfall profit from the 2012 assessments. How, Assuming inflation is less than or equal to 3%, the Board gets to spend several million dollars (equal to about 3% of total real estate taxes) without having to raise the real estate tax rate. (Paragraph added 1/21/12).

January 19, 2012

Highlighting Massive Government Pension Benefits

At the National Taxpayers Union blog, Government Bytes, Doug Kellogg reports on the work of “a number of intrepid Bloomberg reporters” who published stories of “just how extensive our government's pension promises are, and some of the potential impacts on taxpayers.” According to Kellogg:

“The big finding of the report is that the federal system faces a $674 billion shortfall, primarily from one of its older components. Further findings include: one of every 125 retired federal civilian workers collects more than $100,000 in benefits annually, The U.S. Treasury pays about $4.9 billion every month for about 1.8 million retirees, an average of $31,633 annually, at least 48,500 retirees are making more now than they did on the federal payroll, and much more.

“These figures will likely raise eyebrows among private industry employees, only about one-fifth of whom have access to a pension plan (at least a larger percentage than this can access 401(K)-type plans). Meanwhile, Social Security's fiscal time-bomb keeps on ticking, threatening private-sector taxpayers (and some public-sector employees) with major collateral damage.”

Kellogg provides links to two Bloomberg articles which provide the gruesome details.

Kudos to the Bloomberg reporters and to NTU’s Douglas Kellogg.for the blog post.

January 18, 2012

A Boondoggle? Possibly, but it’s Hard to Say Yes

Early last month, I received an e-mail telling me of a trip to Apple headquarters in Cupertino, California by a group of Arlington Public Schools administrators and management officials who traveled at taxpayers expense. According to the e-mailer, some teachers and principals thought the trip was “excessively expensize(sic).”

The trip’s cost was the easy thing to discern because it’s clearly spelled out on the spreadsheet provided under a Freedom of Information Act request. Twelve employees made the trip at a total cost of $10,963.25. Travelers included school board member Libby Garvey, Superintendent Patrick Murphy, Assistant Superintendent Salah Khelfaoui, two principals (one high school, one elementary school). The others were mostly information specialists.

Economy class airline travel was obtained through Citicorp Diners Club. Lodging was at the Inn at Saratoga at the Apple group rate. Breakfast and lunch was provided at the meeting while participants paid for their own dinner. Consequently, there is no reason to suggest the cost of travel was “excessively expensive.”

This is where things get difficult, which is trying to understand just why twelve APS employees traveled to the Cupertino, California, headquarters of Apple computer. We asked for, and received, two “end-of-trip” reports. One was written by Arlington School Board member Libby Garvey. The second, just over one page, was part of Dr. Murphy’s November 14, 2011 report to School Board members. Unfortunately, it is difficult to find a real purpose in either one to spending almost $11,000 to send 12 APS employees to Cupertino, California. Here are the highlights from the two reports:

  • Dr. Murphy told School Board members there was “a good group” of APS employees who went on the trip. The Apple speaker who impressed him the most was Apple’s Chief Information Officer, Naill O’Connor, who talked about such things as “hierarchy of thinking,” “setting the bar high,” and “utilizing time and its importance to us in our work and business.”
  • Ms. Garvey wrote that she hopes APS will “get some significant support from (Apple). They do this regularly with school systems around the country. I’m not so sure they give these school divisions a whole lot of support/resources. They do follow-up, however.” She also pointed out that Apple has a “center in Reston and likely there will be future conferences there for us.” From the “executive summary,” Ms. Garvey wrote this:

“ . . . I think my overall take away is that Apple products for, and philosophy of, teaching and learning dovetails pretty exactly with the 12 Brain Rules we read about for the last APS book group. This is how education can move from the 19th to the 21st century. I came away with a sense of affirmation that we are moving in the right direction. The only question is how fast can we get to where we need to be. The more support we can get from Apple, the faster we’ll get there . . . .”

The remainder of Ms. Garvey’s “end-of-trip” notes report on the comments of the Apple speakers, including the Chief Information Office, Director of Finance, Area Development Manager, a Consulting Engineer, the Business Manager for Content and Mobility, and the Marketing Manager for Apple’s iLife and iWork product lines.

The Area Development Manager spoke about the “iGeneration,” noting that today’s children “have different lives, different needs and different expectations.” The Consulting Engineer noted that “technology can be used in education” and “has four levels,” i.e., substitution, augmentation, modification, and redefinition. In her notes about the comments of the content and mobility business manager, Ms. Garvey wrote, “this is where I realized how much everything dovetails with Brain Rules. Finally, she wrote the marketing manager “spoke about the importance of giving teachers and students the space to try things . . . He was more showing us the bells and whistles. And there are a lot of things students and teachers can do with the right tools.”

I know the writers of the two trip reports did not expect the reports would be reviewed outside of APS headquarters, but unless there is clarity of purpose for making the trip, it’s quite likely the expectations from the trip will ever be realized. As a result, the $11,000 cost for the trip may well be wasted.

