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November 30, 2016

A Thought about Taxes, Revolution, and Government

"An overtaxing government was more dangerous than a foreign invader, said (Thomas) Paine, and a revolutionary change in government was necessary."

"What has application today was his observation that there are two classes of citizens, "those who pay taxes and those who receive and live upon taxes. When taxation is carried to excess it cannot fail to disunite those two."

"One cannot help but notice how right Paine was. In every effort to reduce spending today, there are howls of protest from those who live off the taxes of others. Those people are well-organized and have good political connections and a substantial voting block. But in recent times, taxpayers have been demanding relief, and the yrealize that relief can only come if those who live off the public trough find other ways of taking care of themselves. In short, a revolution in government, as Paine predicted, is necessary to produce a government "less expensive, and more productive."

~ Charles Adams

Source: pages 25-26, "Those Dirty Rotten Taxes: The Tax Revolts that Built America.

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"These are the times that try men's souls." (emphasis in the original)

This simple quotation from Founding Father Thomas Paine's The American Crisis not only describes the beginnings of the American Revolution, but also the life of Paine himself. Throughout most of his life, his writings inspired passion, but also brought him great criticism. He communicated the ideas of the Revolution to common farmers as easily as to intellectuals, creating prose that stirred the hearts of the fledgling United States. He had a grand vision for society: he was staunchly anti-slavery, and he was one of the first to advocate a world peace organization and social security for the poor and elderly. But his radical views on religion would destroy his success, and by the end of his life, only a handful of people attended his funeral
.

From USHistory.org's brief biography of Thomas Paine.

November 29, 2016

A Closer Look at Federal Income Taxes

In an "economic synopsis," at the beginning of the month, St. Louis Fed senior economist Fernando Martin took "a closer look at federal income taxes," or more specifically, revisiting "some facts about  federal tax collections."

Their paper includes the following two tables"

 

Here's how Martin describes the first table:

"The first table provides a snapshot of revenues collected by the U.S. federal government for fiscal year 2016.1 Total revenue was $3.3 trillion, or roughly 18 percent of gross domestic product (GDP). Almost half of this revenue comes from individual income taxes. About one-third comes from payroll taxes, which are collected to fund Social Security, Medicare, and other social insurance benefits. Only 9 percent of total revenue comes from corporate income taxes, while another 9 percent comes from various sources (e.g., excise taxes, estate and gift taxes, and custom duties). These proportions have been stable in recent years."

And his description of the second chart:

" . . . The second table breaks down individual income taxes by adjusted gross income brackets and four categories. The first three are relative to total filings: the share of returns; the share of taxable income generated (note that about one-third of returns report zero taxable income); and the share of tax revenue collected. The final category is the implied average tax rate. The data are for fiscal year 2014, the latest available for tax revenue by income levels. Notably, the data do not distinguish between single or joint (filed with a spouse) tax returns."

Here's the bottom line analysis that Martin is attempting to portray:

"The differences in individual income tax collection at the extremes of the income distribution are striking. Filers earning less than $50,000 annually account for nearly two-thirds of all tax returns but contribute 7 percent of total revenue. Around half of the filers in this group report zero taxable income4; for those with taxable income, the average income tax rate is 12 percent.5 In contrast, filers making at least $1 million annually account for 0.3 percent of all tax returns and contribute 27 percent of total revenue. Their average tax rate—31 percent—is almost triple that of filers in the lowest income bracket.

"Due to the progressive nature of the U.S. income tax code, average tax rates increase up the income ladder. Each income group’s contribution to total revenue, however, depends not only on their tax rate but also on the number of filers in the group and how much income they generate. For example, tax filers earning between $100,000 and $199,999 annually face an average income tax rate of 17 percent but contribute 22 percent of revenue, very close to the proportion contributed by those earning $1 million or more. The reason is that there are many more filers in the former group (12 percent versus 0.3 percent), who together generate about one-quarter of total taxable income (versus 17 percent for the highest earners).

"These properties of the income distribution have profound implications for the likely effects of tax reform. For example, tax cuts for the middle class, even minor ones, would imply big declines in revenue; and collecting significantly more revenue from the rich would necessitate large tax hikes. (emphasis added)

"To illustrate this point, consider a simple back-of-the-envelope calculation. Suppose the desire is to cover the deficit by increasing the tax rates of the top income earners. The current deficit estimate for fiscal year 2016 is $590 billion. Income taxes collected from filers earning $500,000 or more annually (the top 1 percent) add up to roughly the same amount as the deficit. The tax rate of this group would need to double to collect enough revenue from the group to cover the deficit. Specifically, their average tax rate would need to increase from 30 percent to around 60 percent. A tax increase of this magnitude, however, might decrease the incentives for high-income earners to work as hard and encourage them to seek new ways to shield their income. Hence, in practice, the tax rate may need to be raised further and even then might not be enough to raise all the additional revenue."

Martin adds one additional point:

"Individual income taxes only partially reveal how the burden of federal taxation is distributed among different income groups. For low-income earners, payroll taxes constitute a significant portion of tax liabilities. The current Social Security and Medicaid withholding rates are 6.20 percent and 1.45 percent, respectively (in addition, employers must also match these contributions). Thus, the average tax rate faced by an individual making less than $50,000 annually and reporting positive taxable income is 12 percent in income taxes plus 7.65 percent; that is, almost 20 percent of income. Since wages contribute less to total income for higher-income earners, payroll taxes play a less significant role at the top. In other words, payroll taxes are regressive. Note, however, that the benefits they provide are progressive, as-high income earners rely more heavily on other sources of funding for retirement and healthcare (e.g., a 401(k) retirement plan)." (emphasis added)

Your humble scribe hopes Martin's explanation explains why "middle class tax cuts, even minor ones, imply big declines in revenue" while tax cuts for the rich "would necessitate large tax hikes." If the explanation is still unclear, please contact ElGrowlerGrande.

November 28, 2016

Additional Space for the Education Blob?

The Arlington Sun Gazette's Scott McCaffrey reported this morning that "Arlington school officials to consider leasing more space for HQ."

Here's how he explains what's going on:

"Angling to free up space for what would be Arlington’s fourth all-purpose high school, county education officials are aiming to lease additional space on Washington Boulevard and move administrative offices there.

"School Board members on Dec. 1 will be briefed on a proposal to lease nearly 80,000 square feet of additional space in the Sequoia Plaza complex, where school officials since 2013 have rented more than 60,000 square feet for instructional programs and administration.

"A proposal agreed to by the school system and developer – but awaiting School Board approval – would result in the school system occupying a total of about 140,000 square feet of space through 2033. (The existing lease on the current 60,000 square feet runs through 2027.)

"Complete financial details of the proposal have not yet been provided, but seem to indicate a cost of $2.6 million annually, plus escalation, for the additional space. The school system would receive a 100-percent rebate on the extra space for the first six months of the term, plus a 50-percent reduction for the subsequent six months."

According to McCaffrey, "School officials in recent months have offered increasing signs that they’d like to use the Arlington Education Center space for a new high school."

Although the term "education blob" is a beloved term most often used by John Stossel that generally includes teachers unions, parent-teacher associations and school bureaucrats (see John Stossel's 4/24/13 Townhall article), school bureaucrats would form the core of the "education blob." Given the implications of building a new high school, and thus a larger "education blob"  for Arlington County taxpayers, we urge Growls readers to growl to members of the Arlington School Board about the cost of public education in Arlington County, including a new headquarters building. Tell School Board members there is no need to pay Cadillac prices for a Chevrolet education. Just click-on the link below:

  • Call the School Board office at (703) 228-6015

And tell them ACTA sent you.

November 27, 2016

A Thought About Taxation

"To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it."

~ Thomas Jefferson, letter to Joseph Milligan, 1816

Source: Founders' Quote Database, The Patriot Post.

November 26, 2016

New Porker of the Month is Secretary of Veterans Affairs

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.

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A week ago, "Citizens Against Government Waste (CAGW) named Secretary of Veterans Affairs (VA) Robert McDonald its November 2016 Porker of the Month for giving bonuses to some of the senior executives who were involved in the continuing hospital wait-times scandal," according to this press release.

