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March 23, 2017

U.S. Business Taxes are Highest in the World

In an editorial two weeks ago, Investors Business Daily (IBD) wrote, "American businesses face the highest tax rate in the world, a new report says. We already knew it faced the biggest regulatory burden. Is it any wonder then that the prospect of lightening the load has led to rising stock prices and more jobs?"

The IBD editorial explained in part:

"The Congressional Budget Office, in a study released last Wednesday, noted that U.S. corporations now face a 39.1% tax rate, the highest statutory corporate tax rate in the wealthy G20 group of nations. The U.S. was in third place, but both Japan and Germany — wising up to the fact that higher taxes hurt economic growth — recently cut their corporate rates, leaving the U.S. atop the tax heap.

"The United States made no change in federal corporate tax rates between 2003 and 2012," said the CBO, "and by 2012, it had the highest top statutory rate in the G20."

"This may be a big reason why American companies now have an estimated $2.4 trillion parked overseas — they don't want to be hit by absurdly confiscatory tax rates when they bring it home."

Read the complete editorial here.

Here is the link to the Congressional Budget Office (CBO) report.

IBD concludes their editorial by writing:

"As we note above, businesses are showing a little spring their step. And the stock market, as measured by the S&P 500 Index, is up nearly 11% since Trump was elected. Investors clearly expect more than 2% growth.

"Trump can do a lot to shrink the regulatory state. But that high corporate tax rate is worrisome. Sen. Majority Leader Mitch McConnell says tax reform must wait until next year. But why wait? Republicans have a great chance to turn the economy into a growth machine. It would be a shame if their political dithering blew it."

Growls readers are urged to make their views about the competitiveness of the United States' corporate income tax rate known to their representatives in Congress. 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.

March 22, 2017

Pennsylvania City of Altoona Scraps Land Value Tax

According to Washington Examiner's economics writer, Joseph Lawler, last month, "An experiment in truly bold tax reform quietly died last summer, when the Pennsylvania city of Altoona scrapped its land value tax."

Lawler explains in part:

"Starting in 2011, the small city in central Pennsylvania employed a tax system unique among U.S. cities. It taxed properties based on the value of land, not on the value of structures.

"As the only example of a town with a land value tax, Altoona was the incarnation of tax economists' dream. Despite support from economists across the political spectrum, however, the tax eventually foundered on the realities of administrative complexity and politics in Altoona.

"Land value tax proponents have sought to experiment with a 100 percent land value tax since the idea was popularized by 19th-century political economist and journalist Henry George. George suggested land value taxes as a way of rewarding strivers and business owners who build up cities and generate commerce — and of denying financial returns to owners of land merely because they happen to own the land.

"The concept has strong intellectual support. Milton Friedman, the father of modern free-market economics, called the land value tax "the least bad tax." That logic is simple: Taxing discourages whatever it is that is taxed. Tax income, and you will get fewer workers working fewer hours. Tax investment, and you will get fewer new ventures and smaller factories. Tax land, however, and the supply of land remains the same.

"More recently, the land value tax has received interest from the Left . . . ."

Lawler added:

"Losing population and tax base, Altoona began trying out the land value tax in 2002 on the recommendation of the Center for the Study of Economics, a Philadelphia think tank that advocates land value taxes.

"In 2011, the city began levying taxes solely on land value and not at all on property value.

"Joshua Vincent, the head of the Center for the Study of Economics, portrayed the reform as a way to boost a struggling city. Altoona, he said, was out of the "economic mainstream now, sort of flyover country if you will. They were stuck with vacant land and had no practical way to attract investment."

"The idea was that, by eliminating taxes on building, the land value tax system would spur construction and increase density in the downtown area."

In concluding remarks, Lawler wrote, "the trial run in Altoona may have helped advance the goals of Henry George and his intellectual followers. City officials said that while the tax was in place, it earned interest from national media and places as far away as England and elsewhere in Europe intrigued by land value taxes."

So, kudos to the Altoona city council for their willingness to experiment with Henry George's land value tax, and even more kudos for being willing to letting the tax die when it eventually foundered. Were it that most other legislators were that wise?

Read Joseph Lawler's entire article here.

March 21, 2017

What Will Trump Budget do to Local Region?

As reported by Vox last week, "On Thursday, President Donald Trump released his outline for next year’s federal budget, titled “America First: A Budget Blueprint to Make America Great Again.” In it, he proposed major cuts to federal spending, with the Environmental Protection Agency, Department of State, and Department of Labor among those hardest hit. He also proposed spending increases on Department of Defense and other US military operations."