Unfortunately, neither Dr. Murphy’s trip notes nor Ms. Garvey’s trip notes are clear about the purpose of the trip. And that’s being generous. Consequently, I have to agree with my e-mailer and his sources that the trip to Cupertino was “excessively expensive.” Since Apple has a “center in Reston,” the APS employees could have been accommodated there at far less cost. Perhaps the story of the trip to Apple’s headquarters in Cupertino helps explain why APS ranks at the top in cost-per-student comparison’s.

UPDATE (1/19/12): The business section of today's Washington Post has a story that"Apple announced a few new apps Thursday that should send some ripples through the education world — and may also help save the backs of millions of students. In addition, the Post reported:

"The company also released an app for iTunes U, which is designed for students and educators. The app allows teachers to post course material, to stream and post video and to give students access to class materials such as readings, quizzes and assignments."

In a related story, the Post said that Apple is "expected to delve into textbooks."

UPDATE (1/20/12): ARLnow reports on ACTA's information. They quote APS spokeswoman Linda Erdos as saying, "The purpose of the trip is really to talk about what Apple is doing as a company . . . The talke to school districts about how they could possibly collaborate. Because we are using the technology, we are very interested." Yesterday, I changed the wording in the title from "likely" to "possibly." Based upon the purpose provided by Ms. Erdos, the use of "likely" in the original title appears to have been correct.

January 17, 2012

Today's Quote

“There’s a widespread belief and common conception that somehow or other business and economics are the same, that those people who are in favor of a free market are also in favor of everything that big business does. And those of us who have defended a free market have, over a long period of time, become accustomed to being called apologists for big business. But nothing could be farther from the truth. There’s a real distinction between being in favor of free markets and being in favor of whatever business does.”

~ Milton Friedman

HT OnPower.org

January 16, 2012

Today's Quote

"At this stage in a critical election cycle, we ought to be arguing about how many government departments to close, how many government programs to end, how many millions of government regulations to do away with. Instead, one party remains committed to encrusting even more barnacles to America's rusting hulk, while the other is far too wary of harshing the electorate's mellow."

~ Mark Steyn

HT Investor's Business Daily

January 15, 2012

Happy Days for Liberals/Progressives?

Thanks to Veronique de Rugy, Senior Research Fellow, of George Mason University’s Mercatus Center, we learn “the United States has the most progressive income tax system among industrialized nations.” She uses data from from a new report from the Organization for Economic Cooperation and Development based “on the share of taxes paid by the richest 10 percent of households in 24 industrialized countries.”

Ms. de Rugy describes the chart below this way:

“The richest 10 percent of households in the United States (those making $112,124 or more) contribute a greater share of taxes (45.1 percent of all income taxes) than their counterparts in any other industrialized nation. With the OECD average at 31.6 percent of total tax share from top earners, the U.S. income tax is roughly as progressive as income taxes in Italy, Ireland, Canada, Australia, the Netherlands, and New Zealand.”

In a related post, dated September 19, 2011, at National Review Online’s blog, The Corner, de Rugy focuses on the United States’ progressive income tax system, including charts showing how the top 1%  of wage earners (household income above $380,000) earn 20% of all income, but pay 38% of all personal income taxes. She then comments about the chart:

“As you can see, the (American) tax system is progressive. Does it mean that the rich pay their fair share? I guess it depends on how one defines fairness. But if the progressivity of the income tax doesn’t signal fairness, what does it signal?”

Seems the time is long past to institute a flat tax in America. Liberals may not be happy, but a good case can be made that it would bring greater prosperity to the nation.

January 14, 2012

Today's Quote

"We have a system that increasingly taxes work and subsidizes non-work.”

~ Milton Friedman

HT OnPower.org

January 13, 2012

Jobs, Debt, and Economic Decline Worry Americans Most

In a poll released yesterday, Gallup said, “Americans name jobs, the national debt, continuing economic decline, outsourcing, and politicians' bickering -- including President Obama and Congress -- when asked to say what worries them most about the national economy at this time.”

The Gallup organization said that “economic concerns remain the dominant response when Americans are asked to name the most important problem facing the country. Gallup included this open-ended question in its Jan. 5-8 survey to find out more about the underlying nature of Americans' economic concerns as this election year begins.” The top five responses were:

  1. Jobs/unemployment -- 26%
  2. National debt/federal budget deficit -- 16%
  3. Continuing economic decline/economic instability -- 10%
  4. Outsourcing of jobs overseas/Create jobs here in U.S. -- 6%
  5. Obama not doing a good job/No plan/Lack of leadership -- 5%

Both Republicans and Democrats worry almost equally about jobs. According to Gallup, “Republicans and Democrats worry most about jobs. But Republicans, including Republican-leaning independents, are significantly more likely than Democrats and Democratic-leaning independents to say that the deficit worries them most. Republicans are also more likely to say that Obama's handling of the economy worries them.”