CAGW justified Sec. McDonald's selection this way:

"Despite assurances by Sec. McDonald and President Obama that the wait-times scandal was isolated to Phoenix and that the department has solved the problem, numerous VA inspector general (IG) reports over the last year have confirmed that thousands of veterans still languish in the VA’s single-payer system. They are waiting for care mainly due to the department’s abject failure to solve its corrosive culture, which led to the scandal in the first place.  Data released on June 3, 2016 found that the number of patients who have waited more than a month to see a doctor exceeded a half a million since the beginning of 2016, and no improvement was seen in any month so far this year.

"In the face of this continued mismanagement, an October 28, 2016 USA Today report found that the VA had provided $177 million worth of bonuses to its nearly 189,000 employees in 2015.  Included in that total were more than 300 senior executives, some of whom were intimately involved in the ongoing wait-times scandal at the Phoenix VA hospital as well as facilities nationwide.

"In an April 7, 2016 USA Today investigation, some of these same officials in 19 states were exposed as routinely “zeroing out” wait times for veterans and concealing the true length of delays.  Astonishingly, VA supervisors themselves instructed schedulers to fabricate wait times at medical facilities in seven states.

"Sec. McDonald’s May 23, 2016 attempt to reassure veterans and taxpayers of his focus on reform failed in an epic fashion when he compared veteran wait times to lines at Disney theme parks.  Those comments, along with the payment of bonuses to corrupt VA executives, seems to clearly illustrate Sec. McDonald’s flagrant disregard for reforming his beleaguered department.

"CAGW President Tom Schatz said, “The thoughtless payment of bonuses to shady VA bosses is despicable.  Sec. McDonald was heralded as a private-sector business leader who could turn around a troubled department.  Instead, Sec. McDonald is even worse than a standard issue Washington bureaucrat.  As I said after Sec. McDonald made his callous Disney comparison, he is Frozen in the past, and perhaps the fish from Finding Nemo need to be called on to help the VA find a new leader.”

See CAGW's press release for the embeded links that will take you to the supporting documents.

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

November 25, 2016

No. 1 Purchase by Food Stamp Recipients? Soft Drinks

In a CNS News story on Tuesday, November 22, with the headline, "Soft Drinks No. 1 Purchase by Food Stamp Recipients; $357,700,000 From 1 Grocery Chain," Terry Jeffrey's lede says, "Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer."

Jeffrey goes on to explain:

"That is according to a new study released by the Food and Nutrition Service, the federal agency responsible for running the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program.

"By contrast, milk was the top commodity bought from the same retailer by customers not on food stamps.

"In calendar year 2011, according to the study, food stamp recipients spent approximately $357,700,000 buying soft drinks from an enterprise the study reveals only as “a leading U.S. grocery retailer.”

"That was more than they spent on any other “food” commodity—including milk ($253,700,000), ground beef ($201,000,000), “bag snacks” ($199,300,000) or “candy-packaged” ($96,200,000), which also ranked among the top purchases."

He then continued, explaining:

"The dollar amount that food stamp recipients spent on soft drinks and other commodities comes from data a retailer provided to a data analysis company the federal government hired to find out what kind of foods people on foods stamps—and Americans not on foods stamps—were buying.

“The Food and Nutrition Service (FNS) awarded a contract to IMPAQ International, LLC, to determine what foods are typically purchased by households receiving Supplemental Nutrition Assistant Program (SNAP) benefits,” the study explained. “This study examined point-of-sale (POS) food purchase data to determine for what foods SNAP households have the largest expenditures, including both SNAP benefits and other resources, and how their expenditures compare to those made by non-SNAP households.”

“POS transaction data from January 1, 2011 through December 31, 2011 from a leading grocery retailer were examined for this study,” the report said.

"As explained in a footnote, the identity of the retailer was not revealed: “Per the data sharing agreement between the data provider and IMPAQ, a description of the source of these data must be limited to the following: ‘From a leading U.S. grocery retailer data examining POS transactions from January 1, 2011 through December 31, 2011 across approximately 11 million SNAP households. The majority of the stores would be classified as grocery stores, supermarkets, and combination food and drug stories per USDA/FNS food retailer definitions.”

"The report concluded that, overall, the commodities and general categories of food products purchased by households on foods stamps and households not on food stamps were largely similar—although the rankings of these products in household purchasing patterns differed slightly between SNAP recipients and non-SNAP recipients."

The following table was included as part of the CNS News story:

Read the entire story since there's a second table, and more information.

Concerned about the abuse or misuse of "food stamps?" Take a few minutes, and send a message to your representatives on Capitol Hill. Tell them whether you think "food stamps" are being abused or misused. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact their members of Congress by just clicking-on the embedded link:

  • 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.

For more information about CNS News, visit their website.

UPDATE (11/26/16): At the Director Blue blog yesterday, Tyler Durden does some additional arithmetic,  and finds:

". . . when we added up all of the commodities that would typically be considered "junk food" (i.e. soft drinks, candy, cakes, energy drinks, etc.), we found that roughly $950mm, or just over 14% of the aggregate $6.6BN of food expenditures made by SNAP recipients, is spent on unnecessary, unhealthy products."

November 23, 2016

A Thought As We Prepare to Celebrate Thanksgiving

"In 1789, after adopting the Bill of Rights to our Constitution, among the first official acts of Congress was approving a motion for proclamation of a national day of thanksgiving, recommending that citizens gather together and give thanks to God for their new nation's blessings.

"The first Thanksgiving Day designated by the United States of America was proclaimed by George Washington on October 3, 1789:

"Whereas it is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor, and whereas both Houses of Congress have by their joint Committee requested me to recommend to the People of the United States a day of public thanksgiving and prayer to be observed by acknowledging with grateful hearts the many signal favors of Almighty God especially by affording them an opportunity peaceably to establish a form of government for their safety and happiness.

"Now therefore I do recommend and assign Thursday the 26th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be. That we may then all unite in rendering unto him our sincere and humble thanks, for his kind care and protection of the People of this Country previous to their becoming a Nation, for the signal and manifold mercies, and the favorable interpositions of his providence, which we experienced in the course and conclusion of the late war, for the great degree of tranquility, union, and plenty, which we have since enjoyed, for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness, and particularly the national One now lately instituted, for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.

"And also that we may then unite in most humbly offering our prayers and supplications to the great Lord and Ruler of Nations and beseech him to pardon our national and other transgressions, to enable us all, whether in public or private stations, to perform our several and relative duties properly and punctually, to render our national government a blessing to all the people, by constantly being a Government of wise, just, and constitutional laws, discreetly and faithfully executed and obeyed, to protect and guide all Sovereigns and Nations (especially such as have shown kindness unto us) and to bless them with good government, peace, and concord. To promote the knowledge and practice of true religion and virtue, and the encrease of science among them and Us, and generally to grant unto all Mankind such a degree of temporal prosperity as he alone knows to be best.

"Given under my hand at the City of New York the third day of October in the year of our Lord 1789."

"Then-governor Thomas Jefferson followed with this 1789 proclamation in Virginia: "[I] appoint ... a day of public Thanksgiving to Almighty God ... to [ask] Him that He would ... pour out His Holy Spirit on all ministers of the Gospel; that He would ... spread the light of Christian knowledge through the remotest corners of the earth; and that He would establish these United States upon the basis of religion and virtue."

~ Mark Alexander

Source: The History and Legacy of Thanksgiving by Mark Alexander, Publisher, The Patriot Post.

November 22, 2016

Arlington County Sheriff Signs $250,000 Settlement

According to an online story in yesterday's Arlington Sun Gazette, "The Arlington County Sheriff’s Office has agreed to pay $250,000 and make procedural changes in connection with a civil-rights case brought by the U.S. Department of Justice."

The Sun Gazette goes on to say:

"The cash will go to a deaf man who was incarcerated for 40 days at the Arlington County Detention Facility. The Justice Department contended the sheriff’s office violated various provisions of the Americans with Disabilities Act in the treatment of inmates.

“People who are deaf or hard of hearing must be able to communicate clearly with law-enforcement officials,” the Justice Department said in announcing the settlement on Nov. 18.