How would such federal budget cuts affect the local economy? A three-page research report from the Stephen Fuller Institute at George Mason University yesterday takes a look at the direct effect, which the Trump budget might have "on federal activity in the Washington region." Following is the report's executive summary:

"The net direct effect of the Trump budget, if implemented as proposed, would result in

  • a decrease of from 20,000 to 24,600 federal jobs, taking between $2.3 and $2.7 billion of federal salaries out of the economy,
  • a decrease of from $800 million to $1.2 billion in federal procurement spending, resulting in a loss of up to 12,000 private sector contractor jobs, and
  • a decrease of $1.1 billion in federal grants in the Washington region.

"Overall, federal spending in the region would decrease between $4.2 and $5.0 billion, the equivalent of reducing region’s Gross Regional Product growth rate by about one percentage point.

"These (estimates) assume that employment and procurement changes will occur proportionally to budget reductions by agency and are shown in the tables below based on the current location of the activity. However, it is likely that activity will shift, both within the region and the nation. Within the region, jobs may be consolidated into owned space, which is more concentrated in the District, or into longer-term, lower-cost leases. Similarly, jobs are likely to be consolidated into the main offices, largely located in the region, from other places in the US, unless there are directions to do otherwise."

The Stephen Fuller Institute's report goes on to discuss federal employment, federal wages and salaries, federal procurement. and federal grants in greater detail. Short tables are included to increase understandability. A .pdf version is also available.

Will Arlington County officials take these estimates into consideration as they formulate the FY 2018, and beyond, budgets? Let's certainly hope so.

March 20, 2017

A Thought about Dependency on Entitlements

"The consequences for those trapped in entitlements are forbidding. Getting a job means losing your situation—in housing, health care, and so on, with criminal penalties if you don’t come clean about making more money. The authorities play along in the enforcement/judicial system because it brings them more business, as the brave new entrants to the real workforce are tagged as “offenders.” Ordinarily, we’d call this enserfment, or worse.

"The working class, in the 2010s, faces hurdles surely unprecedented in our star-spangled history to do just that, work. Thanks, Obama. Or maybe it is thanks, Nancy Pelosi. You recall after she waved through Obamacare in the House in 2010/11, she said it will free up people to discover themselves, namely not to work. How prescient that unfortunate creature was."

~ Brian Domitrovic

Source: his October 16, 2016 column at Forbes.com.

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In his Forbes columns, Mr. Domitrovic writes "about how history can help illuminate the economic challenges we face today, and how very often historical sources do validate free-market economics. I’m author of what’s now the standard history of supply-side economics, "Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity" (2009)."In addition, he and Larry Kudlow "recently published a book on the history of the great John F. Kennedy tax cut and its influence on both the 1960s and the 1980s, "JFK and the Reagan Revolution: A Secret History of American Prosperity" (Portfolio, 2016)." (Source: his Forbes biography)

March 19, 2017

A Thought about the Purpose of Welfare

“Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.”

~ Ronald Reagan

Source: Article by Kyle Becker, Independent Journal Review. Also Goodreads.com.

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"Ronald Reagan, originally an American actor and politician, became the 40th President of the United States serving from 1981 to 1989. His term saw a restoration of prosperity at home, with the goal of achieving "peace through strength" abroad." "A History of the Presidents" at the White House website.

March 18, 2017

Will the Arlington County Board Play Scrooge or Santa Claus?

Yesterday, we growled about the Arlington County Manager's release of a list of possible budget cuts, totaling $11.1 million, that the County Board could use to obviate the need to raise the real estate tax rate a complete 2-cents.

After posting the Growls, we saw comments made yesterday by Scott McCaffrey in his Editor's Notebook, a blog at the Arlington Sun Gazette. He recalled how a prior Arlington County Board faced budget crunches, writing:

"This may not be exactly how it went down, but it is how I remember it.

"A decade or more ago, when the Arlington County government was facing a bit of a fiscal crunch, the county-manager-du-jour issued an edict to his department heads: Find me ways to cut 5 percent from your budgets, just in case we need to.

"Some of the departments – libraries springs to mind – took the project seriously, and provided a list of reductions. Other departments were a little more cavalier; if memory serves, the police department essentially said, “Go ahead, elected officials, you can cut the SWAT team if you have to. But don’t blame us if you find yourself in a hostage situation and we cannot help you.”

"That may have been the last year those “goldenrod” reductions (so called because of the color of the paper the proposed cuts were put on) were ever considered.

"Yesterday, County Manager Mark Schwartz unveiled a proposal for $11 million (ish) of potential cuts, in order to alleviate the need for a 2-cent increase in the tax rate. And looking over the list, it’s clear that this is another effort – whether intentional or not – that ensures the positions and programs on the chopping block are not taken seriously by the County Board.

"Prediction: A majority of County Board members will wring their hands, furrow their brows and say, darn it, they just can’t find anything in the list of proposed cuts that isn’t absolutely essential.