Gallup also provides the top five economic worries by annual household income. In addition, the “divide between rich and poor” ranked 18th, a concern of only two percent of those who responded. Among  several implications, Gallup wrote:

“Obama's focus on inequality and the lack of a fair chance in today's economy for middle- and low-class Americans does not reflect Americans' top economic concerns, at least as measured by Gallup's open-ended question. But, a small percentage of Americans mention the unhealthy power of big business or corporations or the rich.”

Take a few moments to read the entire Gallup survey.

January 12, 2012

Today's Quote

“The economic miracle that has been the United States was not produced by socialized enterprises, by government-union-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.”

~ Milton Friedman

HT OnPower.org

January 11, 2012

US Debt Now Larger Than US Economy

A front page story in Monday’s USA Today (above the fold) reported, “The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy.” The news item went on to say:

“The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion.

“That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month.

"The 100% mark means that your entire debt is as big as everything you're producing in your country," says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. "Clearly, that can't continue."

"Long-term projections suggest the debt will continue to grow faster than the economy, which would have to expand by at least 6% a year to keep pace.”

The following chart is from the USA Today article:

In an op-ed posted at the Independent Women’s Forum, Nicole Kurokawa Neily points out:

“With this milestone, the U.S. joins a small group of nations whose debt exceeds their GDP: Europe’s PIIG nations (Portugal, Italy, Ireland, and Greece) as well as Iceland and Japan. What… illustrious company.

“As Rep. Jim Jordan, chairman of the Republican Study Committee, soberly assessed, “Having a national debt larger than our economy basically means two things. The debt is too big, and our economy is too small.”

“With GDP growth slightly less than 2 percent, we’re a long way from where we need to be on that front . . . .”

At the Heritage Foundation’s blog, The Foundry, Josh Shepherd discusses “the reality of America’s national debt,” and points to two informative Heritage resources: first, their budget reform plan, Saving the American Dream; and the documentary film/DVD, I Want Your Money ($).

Other Resources: U.S. National Debt Clock is here. U.S. National Debt Clock (real time) is here. Historical charts and tables of U.S. debt by year is here. And here is the link to the Bipartisan Policy Center, founded by, among others, former U.S. senators Bob Dole and Tom Daschle. In addition, the U.S. Treasury Department's Bureau of Public Debt provides this webpage where you can "find the total public debt on a specific day or days.

UPDATE (1/13/12): At the Wall Street Journal blog yesterday (HT Big Government), Washington Wire, Damian Paletta writes:

"The Treasury Department has begun maneuvers to avoid hitting the debt ceiling, as the Obama administration waits for Congress to return from the holiday break before it can raise the federal borrowing limit.

"The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling “and that further borrowing is required to meet existing commitments.”

"Raising the debt ceiling another $1.2 trillion is procedurally simple but politically it is much more complex."

Paletta closes saying, "If the debt ceiling is raised $1.2 trillion, it would mean the government wouldn’t need to raise the debt ceiling again until late 2012 or early 2013."

January 10, 2012

Are civil rights laws being exploited for political purposes?

In an editorial last Friday, the Washington Times asserts:

“The Justice Department has been empowered to use millions of dollars intended to go to victims of racial discrimination to enrich pressure groups with close White House ties. It's another revelation of the means the Obama administration is using to divert funds to political cronies.”

The editorial explains it this way:

“Information obtained by the public interest group Judicial Watch has exposed the details of this latest shady deal. On Dec. 28, the United States District Court for the Central District of California issued a consent order in the case of the United States v. Countrywide Financial Corporation et al. Under the terms of the settlement, Countrywide will pay $335 million to 200,000 blacks and Hispanics who took out home loans between 2004 and 2008. The Justice Department claims they were charged higher interest rates than white borrowers not because of poor credit scores but solely because of their race. The payment is intended to "compensate allegedly aggrieved persons for monetary and other damages they may have suffered." (emphasis added)

And the motive, according to the editorial"

“Organizations beholden to the Democratic Party and to President Obama in particular stand to gain millions of dollars, which could then be shifted into use for political purposes. It's another manifestation of the intentional, institutional corruption of American politics. The public has been forced to fund corporate handouts and sweetheart deals to political donors such as occurred in the Solyndra loan debacle. All these efforts are aimed at propping up those in power and seeking maximum benefits for their friends. It comes at the expense of working Americans, the economy and the legitimacy of the political system.”

Holman Jenkins of the Wall Street Journal wraps-up the motive in his column on the Countrywide settlement this way:

“Perhaps some truly believe society must be arranged to extirpate any sign of differences between groups. Justice certainly exhibits such perfectionism: It explicitly faults Countrywide for not monitoring lending data and rushing out proactively to compensate blacks and Hispanics (but not whites) whose loan terms exceeded the average of similarly placed whites.