"The $250,000 will go to the incarceree, Justice Department officials said, and the sheriff’s office has agreed to appoint an Americans with Disabilities Act coordinator and to provide telecommunication devices for incarcerees who are deaf or hard of hearing."

In a separate commentary today at his Editori's Blog, Scott McCaffrey asks: " Did they think nobody was going to notice the omission?' Here's the basis for his question:

"The Arlington County government Friday put out a press release about a settlement agreement between the county sheriff’s office and the U.S. Department of Justice, over the treatment of a deaf inmate.

"Besides the fact the press release mentioned that the inmate had had a “six-week stay” in the detention facility – making it sound like a spa vacation rather than being stuck in the clink – it neglected to mention the most salient fact: the that sheriff’s office agreed to pay the inmate $250,000 as part of the settlement. You had to click through to the Justice Department release to find that.

"Jumpin’ Jehoshaphat: Did county officials think nobody was going to figure this out? Why not just fess up in the press release, rather than try to happy-talk and tapdance your way around it?

"Tsk, tsk, tsk ...."

A jail official provided your humble scribe with two pieces of explanatory information. The first, obviously, related to why the press release failed to include the $250,000 settlement amount while the second item address the question of just what caused the ADA violation. The press release was corrected today, and now includes the settlement amount.

"We did not include the settlement amount as this was already covered by the DOJ Press Release (https://www.justice.gov/usao-edva/pr/arlington-county-sheriff-s-office-agrees-settle-ada-claim).

"ADA requires that a qualified interpreter is made available during specific processes while an individual is incarcerated. Our interpreters were not qualified under ADA standards. Our technology at the time was also not capable of offering the video rely service to deaf and hard of hearing individuals. This was the first deaf/hard of hearing inmate that we have had that also did not speak, read or write English and could only communicate using ASL. Before this, deaf/hard of hearing inmates were able to communicate using the TTY machine."

Arlington County's now corrected press release is available here. The press release from the Unites States Attorney's Office for the Eastern District of Virginia can be found here.

Monday's Washington Times included a relatively detailed article, "Arlington County pays $250,000 to deaf inmate," on page A12. However, I was unable to locate the URL link to the story by Matthew Barakat of the Associated Press. However, here is an NBC News 4 story by Sara Moniuszko and the AP.

Unfortunately, no one has explained why this immigrant (undocumented? illegal?) remained in jail for such a long period without the proper ADA-approved communications equipment. It seems Sheriff Arthur should hold a press conference whereby the press and interested citizens could hold her accountable.

November 21, 2016

Arlington Public Schools Contnue to be Region's Costliest

The Washington Area Boards of Education (WABE) Guide for Fiscal Year 2017 was recently published, and the Arlington Public Schools (APS) remain the costliest on a per-student basis. It is available on the APS website, and can also be found at the Fairfax County Public Schools website.

The WABE Guide compares the school divisions on an "apples-to-apples" basis on such factors as cost per pupil, average teacher salary, enrollment, sources of revenue, class sizes, authorized positions, and SAT scores. The data represents operating budget data, and does not include any capital budget funds.

The WABE Guide compares two Maryland and eight Virginia school districts. The Washington, D.C. school district is not included. The Arlington Public Schools receive 81.7% of its revenue from the local government. That is exceeded only by the Falls Church school district, which receives 82.5% of its revenue from its local government. By comparison, The City of Alexandria receives 79.1%, Fairfax County receives 70.5%, and Loudoun County receives 66.1%. Prince William receives 46.1% and the Manassas City Park receives 30.2%.

Let's take a look, then, at tge cost-per-student, total SAT score, and average teacher salary for the 10 WABE schools:

School Division -- Cost-per-Student; Total SAT Score; Average Teacher Salary

Alexandria City -- $17,008; 1458; $76,096.

Arlington County -- $18,957; 1661; $79,055.

Fairfax County -- $14,432; 1672; $70,813.

Falls Church -- $18,418; 1760; $75,360.

Loudoun County --  $13,121; 1617; $66,213.

Manassas City -- $13,112; 1416; $65,600.

Manassas Park City -- $11,158;1513; $59,686.

Montgomery County -- $15,975; 1631; $77,887.

Prince George's County -- $13,869; 1184; $70,278.

Prince William County -- $10,981; 1507; $65,334.

We growled about the FY 2016 WABE numbers on November 3, 2015.

Let's compare the Arlington and Fairfax County school numbers a bit further. First, the Arlington schools are 31.3% costlier, but the average SAT school is higher in the Fairfax County schools, albeit under 1%. But note there is a cost-per-student difference of $4,525 between the Arlington Public Schools and the Fairfax County Public Schools. In the FY 2017 school year, Arlington had an enrollment of 25,302 students. So consider, the Fairfax County Public Schools educate that same number of students, i.e., 25,302, for more than $112 million less (25,302 student x $4,525 difference per student). To the best of our knowledge, neither the Arlington School Board, nor the Superintendent, have have ever explained the $4,525 cost-per-student difference between the Arlington and Fairfax County public schools.

Given the implications for taxpayers, we urge Growls readers to growl to members of the Arlington School Board about the cost of public education in Arlington County. Tell School Board members there is no need to pay Cadillac prices for a Chevrolet education. Just click-on the link below:

  • Call the School Board office at (703) 228-6015

And tell them ACTA sent you.

November 20, 2016

Thank Goodness for Virginia Being a Dillon Rule State

At the Tax Foundation's Tax Policy Blog on Friday, Jared Walczak reports the Portland, Oregon, City Commissioners are considering a "Tax on Companies with High CEO Pay."

Here's how he begins explaining the proposed Portland tax:

“Like most other lefties, I bought [Thomas Piketty's Capital in the Twenty-First Century], but haven’t read it all,” Portland City Commissioner Steve Novick told The Huffington Post. The book does make an appearance, though, in the first two findings of a Portland ordinance Novick drafted, which would penalize companies with high CEO compensation.

"The ordinance, currently under consideration, would take advantage of a pending SEC pay ratio reporting requirement to impose a business surtax on companies with high executive compensation. Novick characterizes the proposal as a “direct assault on extreme inequality,” though in practice, it may prove to be more of a symbolic blow.

"The draft language of the ordinance proposes a business surtax of 10 percent on any publicly-traded company doing business in Portland where the ratio between CEO and median employee pay is at least 100 to 1, and a 25 surtax at 250 to 1 or above. The city’s Revenue Division estimates that about 545 publicly traded companies currently pay the city’s business license tax, and that they currently pay $17.9 million a year. An unknown number have CEO compensation above these thresholds ($5 million in CEO compensation, by way of example, for a company with median compensation of $50,000), though the city produced revenue estimates based on a study by the Economic Policy Institute (EPI).

"There are limits to the projections of EPI or any other group, however. For instance, such estimates frequently count performance-linked compensation prospectively, without regard to whether the performance targets are met and the bonus is paid or options are exercised. When SEC filings begin including a ratio next year, these figures may fall far short of EPI (and other) estimates, which can be wildly disparate. Whereas EPI estimates a national ratio of 335:1 for Fortune 500 CEOs, PayScale estimates that the median compensation for the nation’s 168 highest-paid CEOs had a ratio of 71:1."

Walczak concludes the post,writing:

"The idea of using the tax code to penalize companies with high CEO pay ratios is a relatively new development, but Portland isn’t the first to consider it. In 2014, the California State Senate rejected legislation which would have bifurcated the corporate income tax, with higher rates for companies with high CEO pay, and the Rhode Island House of Representatives defeated a Senate bill that would have granted preference in state contracts to vendors with low pay ratios.

"With “Keep Portland Weird” the city’s unofficial motto, Portland is not, perhaps, a bellwether of national trends. Such taxes, moreover, are unlikely to prove an effective way to address inequality. Nevertheless, with this proposal, Portland is simply building on a year of outside-the-box thinking on state and local tax policy."