"Meanwhile, programs where cuts indeed could be made will survive, and the tax rate will inevitably rise. (I’ve been to this rodeo before, as Joan Crawford might say.)

"Of course, this whole charade would have been unnecessary had County Board members over the summer simply cobbled away some of their surplus, rather than allocating it to a host of non-budgeted items. But it’s always more fun being Santa Claus than Scrooge, especially when someone else is providing the money for the presents."

Last Saturday, we growled about the need for the Arlington County Board to advertise a possible 2-cent real estate tax rate increase, agreeing with the opinion of ARLnow.com columnist Peter Rousselot, who opined the budget gap that requires the tax increase was entirely self-inflicted because the County Board failed to "carry over last fall's close-out surplus."

Moreover, Mr. McCaffrey's prediction that the Arlington County Board would wring their hands . . . but fail to find anything in the  Manager's list that isn't absolutely essential, and find it easier to play Santa Claus than Scrooge.

Consequently, Growls readers who are Arlington County taxpayers are encouraged to tell the Arlington County Board to do the right thing and adopt the Manager's entire list of cuts, and then cut some more. Just click-on the following link to send the Board a message:

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

And tell them ACTA sent you.

March 17, 2017

County Manager Proposes $11.1 Million in Possible Cuts

The online ARLnow.com local news site reported yesterday that "Arlington County Manager Mark Schwartz has proposed a series of budget cuts to halve his proposed two cent tax increase to one cent."

ARLnow.com went on to explain:

"The cuts to Schwartz’s proposed budget total $11.1 million and include everything from a multi-million dollar reduction in school funding to a reduction of hours at the Glencarlyn library and the elimination of a management intern position in the parks department.

"The Arlington County Board advertised Schwartz’s recommended two cent tax rate increase but also asked him to recommend some budget cuts, as an option to consider.

“Putting together budget reduction options is always difficult, particularly given the growing demands and potential impacts on our community,” Schwartz said in a statement. “The package makes no change to the additional resources committed to Metro. Since we presented our Proposed Budget on Feb. 25, jurisdictions are facing a Metro funding deficit that may grow even larger.”

"Under the advertisement, the Board cannot raise the property tax rate more than two cents for every $100 in assessed value this year. (At last month’s meeting, Board members Libby Garvey and Christian Dorsey proposed, unsuccessfully, setting the advertised rate three cents higher than the current $0.991 for every $100.)"

The story quoted from this Arlington County press release, which included the following six bullet points:

  • Board asked for reduction options equal to one penny on the tax rate
  • Cuts would be shared by APS
  • Options to be considered during March budget work sessions
  • Board has advertised tax rate increase up to two cents over CY 2016 rate
  • Public can weigh-in at two March public hearings; online feedback form
  • Board to adopt final FY 2018 Budget, tax rates and fees April 22, 2017

The press release included two additonal important points. First, they pointed out the upcoming budget and tax hearings on Tuesday, March 28 and Thursday, March 30. For more information, visit the "Speaking at Budget and Tax Rate Public Hearings" webpage. Second, the press release reminds taxpayers that County Board work sessions with the County Manager are broadcast live on ATV, the County’s cable channel, (Comcast 25 & 74 and Verizon FiOS 39 & 40), and live-streamed on the County website." Meetings are open to the public, but the Board doesn't take testimony.

Growls readers are encouraged to voice their concerns about the Manager's proposed FY 2018 budget to members of the Arlington County Board. Just click-on the following link to send the Board a message:

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

And tell them ACTA sent you.

March 13, 2017

Don't Blame Us, Blame the Hot and Dry Summer

The Arlington Sun Gazette's Scott McCaffrey wrote last week, "Arlington officials’ explanation on water bills still not convincing everyone."

He explains, but only in part:

"Arlington public-works officials remain steadfast in their belief that it was last year’s hot and dry summer that led some county residents to experience major spikes in their water bills.

"But not everyone is buying it.

"In a Feb. 28 briefing to County Board members, government officials acknowledged that 6 percent of cases they investigated over the past year were found in some way to be the fault of the county government, and about a third were found to be previously unnoticed leaks. But 60 percent of the time, there was no other explanation besides the likelihood that water customers simply were using more water.

“We’ve not found any evidence of a process or a system error,” said Mike Collins, deputy director of operations for the county government’s Department of Environmental Services.Collins repeated the county government’s past statements that a wet summer and early fall of 2015 was followed by a hot and dry summer and fall of 2016, “a perfect scenario” for seeing both interior and – more significantly – exterior water-usage spikes.

"Lawn-watering, frequent car-washing, leaky faucets or toilets and an increase in household size all can impact water bills, county officials noted. Water and sewer rates total $13.87 per 1,000 gallons used, and high levels of irrigation (or even a leaky toilet) can add up to hundreds or thousands of dollars in extra costs, they said.