“Think about the intrinsic Stalinism of this conceit. In the Los Angeles auto dealer case, which also targeted the city's Nara Bank, in servicing dealings between two "protected" groups, Asians and Hispanics, the bank presumably would have to know which group to compensate (and which not to compensate) when any of its members' individual deals exceeded the average price of the other group's.

“If this sounds insane, there's another way to think about it: Public choice theory holds (in essence) that those in power loot for the benefit of the constituencies that keep them in power. Law and regulation are tools for redistributing resources; the nature of politics is to seize every such opportunity and make it serve a political end. In the Countrywide settlement, Bank of America (without admitting fault) will hand over $335 million so Justice can distribute money to African-Americans and Hispanics (though not whites) who were charged more than the white average, with any surplus funds explicitly reserved for donations to Acorn-like groups that typically align with the Democratic Party.” (emphasis added)

Kudos to Judicial Watch for getting the information through the Freedom of Information Act. Here’s last week’s write-up of their efforts at Judicial Watch’s blog, Corruption Chronicles.

Additional resources: The New York Times story on December 21, 2011 is here. A commentary piece is posted at CBS News. An associate editor at Atlantic magazine writes that Countrywide's lending practices “were fueled by greed.” Finally, here is Fox News’ reporting of the $335 million settlement while Big Government's reporting is here.

January 09, 2012

GAO Audit of the Troubled Asset Relief Program (TARP)

The U.S. General Accountability Office (GAO) released an audit report (comments below are from the report’s highlights) today involving TARP, a program of the Department of Treasury. TARP was GAO’ major recommendation said:

“Treasury should enhance its program-specific press releases to the public by consistently including lifetime cost estimates when reporting on program activities and results. Treasury agreed with our recommendation and plans to implement it by including a link to its cost reporting in future TARP program-specific press releases.”

GAO’s explanation of why they conducted the audit:

“The Emergency Economic Stabilization Act of 2008 authorized the Department of the Treasury (Treasury) to create the Troubled Asset Relief Program (TARP), a $700 billion program designed to restore the liquidity and stability of the financial system. The act also requires that GAO report every 60 days on TARP activities. This report examines (1) the condition and status of TARP programs; (2) Treasury’s management of TARP operations, including staffing for the Office of Financial Stability (OFS) and oversight of contractors and financial agents; and (3) what is known about the direct and indirect costs of TARP. To do this work, GAO analyzed audited financial data for various TARP programs; reviewed documentation such as program terms and internal decision memos; analyzed TARP cost estimates from the Congressional Budget Office (CBO), the Office of Management and Budget, and Treasury; and interviewed CBO and OFS officials.” (emphasis added)

And here is what GAO found:

“Many TARP programs continue to be in various stages of unwinding and some programs, notably those that focus on the foreclosure crisis, remain active. The figure provides an overview of selected programs and the amount disbursed and outstanding, as applicable. Treasury has articulated broad principles for exiting TARP, including exiting TARP programs as soon as practicable and seeking to maximize taxpayer returns, goals that at times conflict. Some of the programs that Treasury continues to unwind, such as investments in American International Group, Inc. (AIG), require Treasury to actively manage the timing of its exit as it balances its competing goals. For other programs, such as the Capital Purchase Program (CPP)—which was created to provide capital to financial institutions—Treasury’s exit will be driven primarily by the financial condition of the participating institutions. Consequently, the timing of Treasury’s exit from TARP remains uncertain.

“Treasury continues to manage the various TARP programs using OFS staff, financial agents, and contractors. Overall OFS staffing has declined slightly for the first time as staff responsible for managing TARP investment programs and those in term-appointed leadership positions have departed. However, staff in some offices within OFS have increased—for example, in the Office of Internal Review, which helps to ensure that financial agents and contractors comply with laws and regulations. Through September 30, 2011, about half of Treasury’s 116 contracts remained active, along with 14 of the 17 financial agency agreements. Treasury has continued to strengthen its management and oversight of contractors and financial agents and conflict-of-interest requirements. In response to a GAO recommendation, OFS has finalized a plan to address staffing levels and expertise that includes identifying critical positions and conducting succession planning, in light of the temporary nature of its work.

“Treasury and CBO project that TARP costs will be much lower than the amount authorized when the program was initially announced. Treasury’s fiscal year 2011 financial statement, audited by GAO, estimated that the lifetime cost of TARP would be about $70 billion—with CPP expected to generate the most lifetime income, or net income in excess of costs. OFS also reported that from inception through September 30, 2011, the incurred cost of TARP transactions was $28 billion. Although Treasury regularly reports on the cost of TARP programs and has enhanced such reporting over time, GAO’s analysis of Treasury press releases about specific programs indicate that information about estimated lifetime costs and income are included only when programs are expected to result in lifetime income. For example, Treasury issued a press release for its bank investment programs, including CPP, and noted that the programs would result in lifetime income, or profit. However, press releases for investments in AIG, a program that is anticipated to result in a lifetime cost to Treasury, did not include program-specific cost information. Although press releases for programs expected to result in a cost to Treasury provide useful transaction information, they exclude lifetime, program-specific cost estimates.