So what is the Dillon Rule? According to a white paper by the American City County Exchange, posted at the American Legislative Exchange Council (ALEC):

"Local governments across America follow one of two types of governing authority: Home Rule or the Dillon Rule. Home Rule, as it sounds, gives local governments governing authority to make a wide range of legislative decisions that have not been addressed by the state. By contrast, the Dillon Rule creates a framework where local governments can only legislate what the state government has decreed. Both forms of governing author- ity were created by the states to help carry out the mission of the states at a local level. It would be virtually impossible for state governments to administer public safety, infrastructure and zoning issues without the creation of these political subdivisions. States use the Dillon Rule and Home Rule as ways to keep local governments focused on what they do best. As a re- sult, the state is able to maintain a limited local government to promote economic continuity throughout its borders. Whether a local government is governed by the Dillon Rule or Home Rule, the ultimate decision of what powers they possess resides with the states."

Imagine the tax burden Arlington County taxpayers would have to shoulder if the five County Board grandees enjoyed Home Rule authority to set and increase taxes. So thank goodness for the Dillon Rule.


November 19, 2016

Who Doesn't Pay Federal Income Taxes?

Last week (November 8, 2016) we growled about the National Taxpayers Union (NTU) 2014 update of who pays federal income taxes.

Our friends at NTU also posted information about the "significant number of tax returns that show no income tax liability." Specifically, they wrote, "The latest data available show that 35 percent of returns in 2014 paid no income tax." They also wrote:

"Income tax rates are designed to shield low-income workers from excessive burdens. Thus, the number of nontaxable returns is in part indicative of the state of the economy. As the economy has slowly recovered and unemployment decreased, the number of taxable returns has gradually increased.

"The number of nontaxable returns is also reflective of the number of exclusions and credits available to eligible filers. The Fiscal Year 2017 Budget reports that there are 196 "tax expenditures" related to individual and business tax income, up from the 128 tax expenditures listed in the FY 1980 historical budget book. While these tax credits provide targeted relief to eligible taxpayers (in lieu of a flatter tax with lower overall rates), they also contribute to the complexity and compliance burdens of the Tax Code.

They also provide the following table of the number of total, taxable and nontaxable returns from 1980 through 2014, and is the basis for the following chart:

 

NTU also provides a chart of paying and non-paying tax returns for the period 1980 through 2014. Finally, there is a table of paying and non-paying 2014 returns by filing status, which shows:

  • All Returns -- 35.0%
  • Joint Returns -- 23.9%
  • Filing Separately -- 18.5%
  • Head of Household -- 67.9%
  • Individual Returns -- 33.9%
  • Surviving Spouse -- 49.6%

Take a few minutes, and send a message to your representatives on Capitol Hill. Tell them whether you prefer the current, progressive tax rates, or whether you prefer a flat tax. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

For more information about the National Taxpayers Union, visit their website.

November 18, 2016

Two Thoughts about Tax Exemptions

"Every tax exemption constitutes a subsidy."

~ William J. Brennan, Jr.

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"Tax exemption is a privilege derived from legislative grace, not a constitutional right."

~ Lapsley W. Hamblen, Jr.

Source: page 165, "As Certain as Death: Quotations about Taxes," 2010, compiled by Jeffrey Yablon, TaxAnalysts.com.

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"William J. Brennan Jr. (1906 -- 1997) was a liberal associate justice of the Supreme Court, having served on the bench for more than 33 years," according to Biography.com.

Lapsley W. Hamblen, Jr. (1926 -- 2012) was appointed by President Reagan as a Judge of the United States Tax Court on September 14, 1982, for a 15-year term, and performed judicial duties until June 30, 2000, according to the U.S. Tax Court.

November 17, 2016

Elections Over . . . House GOP Passes New Tax

At the Conservative Review on Tuesday, November 15, Chris Pandolfo wrote, "the Republican-controlled House voted in favor of a tax on concrete to placate special interests in Washington D.C."

Pandolfo explains what happened this way:

"Provided yet another opportunity to expand the size and scope of government, the House of Representatives overwhelmingly passed H.R. 985, the Concrete Masonry Products, Research, Education, and Promotion Act of 2015, a tax in all but name.

"The bill, introduced by Rep. Brett Guthrie, R-Ky. (F, 45%), would create a Concrete Masonry Products Board composed of 15-25 members appointed by the Department of Commerce after a referendum approval by producers of concrete masonry products. This board will have the power to establish, finance, and carry out a “coordinated research and education program,” ostensibly to “promote masonry products in the domestic market,” according to a legislative bulletin email from the Republican Study Committee. This program will be paid for by a “federally administered assessment.”

"An “assessment,” in case you were not aware, is Washington-speak for a “tax” — in this case, a tax on concrete."

He also wrote:

"The House Liberty Caucus released a statement in opposition to H.R. 985.

"Said Rep. Justin Amash, R-Mich. (A, 96%), chairman of the Liberty Caucus: “If an industry wants to raise money to promote itself, then interested businesses should do so through voluntary agreement. The fact that an industry asks the government to impose an assessment means that it has been unable to persuade every business to participate voluntarily.”

"The government has no business involving itself in the research and promotion of the concrete masonry industry. This legislation is purely and simply corporate welfare to the special interests of the Concrete Masonry Products Board.

"The bottom line is that your representative’s commitment to free market principles was just put to the test. The vote Monday evening passed with just 37 Republican members voting against the special-interest bill."

You can read the statement released by the House Freedom Caucus here.

On Roll Call vote #575, there were 355 Yeas (188 Republicans and 167 Democratic) and 38 Nays (37 Republicans and 1 Democratic) votes. A total of 38 Congressmen did not vote (20 Republican and 18 Democratic). Rep. Don Beyer (D), who represents Arlington County in the House of Representatives, voted to support cronyism and against liberty and free market principles.

For the record, Rep. Beyer has a Liberty Score of 7% (an F) at Conservative Review.

Take a couple of minutes to write to your member of Congress. If a member of the House of Representatives, thank them if they voted Nay. If you write one or both of your Senators, urge them to vote against this pseudo-tax when it comes up in the Senate. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

November 16, 2016

A Thought about the Dignity of Work

" . . .  There is indeed a gap in this country, and it has now led to a political revolution, a significant realignment in American politics. But the relevant gap wasn’t income. It was dignity.

"Too many Americans have lost pride in themselves. We sense dignity by creating value with our lives, through families, communities, and especially work. That is why American leaders so frequently talk about dignity in the context of labor. As Martin Luther King Jr. taught, “All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.” Conversely, nothing destroys dignity more than idleness and a sense of superfluousness—the feeling that one is simply not needed.

"That is the circumstance in which millions of Americans find themselves today. Best-selling books over the past few years such as Charles Murray’s “Coming Apart” and J.D. Vance’s “Hillbilly Elegy” tell the story. The U.S. is bifurcating into a nation of economic winners and losers, and this distinction is seeping into American culture. The dignity gap grows every time those who lose out start hearing, “We don’t need you anymore.”

"Who falls on the wrong side of this dignity gap? These days it is working-class men. In his new book “Men Without Work,” my colleague Nick Eberstadt shows that between 1965 and 2015 the percentage of working-aged men outside the workforce increased to 22% from 10%. Many millions more are underemployed. The employment-to-population ratio for men aged 25-54 is 6.8% lower today than it was in 1930, in the teeth of the Great Depression."

~ Arthur C. Brooks

Source: his November 9, 2016 op-ed in the Wall Street Journal (behind the WSJ paywall).

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Brooks is President, American Enterprise Institute.

November 15, 2016

Audit Finds Inefficiency and Ineffectiveness at Virginia Agency

Earlier this year, the General Assembly directed the Joint Legislative Audit and Review Commission (JLARC) "to review various aspects of the Virginia Economic Development Partnership Authority (VEDP), including its operational efficiency, performance, and accountability structure. JLARC staff were also directed to review the level of coordination of economic development programs in Virginia."

According to JLARC, "The General Assembly established VEDP in 1995 to 'encourage, stimulate and support the development and expansion of the economy of the Commonwealth through economic development.' VEDP has sought to accomplish this statutory objective primarily through marketing Virginia as a good place to do business, promoting international exports, and administering economic development incentive grants. VEDP is almost entirely funded by state general funds and is governed by a board of directors."