"For months, owners of single-family homes in various parts of the county complained on social media about major increases in bills for the affected period.

“Our staff has been taking this very seriously,” said County Manager Mark Schwartz.

"But many have found the government’s explanation less than satisfying. “Ridiculous” is how Yorktown Civic Association president Mike Cantwell described the Feb. 28 report to County Board members. Several other civic leaders also vented their anger, but didn’t want to do so on the record.

"County Board member John Vihstadt was slightly more restrained, saying it was “frustrating” that there was no answer found to satisfy concerns of a restless community."

You can read McCaffrey's entire report here.

Growls readers who may have encountered spikes in their water bills are encouraged to tell that to the Arlington County Board. Just click-on the following link to send the Board a message:

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

And tell them ACTA sent you.

March 12, 2017

A Thought about Patriotism

"It is the responsibility of the patriot to protect his country from its government."

~ Thomas Paine

Source: Professor Walter E. Williams' "Quotations from Founders of the Constitution and Others -- Government," available at his homepage.

March 11, 2017

A "Self-Inflicted Budget Gap"

On February 25, 23 we growled when the Arlington County Board followed the Manager's recommendation and voted to advertise a 2-cent increase in the real estate tax rate. The vote was 3-2. The 2-cent increase would raise additional revenues of $14.8 million.

According to the county's press release, "The County Manager had recommended a two-cent increase in the property tax rate specifically to address the “extraordinary” funding needs of Metro and enrollment growth in the Arlington Public Schools. The County Board accepted that recommendation in choosing a maximum tax rate to advertise."

The is all self-inflicted, however. In his weekly ARLnow.com column, Peter's Take, on Thursday, Peter Rousselot explains:

"The Manager fully highlighted these “extraordinary circumstances” last fall, but he and the County Board failed to act then to address that potential budget gap.

"Metro is critical to Arlington and our entire region, and our critically-important schools are experiencing dramatic enrollment increases. Without much-needed fundamental reforms, the long-term costs represented by APS and Metro will indeed put tremendous upward pressure on Arlington’s property tax rate in every year for the foreseeable future.

"However, any need to increase that rate in 2017 is entirely attributable to Arlington’s failure to follow recommendations that John Vihstadt, the Civic Federation, I and others made regarding last fall’s $17.8 million “close-out” surplus.

"In a column last October, I proposed that the Board defer almost all of the proposed expenditures that the Manager recommended for that $17.8 million surplus, and hold in reserve virtually all those funds for first-priority use to bridge any budget gap for FY 2018. Instead, the Board approved spending almost all that surplus. That was a mistake that should not be repeated."

In his conclusion, Rousselot said the Arlington County Board should "direct the Manager to reserve almost all of any fall 2017 close-out surplus to lessen upward pressures on the 2018 tax rate."

Growls readers who are Arlington County taxpayers, and agree the entire FY 2017 close-out surplus should be reserved and not be distributed until the following year's budget adoption, should tell that to the Arlington County Board. Just click-on the following link to send the Board a message:

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

And tell them ACTA sent you.

March 10, 2017

Civic Federation Asks County Board to Change Policy

 Last month, we growled about the effort by the Arlington County Civic Federation to "take up a resolution expressing concern about recent changes to the County Board’s public-comment period."

At their monthly delegate meeting this week, the Arlington Sun Gazette reported yesterday, the Federation unanimously passed a resolution sponsored by Federation delegate Suzanne Sundburg. The resolution asks the Arlington County Board to revert back to its prior policy.

The Sun Gazette went on to explain:

"Under state law, some of the items put on the consent agenda are required to have public hearings, and community members still have the power to remove them for a full airing. But for items where the state requirement does not apply, activists now must get a County Board member to agree that the item should be pulled for further discussion.

"County Board members say they made the change in order to streamline their agendas and to prevent a small corps of citizen-activists from monopolizing meeting times. Over the past year, one individual was responsible for removing 60 percent of the total number of consent items pulled for further consideration, which required staff time on items that board members and staff (although not always the public) deemed non-controversial matters.

"The federation’s resolution asks County Board members to “seek input and suggestions from the public and civic groups to create an alternative policy that allows the board to conduct orderly meetings within a reasonable time frame while also meeting the board’s stated goals of improving government transparency and encouraging greater public participation.”

To reead the Civic Federation's resolution, click here.

Growls readers who are Arlington County taxpayers, and agree with the Civic Federation resolution, are encouraged to tell the Arlington County Board to revise its public comment policy. Just click-on the following link to send the Board a message:

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

And tell them ACTA sent you.