“Consistently providing greater transparency about cost information for specific TARP programs could help reduce potential misunderstanding of TARP’s results. While Treasury can measure and report direct costs, indirect costs associated with the moral hazard created by the government’s intervention in the private sector are more difficult to measure and assess.”

The second page of the report highlights include a handy infographic showing the status  and amounts of selected programs as of September 30, 2011. These include both closed and active programs and programs that Treasury has exited. The 85-page report includes numerous, helpful graphics, including four tables and 17 figures. We congratulate GAO for urging Treasury to enhance communication on program costs.

January 08, 2012

The Socialist, Redistributionist Behemonth

Washington Post columnist George Will has one of his “must read” columns today telling liberals they “have a rendezvous with regret” The print column is titled “The socialist behemoth” while the online column is titled “Government: The redistributionist behemoth.” According to Will:

“Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.”

Will ends the column with the following wisdom:

“Government uses redistribution to correct social outcomes that offend it. But government rarely explains, or perhaps even recognizes, the reasoning by which it decides why particular outcomes of consensual market activities are incorrect. When taxes are levied not to efficiently fund government but to impose this or that notion of distributive justice, remember: Taxes are always coerced contributions to government, which is always the first, and often the principal, beneficiary of them.

“Try a thought experiment suggested decades ago by University of Chicago law professors Walter Blum and Harry Kalven in their 1952 essay “The Uneasy Case for Progressive Taxation,” published in their university’s law review. Suppose society’s wealth trebled overnight without any change in the relative distribution among individuals. Would the unchanged inequality at higher levels of affluence decrease concern about inequality?

“Surely not: The issue of inequality has become more salient as affluence has increased. Which suggests two conclusions:

“People are less dissatisfied by what they lack than by what others have. And when government engages in redistribution in order to maximize the happiness of citizens who become more envious as they become more comfortable, government becomes increasingly frenzied and futile.”

Thank you, Mr. Will.

UPDATE (1/11/2012): Today's Washington Post has three letters responding to George Will's column. You can read them here.

January 07, 2012

When $5 Billion of Your Taxes Is “Free Money”

According to an internal memo from the majority staff of the House of Representatives’ Subcommittee on Oversight and Investigations (requires Adobe):

“The Early Retiree Reinsurance Program (ERRP), a $5 billion fund hailed as one of the key early benefits of the Patient Protection and Affordable Care Act (PPACA), will exhaust its resources long before the planned sunset on January 1, 2014, according to information provided by the Center for Consumer Information and Insurance Oversight (CCIIO).”

The internal memo adds:

“The ERRP was established by Section 1102 of the PPACA.  The PPACA created two programs to act as a bridge to the new health insurance exchanges that would begin in 2014: the temporary high-risk pools for individuals with pre-existing conditions and the ERRP. The PPACA appropriates $5 billion to each of these programs, for a total of $10 billion . . . the ERRP was intended to address trends that have led employers to reduce or eliminate health benefits for early retirees.”

Yet Greg Scandlen writes the following about this ObamaCare program at John Goodman’s Health Policy Blog yesterday:

“The program began on June 1, 2010 and was supposed to last until January 1, 2014. But it turns out that getting free money was so popular that all the dough ran out by January 1, 2012 — a mere 19 months. So, no more money will be distributed, alas.

“It will be interesting to see what happens next.  Virtually all of these organizations have union contracts that require them to provide the benefits, so they are unlikely to suddenly drop the coverage.

“Let’s take a look at who got the moolah in a few sample states — Illinois, Ohio and Pennsylvania. These are the numbers as of December 2, 2011.”

Citing a news report from Kaiser Health News, Peter Suderman, associate editor of Reason magazine, notes in a December 12 blog post that the fund “will stop taking claims for expenses incurred after Dec. 31 because it is running out of money, according to a notice Friday in the Federal Register.” Suderman also provides a link to the internal memo cited above as well as a link to an article he wrote about ERRP that appeared in the April issue of Reason.

And where did the $5 billion go? Scandlen uses data from the internal memo to list who received ERRP money in Illinois, Ohio, and Pennsylvania, just to name three states. Here are what he shows for Ohio:

"In Ohio, 105 organizations received funds, of which 36 went directly to unions and 2 went to state or local governments. The organizations that received $5 million or more include:

  • Bridgestone Americas, Inc. -- $5,144,493
  • Firstenergy Corp -- $6,125,591
  • Ohio Public Employees Retirement System -- $180,084,872
  • Police and Firemen’s Disability 1-- $16,870,013
  • State Teachers Retirement System -- $75,998,236
  • The Proctor & Gamble Company -- $19,186,151
  • The Timken Company -- $5,378,873"

Scandlen ends his post saying:

“So again, the entire $5 billion was depleted in just 19 months, instead of the 43 months originally projected. That is swell for the organizations that got the money, but now we are right back to where we started. All of these organizations now have to pay for the benefits themselves or drop their coverage. But most are forbidden from dropping coverage because of union contracts. Perhaps they will have to renegotiate these contracts, which is what they should have done 19 months ago.”