Here is what JLARC found, in bullet-point format:

  • VEDP is not an efficiently or effectively managed organization
  • VEDP’s approach to marketing Virginia compromises its effectiveness
  • VEDP’s marketing efforts do not fully adhere to any fundamental industry practices for effective marketing
  • VEDP has demonstrated success in promoting international exports
  • VEDP’s unstructured approach to administering incentive grants leaves the state vulnerable to fraud and poor use of limited resources
  • VEDP had no documented policies and procedures for critical aspects of administering grant awards prior to January 2016
  • Lack of systematic coordination of statewide economic development activities undermines impact of state’s total investment
  • Systemic deficiencies at VEDP necessitate more accountability through an effective, engaged, and informed board of directors

JLARC made a number of recommendations, divided between legislative and executive actions.

Three documents are available from this JLARC webpage:

  • A 4-page summary.
  • The complete 132-page DRAFT report.
  • An 8-page list of recommendations.

At Bacon's Rebellion today, Jim Bacon points to one ray of hope at VEDP, i.e., its export-promotion program. He also provides his 'bottom line:'

"There’s an even bigger question to ponder. Of all the places that Virginia invests in economic development — corporate recruitment, incentives, tourism, agricultural marketing, the Center for Innovative Technology, university research — is corporate recruitment/incentives the best allocation of funds? Clearly, it was at one time in Virginia’s history. I’m not saying it isn’t now. But like every other expenditure of state dollars, we should seek the greatest return on investment of public dollars, which means periodically reviewing all state-funded initiatives. This might be a good time to step back and look at the big picture."

Finally, news of this JLARC report obviously received statewide coverage today, including the following newspapers:

The Roanoke Times' Jeff Sturgeon wrote the following lede:

"Only after an investigation by The Roanoke Times exposed gaping due diligence failures did Virginia’s lead economic development agency institute safeguards to shield state taxpayer money against bad deals, according to a report released Monday by the General Assembly’s watchdog agency.

"Starting in July 1995, the Virginia Economic Development Partnership operated for more than 20 years without “a formal due diligence process to protect the state from fraud and loss,” the Joint Legislative Audit and Review Commission wrote in a 132-page report.

"That approach changed after the newspaper’s investigation, published Jan. 17, the commission said. Protocols suggested more than four years earlier were enacted and a committee began meeting weekly to vet projects, including a review of companies’ credit ratings and reports, legal histories and financial statements.
None of that happened in the case of Lindenburg Industry, a company owned by Chinese nationals that received $1.4 million in state taxpayer money to start a catalytic converter plant in Appomattox. The factory never opened.

"Officials at the partnership recommended approval of the grant largely basing their faith in the project on a website filled with text and photos pulled from the web pages of an unrelated company. The site listed a physical address in Winston-Salem, North Carolina, where, the newspaper found, the company had never been located. The unaffiliated company had issued a cease-and-desist demand over the lifted copy and pictures.

"Following the newspaper’s report on the “failure of VEDP staff to validate the legitimacy” of the company, the agency “created formal due diligence procedures,” the commission said." (emphasis added)

Kudos to Jeff Sturgeon of the Roanoke Times for his work in getting JLARC to audit VEDP!

Growls readers who continue to be concerned about the Virginia Economic Development Partnership Authority (VEDP) may want to provide their comments to their state legislators. 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.

November 14, 2016

Higher Metro Subsidy Gets Pushback

Earlier today, the Arlington Sun Gazette's Scott McCaffrey wrote that Metro's request for a higher subsidy is getting pushback from Arlington County's representative on the Metro board.

McCaffrey begins by writing:

"Arlington’s representative to the Metro board said he will do what he can to ensure county residents don’t get hit with a whopping increase in the annual subsidy required to fund the beleaguered transit system.

"County Board member Christian Dorsey on Nov. 9 said he would work to “value-engineer that subsidy level down to as low as possible” while maintaining basic safety and operational quality.

"Cutting the proposed subsidy increase “is not only my hope but my expectation,” Dorsey said in a briefing to fellow County Board members.

"His comments came after the transit system’s CEO proposed a $1.8 billion fiscal 2018 operating budget that calls for Virginia jurisdictions to contribute $39 million more in operating funds. Under the proposal, Arlington’s share of the subsidy would grow $12 million, rising to $68 million, to help offset a projected $290 million budget shortfall."

He also wrote:

"Dorsey is approaching the end of his first year as a non-voting member on the WMATA board. He will have a say on the budget, but Virginia’s votes on it will be cast by representatives from the state government and Fairfax County.

"Wiedefeld’s budget proposal still has a long road ahead of it. Public hearings are likely to be held in January, with final adoption in March. Whether localities across the region will go along with the proposal for higher subsidies remains to be seen, but County Board Chairman Libby Garvey already has warned that higher costs for Metro and county schools could push homeowners’ tax bills higher in the coming year."

As a popular sports broadcaster liked to say, "Let's go to the videotape." Or, in this case, let's go to the CAFR, i.e., Arlington County's Comprehensive Annual Financial Report (CAFR).

When WMATA first reported an $18 billion budget shortfall, we growled on May 15, 2016, that before giving WMATA more money, Arlington County needed to learn whether WMATA wisely spent previously large increases in revenues. We growled at the time:

"But the subsidies that Arlington County taxpayers have been paying to WMATA have been growing faster -- much faster -- than total county expenditures from the General Fund, the main revenue source for county and schools spending. From fiscal year 2001 to fiscal year 2015, which ended June 30, 2015, total expenditures increased by 5.1%. but the subsidies paid to WMATA (technically, "regional contributions transit") increased at an annual rate of 8.3%. During this same period, the annual rate of inflation was about 2.8%. Numbers based upon Table D-1, Statistical Section, of the county's Comprehensive Annual Financial Report (CAFR). (emphasis added)

"Put another way, if the subsidies to WMATA in fiscal year 2015 remained at the same share of total expenditures as 2001, the subsidies to WMATA in fiscal year 2015 would be $19.5 million rather than $29.9 million. That difference of $10.4 million means the real estate tax rate could be an additional 1.7 cents lower. On the so-called average Arlington County home, that would mean an annual saving of $102."

According to Arlington County's FY 2015 CAFR, county taxpayers subsidized WMATA with $29.9 million in that fiscal year. The $39 million that WMATA is now seeking represents approximately a 15% annual increase over the $29.9 million subsidy provided by Arlington County in FY 2015. And, as we previously growled, WMATA's subsidy has been growing faster than overall county spending, and much faster than than inflation.

Growls readers wishing to comment on the county subsidies paid to WMATA, are urged to write to members of the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

November 13, 2016

Arlington County to Launch Fraud Hotline

The Arlington Sun Gazette reported on Friday that beginning November 15, Arlington County government "will launch a hotline for residents wishing to report financial fraud, waste and abuse related to government operations."

According to the Sun Gazette's story:

"The new system will complement a hotline that debuted last year exclusively for county-government employees. Residents who provide tips will be able to give their contact information or remain anonymous, county officials said, and will be able to track progress of action on their complaints.

"The hotline will be operated by Ethical Advocate under contract to the county government. Complaints can be made at www.arlingtonva.ethicaladvocate.com or by phone at (866) 565-9206. (emphasis added)

"Complaints will be forwarded to a committee established by County Manager Mark Schwartz, which will determine disposition.

"County officials said the hotline is only for financial-related issues, “not the place to report issues about zoning, taxes, nuisance loud noises, trash pickup, etc.” Information on how to complain about non-fiscal items can be found on the government’s Web site at www.arlingtonva.us."

It will be most interesting to see the transparency the County Manager builds into the process, e.g., whether the county's Comprehensive Annual Financial Report (CAFR) reports the number, types, and disposition of complaints reported to the hotline.

If Growls readers find the fraud hotline is non-responsive, do not hesitate to write or call members of the Arlington County Board to voice your concerns. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

November 12, 2016

A Thought about Tax Brackets

"Most of the people in the upper income brackets are not rich and do not have wealth sheltered offshore. They are typically working people who have finally reached their peak earning years after many years of far more modest incomes — and now see much of what they have worked for siphoned off by politicians, to the accompaniment of lofty rhetoric."
~ Thomas Sowell
Source: page 140, "As Certain as Death: Quotations about Taxes," 2010, compiled by Jeffrey Yablon, TaxAnalysts.com.
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Thomas Sowell is a senior fellow at the Hoover Institution. He writes on economics, history, social policy, ethnicity, and the history of ideas. His website is www.tsowell.com.
 