March 09, 2017

U.S. Corporate Tax Rate Highest in G20

At CNS News today, Terry Jeffrey writes, "The United States has the highest top statutory corporate tax rate—39.1%--of any nation in the G20, according to a study released Wednesday by the Congressional Budget Office," and then adds, "That rate is nearly twice as high as the 20-percent rate in Russia, which, along with Saudi Arabia and Turkey, has the lowest statutory corporate tax rate in the G20."

He then continues:

"The U.S. won the top spot on the statutory-corporate-tax-rate list after Japan and Germany, which formerly ranked first and second, cut their rates.

“The United States made no change in federal corporate tax rates between 2003 and 2012,” said the CBO, “and by 2012, it had the highest top statutory rate in the G20.”

“In 2003, Japan, Germany, and the United States had the highest statutory corporate tax rates among G20 countries,” said the report, “by 2012, reductions in Japan’s and Germany’s top rates had dropped them to second and ninth place, respectively, boosting the United States to the top of the list.”

“At the time that the tax rates considered in this analysis were computed,” said the CBO report, “2012 was the most recent year for which complete data were available.”

"However, since 2012, the report noted, the trend among G20 nations that changed their corporate tax systems was to cut corporate taxation. (emphasis added)

“Four G20 countries modified their corporate income tax systems after 2012, generally resulting in lower effective tax rates,” said the report. “Japan, South Africa, and the United Kingdom reduced their top statutory corporate tax rates.”

"The CBO report looked at three different measures of corporate taxation in the G20 countries. These included the top statutory corporate tax rate, the average corporate tax rate, and the effective corporate tax rate.

"The top statutory corporate tax rate in the United States includes the top federal tax rate on corporations combined with the taxes that states impose on corporations."

Read the complete article here.

Here is the link to the Congressional Budget Office (CBO) report, "International Comparisons of Corporate Income Tax Rates." In response to the question, "How do different tax rates affect business decisions," the CBO answers:

"All three types of corporate tax rates affect a company’s decisions, but each influences a different choice. Because of their broader scope, average and effective corporate tax rates are better indicators of a company’s incentives to invest in a particular country than is the statutory corporate tax rate. The average corporate tax rate reflects a country’s corporate tax rate schedule, the system’s tax preferences for business investments, any surtaxes, and possibilities for tax avoidance or evasion. Companies consider the average corporate tax rate when deciding whether to undertake a large or long-term investment in a particular country. The effective corporate tax rate, which is a measure of the tax on a marginal investment, is more informative for decisions about whether to expand ongoing projects in those countries in which a company already operates. In contrast, businesses focus on the narrower statutory corporate tax rate when they develop legal and accounting strategies to shift income earned in high-tax countries to low-tax jurisdictions—especially low-tax jurisdictions in which those businesses do not plan to invest and from which they thus expect no benefits from tax preferences for business investments."

Jeffrey includes the following chart with his report, but notes,"The full version of this chart, including the rankings for the "effective corporate tax rate," is on page 2 of the CBO report:"

Growls readers are urged to make their views about the competitiveness of the United States' corporate income tax rate, by comparison to those of the G20 nations, known to their members of Congress. 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.

March 08, 2017

Weekly Wages in Arlington County Trail National Increase

An online story today at Arlington Sun Gazette says, "Year-over-year weekly wages among those working in Arlington were up 3.9 percent in the third quarter of 2016, according to new federal figures, but lagged the national increase."

According to the weekly newspaper:

"The average weekly wage of those employed in the county (no matter where they live) was $1,648 for the quarter, according to figures reported March 7 by the Bureau of Labor Statistics. The figure was good enough to rank the county seventh highest among the nation’s 345 most populous counties.

"But the growth rate ranked Arlington only 292nd among those counties, according to federal figures.

"Nationally, the average weekly wage of $1,027 was up 5.4 percent from a year before.

"The highest average weekly wage in the third quarter of 2016 was reported in Santa Clara County (Calif.) at $2,260, followed by San Mateo County (Calif.), $2,098; San Francisco, $1,892; New York County (Manhattan), $1,879; the District of Columbia, $1,728; Suffolk County (Mass.), $1,660; Arlington; King County (Wash.), $1,582; Middlesex County (Mass.), $1,555; and Fairfax County ($1,546).

"Fairfax’s average weekly wage was up 5.6 percent from a year before, ranking the county 168th out of the 345 largest counties in terms of percentage gain.

"Among other Virginia localities, the average weekly wage in the third quarter was $1,447 in Alexandria (up 5 percent); $1,155 in Loudoun County (up 3.5 percent); $1,124  in Richmond (up 3.2 percent); $1,030 in Norfolk (up 3.4 percent); $995 in Newport News (up 3.6 percent); $992 in Henrico County (up 5 percent); $913 in Prince William County (up 6.5 percent); $877 in Chesterfield (up 5.4 percent); $812 in Chesapeake (up 6.4 percent); and  $729 in Virginia Beach (up 3.7 percent)."