To paraphrase one popular news media outlet, we report, you decide.

January 06, 2012

Today's Quote

“When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is still very careful about how much he spends, but somewhat less what he spends it on. When a man spends someone else’s money to buy something for himself, he is very careful about what he buys, but doesn’t care at all how much he spends. And when a man spends someone else’s money on someone else, he does’t care how much he spends or what he spends it on. And that’s government for you.”

~ Milton Friedman

HT Quotes on Power at OnPower.org, a project of the Independent Institute

January 05, 2012

Lawyer Bonanza or Protection of Private Property Rights

On November 20, 2011, we growled after reading that local jurisdictions feared the impact of the proposed constitutional amendment that would strengthen Virginia’s eminent domain legislation. Then on December 4, we growled again, saying kudos were due an editorial in the Washington Examiner.

Well, it looks as if some members of Arlington’s legislative delegation in Richmond are siding with local jurisdictions rather than with the property rights of citizens. At the Arlington County Civic Federation’s monthly meeting on Tuesday evening, January 3, one member of Arlington’s delegation, Del. Bob Brink predicted, “It’s going to be a lawyer’s bonanza if it passes, as I expect it will,” while Senator-elect Barbara Favola said, “On many levels, this is a very bad idea,” according to the report by Scott McCaffrey in the Arlington Sun Gazette yesterday.

McCaffrey also pointed out:

“Arlington officials painted a number of doomsday scenarios, suggesting that the county government could be financially liable to property owners when shutting down roads for parades or even for SWAT-team activity.

“More seriously, county officials have reason to be concerned that the proposed constitutional amendment could complicate their efforts to grab control of a private office building in the Courthouse area for use as a homeless-services center. And it could conceivably increase the cost of public-works projects, such as the planned Columbia Pike streetcar line, if business owners have to be compensated when the public loses access to their facilities.”

Sure doesn't look like Arlington’s representatives in Richmond are on the side of Arlington residents. We think the protection of private property rights trumps the rights of local or state government. More importantly, as we growled on November 20, the number of abuses of property rights in Virginia warrants the strengthening of Virginians' property rights.

January 04, 2012

Trash in the Trash Dump

There’s a reason why governments bury bad news by releasing it on a Friday before a big holiday weekend. When the federal government released it’s 2011 financial statements on the Friday before Christmas, Bryan Lawrence, founder of an investment partnership fortunately spotted them, and read them closely.

Lawrence’s analysis of those financial statements, including the General Accountability Office’s auditor’s report, which appeared in the Washington Post last week, should be required reading for every American wanting to better understand the dire financial condition in which the nation finds itself. The following two paragraphs are the “take aways” from Mr. Lawrence’s column:

“In fiscal 2011, the cost of the promises grew from $30.9 trillion to $33.8 trillion. To put that in context, consider that the total value of companies traded on U.S. stock markets is $13.1 trillion, based on the Wilshire 5000 index, and the value of the equity in U.S. taxpayers’ homes, according to Freddie Mac, is $6.2 trillion. Said another way, there is not enough wealth in America to meet those promises. (emphasis added)

“If the government followed corporate accounting rules, that $2.9 trillion increase would be added to the $1.3 trillion cash deficit for fiscal 2011 that has been widely reported. And a $4.2 trillion deficit is something that Americans need to know about." (emphasis added)

The Federal Times’s lede for their story began this way:

“Deep-rooted problems continue to hobble the federal government's ability to reckon accurately its financial assets and liabilities, the Government Accountability Office found in a newly released review.

“Although 21 of the 24 agencies covered by the Chief Financial Officers Act had fully auditable books in fiscal 2011, two of the largest — the Defense and Homeland Security departments — still did not. The State Department's books also were not fully auditable. As a result of those and other problems, GAO was again unable to provide a clean audit opinion on the government's consolidated financial statements.

“DoD, for example, could not provide solid estimates for key parts of its environmental cleanup liabilities, GAO said in its "auditor's report." (link embedded in the original; requires Adobe)

“Nor did the Pentagon have the systems and records needed to provide accurate information on its holdings of property and equipment.

“More broadly, many agencies had trouble reconciling financial transactions with each other, with a significant number of agency chief financial officers citing "differing accounting methodologies, accounting errors and timing differences" as reasons for the disparities.”

Government Executive also contained a good overall summary, including several useful links, including to the financial statements themselves.