November 11, 2016

Fed. Govt Collects Record $221.7 Billion. Deficit Still $44 Billion.

Earlier today, CNS News' Terry Jeffrey reports, "$221,692,000,000: Federal Taxes Set Record for October; $1,459 Per Worker; Feds Still Run Deficit of $44,192,000,000."

Here's part of his report (emphasis added):

"Federal tax revenues set an all-time record of $221,692,000,000 for the month of October, according to the newly released Monthly Treasury Statement.

"In constant 2016 dollars that is the most taxes the federal government has ever collected in October, which is the first month of the fiscal year.

"The record $221,692,000,000 in taxes collected this October was up $6,718,330,000 from the $214,973,670,000 in constant 2016 dollars that the Treasury collected in October 2015.

"Despite bringing in record tax revenue of $221,692,000,000 this October, the federal government ran a deficit of $44,192,000,000 during month. That is because federal spending in October was $265,884,000,000.

"The record $221,692,000,000 in federal taxes for October equaled approximately $1,459 for every person who had either a full- or part-time job during the month. (According the Bureau of Labor Statistics, the total number of people employed in the United States in October was 151,925,000.)

"The $44,192,000,000 deficit the federal government ran while collecting record tax revenue for October equaled approximately $291 for each person with a full- or part-time job."

Take a couple of minutes to write your member of Congress. Tell them to put the federal government on a fiscal budget. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

November 10, 2016

Arlington County Board Hires 2nd Auditor in 11-Month Span

The Arlington Sun Gazette reported this morning that the Arlington County Board announced yesterday "the hiring of their second independent auditor, Chris Horton, who now serves as audit manager for Fairfax County Public Schools." He will begin working for Arlington County November 21.

The paper went on to say:

"Horton succeeds Jessica Tucker, who served for five months beginning in January before leaving for a position in California.

"During Tucker’s five months in office, she completed three audits of government operations, and put together a proposed audit plan for the fiscal year that began in July.

"Last year, the General Assembly approved legislation allowing the County Board to hire and supervise an auditor reporting directly to its members, rather than up through the chain of command that leads to the county manager. Previously, the County Board was only allowed to independently hire, fire and supervise three staff members: the county manager, county attorney and clerk to the County Board.

"While employed by the County Board, the auditor’s work is overseen by a committee that includes representatives from the county manager’s office and Department of Management and Finance and three citizen representatives in addition to County Board members John Vihstadt and Jay Fisette."

Arlington County's press release yesterday provided the following three bullet points:

  • Will report to the County Board
  • Served as audit manager for Fairfax County Public Schools
  • Will conduct performance, operational audits

We've growled several times over the past year about the need for a strong and dynamic auditor to provide oversight over county operations, including December 16, 2015, June 17, 2016, and June 23, 2016.

For more information about internal audit services performed by Arlington County, see the County Auditor's webpage, and the Internal Audit Services webpage, where you can access a number of audit reports.

Growls readers are urged to write to members of the Arlington County Board to voice their concerns about the County Auditor's position, e.g., whether it is properly staffed or whether it should be combined with the existing internal audit function to ensure proper efficiency. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

UPDATE (11/11/16): The Washington Post's Patricia Sullivan reported on the new hire. Her report included the following comments:

"Horton will do independent audits and reviews with priorities on program efficiency, effectiveness and transparency. His job is the result of pressure brought to bear on the County Board several years ago by now-chair Libby Garvey (D) and board member John Vihstadt (I) who argued that internal auditors were insufficient to review county programs.

"Horton, who will start his job Nov. 21, is actually the second auditor hired. Jessica Tucker was hired 11 months ago for the job, but she resigned within six months to move to her home state of California."

November 09, 2016

A Reminder of Why Arlington County has a Meals Tax

One question on the ballot in Fairfax County yesterday was whether to authorize the Fairfax County government to implement a meals tax.

Here's how the Washington Business Jounral's Drew Hansen reports the results:

"Voters in Fairfax County turned down a meals tax referendum Tuesday aimed at increasing funding for public schools.

"The proposed measure, which would have levied a 4 percent tax on restaurant meals and prepared foods, was defeated by a 56-to-44 margin with 97 percent of precincts reporting.

"Proponents said the tax would raise about $100 million annually. As proposed, 70 percent would’ve been dedicated to Fairfax County Public Schools with the other 30 percent set aside for county services, capital projects and property tax relief.

"The tax would have been in addition to a 6 percent Virginia sales tax that’s already applied to restaurant meals. Adding a meals tax would’ve brought Fairfax County in line with most of its neighbors: Alexandria, Arlington, Falls Church and the city of Fairfax all have a 4 percent meals tax. In D.C., the meals tax is 10 percent, which is in lieu of sales tax.

"The ballot measure had the support of the majority of the Fairfax County Board of Supervisors, who said the purpose of the tax was to reduce dependence on real estate taxes."

Hansen concluded by quoting "George Washington University professor David Brunori, a self-described tax purist," who "told the Washington Business Journal the tax was "dishonest" in that it would raise money from people outside the county to support Fairfax schools."

We've growled several times in the past five weeks about the Fairfax County meals tax, e.g., October 2, October 11, October 15, October 21, and October 31, which explain how an amendment to the legislation that authorized Virginia counties to implement the meals tax, allowed counties whose governing bodies voted unanimously need not obtain voter approval.

Just a reminder that we pay the meals tax in Arlington County because all five members of an County Board in the early 1990s voted unanimously to implement the meals tax, and thus deprived Arlington County citizens from voting on the meals tax. Should we interpret the action of that County Board as the statist government knows best?

Take a few minute, and write the Arlington County Board. Tell them you know their dirty little secret.Use the link below to write directly to the Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

November 08, 2016

Who Pays Federal Income Taxes, 2014 Update

Our friends at the National Taxpayers Union have just posted several charts that "illustrate the share of taxes paid by income percentiles for Tax Year 2014, the most recent set of data available from the IRS." They break "down the federal share of income taxes by gross income to show how much each bracket contributes yearly."

The following numbers are the percentages tanked by Adjusted Gross Income (AGI):

  • Top 1% -- threshold = $465,626; AGI share = 20.58%; percentage of personal income tax paid = 39.48%.
  • Top 5% -- threshold = $188,996; AGI share = 35.96%; percentage of personal income tax paid = 59.97%.
  • Top 10% -- threshold = $133,445; AGI share = 47.21%; percentage of personal income tax paid = 70.88%.
  • Top 25% -- threshold = $77,714; AGI share = 68.91%; percentage of personal income tax paid = 86.78%.
  • Top 50% -- threshold = $38,173; AGI share = 88.73%; percentage of personal income tax paid = 97.25%.
  • Bottom 50% -- threshold = <$38,173; AGI share = 11.27%; percentage of personal income tax paid = 2.75%.

There is also a table of showing how the percentage of federal personal income tax paid has changes over the years. For example, in 1980, the top 1% of earners paid 19.29% of all federal income taxes paid. By 2014, that percentage more than doubled, increasing to 39.48%. The share paid by the bottom 50%, however, decreased from 7.02% in 1980 to 2.75% in 2014.

So visit the NTU/NTUF webpage to see the table and the charts.

As we've growled on many occasions, e.g., here, we keep asking liberals to define 'fair share.'

Take a few minutes, and send a message to your representatives on Capitol Hill about what share of federal income taxes should be paid by individual taxpayers.

If you have a few minutes, write your member of Congress. Find out what they are doing to reduce the federal budget. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

For more information about the National Taxpayers Union, visit their website.

November 07, 2016

Yet Another Example of Your Tax Dollars Down the Rathole

CNS News' Penny Starr reports today, "Feds to Dish Out $1.7 Billion to Ranchers, Farmers to Leave Land Fallow.

Starr reports:

"The United States Department of Agriculture announced it will “invest” $1.7 billion in 500,000 ranchers and farmers to stop production on “sensitive agricultural lands.”