The story links to the Bureau of Labor Statistics.

March 07, 2017

A Thought About Spending by Governments (Funding)

"The principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale."

~ Thomas Jefferson

Source: page 118, "As Certain as Death: Quotations about Taxes," 2010 Edition, compiled by Jeffrey Yablon, TaxAnalysts.com.

March 06, 2017

February 2017 Porker of the Month Named

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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Citizens Against Government Waste (CAGW) recently announced their February 2017 Porker of the Month, and she is House Minority Leader Nancy Pelosi (D-Calif.) based on "her long history of misinformation and hyperbole regarding Obamacare."

Here is how CAGW justified their selection of Rep. Pelosi:

"During a CNN town hall on January 31, 2017, Leader Pelosi made a startling claim about the Affordable Care Act (Obamacare):  “It’s three purposes were to increase coverage, expand those who got healthcare; to improve benefits, and to lower costs, and it has succeeded in every way.”

"This whopper is in desperate need of a fact-check.  A January 2017 Congressional Budget Office (CBO) projection found that Obamacare covers less than half of the original estimate of 30 million.  While 14 million Americans have enrolled since the law was fully implemented, 11.8 million, or 84 percent, are covered under Medicaid, not private insurance.  Like all Medicaid recipients, the new enrollees’ access to quality care is sparse.  A 2014 Merritt Hawkins study found that 55 percent of doctors reject Medicaid beneficiaries, which is a 10 percent jump since 2009.

"Many Obamacare enrollees who did receive new private health insurance are finding that their high-deductible plans leave them just as vulnerable when they become ill.  David Reines, a 60 year-old former hardware salesman from Jefferson Township, New Jersey with chronic knee pain, told The New York Times on November 14, 2015, that, “The deductible, $3,000 a year, makes it impossible to actually go to the doctor.  We have insurance, but can’t afford to use it.”

"The skyrocketing cost of Obamacare has caused insurers to either drastically increase premiums or withdraw from the marketplaces altogether as Humana and Aetna announced within the last year.  In 2017, insurers plan to triple the premium prices in 38 states, and 70 percent of U.S. counties only offer one or two health insurance choices.

"Leader Pelosi, who famously quipped that Congress would have to pass the healthcare bill so that Americans could see what was in it, is clearly wrong when she says the law “has succeeded in every way.”  She parroted former President Obama’s patently false claim in 2009 that if Americans liked their healthcare plan and doctor that they would be able to keep them.  She described Obamacare as “Affordable, affordable, affordable, affordable,” in 2014.  She outrageously said that attempts to reform the broken law were acts of “cowardice,” and fear-mongered that Obamacare repeal would lead to “grandma living in the guest room.”

"CAGW President Tom Schatz said: “Leader Pelosi is perhaps the most vocal and hyperbolic proponent of the broken Obamacare system.  Her utter and complete disregard for facts and the efforts of healthcare reformers to rescue the millions of Americans who are victimized by this law is shameful.  Leader Pelosi should renounce her past false statements defending Obamacare, and pledge to help build a healthcare system that truly offers more choice and greater access at a lower cost to both consumers and taxpayers.”

"For repeatedly peddling false claims to the American people about ObamaCare, CAGW names House Minority Leader Nancy Pelosi its February 2017 Porker of the Month."

Kudos to Citizens Agains Government Waste (CAGW) for their continuing work  to eliminate waste, fraud, and abuse in government.

March 05, 2017

"Good Faith" Costs Taxpayers $21.8 Million

The Washington Free Beacon's Ali Meyer reported today that "$21.8 million in ObamaCare tax credits (were) awarded to individuals who were not eligible to receive them: because of the Affordable Care Act's 'good fairth' provision.

According to Meyer:

"The Affordable Care Act exchanges awarded $21.8 million in advance premium tax credits to individuals who were not eligible to receive them, according to an audit from the Treasury Inspector General for Tax Administration.

"Advance premium tax credits are awarded to those with low to moderate income to help rein in the cost of purchasing health care insurance on the exchanges.

"The Centers for Medicare and Medicaid Services is responsible for overseeing the Obamacare exchanges which should ensure that an individual who applies for the tax credit has his identity verified and that the individual is eligible to receive the payment.

"Individuals are asked a number of questions regarding their personal information such as their address, telephone number, date of birth, and out-of-wallet questions to determine their identity. After this process, individuals can submit an application to see if they are eligible to receive benefits.

"The audit found that the exchanges did not successfully verify the identity of 35,276 individuals, and these individuals received $112 million in advance premium tax credits. The report notes that the majority of these applications—99 percent—had no verification process performed on them, and 251 failed identity verification.