Here is how GAO summarized what they found in their report (requires Adobe):

  • Certain material weaknesses5 in internal control over financial reporting and other limitations on the scope of our work6 resulted in conditions that continued to prevent us from expressing an opinion on the accompanying accrual-based consolidated financial statements for the fiscal years endedSeptember 30, 2011 and 2010.
  • Significant uncertainties (discussed in Note 26 to the consolidated financial statements), primarily related to the achievement of projected reductions in Medicare cost growth reflected in the 2011 and 2010 Statements of Social Insurance, prevented us from expressing an opinion on those statements as well as on the 2011 Statement of Changes in Social Insurance Amounts. The Statements of Social Insurance for 2009, 2008, and 20078 are presented fairly, in all material respects, in conformity with GAAP.
  • Material weaknesses resulted in ineffective internal control over financial reporting (including safeguarding of assets).
  • Our work to test compliance with selected provisions of laws and regulations in fiscal year 2011 was limited by the material weaknesses and other scope limitations discussed in this report.
Be a informed voter. Take a few minutes to read through the entire documents!

January 03, 2012

Can Prisoners Prepare Tax Returns?

The Treasury Inspector General for Tax Administration (TIGTA) completed an audit last month (requires Adobe) in order “to monitor and evaluate the IRS’s implementation of the e-file mandate for preparers.” (HT Tax Prof Blog)

In short, TIGTA found that more tax return preparers are filing electronically, but better controls are needed so that all preparers are complying with the new regulations for preparers. According to the report’s highlights, TIGTA found (Asterisks indicate redaction):

“The e-file mandate is helping the IRS with its goal to electronically receive 80 percent of individual tax returns by Calendar Year 2012.  More than 79 percent of tax returns were e-filed in Calendar Year 2011 as of June 9, 2011. However, the continued use of multiple preparer identification numbers makes it difficult to match all tax returns to the preparers. The potential risk of Preparer Tax Identification Numbers (PTIN) ****** *******2(f)********* ******** *************2(f)*** also presents significant challenges. Additionally, the IRS is unable to determine **********2(f)********* ******* *******2(f)*************** ******** **********2(f)*********** ******* ******** ********** ***2(f)*********** ********* ********.

“For the first few years, the IRS plans to use a “soft” approach to enforcement with emphasis on educating and collaborating with preparers in implementing e-file requirements. However, improvements are underway to ensure controls and system validations over the preparer registration process are effective.”

TIGTA also found that prisoners registered for and obtained PTINs. As a result, TIGTA reported that:

“Current regulations do not prohibit prisoners from registering and obtaining PTINs.

  • 962 PTIN applicants on the IRS’s Prisoner File with an incarceration date within the last 10 years received active or provisional PTINs – 745 (77 percent) of the 962 applicants did not disclose the felony conviction.
  • 331 active or provisional PTIN holders were in prison when they received their PTINs.
  • 43 PTIN applicants are serving life sentences and received active/provisional PTINs. None of the 43 disclosed the felony conviction on the PTIN applications. Eleven (26 percent) of the 43 indicated they had a qualifying professional certification and they received active PTINs; 32 (74 percent) received provisional PTINs.

“The IRS has decided that prisoners will not be issued PTINs and those who were issued PTINs will have them suspended.  The IRS stated that it is actively working on solutions for suspending PTINs of prisoners and preventing future PTIN applicants who are prisoners from receiving a PTIN. ************************************2(f)****************** ***********. ******2(f)*************."

So when seeking help on preparation of your tax return, be sure of your trust in the preparer.

January 02, 2012

When a Flat Budget is an Improvement

The Wall Street Journal editorialized this weekend that Congressional “spenders won 2011.” The editorial began this way:

“Amid this month's payroll tax fracas, few noticed that Congress passed a 1,200-page, $1 trillion omnibus spending bill for fiscal 2012. Maybe no one in Washington boasted because it's a victory for spending as usual. Republicans—in the House and Senate—need a better strategy.

“The news is that after accounting for last-minute unemployment insurance extensions, "emergency" spending and higher Medicare physician payments, total federal outlays are estimated to be $3.65 trillion in fiscal 2012, up slightly from $3.6 trillion in 2011. The last year has seen no major reforms in any of the big entitlement programs—Medicare, Medicaid or Social Security. Spending on food stamps alone is scheduled to reach $80 billion in 2012, more than double the amount as recently as 2007.

“Republicans had promised to roll back discretionary spending to 2008 levels, to save $100 billion. But the August debt deal lowered the savings to $7 billion—or a 2012 target for appropriations of $1.043 trillion. Even that target was missed because appropriators tacked on roughly $10 billion in disaster relief—hurricanes this summer—and so the new total is $1.054 trillion. That's $4 billion more than the 2011 baseline of $1.050 trillion, although savings from troop withdrawals in Iraq may reduce that.”

And far too few programs were eliminated -- “only 28 programs out of the thousands of line-items contained in the omnibus budget were terminated. The list includes mostly minor programs such as $12.5 million spent on something called "adolescent family life," $1.2 million for civic education, and $1.4 million for economics education (not for members of Congress)," they wrote.