“The investment, part of the voluntary USDA Conservation Reserve Program (CRP), will allow producers to protect almost 24 million acres of wetlands, grasslands and wildlife habitat in 2016,” the Oct. 28 announcement said.

"The ranchers and farmers “enroll” in the program to have access to the funding.

“CRP provides financial assistance to farmers and ranchers who remove environmentally sensitive land from production to be planted with certain grasses, shrubs and trees that improve water quality, prevent soil erosion, and increase wildlife habitat,” the announcement said. “In return for enrolling in CRP, USDA, through the Farm Service Agency (FSA), provides participants with rental payments and cost-share assistance. Landowners enter into contracts that last between 10 and 15 years.”

"We have seen record demand to participate in this important program," Agriculture Secretary Tom Vilsack said in the press release announcing the funding.

"Despite the current enrollment limit of 24 million acres, USDA is committed to continuing our important partnerships with farmers, ranchers, state and local governments and sportsmen to maintain the environmental benefits provided by the Conservation Reserve Program,” Vilsack said.

"“More than 1.3 million acres were newly enrolled in CRP in fiscal year 2016 using the continuous enrollment authority, double the pace of the previous year,” the announcement said. “In fiscal year 2016, FSA also accepted 411,000 acres through its general enrollment authority, plus 101,000 acres in the new CRP-Grasslands program, which balances conservation with working lands.”

"The announcement said this fallow land and, in turn, protected waterways, helps “pollinators, and hundreds of thousands of acres of wildlife habitat that has resurrected waterfowl and gamebird populations, like pheasants, quail and prairie chicken.”

"The program is also good for the environment, the announcement said.

“CRP has sequestered an annual average of 49 million tons of greenhouse gases, equal to taking nine million cars off the road, and prevented nine billion tons of soil from erosion, enough to fill 600 million dump trucks,” the announcement said."

For any math-challenged liberals who are wondering, the average check written by the feds "to stop production on 'sensitive agricultural land'" was $3,400 ($1.7 billion / 500,000 ='s $3,400).

Actually, sounds like another form of wealth redistricution, doesn't it?

Another data point to remember when you step into the voting booth tomorrow, Tuesday, November 8, 2016? If you have a few minutes, write your member of Congress. Find out what they are doing to reduce the federal budget. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

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CNSNews.com was launched on June 16, 1998 as a news source for individuals, news organizations and broadcasters who put a higher premium on balance than spin and seek news that’s ignored or under-reported as a result of media bias by omission.

November 06, 2016

A Thought about Taxation

"Milk the cow, but do not pull off the udder."

~ Old Greek Proverb

Source: page 94, "As Certain as Death: Quotations about Taxes," 2010, compiled by Jeffrey Yablon, TaxAnalysts.com.

November 05, 2016

Taxing Americans Another $3.6 Trillion; $15,000 per Family

In a commentary at CNS News yesterday, Robert Rector writes that "amnesty would cost taxpayers an estimated $3,600,000,000,000 over 75 years," citing a report from the National Academy of Sciences.

Here's a portion of what Rector writes:

"The findings in the report indicate that if amnesty for illegal immigrants were enacted, the government would have to raise taxes immediately by $1.29 trillion and put that sum into a high-yield bank account to cover future fiscal losses generated by the amnesty recipients and their children.

"To cover the future cost, each U.S. household currently paying federal income tax would have to pay, on average, an immediate lump sum of over $15,000. (emphasis added)

"The National Academy of Sciences report, “The Economic and Fiscal Consequences of Immigration,” provides fiscal balance projections for immigrants and their descendants over 75 years.

"The fiscal balance of an individual equals all government taxes paid minus all benefits received. Federal, state, and local benefits and taxes are included in the estimates.

"The NAS report, released a few weeks ago, shows that the fiscal balances of immigrants vary greatly according to education level: Immigrants with low education levels impose substantial fiscal costs that extend far into the future. The government benefits they will receive greatly exceed the taxes they will pay.

"This is critical because current illegal immigrants have very low education levels.

"Around 10 million adult illegal immigrants currently are in the U.S. Nearly half don’t have a high school diploma. Overall, adult illegal immigrants are six times more likely to lack that diploma than are U.S.-born residents.

"Illegal immigrants currently receive routine government services such as roads, sewers, and police and fire protection. The children of illegal immigrants currently receive heavily subsidized public education at an average cost of $12,000 per child per year."

He continues by making these important points:

"Because illegal immigrant families already receive many government benefits and services, they currently impose a fiscal cost on taxpayers. The benefits they receive exceed taxes paid.

"Amnesty or “earned citizenship” would provide current illegal immigrants access to an additional level of expensive government entitlements and benefits.

"All of the major “comprehensive” immigration reform or “earned citizenship” bills debated in Congress since 2006 would have granted nearly all current illegal immigrants eligibility for future Social Security and Medicare benefits after 10 years of work. These bills also would have given amnesty recipients access to almost the entire U.S. welfare system, after modest delays.

"In effect, amnesty would give current illegal immigrants access to the same government benefits as immigrants who are here legally . . . ."

Another data point to remember when you step into the voting booth on Tuesday, November 8, 2016? If you have a few minutes, write your member of Congress. Find out what they are planning on immigration reform. And since they still represent We the People in Congress, be sure to describe the legislation you expect. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

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Robert Rector is a leading authority on poverty, welfare programs and immigration in America for three decades. He is The Heritage Foundation’s senior research fellow in domestic policy.

November 04, 2016

Arlington County Board Seeks Input on Budget Items

At their October 18, 2016 recessed meeting, the Arlington County Board considered two budget items. One involved closeout of the fiscal year 2016 budget that ended June 30, 2016 (agenda item #34). The second was the Board's budget guidance to the County Manager in preparing the FY 2018 budget that will begin July 1, 2017, and included a financial forecast (agenda item #35).

The county's press release coming out of the meeting identified four talking points for the two items, which were:

  • Manager makes recommendations for $17.8 million in FY 2016 close-out funds
  • $5.4 million funding gap forecast for FY 2018
  • Increased funding for Metro, Schools anticipated for FY 2018
  • Board draft guidance for FY 2018: balance budget within existing tax rate

In addition, the county said:

"Arlington County is asking the public to weigh-in on both the County Manager’s recommendations for how to spend $17.8 million in Fiscal Year 2016 Budget close-out funding and on the Board’s draft guidelines for the County Manager’s FY 2018 Proposed Budget.

"Arlingtonians should have a chance to study and comment on the Manager’s proposals for spending our FY 2016 close-out funds, and the guidelines the Board is proposing the Manager follow in preparing the FY 2018 Budget. We look forward to hearing from them before taking a final vote on these important fiscal decisions at our November meeting,” County Board Chair Libby Garvey said.

"Share your feedback on the County website. Comments are visible online and will be compiled and presented to the Board before its November meeting, when the Board will hold a public hearing and take a vote on both close-out spending and the draft guidelines for the FY 2018 Budget."

Feedback via the county website's feedback form closed at 5:00 P.M. today. However, the county says they will accept "additional feedback by e-mail." Just click-on the following link:

There are currently 269 responses to the two issues: 1) FY 2016 closeout; and 2) FY 2018 budget guidance. The two questions asked about the FY 2016 closeout were:

  1. Do you agree with the County Manager's recommended allocations for the FY 2016 close-out funds?
  2. Do you have an alternative recommendation(s) for the County Board to consider?

There were also two questions about FY 2018 budget guidance, which were:

  1. Provide feedback or comments on the priority areas outlined in the draft guidance that you would like the County Board to consider in its final guidance to the County Manager.
  2. Funding for Metro and Schools will likely be budget pressures for the FY 2018 operating budget. How would you propose we address these issues if we are unable to fund these needs within projected revenue?

Before responding to the above questions, you may want to consider three suggested principles offered by Peter Rousselot in his October 27, 2016 column at ARLnow.com. They were:

  1. As a matter of prudent financial management, a fair and reasonable percentage (i.e., a % higher than 0%) of any close-out surplus always should be allocated to moderate the tax rate and/or reduce bonded indebtedness.
  2. The remainder of the close-out surplus (after setting aside a % for tax rate moderation and any debt reduction) should next be considered to address any emergency that requires funding before final adoption of the FY2018 operating budget.
  3. All other proposed uses of the close-out surplus automatically should be deferred, and the remaining funds’ allocation should be decided in conjunction with the FY2018 budget process.