"When we provided the results of our review to the Centers for Medicare and Medicaid Services, management stated that the ACA does not require the exchanges to verify an applicant's identity," auditors said. "Management indicated that identity information is not a requirement or a factor in the determination for an individual's eligibility for health insurance coverage through the exchanges."

"Additionally, auditors found that there were 11,388 individuals who received $21.8 million in tax credit payments even though one or more of the eligibility requirements were not met. For 2,498 of applications, there was no data present indicating that the exchanges did not verify eligibility at all."

Read Meyers' entire article here.

She links to a 58-page Treasury Inspector General for Tax Administration (TIGTA) audit, "Affordable Care Act: Analysis of Tax Year 2014 Nonfilers who received Advance Premium Tax Credit Payments (Number 2017-43-021, February 28, 2017).

Growls readers, who are outraged by such waste and mismanagement in federal programs, are urged to make your views known to your members of Congress. 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.

March 04, 2017

America's Economic Freedom Hits New Low in New Index

Based on such facts as size of government, higher taxes, debt, and regulations, the Washington Free Beacon's Ali Meyer reported last month that based on "the Heritage Foundation's Index of Economic Freedom, economic freedom in the United States has hit a record low in 2017 — the nation dropped out of the top 15 countries and declined to 17th place."

Meyer begins her report this way, writing:

"The index ranks countries on 12 metrics that measure four pillars of economic freedom: the rule of law, limited government, regulatory efficiency, and open markets. Each country's economic freedom score is graded on a scale of zero to 100, with 100 indicating the most economic freedom.

"Last year, the United States received a score of 75.4 and stood in 11th place among all 180 countries ranked by the index. This year, the United States declined even further to 17th place, receiving a score of 75.1—the lowest score this country has ever received in the index.

"The report says that the decline in America's economic freedom is largely due to the increase in the size of government, higher taxes, increasing debt, large welfare programs, and a heavier regulatory burden."

She continued, writing:

"The United States continued its string of discouraging trends in the 2017 index," the report said. "The substantial expansion in the size and scope of the U.S. government, increased regulatory and tax burdens in many sectors, and the loss of trust and confidence that has accompanied a growing perception of cronyism have severely undermined America's global competitiveness."

"The United States ranked sixth for economic freedom when President Obama took office in 2009. Now, in President Trump's first year in office, the United States has fallen behind Hong Kong, Singapore, New Zealand, Switzerland, Australia, Estonia, Canada, United Arab Emirates, Ireland, Chile, Taiwan, the United Kingdom, Georgia, Luxembourg, the Netherlands, and Lithuania.

"The anemic economic recovery since the great recession has been characterized by a lack of labor market dynamism and depressed levels of investment," the report states. "The substantial expansion of government's size and scope, increased regulatory and tax burdens, and the loss of confidence that has accompanied a growing perception of cronyism, elite privilege, and corruption have severely undermined America's global competitiveness."

"Countries that allow their citizens more economic freedom achieve higher incomes and better standards of living," said Terry Miller and Anthony Kim, who authored the index. "As the global economy has moved toward greater economic freedom over the past two decades, real world GDP has increased by about 80 percent, and the global poverty rate has been cut in half, lifting hundreds of millions of people out of poverty."

The entire 492-page report is here.

Anthony Kim, Research Manager for the Index of Economic Freedom, provides some introductory remarks, asking what happened, including:

"Today, the imperative to restore America’s economic freedom and thereby revitalize vibrant entrepreneurial growth is stronger than ever. Americans deserve better, and they can do better.

"It should be noted that free-market capitalism built on the principles of economic freedom does not just conserve the status quo. In many cases, it overturns and transforms. It pushes out the old to make way for the new so that real and true progress can take place. It leads to innovation in all realms: better jobs, better goods and services, and better societies.

"The 2016 election was a game-changer. America has been given an incredible and unique opportunity to move away from Obama’s failed liberal policy agenda and toward an agenda that strives to restore America’s economic freedom and spur dynamic growth."

In a commentary for Investor's Business Daily, Terry Miller, Director of the Center for Free Market and Regulatory Reform at the Heritage Foundation, says:

"This year, more than 100 countries recorded increases in their economic freedom. Those winners are found around the world, but the Asia-Pacific region had the highest number of countries recording major gains. Forty-nine countries recorded their highest economic freedom scores ever. This group included both China and Russia, though even with their improvements, both continue to lag far behind most western developed economies in economic freedom.

"The U.S., regrettably, headlined the list of countries not only losing freedom, but recording their lowest scores ever. Driving the U.S. decline was a new category in the Index: fiscal health. That category measures fiscal deficits and government debt relative to the size of the economy. U.S. government spending has accounted for over 38% of total U.S. economic activity over the last three years, with deficits averaging above 4% of GDP and total government debt exceeding a full year's output of the economy."