Yet, the Journal’s editorial staff said that “a flat overall budget is a vast improvement over the years 2007 to 2011, when overall spending increased 32%, or $868 billion. (See the nearby table.) Voters elected a GOP House to pull the Democratic credit card, and Republicans at least stopped the blowout of the Pelosi-Obama years.” Here’s the chart from the Wall Street Journal’s editorial:

Even the Washington Post entered the fray in pointing out the small favors done by Congress in 2011, saying in an editorial today:

"THERE MAY NOT have been a party in Times Square to celebrate, but two of the most wasteful subsidies ever to clutter the Internal Revenue Code went out with the old year. Congress declined to renew either the 45-cent-per-gallon tax credit for corn-based ethanol or the 54-cent-per-gallon tariff on imported ethanol, so both expired Dec. 31.

“Taxpayers will no longer have shell out roughly $6 billion per year for a program that badly distorted the global grain market, artificially raised the cost of agricultural land and did almost nothing to curb greenhouse gas emissions. A federal law requiring the use of 36 billion gallons of ethanol for fuel by 2022 still props up the industry, but the tax credit’s expiration is a victory for common sense just the same.

“Meanwhile, a lesser-known but equally dubious energy tax break also expired when the year ended Saturday: the credit that gave electric-car owners up to $1,000 to defray the cost of installing a 220-volt charging device in their homes — or up to $30,000 to install one in a commercial location. As a means of reducing carbon emissions, electric cars and plug-in hybrid electrics are no more cost-effective than ethanol. What’s more, only upper-income consumers can afford to buy an electric vehicle (EV); so the charger subsidy is a giveaway to the well-to-do.”

With the Washington Post editorial staff at least making sounds like fiscal conservatives, maybe there’s hope that Arlington’s representatives in Congress may be on the road to fiscal conservatism. Signs for a better 2012? I know, I know, hope springs eternal, but kudos to the Washington Post editorial staff for their "Overcharged" editorial.

January 01, 2012

Kudos to a Young Woman

With a HT to Mark Levin (podcast, December 16, 2011, just after the 56-minute mark), we learn of a brave young student at Providence College who wrote of her two summers cashiering at Walmart. At the College Conservative blog, she wrote:

“During the 2010 and 2011 summers, I was a cashier at Wal-Mart #1788 in Scarborough, Maine. I spent hours upon hours toiling away at a register, scanning, bagging, and dealing with questionable clientele. These were all expected parts of the job, and I was okay with it. What I didn’t expect to be part of my job at Wal-Mart was to witness massive amounts of welfare fraud and abuse. (emphasis added)

“I understand that sometimes, people are destitute. They need help, and they accept help from the state in order to feed their families. This is fine. It happens. I’m not against temporary aid helping those who truly need it. What I saw at Wal-Mart, however, was not temporary aid. I witnessed generations of families all relying on the state to buy food and other items.  I literally witnessed small children asking their mothers if they could borrow their EBT cards. I once had a man show me his welfare card for an ID to buy alcohol. The man was from Massachusetts. Governor Michael Dukakis’ signature was on his welfare card. Dukakis’ last gubernatorial term ended in January of 1991. I was born in June of 1991. The man had been on welfare my entire life. That’s not how welfare was intended, but sadly, it is what it has become.”

One of the other examples she wrote about involved “(a) man who ran a hotdog stand on the pier in Portland, Maine.” She said he liked to “discuss his hotdog stand” -- even encouraging her to visit the hotdog stand. But, she wrote:

“What would he buy? Hotdogs, buns, mustard, ketchup, etc. How would he pay for it? Food stamps. Either that man really likes hotdogs, or the state is paying for his business. Not okay.”

She closes with an analysis that is much more clear and cogent than anything coming out of the mouths of so many politicians. She says:

“Maine has a problem with welfare spending. Maine has some of the highest rates in the nation for food stamp enrollment, Medicaid, and TANF. Nearly 30% of the state is on some form of welfare. Maine is the only state in the nation to rank in the top two for all three categories. This is peculiar, as Maine’s poverty rate isn’t even close to being the highest in the nation. The system in Maine is far easier to get into than in other states, and it encourages dependency. When a person makes over the limit for benefits, they lose all benefits completely. There is no time limit and no motivation to actually get back to work. Furthermore, spending on welfare has increased dramatically, but there has been no reduction of the poverty rate. Something is going terribly wrong, and the things I saw at work were indicators of a much larger problem. Something must change before the state runs out of money funding welfare programs.”

What a brave and civically-engaged young woman! Hopefully she is opening the eyes of some politicians who want to reform welfare.

You can watch her being interviewed at the Bangor Daily News. Her story has also been   picked-up in the blogosphere, including one at the Chicago Tribune, Right Turn Forever, Enemy of the Statist, and Anchor Rising.