Since closing out the accounting records for the fiscal year is a necessary accounting procedure, I could continue Mr. Rousselot's first. However, I would combine his second and third steps, and defer their allocation until adoption of the FY 2018 budget. If they were needed to further moderate any tax rate increase, fine. If they were needed to shore-up reserve funds, fine. And, if the Board wanted to use them for special "one-time" County Board projects, the funds could be used for that, too. As Mr. Rousselot reminds us:

"Close-out surpluses are “one-time” funds rather than ongoing revenue. They exist solely because the County collected more tax revenue than required to meet its budgeted commitments."

So take some time, and provide the Board with their requested feedback on the FY 2016 closeout and FY 2018 budget guidance. Use the link to send your feedback via e-mail to the Department of Management and Finance.

Telling the Arlington County Board to reserve that most if not all of the $17.8 in surplus funds to moderate a real estate tax increase is especially important. According to the Arlington Sun Gazette's Scott McCaffrey's report of the Board's October 18 recessed meeting:

"Higher costs associated with transit and schools could translate into higher tax bills for Arlington property owners next year.

"County Board members got their first formal briefing on prospects for the fiscal 2018 budget on Oct. 19, and it’s clear the county government will be unable to count on higher property assessments to bring in more revenue without increasing existing tax rates.

"County officials estimate an assessment growth of 2.1 percent next year – 2.4 percent in the commercial sector and 1.9 percent in the residential – which would be the lowest increase since 2013 and less than half the boost in assessments seen in 2014 and 2015.

"Even with expected increases in business and personal-property taxes, increased revenues would be eaten up by higher government expenses: a projected $10.2 million more for schools, $7.5 million more for staff compensation, $1.2 million more for health-care benefits, $2.1 million more for debt service and perhaps $4 million more (up a whopping 13 percent) to fund the county’s share of Metro service.

"It’s the mass-transit and education parts of that equation that remain up in the air. “We’re sort of holding” in search of more concrete data, County Board Chairman Libby Garvey said.

"There seems no sense of panic; County Manager Mark Schwartz said staff was looking at a budget gap of about $5 million, under present assumptions, in the spending plan that starts next July. Any shortfalls will need to be filled by a combination of revenue increases and/or budget cuts.

"John Vihstadt, the most strenuous budget hawk on the five-member County Board, pressed Schwartz to look for ways to trim spending that now tops $1.2 billion."

Vihstadt has also pointed out:

"(T)he Manager’s recommendation spends all but $1.5 million, rather than (a) setting aside anything to help moderate the tax rate, (b) paying down our growing bonded indebtedness, or (c) deferring consideration of the remaining funds (other than for true emergency needs) to be considered with everything else in the context of the larger FY 2018 budget process next spring."

It's worth noting that the county press release, the same one mentioned above, devoted five paragraphs to the "projected $5.4 million funding gap for FY 2018. Thus the importance of using much of the $17.8 million surplus to moderating a future real estate rate rate increase in2018.

If you need additional budget information, both items (#34 - FY 2016 closeout and #35 - FY 2018 budget guidance) on the October 18, 2018 recessed meeting agenda included staff presentations to the County Board. In addition, item #35 includes a draft of the budget guidance.

So, again, take a few minutes, use the link above to tell the Department of Management and Finance how the Arlington County Board should use the FY 2016 surplus funds. If you are unable to e-mail your thoughts to the Department of Management and Finance, then attend the Board's recessed meeting on Wednesday, November 9 (remember Tuesday, November 8, 2018 is Election Day). If none of those work for you, then use the link below to write directly to the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

November 03, 2016

A Thought of Whether Life is Fair

"The political left keeps announcing, as if it is a new breakthrough discovery of theirs, that life is unfair.

"Have they never read Thomas Gray's "Elegy Written in a Country Churchyard," more than two and a half centuries ago? What about economic historian David S. Landes' statement: "The world has never been a level playing field"?

"In the joint autobiography of Milton Friedman and his wife Rose, they say: "Everywhere in the world there are gross inequities of income and wealth. They offend most of us. Few can fail to be moved by the contrast between the luxury enjoyed by some and the grinding poverty suffered by others."

"Moreover, Professor Friedman left behind a foundation dedicated to promoting school choice, so that disadvantaged children could get a better education for a better chance in life.

"What is it that the political left is saying that they think is so new, such a breakthrough and such a necessity for progress? More important, what test of evidence -- if any -- have they ever subjected their notions to?"

~ Thomas Sowell

Source: his 11/1/16 column, "The Left's Vision," posted at Townhall.com.

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Thomas Sowell is a senior fellow at the Hoover Institution. He writes on economics, history, social policy, ethnicity, and the history of ideas. His website is www.tsowell.com.

November 02, 2016

More of Your Federal Tax Dollas Down the Proverbial Rathole

The Fiscal Times' Eric Pianin reported Monday on "How the US Wasted Billions on Broken Highways in Afghanistan."

Here's how Pianin begins his reporting:

"Since 2002, the U.S. has spent roughly $2.8 billion to build and repair Afghanistan’s network of roads and bridges, yet most of that work has either been destroyed or left in serious disrepair, according to a new report by the Special Inspector General for Afghan Reconstruction. (emphasis added)

"SIGAR for years has documented the costly and often failed efforts at nation building since the U.S. invaded Afghanistan in the wake of the 9/11 attacks. Those include tens of billions spent on government offices, schools, police facilities and major infrastructure that have largely gone for naught.

"Over the weekend, the independent government watchdog group issued its latest report showing that the U.S. Agency for International Development (AID) spent at least $1.9 billion on eight star-crossed programs intended to rebuild the country’s road infrastructure. The U.S. also developed plans for other road projects costing hundreds of millions of dollars to spark short-term employment through road construction and counterinsurgency efforts.

"Citing a report from the Afghan Ministry of Public Works, however, SIGAR concluded that 20 percent of the roads have been destroyed in battle while the remaining 80 percent are in varying states of disrepair or deterioration. What’s more, the Kabul to Kandahar highway, a vital artery, is “beyond repair” and needs to be rebuilt. USAID has estimated that unless properly maintained, it would cost about $8.3 billion to replace Afghanistan’s overall road infrastructure.

"The report comes at a time when federal and state officials in the U.S. are struggling to come up with sufficient funds to finance new major highway, bridge and mass transit projects. Although Congress last December approved a $305 billion five-year extension of the highway bill, the American Society of Civil Engineers says there is still a glaring $2 trillion gap in needed infrastructure spending in the U.S. over the next five years." (emphasis added)

He also points out:

"These and other findings are hardly surprising, and fit a pattern in Afghanistan of wasteful spending, widespread corruption, lack of accountability and incompetence on the part of local officials. Moreover, a war of insurgency by Taliban forces has grown in strength and led to years of destruction of roads, bridges, schools and other government structures."

Read the complete Fiscal Times' report here.

The entire 40-page report of the Special Inspector General for Afghanistan Reconstruction (SIGAR) is available here.

Another data point to remember when you step into the voting booth on November 8, 2016? If you have a few minutes, write your member of Congress. Find out what they are doing to oversee that your tax dollars are used wisely. For those not living in Arlington County, contact information is available at the Library of Congress' Congress.gov. 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.

November 01, 2016

A Thought about Knowing History

"The monumental tragedies of the 20th century -- a world-wide Great Depression, two devastating World Wars, the Holocaust, famines killing millions in the Soviet Union and tens of millions in China -- should leave us with a sobering sense of the threats to any society. But this generation's ignorance of history leaves them free to be frivolous -- until the next catastrophe strikes, and catches them completely by surprise."

~ Thomas Sowell

Source: his 11/1/16 "Random Thoughts" column, posted at Townhall.com.

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Thomas Sowell is a senior fellow at the Hoover Institution. He writes on economics, history, social policy, ethnicity, and the history of ideas. His website is www.tsowell.com.