Miller concludes saying:

"One of the most interesting conclusions of the Index of Economic Freedom is that intentions matter. Policy changes that increase or retard economic freedom can have an immediate impact for good or ill on economic performance. The free market, now ascendant in much of the world, is an incredibly fast and accurate monitor of economic prospects, whether at the level of the household, the firm, or the national economy.

"At the moment, most market indicators are pointing up for the U.S. Hope is high that policy changes are coming to restore American's economic freedom. We'll see if the politicians can deliver."

For more information about the Heritage Foundation, click here.

March 03, 2017

A Thought about Cuttting Income Tax Rates

"Every time this country . . . has cut tax rates across the board, revenues went up and the economy grew."

~ Jack Kemp

Source: page 29, "As Certain as Death: Quotations about Taxes," 2010 Edition, compiled by Jeffrey Yablon, TaxAnalysts.com.

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Jack Kemp (1935-2009) played professional football (1957 to 1970); member of House of Representatives (1971-1989); Secretary of Housing and Urban Development (1989-1993); and, candidate for Vice President (1996). (Biographical Directory of the United States Congress).

March 02, 2017

Your Tax Dollars Paying Employees to Watch Porn

According to the Washington Free Beacon's Elizabeth Harrington on Tuesday, "Hundreds of federal workers have been caught watching porn on the job, including viewing child pornography, according to a new investigation."

Here's how she begins her reporting:

"NBC News 4 in Washington, D.C., identified over 100 "egregious" cases during the past five years where federal employees watched porn for hours during the day or required an inspector general investigation into their porn habits at work. The report relied on records obtained through Freedom of Information Act from 12 separate government agencies.

"The cases include workers who admitted spending six hours a day surfing illicit images and videos and maintaining tens of thousands of adult images on their office desktops," the report said.

"The investigation revealed over 20 cases at the Justice Department during the past two years, and numerous cases at the Environmental Protection Agency.

"The report includes the notorious case of an EPA employee in the Office of Air and Radiation who, while earning a $120,000 salary, watched porn between two and six hours every day, masturbated at work, and received bonuses.

"The employee said that "‘a lot' of his time each workday is spent ‘organizing' the pornography he downloaded into saved folders," according to the records obtained by NBC News 4.

"The report noted that although being caught watching porn "opens employees to possible disciplinary action," including being fired, several agencies said penalties are "flexible" and can carry just a written reprimand.The EPA employee was not fired and stayed on the payroll for years even though he had been banned from the building. He continued to receive his six-figure salary for two years after being caught, including a year of paid leave before he retired in April 2015."

She embeds a number of links in her report. Read the entire report here.

Most hard-working taxpayers may be wondering just why such employees aren't just summarily fired while supporters of the status quo say that union and other bureaucratic work rules protect such misconduct. And while its certainly true that firing federal employees is often cumbersome, such problem employees often know where skeletons are buried. Consequently, the brass look for a friendly departure.

Growls readers, who are outraged by such stories about waste and mismanagement in the federal government, are urged to make your views known to your members of Congress. 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.

March 01, 2017

A Thought about the 'Separation of Power'

"Today’s “separation of powers” is no longer between the three original, constitutionally created, branches of government, but between, on the one hand, a branch consisting of the president, his supporters in Congress and their mutual supporters on the federal bench; and on the other hand, a branch made up of the party in opposition to the president, his opponents in Congress and their co-partisans on the bench.

"America’s Founders recognized the truth in Hobbes’ declaration that governments were needed to prevent abuses of the weak by the powerful. But they recognized that government, too, would need to be prevented from committing its own abuses—hence the need for the sometimes frustrating but nonetheless necessary divisions of authority between the state and federal governments and between the branches of the federal government. That is the system described in the Constitution and the system I taught. But it is not the system by which America operates today—a persistent war between competing political clubs.

"I taught my students a system of government based on the Constitution. I thought I was teaching about current events. Instead, I now realize, I was teaching ancient history."

~ Mickey Edwards

Source: his February 27, 2017 column, "We No Longer Have Three Branches of Government," Politico Magazine.

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In American government, "Separation of powers . . . refers to the division of government responsibilities into distinct branches to limit any one branch from exercising the core functions of another.  The intent is to prevent the concentration of power and provide for checks and balances." (National Conference of State Legislatures).

Mickey Edwards, Republican, served eight terms in Congress, 1977-1993. He also chaired the House Republican Policy Committee. "After leaving office in 1993, he taught government for 13 years at Harvard and Princeton, and became a vice president of the Aspen Institute, where he directs a political leadership program."